The release of beauty companies’ 2015 results and their outlooks for 2016 all highlight the increasing importance of digital activities and how new initiatives are becoming more driven by the alignment of industry trends and technology. While “digital” has been a loud buzzword in beauty in recent years and it has seen a myriad of new apps and marketing and sales platforms being launched, going forward, companies need to combine digital initiatives with industry drivers and to measure their impact and value. Euromonitor International’s Beauty Survey on purchase influencers evaluates the growing significance of digital platforms and identifies the trends giving directions for new developments. For 2016 there are two key areas beauty companies need to target with their digital investments: the continuing shift towards personalised, health-orientated beauty and the growing impact of niche brands.
Select Purchase Influencers in Beauty Categories – 2015
Source: Euromonitor International Beauty Survey
Smart skin care on the rise, driven by personalisation and interactivity
The strongest digital influence has been measured in colour cosmetics in 2015 as new imaging technologies can provide the opportunity to access many different looks without making a purchase before finding the most suitable products. It also allows the industry to reach out to a greater number of consumers in a shorter period of time and with less investment.
However, it is expected that digital app innovations will become more aligned with healthy beauty trends. In 2015, OKU skin care coach was launched to monitor skin health and track recommendations, routines and products. OKU is claimed to come with a uniquely designed light source that illuminates skin, to offer deeper layer health analysis as well as take lifestyle and life-stage factors into account.
Most recently, UK company Aurelia Probiotic Skincare created a digital consultation tool with the aim of benefiting from the continuing demand for bespoke skin care combined with lifestyle coaching.
Product placement in skin analysis and skin coaching apps can be a powerful sales tool. For example, the skin care app voted number one in the US in 2015 was MySkin, providing recommendations from 160,000+ skin care products best suited to the app users’ skin.
Smart skin care does not end with skin analysis apps, it has already been taken further into the wearable technologies space. For example, L’Oréal has announced the launch of the My UV Skin Patch for the summer of 2016 to better protect against sun damage. The patch will be launched under the La Roche Posay brand and it uses a sensor to help consumers to measure their exposure to UV radiation and it helps to adopt the right sun protection based on skin type.
Although virtual try-on and imaging apps will continue to be popular through 2016 and beyond, the apps landscape is moving towards more personalised, connected and interactive features, measuring results and efficacy more accurately.
Niche brands’ successes anchored to innovative digital strategies
When it comes to niche beauty brands the demand for digital content has never been greater and it has never been as accessible for consumers. Niche brands’ strategies stand out for their more experimental and story-driven positioning to reach new audiences and to build two-way conversations that drive sales, engagement and brand awareness; in addition to helping brands differentiate themselves from competitors.
For example, Anastasia Beverly Hills was the most-liked beauty brand on Instagram in 2015 with 7.5 million followers (the beauty industry average is 1.4 million followers). The brand was an early adopter on the platform and it continues to post daily at least once every three hours. This strategy has been particularly effective in using Instagram to expand consumer awareness and retailers’ interest beyond its core brow category and into contouring and lip products. The brand’s rapid growth in popularity and revenue is strongly driven by its intense digital strategy.
Niche brands have been generating great interest in the beauty industry both in terms of innovations and acquisition targets – and this trend will likely to continue. Most major beauty players have recently bought niche brands with focused specialities, such as the GlamGlow face masks range becoming part of Estée Lauder Cos and Unilever gaining a foothold in dermatologist-endorsed beauty space through the integration of Murad and Kate Somerville – all of these brands have built a substantial digital footprint, generating brand awareness, development ideas and new sales platforms. For example, Kate Somerville runs its “Share your glow” campaign on its sites, prompting product users to tag #KateSomerville in their most radiant shots and featured on the brand’s websites, resulting in a consumer-generated content that is varied, credible and very cost efficient for the brand.
The growing interest in niche brands in beauty is strongly enhanced by the brands’ successful digital strategies and this is an opportunity industry players need to exploit both by matching their digital innovation activities or identifying key brands for acquisition purposes.
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