The beauty industry has undergone a much-needed disruption over the last five years. A new demographic of buyers have emerged, and their shopping habits are vastly different from anything we have seen before. The days of visiting a beauty counter at a mall or physical store are long gone, and print and TV advertisements are no longer driving sales like they used to. We are now in a digital-centric age where social media, e-commerce, and progressive technology reign supreme. A two-way conversation has been opened up between brands and consumers, and those who put their customers at the heart of their products will be the ones who succeed. The emergence of new technologies has enabled seamless access for consumers to stay on top of the latest trends and access interactive virtual shopping experiences, new products, and content at the click of a finger.
For decades, consumers sought out the newest products and trends in beauty while embracing the stories behind brands and enjoying the physical shopping experience that tied it together. However, the rise of social media has arguably been one of the driving forces of the digital disruption of beauty. Not only has it altered how brands connect with consumers, but it has facilitated an entirely new business model. Social platforms including Instagram, YouTube, and TikTok have become essential marketing channels, interactive channels, and sales channels in their own right as consumers are able to interact and purchase on their terms. Prior to this digital age, beauty brands were considered the authority on new formulas, products, and trends, but there has been a complete 180 as consumers are now in the driver’s seat and are shaping the future of the beauty industry.
As millennials and Gen Z are rapidly rising to become the largest demographic of consumers, brands have had to alter strategies to accommodate their purchasing decisions and invest in programs that foster relationships to consolidate their loyalty. These consumers are looking for a fully immersive and interactive experience, so instead of it being a one-time transaction, the brand becomes integrated into their lifestyle.
With millions of followers on social channels, brands including L’Oreal, Huda Beauty, and Fenty have allocated huge budgets to spend on digital. L’Oreal recently declared themselves a “Digital First” company and focused on initiatives including building their ‘Beauty Squad’ campaign featuring influencers creating content for beauty tips and tricks on their own platforms and L’Oreal’s. Rihanna’s Fenty Beauty exemplified the power of social media in building a brand as their inclusivity philosophy led them to develop a foundation for all skin tones with testimonials from influencers, models, and everyday consumers. The genius marketing move brought them 1.4 million Instagram followers in four days and an unprecedented revenue of $100 million in 40 days.
Influencer marketing is undoubtedly one of the most lucrative marketing strategies at present. According to the British Beauty Council, for every $1 spent on influencer marketing, brands secured a return on investment of around $11.45, while Harvard Business School reported that global spending on influencer marketing has risen from an estimated $2 billion in 2017 to $8 billion in 2019 and is expected to leap to $15 billion by 2022. But when it comes to the success of influencer marketing, there is arguably no greater force than Kylie Jenner with her company, Kylie Cosmetics. Through capitalizing upon her fame and exposure through her family’s reality show Keeping Up With The Kardashians, Kylie became one of the most famous teenagers on the planet. With a fan base totaling over 100 million, she leveraged a huge platform and transformed her passion into an empire.
Jenner created a product for her own demographic and started with a limited run of ‘lip kits’ that sold out within minutes. Stretching the boundaries on consumer engagement, Jenner leveraged all social media channels to promote and market her brand, which generated $200 million in annual sales and is now a full-service, direct-to-consumer beauty brand.
It is clear that the online experience is eclipsing the in-store experience as brands are finding new ways to tap into the imagination of consumers. One of the more advanced programs being utilized by companies is VR and AR technology. Major industry players including Estée Lauder and Mac Cosmetics have adopted the technology for virtual try-ons of their products, eliminating the need to visit a physical space, and unhygienic testers that do not align with health guidelines in 2021. Other brands including Lancôme have gone for a more immersive approach to VR through the adoption of virtual stores.
Through creating a shoppable environment, customers were taken on a mesmerizing journey through an exact replica of the beauty giants’ Paris flagship with the highest levels of photorealism, making them feel like they were physically there. The inclusion of virtual assistants, live panels from beauty experts, and interactive games embedded within the program gave consumers the opportunity to engage with the brand on an entirely different level before making a purchase directly on the platform. The virtual environments provide a curated experience that caters to the new age of consumer and provides them with round- the-clock availability. For brands, the virtual stores reduce overall expenditure, increase conversion rates and brand value and loyalty, positioning them as the future of e-commerce.
The digital transformation of beauty will continue to grow rapidly as millennials, and Gen Z become the next crop of consumers. In this age, innovation, value, and quality are integral components for influencing consumer transactions, and brands must accommodate this mindset or succumb to their business falling behind. While embracing technology is important, first and foremost, brands must uphold their values and their consumers’ expectations.
Want to learn more about ByondXR? Have questions or suggestions in regards to the article’s topic?
Scroll down and send us your questions!