“Too many beauty brands don’t get that a growing number of customer are buying beauty online.” That’s how a recent conversation started with a VP of beauty at a leading top tier department store retailer. Why? Every major beauty retailer is searching for the answers to this questions while aggressively building both in-store and online strategies to get as much of the beauty consumers’ wallet as possible.
The new buzzword is omnichannel and if you aren’t planning for it, your brand already has one foot in the grave.
The good news for emerging brands is that large retailers are finding that consumers are buying online because the brands they want aren’t in-store. Niche brands are the hottest trend in the market today. While consumers want mink brands that provide extraordinary, high class, and or expensive qualities, they are also seeking convenience, fun and value.
At this summer’s Cosmoprof North America 2015 show, Carrie Mellage, Vice President of consumer products for Kline Research, reported their annual report on Beauty Retail in the USA. The key finding of the report was this: consumer behavior has changed. (We could have told you that!) Consumers are buying brands that suit them, where and when it suit them. They don’t care about channels. They want convenience and value. This consumer behavior is driving the development of the omnichannel.
The big winners in the beauty sector are direct marketers which include e-commerce, multilevel marketing and direct response channels. We are seeing what would have been considered odd bedfellows a decade ago, like Nordstrom with Kohls or CVS with Target.
There are also interesting plays like Blue Mercury purchased by Macy, BirchBox the consumer subscription samples box model, opening pop-up stores. Even Costco has created their beauty department’s most wanted program offering curated, limited edition brands. The key is that there is more and more channel hopping going on and consumers are meeting brands in different areas. Consumer convenience and brand accessibility is proving to be a winning strategy as the omnichannel takes form.
Another detail: more and more beauty brands are using technology. In US airports consumers are buying prestige retail in automated vending machines – of course in TSA-friendly three fluid ounces sizes.
What about in-store?
Recognizing that 8 of 10 consumers are now using smartphones to help them shop, in-store beauty is working hard to keep the pace. Beacon technology addresses how smartphones have drastically changed how brands engage with consumers. Beacon technologies are location-enabled mobile apps that allow brands to guide the opt-in consumer’s purchase path across channels in real time. This technology is helping brands to build sophisticated campaigns that target their entire audience or individual users. This technology is bridging the on-and offline worlds. It is also driving store traffic with time-and location-relevant marketing and personally engaging consumers in-store, nearby and at other relevant locations. The key to this technology is helping brands get smarter by capturing insights into their consumers’ behavior across your physical and web properties.
The growing used of mobile payment systems line Apple Pay and the use of augmented reality (AR) systems are also changing the buying experience. AR is a live direct- or indirect- view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. It is related to a more general concept called mediated reality, in which a view of reality is modified (possibly even diminished rather than augmented) by a computer as defined by Wikipedia.
The pace of change is unprecedented and the opportunities are also boundless. This is omnichannel. Let’s talk.