The Evolution of Beauty: Five Steps to giving beauty customers what they want
Today’s beauty shopper has a plethora of choices for where to shop: online, by subscription, specialty, mass, department stores, etc. It can seem like an overwhelming and daunting task to begin to understand how to reach them when they have so many choices, and loyalty to a particular retailer seems to mean very little to shoppers these days. If retailers want to win in the beauty game, they need to understand not only who their shoppers are but also what drives them. Moreover, in today’s digital environment, the best place to look for this understanding is through customer data.
To begin to understand beauty shoppers, retailers should take a quick look at how this $445 billion industry came to be. In today’s beauty market, beauty specialty stores (i.e. Ulta, Sephora, and Bluemercury) have experienced amazing growth and loyalty in a space where it seems difficult to achieve either. In fact, between 2014 and 2016, spend in specialty stores grew from $53 billion to $65 billion. The reason these specialty stores have done so well is that they have mastered how to talk to Millennials and, to a certain extent, Gen X’ers, whose shopping patterns are a far cry from that of their mothers. Today’s beauty consumer wants a shopping trip that includes: an inviting space, knowledgeable staff, and a wide variety of products and services. Most float easily between on-and-offline shopping, so a seamless omnichannel experience is also key. Bottom line: if retailers want to create loyal beauty shoppers, they must create an all-encompassing experience that delights.
Nowadays, women have become more independent and self-aware, have more disposable income than ever, and will often overlook price if a more expensive offering better meets her needs. This leads to a low threshold for customers to switch to another retailer if they don’t find what they are looking for.
Some traditional retailers are beginning to take steps to create this atmosphere for their shoppers. Macy's, is one example. The 160 year-old department store is creating a new beauty experience where “beauty advisors” have the ability to consult across all brands and categories, the company said. The retailer is calling its new training platform, "Beauty Playground," which the company says ensures that these 'advisors' are always informed on the latest product and brand recommendations, tips, and influencer insights.” Knowing what shoppers want today is important, but how can retailers turn this into action?
Five Steps to giving beauty customers what they want
- 1. Understand your data. Beauty, as with any other retail segment, is about knowing what your shoppers want and activating against it. Most retailers sit on a wealth of information about their customers in the form of sales and customer data, so in order to begin to understand a buyer’s journey, a retailer must utilize this data through smart solutions to understand buying behaviors and patterns.
- 2. Look into broader industry trends. In order to gain a better understanding of the bigger picture, retailers need to look into broader industry trends that can affect how the beauty category may perform in store. Health and wellness is becoming a significant influencer in this space. In fact, as one report published by CB Insights indicates, “beauty retailers such as Sephora and Ulta distribute beauty-focused vitamins and supplements. Sephora, for example, [have begun to sell] products from brands like Hum Nutrition and Moon Juice.” Understanding the macro trends will help retailers stay in-step with consumers’ ever-changing preferences.
- 3. Curate a customer-centric assortment. It is not just about what information you have but how you use it. As previously mentioned, assortment is key within the beauty business, retailers must have the right assortment that speaks to their customers. Creating this customer-centric view can be challenging which is why it is all the more imperative that retailers have the tools in place to be able to utilize the data they have on hand to turn intelligent insights into actions.
- 4. Relevant content and channel is key. Intelligent solutions also play a large role in speaking to customers via their most relevant channel. Customers are more responsive to content and offers that are personalized and delivered via a channel that is most relevant to them, for some this could be direct mail, but for increasingly more, this shift has gone digital, specifically mobile. In fact, 86% of shoppers would find it beneficial to receive store offers or coupons on their mobile device while shopping in their favorite stores. When retailers get the right offer into the right hands at the right time, they will drive business into the stores.
- 5. Create an engaging and memorable experience. Creating a seamless experience in-store and online plays a huge role here. Customers today can seamlessly navigate between brick and mortar and online shopping experiences, and in an industry such as beauty, where many online only or subscription-based businesses are booming (BirchBox alone has over 1 million subscribers), traditional retail must do something in order to compete. The best way is to create an engaging and smooth transition between their online and in-store platforms, thus creating a memorable and enjoyable experience for their shoppers that will drive conversion and trips. Throw in a knowledgeable staff that can provide information about ingredients, ethical manufacturing practices, or beauty topics, and you have created the personal touch that is necessary in an industry where the customer has to feel like a ‘queen.’
With a $445 billion industry, beauty is one of the few retail sectors to grow and maintain a loyal shopper base. Gone are the days of department or drugstore options for shoppers, and in order to gain a loyal following, retailers must be able to speak to their customers. Retailers can utilize a variety of options to give their consumers what they want, but the best place to start is to look into their own data. When retailers utilize their data to speak to their shopper the way she wants to be spoken to and at the right time that is the beginning of a loyal shopper.