Sandy Skrovan is an industry research director at Profitero. Views are the author's own.
E-commerce was already on a path of acceleration for beauty and personal care brands, but COVID-19 has sent it into overdrive. Nielsen data shows that health and beauty care e-commerce sales were up 32% in March/April 2020 versus the same period last year. According to a Common Thread survey, 42% of women buy beauty products online — a figure that undoubtedly has swelled during the pandemic.
This rapid shift to digital, coupled with an increasing channel lineup (Amazon, Ulta, direct-to-consumer sites, online-to-store pickup etc.), means it is more critical than ever for brands to double down on e-commerce.
Here are five growth principles every beauty brand can apply to win online, drawn from Profitero's Amazon playbook for beauty brands.
1. Ubiquity is a necessity, not a nice to have
The days of retailer loyalty are over. Consumers are shopping everywhere to meet their beauty and personal care needs, fluidly switching between online and offline modes of shopping. This means your brands need to be visible everywhere and consistent everywhere. If you are not showing up on page one of retailer website search results, you are losing significant sales and brand awareness.
Actions for brands to take:
- Maximize your share of page one for the top-searched keywords
- Maintain the same brand consistency across all websites through regular content audits
- Ensure your product is in stock and available to buy
2. Get good at managing channel conflict
Retailer price-matching algorithms are creating a race-to-the-bottom dynamic that destroys margins and brand equity for premium brands. It's no longer enough for brand managers to focus on brand building, they also have to be focused on brand protection by constantly monitoring online price activity and threats from third-party (3P) marketplace sellers.
ASP: average selling price
Actions for brands to take:
- Set up monitoring systems to see how your products' pricing is tracking
- Keep an eye on marketplace resellers
- Protect margins by varying your pack configurations or even offering different SKUs for different retailers
3. Sharpen your 'Spidey Senses'
As COVID-19 has shown, consumer trends can change overnight, making some beauty and personal care products more relevant than others. Winning brands detect consumer demand changes early using leading indicators like search traffic and are quick to adapt their marketing and innovation strategies to seize opportunities.
Actions for brands to take:
- Watch changing demand signals (such as search traffic) closely
- Ensure your content is optimized for the keywords that are being searched for
- Sponsor trending keywords
4. Treat product pages as the new beauty counter
The days of walking into Macy's to seek beauty consultation from someone behind the counter are effectively over. Instead, consumers want authentic feedback, in the form of product reviews, from those who have used the product. Profitero's research has found that doubling your count of consumer reviews online increases page traffic by 73%.
Actions for brands to take:
- Increase your review count and recycle the good reviews you are getting
- Don't stop at reviews, enhance your product content too
- Benchmark your review count against top sellers in the category
5. Respect the threat posed by Amazon's private labels
Amazon has tripled its number of private label products since 2018, and now offers beauty and personal care products under three of its own brands: Belei, Solimo and Find in the U.K. To counter this threat, national brands will need to rely on innovation, digital brand-building and excellent execution at the digital shelf.
Actions for brands to take:
- Drive stickiness by ensuring your products are eligible for programs like Amazon's Subscribe and Save
- Include private label brands in your daily and weekly auditing of brands appearing on page one of keyword search results
- Double down on digital brand-building and digital shelf execution
Is your e-commerce strategy in need of a makeover?
Without question, beauty and personal brands are facing incredible digital transformation. Never has it been more critical for beauty brands to double down on e-commerce initiatives. So be sure to formulate an e-commerce strategy that helps you effectively funnel shoppers down the buyer's journey. Brands following some of the principles spotlighted above should expect to see outsized growth relative to their peers.
via https://ift.tt/2Jn9P8X by Sandy Skrovan, Khareem Sudlow
