The beauty industry in America is one of the world's most competitive, with an overwhelming amount of cosmetic products ranging from moisturizing shampoo to mascara to lipstick. Selling to the beauty customer requires skills at once specific and universal, traditional and innovative. "I would say that [this is] a market that doesn't leave anything behind, but [it's] also an industry that's not afraid of trying new things," notes Kimberly Collins, vice president of Gartner Research. "The competitive nature puts [it] out there at the front edge."
The industry is also growing rapidly. In 2012, it increased by 6 percent, with e-commerce growing at nearly five times that rate, for a total of 29.1 percent. That growth put it ahead of the apparel, retailing, home care, and packaged food industries, according to a report released last year by Euromonitor International.
Like all brands, companies in the beauty category strive for relationships with customers. They rely on technology to find customers, engage with them, and even match them with specific products. More than most brands, those in the beauty category rely on passionate advocates to establish trust and authenticity. Testimonials and reviews play a huge part in wooing customers toward a specific brand. All brands can look to successful beauty companies for lessons about how to engage audiences in a competitive marketplace with highly engaged users. Read on to see how you can apply these tips to your organization.
Tip 1: Find Consumer Advocates
If you believe an engaged customer is a retained customer, then interacting with consumers and clients as often as they want makes sense. Not only does this improve brand loyalty, but the feedback you receive could also benefit the company and other customers.
To better understand their customers, beauty brands are turning to insight communities to shape product development, test advertising, and gain insights about their products. Women's magazine Allure formed its own insight community to poll its readers for editorial and advertising purposes. To do so, it turned to Vision Critical, a creator of such communities.
Allure introduced its insight community, called Beauty Enthusiasts, in 2007; it's now 35,000 members strong. When people join, they answer a detailed survey, providing demographic information and product needs, such as whether they feel they have dry hair or that their skin is aging. Brands can then offer samples to a specific segment of that audience. The feedback combines the precision of quantitative research with the qualitative results of focus groups, as people write their reactions to products in their own words. Some members' comments have appeared in Allure's ad copy.
Jennifer Friedman Perez, Allure's senior director of marketing intelligence, is careful to make sure the community is rewarded for the time they spend on the site. "For a community as large as ours, it's important to touch each one of them. We do that through newsletters, [letting them know] what we learned from different efforts, and providing that value to them. We have an email address they can use, and I answer [the emails] personally. They see that someone is listening to them, and there is someone behind the wall," she says.
"The most successful way to motivate these participants is to share with them," echoes Andrew Reid, president and founder of Vision Critical. When you show them "what you're doing with the research or [give them] a sneak peek...you earn trust." Consumers feel less like "lab rats" and more like "stakeholders," Reid adds.
Members of Allure's insight community can turn into even more passionate brand advocates by participating. "With millennials, co-creation is important," Friedman Perez states. "In some cases, we're sending products to them that aren't on the market yet. We give them access, and they don't even know what brand it is," since many are blind tested. "If they have a great experience, once they find out what the product is, they're more likely to buy it."
Tip 2: Highlight Social Media and Content Marketing
Recommendations are key to consumers choosing one brand over another, making it important for brands to weave the voices of experts and users into the shopping experience. Eighty-three percent of beauty and personal-care sites include space for user reviews, according to research by L2 Think Tank. On Sephora.com, consumers leave detailed, multiparagraph reviews about products. It's not unusual for a product to have hundreds of reviews. To channel this engagement, Sephora recently launched Beauty Board, a Pinterest/Instagram-like mini social network that enables users to upload selfies that are tagged with the products