A recent headline in Vogue Business declared “the U.S. cosmetics boom is over.” That prediction may be a bit too critical, but there’s no doubt the industry is on the cusp of a major change.
For one, today’s beauty buyers aren’t just interested in new trends, they’re actually incorporating them into their beauty regimen. Consumers are looking for natural skincare routines and a less-is-more approach to cosmetics, a trend pioneered by millennials and Gen Z. But this focus isn’t limited to younger consumers; clean beauty resonates with mature buyers, as well.
Product preferences aren’t the only change. Direct-to-consumer (DTC) brands are bringing retail disruption, affecting everything from apparel to pet food. No beauty brand is safe from DTC competition; about a third of retail consumers plan to make 40% of their purchases from DTC brands over the next five years and over 80% say they’ll make at least one DTC purchase in the same timeframe.
At the same time, nimble niche brands are cashing in on consumers’ desires for a more authentic and personal brand experience.
To stay relevant—and drive sales—beauty brands need a way to cut through the clutter and have meaningful, personalized conversations with their customers.
But how can they actually make this happen? For starters, they need to work on filling the major gaps in their customer data.
Learn more: Bridging the data gap: Solutions for beauty brands to bolster engagement
Symptoms of the data gap
Because they have access to high-quality first-party data, they have deep visibility into their customers—who they are, what they like, how and when they buy—retailers and DTC brands can cultivate relationships with their customers with individual personalization.
This first-party data gives DTCs and retailers a huge leg up when it comes to personalized marketing. Personalization is no longer optional for beauty brand marketing; 65% of consumers are more likely to buy from a brand that knows their history and recommends relevant products. DTC brands know how to leverage personalization—and it’s working for them; during the 2019 holiday season, 67% upped their personalization budgets, as did 58% of retail brands.
Beauty brands are at a distinct data disadvantage. In most cases, they don’t sell directly to their customers, they don’t own their consumer and transactional data, and partner retailers keep their data close to their vest. Without that information, you’re essentially in the dark when it comes to understanding who your customers are. So how do you bridge that data gap?
Finding, using and activating the right data
Beauty brands need to have personalized, persistent conversations with their customers and prospects throughout their online journey, across all their devices. That sounds like an overwhelming mandate, but if you can’t identify who you should be talking to and what devices you should be talking to them through, everything else is irrelevant.
Activating your data is the first step toward creating these conversations. Most beauty brands don’t have a lot of first-party data, unless they sell directly through an e-commerce platform. However, even with first-party data, many brands lack the online and offline behavioral insights on the consumers who buy products from a retailer and may not have the data needed to power true personalized marketing.
That’s where syndicated retailer data comes in.
Epsilon saw an opportunity to bridge the data gap beauty brands and retailers with digital marketing in a way that benefits both parties, through our retailer media solutions.
These solutions are great for shopper marketing initiatives to help drive customers to a specific retailer, like Ulta. With this rich, first-party data, marketers can serve relevant ads based on buyers’ past purchases and browsing behavior, driving them to the retailer that makes the most sense.
By building custom audiences of individuals who have bought online or in-store in the past 30 days, or have recently searched for your brand, you can deliver the type of gold standard, one-to-one messaging DTCs and retailers have thrived on. And when it’s all said and done, you will tie advertising dollars directly to online and offline purchases through closed-loop measurement.
Retailer media solutions give beauty brands the ability to communicate effectively and persistently with personalized messaging across all channels and devices, increasing brand sales and driving the right customers to partner retail stores.
Ardell is the leading brand in the false lash and adhesives category with 50,000 doors of distribution in the U.S. market. With long-standing B2B relationships, Ardell’s digital marketing primarily supports its brick and mortar sales efforts.
The company participates in partner retailer marketing efforts such as loyalty clubs and in-store promotions, but accurately measuring ROI for these programs has always been a challenge. They have little control over the messaging because the customer’s direct relationship is with the retailers, not the Ardell brand. Marwan Zreik, Ardell’s VP of marketing, concurred: “When brands support retail marketing initiatives, we have minimal opportunities to control the message to a specific consumer. We are very dependent on the relationship the retailer has built with the shopper that is going in and buying our products.”
Ardell worked with Epsilon’s retailer media solutions to create a campaign supporting sales at their two largest retailer partners. They were able to target customers who had purchased an Ardell product at these two chains in the past 30 to 60 days and those who had browsed for a particular product—down to the SKU—or ordered a product online. They set a baseline goal of 5:1 return on ad spend (ROAS) for the two-month campaign.
At the end of the campaign, over 48,000 shoppers converted at the brand level and made an Ardell purchase. The company also discovered that 95% of those conversions occurred in a partner retailer’s brick and mortar store. Ardell achieved a 20% lift in sales at the two stores targeted in the campaign. “Look, at the end of the day we are omnichannel… but it’s nice to see a digital effort result in a specific, trackable and measurable in-store purchase,” Marwan said.
That 5:1 ROAS goal? In his words: “We blew it out of the water.”
If you’d like to know the whole story behind Ardell’s campaign, we recorded a webinar with all the details. You’ll learn how the company leveraged our solution to increase sales and gain valuable customer insights to guide their future marketing strategies—and how you can use similar solutions to grow your brand.