Gearing up the cosmetics & beauty industry for the post-COVID era

Christopher Lowe

Apr 27, 2020

In the past few astonishing weeks, we have seen major cosmetics brands adopting their production lines to support healthcare workers who brace the frontlines during the ongoing outbreak. In less than 72 hours, a Christian Dior hand sanitizer was born and distributed to European hospitals free of charge. Several leading brands like L’Oreal, Jo Malone, Estée Lauder Companies and LVMH, the luxury goods giant producing perfumes of Guerlain, Givenchy and Christian Dior, have volunteered to support the health care fighters.

It has been a tough period of adaptation for Cosmetics & Beauty industries where health and sanitization concerns of consumers surpassed every other need. And many people stocked up on essential products to tide over during the lockdown. The Cosmetics & Beauty industry has been witnessing a continuously rising trend in the number of sessions and revenue until now, according to Insider’s COVID-19 Live Benchmarks, a daily updated dashboard powered by the data of our 600+ global partners. Yet, these trends are expected to change gradually though, as people go outside more to fulfill their self-care needs and begin recovering from this stressful period by pampering themselves. 

There are several steps to take for marketers in the Cosmetics & Beauty industry to gear up their brands in critical times like these. Let’s dive into our insights and great tips to help you anticipate and address the needs of customers directly and act timely.

Table of Contents
  1. A Giant Leap Forward to Become Digital-First

  2. Immediate Steps

  3. Getting Ready for the Post-COVID World

  4. Before You Go

A Giant Leap Forward to Become Digital-First

The Cosmetics & Beauty industry has seen a sizable shift in customer’s buying patterns and methods. The online demand has been so great that UK cosmetic retailers observed 23% of their products going out of stock. The industry leaders are grossly unprepared—the top 20 Cosmetics & Beauty brands hold 90% market share in offline sales but have only 14% share in the online world (Nielsen’s “The Future of Beauty” Report).

The current trends are a clear indication in the direction of the future of beauty. As more people will shop for cosmetics products online and the basket will be skewed more towards skincare and hygiene segments than luxury, color & fragrance segments, there is great potential to be tapped in online channels.

With the near-future looking difficult for cosmetic players, it’s essential to keep businesses afloat and keep selling essential segment products. The luxury sales are expected to pick up as more people start engaging in smaller indulgences. Both require a giant leap forward to a digital-first world. Cosmetics & Beauty players primarily need to:

  • Invest in digital channels. It’s not a choice anymore. Capture the market share from digital-laggards, smaller competitors and high-street stores
  • Focus more on safe, reliable and medicinal products for the near future 
  • Be creative and innovative in the way you communicate with your customers and cater to their current needs

Read on to find out the immediate and longer-term steps Cosmetics & Beauty marketers can take to pivot based on continuously changing trends.

Immediate Steps

Cosmetics & Beauty industry has been shaken up to its core and the future is unpredictable. Understanding your customers, their current needs, improving experiences on digital channels and building loyalty will be key for Cosmetics & Beauty brands in the future.

1. Strengthen Your Online Presence & Engage Your Customers

It’s important to deliver helpful and convenient experiences across digital channels. See how Estee Lauder’s website lists different channel options available to their users: email, call, chat and text. This is particularly important if you are into selling essential products like sanitizers, face masks, skincare products, among others and to reach your customers where they are.

2. Communicate Policy Changes via Text Banners

Along with constant changes to government regulations, your business policies are also expected to change. This includes updates to delivery policies, payment policies and product availability. It’s important to inform your users about all these changes using smart banners visible on relevant pages.

3. Provide Discounts on Essential Products to Show Your Support 

If you have a few product lines that can be sold at a discounted price now is the time to offer discounts. This can go a long way in creating a lasting impression in the minds of customers and help you build loyalty. Watch out discount chasers to increase your revenue.

4. Build Trust and Promote Loyalty 

In these tough times, building trust and generating revenues from existing users makes more sense than spending your budget to seek new users. Incentivize your users to join your loyalty programs, which in turn can help you better understand your customers and tailor their shopping journey.

5.Listen to Your Customers to Keep Them Engaged

Understanding how your customers’ needs change during this time is critical. Use easy and quick survey tools to create interactive surveys and make use of this data to better serve your customers. Also run COVID-specific campaigns, for instance, check how L’oreal is giving a chance for its customers to express themselves with the #WomenOfWorth campaign.

Getting Ready for the Post-COVID World

While leveraging online channels will help you stay afloat, preparing for a post-COVID world gears you up for the long-run and requires innovative strategies. 

6. Educate Customers About Product Safety, Clean Ingredients & Environmental Sustainability

In the post-COVID world, buyers in general are expected to be more safety conscious. This will result in preferences for clean ingredients, environmentally sustainable brands, and safe products. Use appropriate badges and safety certification symbols wherever possible in your product listings to educate consumers and reassure them about the safety of your products.

7. Use AI-Powered Segmentation to Reach the Right Users at Their Preferred Channels

The demand for essential items will keep growing at least for some more time. Reach out to customers with such products on messaging and social channels where they are already active on: Facebook Messenger, WhatsApp, Instagram & Google Smart Shopping for example.

The experiences you deliver can only be as good as the data that powers them. Using advanced segmentation and effective AI-backed algorithms like interest clustering or likelihood to purchase can help you achieve higher engagement and conversions.

8. Win the Hearts of New Visitors to Turn Them into Loyal Fans

Insider’s industry-wise benchmark data shows that the online traffic to beauty websites have gone up by 7.4% since last week, while conversions have decreased by 12%. One major reason for this is that the new visitors may not be used to shopping cosmetics online. So it’s important to nudge and convert these users with hyper-personalized offers across channels to make them complete the purchase and later come back for more. 

9. Tell Your Stories Visually 

You can package existing products, share safety tips or promote top picks with Insider’s InStory. InStory provides a visually-rich experience to make them easily discoverable to your customers. Promote products like personal hygiene, skincare, sanitizers, PPEs, and more using highly-engaging personalized stories, just like you would see them on social media.

10. Announce Stock Clearance Sales

COVID has resulted in a tendency to stock up things in anticipation of future adversities. So it may be a good idea to run stock-clearance sales, especially for hygiene, sanitary and skincare products. Make use of manual merchandising feature from our Smart Recommender product to automate such campaigns.  

11. Drive Sales via Social Proof Messaging

Replicate the power of word of mouth in your online channels to help build trust and drive sales. Make use of ready to deploy social proof templates to quickly create customized social proof messages based on your product feeds. 

12. Leverage the Power of Product Discovery Tools 

Conventional product listings might work well on desktops but may not provide the ideal experience on mobile devices. Make use of mobile product discovery tools like Maven for helping users to discover the best products based on their needs and interests in a mobile-friendly format.  

13. Promote Your Mobile App With Smart Banners

If you already have a mobile app, then it’s high time to promote it. For a start, place a smart banner on your website prompting users to download and try your application from Google Play or Apple Store. A mobile app can also be the most suitable platform for running your rewards and loyalty programs. 

14. Recommend the Right Products to the Right Users

Use customer insights like previous purchases, behavioral data, cross-channel data, or 3rd party information to recommend the best products for your users. Insider’s Smart Recommender does exactly this with its advanced AI-backed recommendation engine and different algorithms like top-trending, most -purchased, most-viewed, location-specific or user-based recommendations.

15. Unleash the Power of Omnichannel Marketing

You can send customers notifications about back in stock information, new product launches, and various other events using app/web push notifications, email, or SMS messages. To deliver greater experiences you can use a customer journey mapping tool to create automated workflows for a seamless omnichannel experience

Before You Go

For Cosmetics & Beauty brands, COVID-19 might be a grim reality they are forced to face. Yet this crisis is a true opportunity for the top cosmetic players to disrupt their old ways and move online as soon as they can. Digital marketers in such companies should use the above strategies to endure the crisis and be prepared for a digital-first world. 

To learn more about how Insider can help your Cosmetics & Beauty brand grow, reach out to us and we’ll schedule a personalized demo with one of our digital growth experts.

Christopher has a long history of driving value and creating personalized, omnichannel journeys that enhance customer experience. He's passionate about learning and development and has a keen interest in developing economies, especially ones with a lot of room for digital growth.