Digitalization of the Beauty & Cosmetics Industry Part 1: The Digital Consumer
Sep 21, 2021 · 5 min read
Across a huge range of retail industries, digitalization – or the use of digital technology for doing business – has long been a buzzword. It’s a sink or swim question for most retail brands – they either get on board with digital innovation, or they get left behind.
And it’s no different in the beauty and cosmetics industry, especially in the pandemic/post-pandemic era. A comprehensive consumer survey, the PowerReviews Changing Face of the Beauty Shopper Study found that in 2020, nearly 50% of those surveyed said they bought beauty products online in 2020 – up from just 16% in 2019. Though a waning pandemic will surely bring some shoppers back to bricks and mortar stores, it’s safe to presume that many who’ve gotten used to doing their cosmetics shopping online will continue to do so.
What does this mean for emerging Beauty Brands? Here are some points to consider:
More and more beauty consumers are digital natives. More than 50% of the US population is under 40. That means that those old enough to buy cosmetics are millennials and members of Generation Z – or so-called digital natives. They were born into the era of digital technology and have never known anything else. Those over 40 are digital immigrants – meaning they came of age before the digital era, but adapted to it for work, communication, and entertainment.
- The takeaway: Beauty consumers are tech-savvy shoppers who are at ease with online shopping. And that trend is not going to change direction. As new consumers come of age and increase their buying power, they’ll be looking for and expecting smart, easy, and ample shopping opportunities online.
Social media matters. When deciding what cosmetic products to buy, a whopping 99% of consumers surveyed by PowerReviews said that they consider online reviews and ratings at least some of the time. They look at star ratings and the overall number of reviews, and also pay closer attention to reviews that include user-generated content, such as photos or videos posted by the customer writing the review.
- The takeaway: Beauty Brands of all sizes need to interact with their customers, especially post-purchase, and encourage them to post 5-star reviews, ideally with photos or video. Provide hashtags and links so that reviewers can share their posts and digital content on social media.
Influencers still have influence. Millennials and Gen Zers have grown up with social media influencers, and they pay attention to them when making purchasing decisions. The PowerReviews survey found that (74%) of Gen Z and 66% of Millennials’ beauty purchasing decisions are swayed by influencers. This is especially true among the market segment known as “beauty enthusiasts” – those cosmetic shoppers who are avid beauty fans and always on the lookout for new products and trends.
- The takeaway: It makes good business sense for brands to build relationships with established beauty influencers by sending samples and seeking collaborations. Especially if your Beauty Brand targets Gen Zers, your marketing budget should include influencer partnerships.
It’s Time to Digitize the Cosmetics Shopping Experience
Pandemic closures, coupled with safety measures that discourage in-store samples, try-ons, and makeovers mean that consumers need new ways to sample products before they buy. Plus, a digitally savvy customer base is hungry for new ways to sample and buy. Enter virtual technologies, which allows consumers to “try on” a product and, in some cases, have products custom-selected for their skin type or tastes.
Here are a few ways Beauty Brands are already using technology to enhance and personalize the cosmetic shopping experience:
In-store and online virtual try-on technology
Apps like Sephora Virtual Artist, which can be used from a computer, tablet, or smartphone, scan the user’s face and so they can try out different make-up, whether it’s lipstick, eyeliner, blush, or mascara. Diverse brands, and hundreds of color options are available, as are make-up tutorials customized to the individual user. And of course, the app lets you share your favorite looks on social media.
Augmented reality (AR) “magic mirrors” like those available from Modiface and YouCam by Perfect Corp. mimic the in-store makeover experience without the customer opening a tube, palette, or compact. This technology is also shaking up the world of beauty samples, and may eventually mean that brands no longer have to count samples among their marketing expenses.
Quizzes and personalization
Beauty service companies like Function of Beauty offer quiz functions to their customers, who answer questions about their hair, skin, and body type and product preferences. Based on their responses, users can order skincare and beauty products custom-made for their skin type. Beauty box subscription service Ipsy will take your quiz results and send you a customized “glam bag” every month.
For Indie Brands and start-up Beauty Brands, going all-in with AR and other virtual try-on technologies may be prohibitively expensive – at least at first. But these digital marketing tools should, at very least, be on your radar for future development. As you grow your brand with a healthy social media campaign, partner with influencers, attract followers, garner great reviews, and grow your customer base, it’s essential to keep in mind that the future of the beauty biz is digital, not analog.
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