Beauty contest

How can beauty brands attract consumers back into their physical stores?

Online growth in the beauty sector was expedited during the pandemic and has since been fuelled by the expansion of beauty offerings from online giants like Amazon and Tmall in China; the growth of direct-to-consumer players and selling through social media, as well as the digital sophistication of millennial and Gen Z consumers. The global beauty industry is predicted to grow by 6% in retail sales each year and record approximately $580 billion in retail sales by 2027, with e-ecommerce representing 26% of the beauty market in 2027 (McKinsey).

Omnichannel consumers purchase 70% more than offline-only consumers (McKinsey). Hence, brands have been looking for ways to re-engage with consumers to bring them back to their physical stores.

We look at five ways they have been doing this:

Omnichannel
Brands such as Glossier evolved from a purely e-commerce proposition to having permanent stores. Stores focus on creating memorable experiences that effectively tell the brand story through a unique and personal experience – prioritising the strengthening of the Glossier community rather than solely focusing on driving sales. With physical pop-ups and stores, omnichannel brands end up spending less on advertising than online-only D2C (direct-to-consumer) brands while achieving a significantly deeper connection with their target customers.

Although D2C brands saw success during the pandemic when use of online was at an all-time high, they now struggle with higher costs associated with acquiring new customers. Physical stores and pop-ups, often occupying space where rents have fallen, provide a compelling opportunity to better engage consumer.

Product launches
Product launches have also been a way to drive sales to physical stores. 69% of consumers want to try a new beauty product every six months (McKinsey), with physical spaces being the most appropriate medium to allow consumers to try, question and engage. Limited-time beauty pop-ups such as Beauty Pie’s (a direct-to-consumer brand) warehouse themed pop-up in Covent Garden, one of London's busiest tourist hotspots, generates a sense of excitement for target customers, allowing them to immerse themselves in the brand, sample, and purchase products.

Brand immersion
Some beauty brands seek to immerse consumers in their brand with new beauty spaces being built around their consumer’s schedules and lifestyles. Hersheson, a hair care brand, goes beyond the typical hair salon model in their two London salons, which offer a holistic lifestyle experience. Hersheson offers haircuts and beauty treatments like a typical salon, but also offers a café, co-working, and social space to make the Hersheson branding become a part of people’s lives.

Community
Beauty brands can also drive consumers to their physical stores by appealing to consumers’ desire for belonging to a community. In conjunction with International Women's Day, Aesop in Shanghai hosted a “Women’s Library” pop-up featuring curated books relating to feminism which visitors could take home for free. This event generated 708,000 views on Xiaohongshu (a Chinese social media platform).  Aesop also collaborated with Chinese personalities to launch a series of podcasts.

Phygital
The Tom Ford Beauty store in London blends technology and reality together with mirrors that record make up tutorials, virtual lipstick trialing, and an interactive perfume counter with vast LED screens. Taking it a step further, P&G Beauty’s BeautySphere is an online virtual storytelling world which allows visitors to interact with P&G Beauty's portfolio of brands through online livestream panels and simulated content. Though the Metaverse may seem gimmicky, it was effective in connecting consumers to P&G Beauty's brands, products, and value through a new engaging channel.

Beauty brands must consider how they can use their online and offline channels in synergy to drive consumer growth and loyalty. There are a multitude of ways that brands can engage with customers offline such as community building concepts and brand immersion through a lifestyle angle to create exciting experiences while driving brand loyalty and awareness online. Technology is an avenue to drive consumers to stores as it can introduce a new element of interactivity while providing a personalised experience. And while brick-and-mortar stores will always be key to the beauty industry, experimenting with virtual spaces will be vital to capturing consumers through new and innovative ways, while growing brand presence online. Ultimately, beauty brands need to strike a balance between online and offline to be successful.

Hui Wen Lim