Disruptive technologies are changing the way consumers discover, experience and purchase beauty products. Not so long ago, the gold standard for beauty brands was to deliver a great product. But in 2020, brands will be expected to go much further, to stand for something way beyond their products and connect with customers in new and innovative ways.
As the purchasing journey and the immersion of product experience goes more and more digital, they need to be more impactful, so there is a growing need to use product information tools to get new and existing products into the market across all channels quickly.
Beauty brands are now venturing beyond websites to create seamless, personal engagements with customers. The traditional retail routes are being left behind, though as we’ll see, consumers still prefer to buy products in-store.
There is also greater demand for insight into what beauty products are made of — especially as the link between specific cosmetic ingredients and health issues becomes more apparent.
For beauty product manufacturers, this means handling the pressures regarding transparency, sustainability, and dealing with a more complex selling environment with the mix of online and offline sales, influencer and social media activity.
Changing Customer Behaviour Due To Online Penetration
In a recent survey, market research company Ipsos, found that beauty brands see e-commerce, digitally-enhanced in-store and virtual try-on apps as the wave of the future. A sizable percentage of beauty customers said they would not buy any beauty product that they had only tried-on virtually. The need to touch and hold a product before buying gives brands in physical retail the edge in introducing new products.
But e-commerce brands are fighting back. They can overcome some consumers’ resistance by offering a free sample to test first and an easy return policy. In addition, if e-commerce beauty brands offer cheaper prices online, they stand a good chance to get hesitant customers to give the product a try.
Attributes such as natural, clean and sustainable are typical features that attract buyers to new brands. Consumers’ preference for brands they know and trust poses challenges for new beauty brands to breakthrough. So new players in the market are having to offer something really new and different to pull people away from what they are using now.
Getting Product Information To The ‘Front Line’
According to McKinsey a major part of the value proposition of Omni-channel beauty retailers and online-only beauty sites is access to different brands, including new ones, and the ability to interact with a community larger than a friend or two in front of a mirror.
Brands are choosing different strategies to get products in-front of customers. Companies like Sephora and Ulta Beauty encourage people to try products in a fun, unintimidating environment that allows them to experiment across a wide range of different brands. The practice encourages exploration—a significant change from the past, when people tended to stick to the brands they know.
Tech is also aiming to do the work for consumers who don’t have the savvy or patience to sit and read cosmetic labels. Consumer-facing ingredient apps and B2B ingredient intelligence platforms are emerging to educate consumers and provide data to brands and retailers on cosmetic ingredients.
Beyond mobile, connected packaging could also play a bigger role in promoting ingredient transparency through digital content, packaging and tutorials. E-commerce sellers are moving to create more trust in their brands and a better product experience.
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The Omni-Channel Product Information Challenge
At the heart of their success lies the ability to bring accurate, consistent product attribute information to each point of contact in the omnichannel buying journey, managing enormous amounts of data at speed. Ulta for instance offers more than 20,000+ products from over 500+ well-established and emerging beauty brands across all categories and price points, including the client’s own private label and they have over 300 stockists. They have deployed a Product Information Management system (PIM) which allows them to automate time consuming manual processes of product on boarding, bringing down the time to market and reducing inconsistencies in data and lost sales.
The surge of smartphone usage and tech savvy tendencies of Millennials and GenZ age groups has meant that the trust factor in buying beauty products and brands has quickly moved online. New technologies, such as augmented-reality apps, allow consumers to upload selfies and then to experiment digitally with different products. The truly daring can upload pictures and ask others to “like” (or not) the result. Whole product catalogues and attributes can be made available via AR, E-Commerce and PIMs working together in examples such as Sales Layer and Dypsela. Augmented reality brings back the digital shopping experience of feeling the product first hand, even if it is virtual. Observing objects in augmented reality causes a response that photographs or videos do not, this is how ecommerce will bring experience closer to real-life, in-store shopping.
As a result there are a plethora of new innovations that are emerging using AR apps in order to trial products virtually such as “e-make up” artists enabling downloads of outlandish make-up to enhance your digital self. The goal is to make photos and videos more shareable online as the market becomes more personal and immersible.
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The Drive For Differentiation, Partnerships And The Move Into Marketplaces
While alternative retailers may create more convenience for beauty shoppers, over-distribution is also heating up competition within beauty retail therefore it is becoming important of differentiation between retailers and brands.
Both strenuously look for the next platform to get their products information in-front of their respective customer targets. They must curate assortments that resonate with consumers, while brands must be focused about which retailers — or individuals — they choose to partner with.
For example Influencer-launched beauty brands can offer retailers a competitive advantage. For instance, new brands like Haus Labs by Lady Gaga and Pattern Beauty by Tracee Ellis Ross have launched exclusively with retailers Amazon and Ulta respectively.
Meanwhile beauty brands from Too Faced to Eos have partnered with Gen-Z-popular platform TikTok, as platform stars increase their following and influence over younger consumers.
Simultaneously, the beauty industry is looking towards tech to provide an edge in an increasingly crowded market. Products now appear on marketplaces like Amazon, Google or Instagram.
Instagram, for instance, has played a major role in creating entirely social, digitally native brands across all consumer categories. It is inherently visual, based on peer recommendations, and has a relatively low barrier to entry.
Engaging The Consumer
Whether the product is lipstick or face cream, it is essential to engage consumers with the right, accurate product information. That means deploying a ‘product experience’ to immerse customers in an increasingly immersive and personal way.
As further disruption occurs throughout the industry, more and more innovation is needed to get customers in front of new products, so more and more product data is needed to improve the brand and the experience for the customer.
Product Experience and the tools to exploit it will continue to be at the forefront of the Beauty Industry to provide the best product assortments, ingredient information and opportunities to further brand engagement and profits through all online and offline channels.
About the Author: Having worked in Tech and Marketing with many international companies for over 20 years Mike Owens has built up a strong interest and now writes on how advanced and exciting technologies are impacting marketing and business practices in markets through digital transformation.