This article was written by Pedro Gomes.
With worldwide revenues of 220 billion euros and 5% growth in 2019, the beauty and cosmetics market, like many other sectors, has not been spared the major upheavals of recent years. One of the most striking is digitalization. Even though the purchase of a beauty product often requires the use of the senses - sight, smell, touch - the cosmetics market integrates digital technology at all stages of the customer journey: research, advice, tests, sales, etc.
As far as the purchase phase is concerned, more and more consumers are using the Internet. In 2019, 14% of worldwide revenue was generated online, an increase of 27% over the previous year. Moreover, over the past few years, many pure players have emerged. But beyond e-commerce, social networks are proving to be real sources of business. Social selling, driven by the new shopping functionalities of the platforms as well as the explosion of influencers, has been growing for several years. And beauty is proving to be one of the key sectors for this trend.
In the current context marked by the Covid-19 pandemic and the closing of stores, web and mobile revenues should rise sharply. Hence the importance for brands and retailers to reinforce their digital presence: merchant sites, mobile applications, presence on social networks, community platforms, influence marketing, augmented reality, virtual diagnostics, etc.
Whatever the sector, the goal is still and always to capture customers wherever they are, by offering them an omnichannel, fluid, and seamless customer experience. Many brands and retailers have invested in digital transformation. Here is a selection of trends from around the world.
The rise of "phygitalization"
Bringing together the physical and the digital for a "phygital" experience. This has been one of the major trends set by cosmetic brands. Tactile terminal, digital shop windows, mobile applications, geolocation, e-booking, click-and-collect, etc. Initially, the goal is to create a bridge between e-commerce and the point of sale, while facilitating the in-store experience.
In Tokyo, a "handmade" cosmetics retailer has done away with labels in favor of a mobile application. Visitors scan each product - without packaging - for information, composition, and price. With its 24/7 online storefront, the company also offers passers-by the opportunity to scan the products projected on the screen and have them delivered to their homes.
Before pushing open the door of a prominent hair salon brand, consumers a chance to imagine their future look. From its mobile application, they fill in their profile - hair length, natural color, fringe, expectations, etc. - and then they can create a new look. Then they take photos of themselves to test different cuts and colors to find the style that suits them. Thanks to the geolocation feature, they then search for the nearest salon to achieve their new look.
Before extending its concept to other continents, a makeup company in the US is testing a new geotracking system via its mobile application. The objective: to bring consumers into the store. How do they do it? By offering discounts, new products, tutoring and beauty workshops directly from the app, as well as upcoming events in stores near users.
The importance of remote consulting
As we know, the notion of advice is essential in the purchase of cosmetic products. But rather than confining this role to the store, several brands have chosen to engage the conversation on digital spaces. Forum and community platforms, chat, social networks, and videos -- everything is good for supporting consumers in their choice, but also in the use of their products on a daily basis. In the current pandemic, when stores are forced to close their doors, remote advice is all the more crucial for brands.
In addition to the advice provided by in-store sales consultants, another beauty brand also supports its online customers through its "Act Beautiful" program. The French brand offers advice and beauty tutorials through articles and videos, and this space is also an opportunity for customers to share their favorite photos on the site or on the brand's social networks.
Another beauty brand is also relying on digital technology, especially social networks, to engage her community. On the brand's Instagram account, the saleswomen in the store regularly presents the latest product innovations. In a very interactive mode, they also offer the community the opportunity to ask their questions and have them answered. Video tutorials are also published there.
A makeup brand marketed to men also engages its customers on digital channels. The British brand offers advice in blog articles and also in video tutorials. It also relies on its community to promote makeup for men. In exchange for a video testimonial, each customer receives a free product.
Data at the service of tailor-made solutions
Today, data plays a predominant role in the beauty industry. It is no longer a question of selling a product on the shelf, but of offering a care and a product adapted to each person. Just like a consultation, a diagnosis is made based on the data collected: skin type, problems, allergies, texture preferences, perfume, etc. Many brands have entered the business of adapted or even custom-made products to take personalization as far as possible.
Through a meticulous questionnaire carried out by a chatbot - about twenty questions – one beauty brand can define the skin type of each user. From all the data provided, the American site establishes a precise diagnosis and advises a selection of products adapted to that type of skin and typical problems encountered. The user can then order the products directly from the site.
40,257 possible formulas. A French cosmetics brand uses advanced technology to create an ultra-personalized regiment adapted to each client, and relies on a million diagnoses and advanced technologies to define the formulation of a day or night cream, or even a tailor-made serum. The customer can carry out this diagnosis in-store via a virtual consultation, by telephone or on the website.
Another innovation in the beauty sector is "Playing the little chemist.” Perso is an intelligent device that, as its name suggests, creates personalized cosmetics - skincare and make-up. Presented at the last Consumer Electronics Show (CES) in Las Vegas, it allows users to design their own custom foundation, cream, or lipstick without going to a store. The dedicated mobile application not only scans the skin but also takes into account geolocation data. Once the analysis is completed, three cartridges inside the device create the custom-made shade. All that remains is to use the dose created.
The beauty sector is truly one of the markets that has evolved and invested in digital transformation in recent years. Even if the purchase of a cream or foundation normally requires seeing, feeling or touching, brands have succeeded in satisfying this need by innovating. They have also, above all, succeeded in creating bridges between the physical and digital experience to best capture the consumer’s needs and imagination.
About the author:
Pedro Gomes is the Senior Vice President of Business Development at Teleperformance, and joined the Group in 2007. With more than 20 years of experience in the CX management industry most of which as COO of Teleperformance's multilingual operations in Portugal, Pedro is passionate about helping organizations deliver a superior customer experience leveraged by high-tech solutions and the high-touch of human interactions.
He helps organizations rethink their customer experience management strategy within the complex mosaic of markets, cultures, and languages by deploying best practices from across the industry, always with the customer's needs in mind.