5 Ways Beauty Retailers Have Adapted to Online-First Ordering

July 29, 2020

Beauty retailers have a very different view of the world than they did just a few months ago. Faced with a hesitant public and significantly restricted in-store operations, beauty brands that once relied on real-world demonstrations and physical interactions with customers have had to adapt quickly.

As we covered earlier this month, retail in a pandemic looks a lot different to what most of us consider normal. The situation has exposed a key weakness of supply chains across many sectors: an inability to react to widespread disruption at short notice.

The pandemic has challenged physical retail-oriented names like Ulta and Sephora to adjust and rethink the role of online service in the journey of their customers. It has also highlighted the narrow distinction between retailers selling products deemed essential and those that do not, making the beauty section of stores like Target an even more appealing place to be.

skin cream beauty products

The Beauty Sector in a Pandemic

Despite the fact that customers were unable to enter their stores, many beauty brands were able to partially weather the early storm of the coronavirus, thanks to some combination of nimble eCommerce tactics and established economic norms.

The latter comes down to the “lipstick index,” a trend identified in post-millennium moments of recession. It proposes that consumers see products like lipstick and other cosmetics as affordable luxuries during periods of economic turbulence, making sales the beauty sector more resilient than others, unless times remain tough.

However, it’s the former that we’re most interested in for the purposes of this post. eCommerce strategy is something that beauty brands can actually control, making the approaches of companies that remained successful in Q2 all the more compelling.

Digital Beauty Face Scan

How Beauty Retailers Have Adapted to Online-First Purchasing

While some sectors of the economy have been reluctant to adopt eCommerce, the beauty, health, and wellness category has not been among them.

Beauty retailers have seen the potential of digital channels and the online connections they can develop with customers, but even this forward-thinking sector has been forced to move quickly to adjust to the pandemic.

Here are five ways that beauty retailers have adapted to pandemic conditions and, by extension, adopted an online-first mindset.

1 – Create a Digital Beauty Counter

It feels like virtual reality (VR) has been a promising technology for decades now, but with selfie culture and a strong online presence for many, beauty brands are a natural fit for VR applications. And, with necessity being the mother of invention, there’s no better time to push a technology that facilitates digitally trying on makeup when your customers are stuck at home or unable to enter a retail store.

Take Ulta’s GLAMlab app, for example, which has reportedly seen more than 19 million shades tried on in Q2 2020 alone.  The initiative to create such a digital beauty counter was underway long before the pandemic hit, but it’s only now that the true value of such online-focused beauty tools is becoming clear. Expect a rush to invest in this kind of technology from brands that had previously dragged their heels.

Ulta GLAMlab app

2 – Get Creative with Sales and Specials

Even luxury beauty brands had to get creative in recent months, with rare promotions and discounts as high as 40% on brands that would not normally use them, according to McKinsey.

This creativity extends to membership and loyalty programs, which play an outsized role in customer retention and average order value. Over the past four years, for example, Ulta’s membership has doubled in size and numbered more than 34 million customers at the end of 2019. Finding inventive, exciting products and rewards to keep these members engaged is a critical part of coming through the pandemic.

More importantly, memberships represent a platform from which beauty brands can catalyze growth, both online as we navigate the pandemic and in-person as customers begin to return to retail outlets. Targeted discounts could also be used to attract buyers back to beauty stores, when the time is right in a given market.

3 – Reimagine Returns and Product Resale

When physical retail transactions fell off a cliff in March, many established processes for moving products and holding inventory required a rethink. Orders suddenly shifted from in-store to online, from pick up to home delivery, leaving retailers to play catch up and figure out how to move in-demand items in a different way.

For example, a major retailer we work with found itself with a wide range of products that simply could not be sold (or held as inventory) in-store. Rather than just allocate them as vendor returns and pass those costs down the line, the company chose to use Capacity’s sorting and rework capabilities. By organizing these products in a different way in our facility, the retailer was able to turn an inventory headache into an opportunity to boost sales.

This kind of creative approach proved the best possible case for everyone, adding items back into circulation for eCommerce channels at a time when online orders spiked and saving vendors from an extra returns burden in an already challenging economy.

4 – Emphasize the Eyes

As face masks become as common as other non-pandemic-driven accessories, categories of makeup like lipstick and blusher are unfortunately hidden away. Not to be deterred from encouraging their customers to look and feel good, beauty brands have adapted to make the most of what remains above the mask: eyes and lashes.

Mascaras, eyeliner, color pencils, and faux lashes have all experienced periods of above-average sales in various markets, as brands continue to explore their product lines for the most compelling items customers seek out during the disruption to normality.

Haircare has also become a prominent area for emphasis, given that Zoom calls don’t show a great deal below the neckline. Personal styling products, home color kits, and even clippers and stylist scissors have shown resilience against the downward trend in purchase habits, as anyone who looked for alternatives to the hair salon during stay-at-home orders will attest.

5 – Promoting Self-care and Home Comforts

Although makeup and other cosmetics products tend to be associated with looking good to go out,  beauty brands are quick to point to the value of what they sell for personal care. Even at home, we remain connected to work and the world by video calls, social networks, and other digital meeting points.

Beauty brands, some digital natives in their own right, understand this. They are encouraging customers to continue the physical and mental benefits of personal care routines as a way to destress and fight back against pandemic life.

As Claire Hennigan, Senior Beauty Analyst at Mintel shared with Cosmetics Design USA, brands are adopting the attitude that “wellness is a right, not a privilege,” while adjusting their pricing and product lines to match that sentiment. Bonus items such as soaps and hand sanitizers are becoming popular extras or upsell opportunities, for example, while promotions and giveaways on products in the aromatherapy and personal grooming categories are increasingly prevalent.

 

Despite the fact that we are only a few months into what promises to be a drawn-out period of disruption to normal life, beauty brands have shown greater flexibility and better positioning to adapt than many other industries. Having already embraced the digital connection with their customers, the main challenge has been to adjust to new purchase habits and ensure that products are in the right place to reach customers when they want them.

As a result, finding and buying online has been less of a stretch for customers of beauty retailers, providing a case study in eCommerce resilience that other sectors can look to for hope and encouragement as we move through and out of the pandemic.