Beauty Marketing in the Age of eCommerce

Stuart Elmes

 

The beauty industry has proved incredibly resilient in the face of change. It is constantly rebuilding and redefining itself as technology alters the retail landscape. This willingness to build on innovations rather than attempt to live in the past has made a lot of brands and entrepreneurs a lot of money. Industry watchers note that the beauty product industry could be valued at as much as $750 billion by 2024. As the selfie becomes perhaps the dominant form of self-expression in modern culture, and millions of young people yearn to become Instagram influencers, it seems that people are willing to spend whatever it takes to look their best. Let’s take a look at the eCommerce marketing trends that have fueled the explosive growth of this industry.


How Have Marketing Strategies Changed?

beauty marketing in the age of eCommerce

The beauty industry has been affected more profoundly by influencer marketing than any other. Social media strategies should no longer be limited to spotting trends and accumulating likes for your brand. Today’s consumers want experiences that go hand in hand with the products on offer, and your customers’ product reviews will travel farther than ever before. The beauty industry has been exceptionally quick to adapt to these trends, with Statista reporting that 96% of beauty brands had Instagram profiles by 2016. A survey from Facebook found that 80% of users reported that they decided whether to buy products and services based on Instagram posts and reviews. The study also found that a heavy Instagram presence offered brands a “halo effect”, with consumers describing them as “ popular (78%), creative (77%), entertaining (76%) and relevant (74%). Those top associations stayed relatively consistent across the globe.”

Influencer marketing also makes relationships with beauty bloggers and vloggers who provide tutorials on Youtube and other platforms crucially important. Consumers from Generation Z feel like they have close relationships with these online personalities, who have built trust and value with their audiences. As one marketing expert puts it: “With consumers today craving… authenticity and inclusivity, beauty brands are collaborating with influencers to better reach and interact with their target audience. Influencers typically have a well-curated network of followers that trust their opinions and relate to their stories.” For brands, building mutually beneficial relationships with influencers can be a powerful driver for sales.

Creating experiences is a marketing buzzword that we’re sure you’ve heard before. Leading cosmetics brands have sensed a great deal of opportunity in this area, and they’ve been creatively leveraging these new ways to reach customers. One of the most interesting ideas we’ve seen is SK-II’s smart pop-up store in Tokyo’s trendy Shibuya neighborhood. The store used leading-edge technology to create a customized and individualized piece of art based on the client’s facial expressions. Visitors could also undergo a digital skin-scan, gain product recommendations, and be recognized by the store on subsequent visits. As Wired Japan declared, SK-II’s smart store is “a platform that redesigns the relationship between humans and skincare.”

Another creatively adopting experience-driven marketing is Benefit Cosmetics. They created a unique pop-up diner in downtown Los Angeles complete with free ice cream sandwiches, all pink decor, Instagram ready photo locations, and a bar offering free samples and pro tips for applying their products. The brand said the diner was conceived as a way for their 8.8 million Instagram followers to come together and experience “Benefit in ‘real life.’” L’Occitane and Glossier have also launched pop-up cafes in the past year in San Francisco, Singapore, London, and Tokyo. In fact, L’Occitane teamed up with a celebrity chef to offer an all dessert menu featuring ingredients used in their skincare products, such as almonds and bergamot oil. More and more brands are discovering that experiences and Instagram are the quickest way to a Millennial’s heart.


Golden Opportunities

beauty marketing in the age of eCommerce

Who is benefiting from these new trends in marketing beauty products? In many cases, the shifts towards personal recommendations, influencer marketing, and unique experiences are helping challenger brands take on the traditional giants in the industry. One industry expert cites creating a seamless experience that integrates the best aspects of online and in-store as a key to helping start-up brands and retailers like Ulta and Glossier find their footing.

A recent report from McKinsey notes that in beauty, the challengers quickly upended a power structure of large legacy brands that had ruled the industry for decades. These days, a smaller company that targets conscious consumers with all-natural and organic ingredients is likely to be seen as more trustworthy and prestigious than long-established brands. Recent start-ups like Charlotte Tilbury in the UK and Anastasia in the USA have attracted far larger audiences than legacy companies on prime video-sharing and social media sites like Youtube and Instagram. Consumers feel that they have authentic relationships with brands like these, which makes them happy to pay higher prices for products.

The growth of omnichannel and online-only sales platforms have helped these brands find some elbow room in a retail space that used to depend on drugstores and department store sales counters. Many emerging companies are experimenting with the DTC model that has driven success for fast-growing brands like ColourPop. The growth of the eCommerce marketplace has leveled the playing field for upstarts. 


Staking a Claim

beauty marketing in the age of eCommerce

But rather than gnashing teeth, or shamelessly copying their new competitors, established beauty brands have largely had a positive response to these incursions. As McKinsey reports, they’ve adopted new strategies to profit from these trends. Acquisitions have been used to bring prominent challengers to a wider market place, with L’Oreal and Estee Lauder purchasing brands like Deciem, NYX, and Urban Decay. They’ve also mimicked social media strategies and embraced influencer marketing to try to build closer relationships with their clientele. As the head of Estee Lauder recently told a fashion website: “It’s not about how a brand defines itself today; it’s how an audience defines you in their mind.… Consumers tell our stories now.”