For the beauty business, 2018 was a perfect 10. Brands both big (such as L’Oreal and Olay) and little reported meteoric sales growth, continuing the trend in 2017. Newer names such as Fenty Beauty, Kylie Cosmetics and Glossier captured headlines and caught fire on social networking, riding a wave of attention from younger shoppers. Now everyone wants a little of the action, with firms across industries scrambling to enter the beauty category. So what is the biggest challenge in this bustling realm?
Omnichannel retail, naturally.
We thought this word was retired from overuse (such as a sweater you have loved to death), but it is having another life. Omnichannel retail is currently a full-blown necessity: based on market research from Glossy, in 2019 that a substantial number of digitally native DTC beauty manufacturers plan to sell through wholesale retailers as part of an omnichannel approach.
Sephora sets the omnichannel retail pub high
Sephora is a prime example of the omnichannel push in actions. Merging in-store tech with internet capabilities and a revamped, customer-focused in-store experience, the brand is capturing shoppers’ attention from every angle.
“We want to be where our customers are, and they’re on their telephones for all kinds of applications, including learning and purchasing,” said Mary Beth Laughton, senior vice president of electronic at Sephora. “She does not need to choose between a Sephora store or mobile, both complement each other and each of the tools we have built support that concept.”
Sephora began laying the foundation for an omnichannel approach years ago — by some estimates, the plan even helped the company survive the retail apocalypse. However, not all brands are after in Sephora’s slow but steady omnichannel footsteps.
Know thy customer
Consider how Glossier is making their move. Launched in 2014, Glossier’ millennial-pink colour scheme and devotion to minimalism captured shoppers’ attention from the beginning — as a direct-to-consumer, e-commerce-only brand, they lost out on possible in-store earnings. No more, though: in 2018, Glossier opened its flagship store in NYC. The new physical retail store was made to bring the brand’s online character to life, creating a seamless digital to in-store transition. Each corner of the shop is Instagrammable, from the lavish, colorful sofas and sculptural display cases into the mirror room filled with epic Glossier makeup tubes.
Glossier might have moved offline, but their attention remains on e-commerce sales. So why the flagship? Company CEO Emily Weiss sees the brick-and-mortar movement as a crucial opportunity to provide the brand’s loyal fans an unforgettable experience.
“When you are in this transactional time — a period of Amazon having engineers working on cross-selling and upselling and better and better algorithms for you to buy things –it is really important to create spaces and experiences which help you sense things,” said Weiss, who likens the shop to an”adult Disneyland.”
Other manufacturers may not have this profound insight to mirror Glossier’s success.
Not all omnichannel retail is made equal
“A seamless omnichannel experience is not only about being frictionless, but it is also understanding the customer better and delivering an experience that is suitable for her every moment,” states Stephanie Wissink, an equity analyst for Jefferies.
While many businesses across industries look to dive right into beauty, they will have to look at how to provide a multi-channel experience that is not just interesting — it has to be ultra personalized into the brand’s unique audience. Plus, brands will have to make certain to disseminate their plans across all their offerings and products.
Take CoverGirl. Last year, the attractiveness manufacturer launched its first direct-to-consumer shop in NYC. The store is high-tech and slick, offering AI-powered assistants and virtual try-on mirrors. The move is only one part of CoverGirl’s wider rebranding strategy —they have changed their packaging and message, as well. Based on Ukonwa Ojo, senior vice president of CoverGirl, the changes are part of an attempt to create CoverGirl about more than just cosmetics. “We hope to ignite a provocative dialogue that changes cultural assumptions about when, where, why and how folks wear makeup,” said Ojo.
That is interesting, but might be somewhat confusing to their current core customer that has been sporting Cover Girl makeup for ages. And the end result is a far cry from Glossier’s fairyland escape. Does the space provide an omnichannel encounter with advanced shopping technology? Sure. However, is it on-brand? Not always — to our attention, it has not become a must-visit place, or captured as much media policy as Glossier earned. Glossier is leveraging physical retail to amplify their established online branding in a seamless and frictionless way. Cover Girl, on the other hand, is bucking present brand perceptions with a new flagship store that assesses new products and new positioning. Up to now, the former approach appears to be getting better grip in the beauty market.
As we go into 2019, omnichannel will continue to dominate beauty retailers’ strategies. It’s apparent that tech alone is not sufficient to deliver a triumph for a brand. Clients also yearn for a shopping encounter that goes beyond touching a keyboard or display. They also want the chance for hands-on, sensory embracing, shareable, unforgettable in-store shopper minutes ®.