5 Min Read |
Peer to peer selling and multi-level marketing have been mainstays of the cosmetics industry as sales models for more than a century. Avon was one of first direct selling pioneers and Mary Kay has been using the multi-level marketing model since the 1960’s.
But while Avon and other pioneering brands have struggled over the last few years the concept of direct selling has made a comeback as incumbent and disruptive brands, leveraging the power of the omnipresent social media, have taken it to a new level.
The beauty industry has truly embraced social media and brands have recognised its importance for sales, raising brand awareness and for gathering insights into consumer preferences, marketing information and product formation.
Platforms like Facebook, Twitter, Snapchat and YouTube have become more than just communication channels but are powerful platforms for direct selling and encouraging others to join their companies as reps. Direct selling company Beautycounter, founded in 2013 by Greg Renfrew and beginning with just nine products, has over one thousand consultants. Each consultant receives a personal website that provides a promotional platform around which they are encouraged to build their business and inspire others to do the same. The consultant gets paid for their own sales but also a percentage of the sales by any new recruits.
A successful blog can grow to become a brand. Glossier, the e-commerce brand founded in 2014 by Emily Weiss, grew from her makeup blog, ’Into the Gloss’, and now has over 500 reps. While it has since opened in two locations, the New York Showroom and Glossier LA, it is still primarily an e-commerce brand backed by a dedicated customer service team, referred to in-house as the gTEAM. The founder is reticent about sales figures but divulges that as of August 2017 revenue are up year on year by 600 percent and the brand has tripled its active customer count over the previous 12 months.
Based on the number of followers, Industry rankings currently put Dove, L’Oreal and Nivea as the most popular beauty brands on Facebook.
Some big beauty brands have also made peer-to-peer a core part of their selling strategy. Younique (acquired by Coty in 2017) uses a multi-level marketing (MLM) model and claims to be the first direct sales company to market and sell exclusively through social media via their ‘Younique Virtual Parties’. There’s no longer a need for a party location as it’s all done on social media platforms. Younique Presenters, as they’re known, begin with a starter pack and also get their own personal website, complete with e-commerce store, and are encouraged to sell products themselves but also recruit others to do the same. A Rodan+Fields consultant is more likely to use Instagram and Facebook than make sales calls in person; posting before and after skin selfies to demonstrate the effectiveness of the products. Estee Lauder acquired the brand in 2003 and sold it back in 2007.
Retailers too are cashing in and social media has inevitably become a platform to drive sales. Sephora is among the top three when it comes to increasing brand performance using both face-to-face and social media conversations, according to ‘TotalSocial’ ranking of top personal care and beauty brands in the US based on social influence, compiled by Engagement Labs, for the six months ending April 2018.
“Our analysis really drives home the need for beauty brands to understand the importance of having a comprehensive view of social influence that embraces conversations as a powerful asset, regardless of where they take place,” – Ed Keller, CEO of Engagement Labs.
Most beauty brands have realised the marketing and advertising potential of social networks and advantages of using the visual medium and active user engagement to generate brand loyalty. Leading beauty and cosmetics brands on Twitter include MAC Cosmetics, Urban Decay, NYX and Benefit. Anastasia Beverly Hills is the second most popular brand on Instagram, followed by Sephora.
Start-up brands looking for a way to get a foot in the door of the beauty market are using social media to their advantage by adjusting their product launch schedule according to trends seen on social media or gaps that appear in the market when followers are looking for a certain product. Determining the correct timing is a key factor. Instagram has proved to be ideal for smaller brands who are taking advantage of their online communities by selling products via Instagram Shopping.
Brands have moved away from online influencer marketing as a simply a way to drive sales, when campaigns were usually one-off and heavily product-focused. Emerging beauty brands understand that they can no longer dictate how the consumer should look or feel but have recognised that their role is to empower the consumer to look and feel the way they want. Brands are realising that influencer marketing is not a quick fix solution but something that has to be built and nurtured over time. Building brand awareness, rather than short-term product sales, is now seen as the primary reason for enlisting the services of digital influencers. As brands have come to realise, the buyer journey can be more complex than previously thought and needs to be viewed in the longer term and as a result are moving towards long-term contracts with influencers and more collaborative projects.
Marketing companies like Tapinfluence and Upfluence now provide the technology to enable brands to source influencers that are most suitable for their brand or product campaign as well as providing the back-up software to manage every aspect of a collaboration with an influencer.
In the future we can expect to see more beauty brands adopt these models as well as developing new viral merchandising strategies.