Mark Stanlein is one of the Senior Advisors at Beyond Borders Consulting, with over 25 years’ experience of brand and business development in the beauty sector. In the current, competitive business climate, beauty and cosmetics brands are facing considerable retail challenges. Mark spoke with us about this, giving his views on what companies can do to stay relevant and engage with the 21st century shopper.
Why are beauty companies facing challenges in the 21st century?
I like to compare the market to an hourglass, with luxury brands in the top end and the mass market offering in the lower end. In the middle are the brands and products that “fight” for their survival and existence. The reason for being in that position is often the lack of a Unique Selling Point (USP) as well as the sheer volume of brands offering similar products. The key to determining the USP is for a company, to ask itself what its raison d’etre is. It is surprising how many companies there are, that have not done this, or cannot think of an answer straight away. The answer should be short – something that the company board, the retailer and the consumer alike can remember, understand and even relate to.
The next question that should be asked is how a company is differentiated from the competition – in other words, why would a consumer be attracted to its offering and what makes the difference?
On another level, part of the problem lies in brands thinking of themselves in a Business-to-Business way (B2B), when it comes to marketing. Today, when consumers have more choice and information than ever before, the focus should be on them rather than on B2B sales.
What could companies do to approach consumers directly?
The solution lies in designing a strategy that incorporates B2B sales as part of the greater consumer journey. Consumers today are certainly driven by price and quality, but not exclusively. Equally of importance are trust in the brand, services provided by the retailer, positioning of the products and consumer advantages (what’s in it for me?). In the Netherlands this year, three of the top-5 beauty retailers are middle to high-end and only two target the mass market.
How has this changed the way that consumers buy their products?
Online shopping has changed the consumer experience in many ways. In 2018, the retail beauty market in the Netherlands grew by 1.5%, while the online market grew with a staggering 30%. Furthermore, at least 40% of all products are sold on discount. These days though, purchasing beauty products, it is less about brand loyalty and more about “what’s in it for me?”. The high-end consumer in particular is likely to be receptible to customisation and individualisation, which implies that they are prepared to spend more, and underlines the shift from rational to emotional purchasing and connects to its core values.
Could retail be integrated with the online experience?
It definitely can. For retail to survive in the next decade, it will have to take into account that the consumer spends a lot of time online, comparing brands and products. This is where they will first encounter a brand / product and its values. Brands should work actively with their retailers to ensure that their values are being conveyed from the shop environment all-through the consumer experience.
Some shops are already doing this. One of the leading retailers in the Netherlands, Rituals, has adopted an OMNI-channel (multi) approach and uses its own stores, retailers, department stores and duty free. All of their stores and counters offer the consumer relaxation and peace. Another brand like Babor (professional cosmetics) partnered with Laundry Industry (fashion) and created their flagship store as a full consumer experience in Amsterdam. Partnering with non-competitive brands, who equally provide new potential consumers, is the way forward.
It is about consistent tools available for every single touchpoint for the consumer journey. They all should convey a similar message, whereas brand, products, retailer and consumer share values and communicate the same clear message.
What does the consumer journey typically look like?
Their journey typically starts online and continues when they go to the physical store. The exterior of the point of sales and the windows / decorations are extremely important and should fit with the perception that the consumer already has of the brand and its products. When they enter the point of sales, the sales staff has a crucial role to play. They should mix their retail values with the core values of the brand they are selling and thereby create a win-win situation for all.
Some shops offer their customers a complimentary cup of tea – something that helps them to relax and encourages them to browse the shelves. It is now that they enter the purchasing process, asking for advice and testing the products. Finally, when they pay for the product, they can be given additional services, promotions and gifts, which incentivises them to return.
Shopping is no longer only about buying a product, but about getting an entire experience. The shop must offer something, in addition to the physical product, that the consumer would not get online. To achieve this, the brand should consider pricing and product quality, which follows logically from the USP. After that, a full SWOT analysis, to create the right strategy with a balanced mix between B2B and B2C should be given some thought. It is important to remember the positive role that retailers have to play. By working with them, brands can ensure that they follow the consumer throughout his or her journey and create an emotional impact, where the fun element is fully used.
If you would benefit from a confidential discussion with Mark about Business Development in the beauty sector, you can contact us at firstname.lastname@example.org for more information.