Building Beauty Brand Tactics

Building Beauty Brand Tactics

Beauty is continuing to expand online. Sephora and Amazon both expanded skincare offerings by releasing new private-label products this year. Meanwhile, Kylie Cosmetics began selling its line through Ulta, helping to reach a new market for Kylie and contribute to strong Q1 growth for Ulta.

As leading brands and retailers get more inventive in a constantly evolving market, what can existing brands, like L’Oreal and Estee Lauder, do to compete and stay relevant?

1. Target Engaged Audiences

Brands can further engage with new and existing audiences through their retail partnerships. If brands are targeting specific demographics or geographic regions, they should assess the profile characteristics of the retailer’s exclusive shoppers.

Sephora’s exclusive audience, those who shopped at Sephora and not Ulta, is most likely to be young & female. In fact, females 18-24 years old are 51% more likely to only shop at Sephora. Meanwhile, women 55-64 years old are 20% more likely to be exclusive Ulta shoppers.

US Beauty: Ulta vs. Sephora
Source: Hitwise, US. 

The largest group of Ulta’s exclusive shoppers are in Chicago while Sephora’s are in New York. 11% more of Ulta’s exclusive shoppers are shopping on their mobile device than Sephora’s exclusive audience. 

Leveraging these insights can help brands determine the best retail partner for targeting new audiences or engaging further with existing ones.

2. Optimize Retailer Mix

Once a brand knows which retailers can help in targeting efforts, they need to determine the optimal channel mix.

40% of consumers searching for “estee lauder” ended up on Estee Lauder’s site, but 10% end up on Macy’s and another 5% land on Ulta.

US Beauty: Estee Lauder Searches
Source: Hitwise, US. Downstream traffic from “estee lauder” and top internal searches containing “estee lauder”, 12 weeks ending 8/10/19.

Estee Lauder can then leverage internal searches on Macy’s and Ulta to identify which products consumers are after specifically.

Ulta shoppers are seeking face products like Double Wear foundation and Perfectionist firming serum, whereas Macy’s customers want Estee Lauder’s lipstick and night repair treatments.

This can feed into product assortment and campaign strategies that direct consumers to the best channel based on their interests.

3. Leverage Search to Compete

Search is a pivotal part of any online strategy. Brands within beauty can leverage it to identify new competitors or develop paid strategies to drive more page views.

The top searched term on Sephora was “drunk elephant” which grew total web searches by +69.4% year-over-year. The skin care brand has quickly become well-loved within the industry and is now in a position to sell for $1 billion. This is certainly a growing brand for others to keep an eye on.

US Beauty Blog: Drunk Elephant
Source: Hitwise, US. Total web YoY growth of “drunk elephant” searches, 12 weeks ending 8/10/19. 

Meanwhile, the top searched term within beauty on Amazon is “mascara.” Although L’Oreal is the top selling brand with 27% of all purchases in the subcategory, up-and-comer Essence Cosmetics has the top selling item.

The top non-branded searches that lead to Essence page views are “mascara”, “mascara clump free” and “mascara black.” Neither L’Oreal nor Essence receives any of these views from sponsored posts. Considering that the top selling L’Oreal mascaras are black and have “no clumping”, L’Oreal could consider bidding on these key terms within Amazon to conquest page views from rising brands like Essence. 

US Beauty: Mascara on Amazon
Source: Hitwise Amazon Search Intelligence, US. Searches within Mascara subcategory on Amazon, June 2019.

To summarize, beauty brands can stay ahead of the competitive landscape online by:

  • Establishing partnerships with different retailers to engage with new and existing audiences
  • Optimizing product assortment by retailer to meet the preferences of varying retail customers
  • Leveraging internal searches to optimize paid strategies and identify new competitors