VIEWPOINT Online beauty retail: Effective customer management techniques
By Christopher Kollat, Country Manager UK&I,
Marketing Applications, Teradata
Online has fundamentally transformed the beauty retail sector. From the thousands of beauty bloggers reviewing and sharing product insights through YouTube and their own sites, the internet has opened up a world of beauty product discussion and dialogue like never before.
It has similarly driven beauty product sales forward online. Recent years have seen an explosion in the number of online-only cosmetics retailers such as FeelUnique or LookFantastic, who are able to pass on significant savings to customers thanks to their lack of costly physical stores. However, their online-only presence does mean their businesses tend to suffer from high customer turnover. When an organisation is built around a discounted offer, and they have no physical footprint which can embed a brand in the eyes of a customer, it’s very easy for those customers to shop around. For most of these retailers email is the
best way to manage their relationships with the customer base. It’s a decision which makes perfect sense, facilitating direct click-throughs and, as DMA research attests, it is consumers’ favoured trusted channel for sharing their information. It would be a rare beauty shopper these days who doesn’t have an inbox filled with promotional discounts, payday exclusive offers or even limited summer collections vying for their attention. If you have previously shopped around, this doesn’t help to solve the issue of standout for those retailers looking to build a genuine, personalised relationship with their customers. Some brands have introduced subscription beauty box services as a means to allow their customers to indulge in regular new product trials and guarantee monthly revenue and a physical touchpoint for the retailer. However, the solution to inbox standout needn’t be so complicated. Short-term discounts are rife in this
space, even the sensitive ones which encourage shoppers to splurge as early as possible. Retailers of all stripes are
cottoning on to the ‘have you forgotten something?” dropped basket email reminder. Often an abandoned cart can serve as a trigger – and understanding why this has occurred is key to re-engagement and ultimately, sale. Equally, some in beauty are relatively sophisticated in reminding their shoppers when it’s likely their purchases may be running out, with a restock reminder. It’s important to remember that what most of these casual or regular shoppers will be looking for is a personalised experience. Email can be and often is a vital conversion tool. But for this to work, businesses need to know who a customer is and understand what they want from you. For beauty, data-driven
communications have the potential to quickly become very targeted and individualised. Many of these sites offer a range of products from makeup to skincare, haircare and electrical personal grooming tools. It’s a short skip and a jump from investigating customer purchase histories and preferences to creating fully bespoke messages, for example suggesting a new serum launch for someone who has bought dry skin products before. Mapping what a customer wants, being able to predict what they might want to trial in the future, and matching the promotion to the person can be incredibly powerful in driving sales. Tis goes beyond the birthday offer, or the Christmas sale – by linking purchase patterns to individual preferences, beauty retailers can be much more targeted in terms of knowing when a customer regularly buys every month, and match their communications accordingly. In a crowded and competitive
marketplace with low brand differentiation between online offerings beyond price and
brands selection, getting these customer relationships cemented is crucial. NPD research has found that prestige beauty brands in particular are flying off the shelves, both physical and virtual, so there are massive tangible gains there for the taking for retailers who get their strategies right. And yet these businesses face challenges which compound customer management issues - namely from consumers who switch seamlessly from mobile to tablet to PC on a regular basis. An IAB survey this year predicted health and beauty retail as potentially the second fastest growing sector for mobile purchases by 2019. Clearly, this is an area where online retailers can capitalise over traditional high street or department store players due to their core digital business expertise, but it also means they need to be able to connect their customer insights together from one channel to the next. Online health and beauty sales are
surging, and pure play digital players have the potential to truly benefit from the British shoppers’ demand for a full range of personal care products at affordable prices. However, to create true, long- term customer relationships, cracking an effective email communications programme is going to be vital. Discounts on their own are no longer enough to gain or retain customer attention and drive brand value. Customers need to be actively managed and looked after, by brands who regularly show a dedication to understanding their specific needs. A flexible and well maintained email programme here could be the key to encouraging repeat purchase again and again.
Direct Commerce |
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