MKT 630 – Spring 2014
Weekly Article Submission – January 29, 2014
Before summarizing this article, I wanted to give a brief overview of the format for choosing my articles. My focus for the final paper is retail and consumer brands, particularly in the beauty industry. The first few weeks will be selected articles that discuss how major brands in the industry use analytics and the weeks following will go into detail about the importance of analytics and innovations in the industry as a whole. I’m sure the more in-depth we get into the topics in class, the more precise I can be while selecting articles, but for now, this is the direction I am heading in.
This article by Timo Elliott, is an analysis of an interview with Georges-Edouard Dias, SVP of Digital Business at L’Oreal, on how the company plans to use “big data” to connect further with their customers by transforming the digital process. L’Oreal plans to use analytics (store trends, sales trends, buying habits, etc.), social media, the cloud and most importantly, smart phones. Their goal is to combine all these points of data to create the ultimate customer experience.
Dias describes this digital journey as “rethinking the way we communicate: a change, transformation of advertising, rethinking the way we sell to people” and wants to branch out from the notion that digital pertains only to e-commerce, into utilizing it in retail and create new forms of business never thought about before.
L’Oreal has always been a leader in consumer brands within the beauty industry and has recently emerged as a leader in luxury brands, acquiring many high-end beauty lines including Yves Saint Laurent and Giorgio Armani Beauty. The company stays on top because they have always been trailblazers in innovation. Before, with the lack of technology, predicting buyer habits were not as precise, but now L’Oreal is partnering with SAP to bring customers a way to help their decision making much easier.
The company is hoping that with all the data already being collected, they can create “marketing in the now versus” marketing in advance. The traditional method of marketing a beauty product is to advertise to consumers ahead of time so they, in turn, head to the store to buy the product. Once the consumer gets to the store, there is a possibility that other products on the shelf are enticing enough to want to purchase (which is also why product placement is so important in stores).
The difference between the traditional approach and the “in the now” approach, is the ability to really convince customers to “add on” products while at the store. L’Oreal hopes to do this via smart phones, potentially reaching one billion new customers. Personally, I think this is a fairly low hanging fruit for L’Oreal, given the loads of data that is available to them and I wouldn’t say this concept is pure genius. Women are doing this for themselves through social media and beauty blogs, but L’Oreal has the money and power to create a well-planned system to make it easier for customers to find this data and choose L’Oreal products over its competitors. Here is how I see this “new customer experience” coming into fruition:
If a customer is at the drugstore looking for a lip color that was seen on Beyoncé at this year’s Grammy Awards, he or she can easily pull up the L’Oreal Knows: Because You’re Worth It ** app on their smartphone and search “Beyoncé 2014 Grammys lip color,” which will direct them to some beauty blog that has that information. Once there, the customer sees that Beyoncé was wearing a non-L’Oreal brand product, and the app can then show you similar products that are apart of the L’Oreal portfolio. The app can go into even more detail to narrow the results, such as “Where are you shopping: Drugstore, Prestige Beauty Store, Department Store, or Online” and this specific customer would select “Drugstore” since he or she is currently at CVS, which will bring up a selection of L’Oreal and Maybelline lip color choices.
This can weed out other drugstore competitors such as Revlon and Almay, mainly because the app has done the work for you. Now, just like it’s done with online shopping, the list of products will also have a “Products to compliment this color” section to include a selection of eye colors, cheek colors and maybe even skincare. And just like most consumers do online, this person who is currently at the drugstore, standing in front of the L’Oreal section of the isle, will click on those complimenting products to get more info. That alone gives L’Oreal a 50/50 chance of a customer adding another product to their basket, all because the company has figured out a way to compile tons of data into your smart phone. With all the blogs and social media available to give recommendations for beauty products, and all the information L’Oreal already has, I think this new customer experience will be a great marketing asset to the company and all its brands.
** Disclaimer: this is not a real app, just a name I created for the sake of the scenario.
MKT 630 – Spring 2014
Weekly Article Submission – February 5, 2014
Author: The Wishpond Blog
This article gives a tutorial on Pinterest Analytics and how to utilize it on your own Pinterest page. The article also examines how Sephora uses Pinterest Analytics to track activity of their followers to create content their followers will be interested in, leading to more traffic to the company’s own website.
Sephora actively began incorporating Pinterest into their marketing strategy, with the first step of integrating Pinterest on its website by adding the “Pint It” button. They added links to Pinterest in their email blasts and began creating themed boards to compliment these e-mailed marketing promotions. In the month following the email campaign, Sephora saw 60% growth in traffic from Pinterest.
By using real-time metrics created by Pinterest and categories listed Most Recent, Most Repinned and Most Clicked, Sephora was easily able to see the popularity of new website content, e-mail marketing and their activity within Pinterest like new pins and pinboards. Sephora found that their most popular Pinterest content includes beauty lists, color swatches and face charts.
Sephora, a division of LVMH, is a retailer that carries a vast array of high-end beauty brands along with its own private labeled beauty collection. I worked for the company for about seven years before moving to Roanoke, and had I not moved, I would still be with this company. The company is innovative, knows how to reach its audience and provide what their customers want. Sephora has gained major brand loyalty from its customers.
Sephora is a pioneer in gathering customer data and utilizing analytics programs to best provide for consumers. They were the first retailer in the industry to establish a rewards card that customers could used to sync up their online shopping account with in-store purchases. The advantage: customers could track their own purchases and any samples they received and Sephora could track customer-purchasing trends. Like any rewards card, there are perks, and with a Sephora Beauty Rewards Card, you receive a personalized profile online with recommended products, beauty tutorials, special discounts and free samples of new beauty products. For companies like Sephora, this is a small price to pay for such a large amount of data.
Utilizing predictive analytics creates a chain reaction for retailers, especially in an industry that is driven by word of mouth and recommendations. Retailers can use analytics to give their customers special offers, show them how to use their products and give beauty advice, all tailored to the individual shopper. This in return brings customers back to the retailer to purchase and try new products. Specifically in the case of Pinterest Analytics, Sephora cannot only recommend products they sell, but create visual boards to group colors, brands and looks together. I have realized that customers want ease of shopping and this is what Sephora has done.
After reading this article, I have decided to utilize Pinterest into my blog. I have a Pinterest account for personal use, but have not really considered using it for professional purposes until this post. Knowing that I can actually track my activity and followers’ activities gives a sense of motivation to add this component to the blog and provide another outlet to reach my audience.
MKT 630 – Spring 2014
Weekly Article Submission – February 12, 2014
Article: Social Media Keeps It Real*
Author: Sourabh Sharma
* This article leads up to my article for next week.
This article breakdown a meta-analysis, conducted by SKIM, of social media and skin care products. Their results illustrate how social media data can reveal true customer sentiment and passion regarding a brand without having to even ask them the question. Through this research, they have been able to find consumer personalities, consumer skin care regimens, most talked about products and how consumers felt about these products.
For the study any public and relevant data was collected. Of the conversations, 22% came from forums and beauty communities, 20% from Tumblr, 13% from Facebook, 13% from blogs and the remainder from online reviews and ratings, twitter, video and other social networks. The article goes on to explain the details and findings of their research.
I originally found an article on Digital IQ Index ratings established by the L2 Think Tank. But before I could give my thoughts on this article, I wanted to write about the “big data” trends in e-commerce. In e-commerce, big data refers to the collection of all available data from traffic, sales and anything else that is related to an online business. After reading all these articles on data mining and analytics, I am realizing that most e-commerce sites are not utilizing consumer data to their full potential. However, I do think the beauty industry is doing a good job with it.
The beauty industry’s biggest marketing tool is word of mouth. For decades, women have bought products based in what their friend circles recommend so marketers had to conduct extensive surveys and focus groups to catch this information. Now with social media, women have an outlet to give their opinions on products, upload their photos and engage with others about their product experiences. With all this information just waiting to be collected, surveys and focus groups are no longer as crucial.
E-commerce beauty sites have options to post their “recently purchased” items to Twitter, Facebook, WordPress, Pinterst etc., as well as the capability to post a link of your product reviews on social media sites. Sephora.com has gone even more in-depth, asking a consumer’s skin type, skin tone and age before providing reviews, so reviewers know what product works for what demographic. The more data a company can collect about their consumer, the more data they have to utilize when reaching targeted markets and specific demographics.
There are so many ways to utilize data on e-commerce sites, especially in the beauty industry. Many sites are beginning to integrate YouTube tutorials specific to their product pages. For smaller companies, this data can be very useful and not as expensive as those “big data” programs. One suggestion I have is for smaller companies: I think a lot of these companies do not have high volumes of traffic so they do not receive large amounts of product reviews on their sites. These companies can embed a twitter hash tag feed on each product’s page to add a collection of reviews from the web. This will help consumers when deciding whether they want to add the product in their cart or not.
MKT 630 – Spring 2014
Weekly Article Submission – February 19, 2014
Article: The Digital IQ Index
Author: L2 Think Tank
This post was a press release from November 22, 2013 about the latest Beauty Digital IQ Index results published by L2 Think Tank. The Digital IQ Index results are based on how well developed a brand’s website, digital marketing, social media, and mobile are. This year eight-five brands were measured. A few of the major findings were:
– Instagram is Beauty’s hottest social platform
– Amazon is the most visible site in Beauty searches
– Nearly three-quarters of Beauty sites are mobile-optimized today
– Five of the Top 10 brands in this year’s Index belong to Estée Lauder
– L’Oréal brands control the Index’s top three spots, the result of significant YOY investments
The company behind the Digital IQ Index, L2, is a think tank for digital innovation. They help prestige brands in luxury, beauty, retail, travel, spirits, and auto navigate the digital marketing landscape through education, research, and other services. The Index is the “global, seminal benchmark for digital performance of brands and the largest and most robust study of its kind.”
The Internet is one of the quickest ways to collect and analyze data. Almost everything about a consumer can be tracked by their purchases or online accounts: from location and gender, to items purchased and how it was paid for. Even click-throughs from other websites are tracked to see what other sites customers came from.
Why is the Digital IQ Index so important? Because of the large amount of time consumers spend online researching and purchasing beauty products has such an impact in how well a company does. Since the Digital IQ Index is based on how well developed and consumer-friendly a brand’s website, digital marketing, social media, and mobile are, brands can utilize this information to allocate resources to areas they would like to improve upon. The Beauty Index results show that most of the traffic on brands’ websites is through social media and mobile platforms. This is why the make-up (no pun intended) of a company’s E-commerce site is crucial to maximizing its profits.
The index has helped many companies allocate more resources to improving their E-commerce and digital footprint. For example, L’Oreal’s has doubled their media budget to $1.5 million since the 2010 Index and this year has brands in the Index’s top three spots. Estee Lauder has five of its brands in the top ten. Just from my experience, the better and more connected (to social media, chat rooms, blog, etc.) a brand’s site is, and the more user-friendly it becomes.
MKT 630 – Spring 2014
Weekly Article Submission – March 5, 2014
Article: Birchbox Proves Try And Buy: Half Of All Subscribers Make Full Size Purchases
Author: Meghan Casserly
This article examines the success of Birchbox, a member based monthly subscription box. Their vision was clear and had a win-win for both brands and consumers. Users would benefit from trying out products that were either too obscure or too costly to purchase in the full-size version to be tried by the average consumer. This would give beauty product lovers a chance to try before they bought and review for others. Monthly subscription boxes, like Birchbox, have changed the way companies market and the way consumers buy.
Some of the important numbers: Currently 50% of all subscribers are making regular full size purchases on the site and that, which surpassed the numbers they had predicted. According to Birchbox, 15% of all E-commerce orders come from non-subscribers, which Beauchamp says is “a testament to the educational content on the site as well as Birchbox-exclusive products.”
If I haven’t said this enough times already, the most efficient marketing channel for beauty products is currently social media. Millions of people use social media to research product reviews, photos, and how-tos. With accessibility to product reviews and how-tos online, beauty brands that don’t have a large social media engagement, will not likely succeed.
Subscription boxes are a new, disruptive innovation from an old concept: try it before you buy it. Before the Internet, social media and other technological advancements, companies had to invest in costly, time-consuming focus groups and surveys to determine what consumers wanted and purchased. Now with data analytics, they can reach their market quickly and with the correct products.
I love the last line of this article: Birchbox is marketing, media, analytics and retailer all rolled into one. These monthly subscription boxes like Birchbox, have changed the way companies are marketing as well as they way consumers are buying. When you register for Birchbox, you will complete an initial profile survey to determine the products you will receive in your Birchboxes. Each month, members receive a customized selection of samples from various beauty brands. Membership is $10 a month and you can cancel at anytime. These boxes can include brand new products, current products with new colors or formulas, and best sellers.
Although there are staples every month, each box has the same products. Because of the detailed survey subscribers are required to take initially, Brichbox can help brands target specific products to certain subscribers. This creates an outlet for brands to market their products to niche individuals. If the subscriber likes to try various lip colors, they will end up with more lip products. Subscribers can retake the survey if they are looking for something else.
Where does big data come in besides being able to customize products? Conversion rates. Birchbox uses conversion as one of their main measurers of success. Stila, a makeup brand, sent a sample of one of their products to 7% of Birchbox subscribers based on their beauty profiles (the survey). The product saw an 11.2% conversion rate into a full sized purchase. It may not seem like a lot, but in this industry, that is strong. I like the idea of companies using these subscription boxes as outlets to market their products. It shows the innovation within the industry and how analytics can help customize who brands want to target.
MKT 630 – Spring 2014
Weekly Article Submission – April 2, 2014
In this article, Rimma Kats interviews Johnna Marcus, Director, Mobile & Digital Store Marketing at Sephora about on how the company has personalized the shopping online process and how Sephora reaches customers on their devices. Marcus talks about how not to get to hung-up on doing the mobile thing first, but to rather do it well. You want to provide the best experience for the customer so they in turn want to come back and continue to stay loyal.
Let me just first say… THANK GOD FOR BIG DATA!!! Without it, women would still be shopping like they did 20 years ago…. Going to the store, asking the sales person at the counter and having to try a product just by what the sales person has recommended. Now women have so many other ways to shop and find the products that best suit them.
Sephora has always been very innovative in the customer shopping experience. They make an effort to gather customer data, and implement it to provide the best customer experience to their shoppers. This interview gives an in-depth look at how they are providing this experience when it comes to the online shopper. They have categorized the mobile-only customer as someone who is using their device for all aspects of their life, from work to social media, to planning for dinner. Sephora has seen an increase of 150% in the “mobile-only” customer base. Again, the company does a really good job at implementing their data and this is one of the accomplishments they have made with it.
First things first, Sephora has created custom apps to support all mobile devices (decreasing bugs and formatting issues) that allow the customer to jump from device to device, as long as the customer has a registered account. Now they can save, review, and/or purchased what they want, whenever they want. Here is a great example of how this can give the ultimate shopping experience:
A customer is out to dinner with her girlfriends and of course she loves the fragrance that one of her friends has on. This triggers her to pull up the Sephora app on her Galaxy phone, look up the product and click the little Love icon next to the product so she can review or purchase it after dinner. As the conversation continues, the girls get into other products they have recently purchased (this is a real scenario by the way) and the customer has now added a few other products to her Love It list. After dinner, she comes back to her app and reviews all the products she added to her basket during dinner. The best part of this shopping experience is the ability to review the products at ease right on the customer’s phone. Keep in mind, not every product with great recommendations or great online views is going to be the right product for this customer. So while laying in bed, after dinner, reviewing her products online, her list comes down to 3 products and all she has to do at this point is click “purchase” and the customer is good to go!
There is a sense of ease that this process gives the customer. Knowing that all the information is stored safely and yet can be accessed on any device lets customers shop freely. I love this company and loved working here so much because of all the innovations they have implemented in the last twenty years.
MKT 630 – Spring 2014
Weekly Article Submission – April 9, 2014
Author: QlikTech International
This piece is a press release that was sent out by QlikTech International on April 1, 2014 regarding the implementation of their QlikView data software into LUSH Fresh Handmade Cosmetics to improve company performance and profitability. LUSH is on its way to delivering a savings of over £1 million in stock loss. QlikView can be accessed by all LUSH staff in all divisions of the company, regardless of technological experience.
Every week I try to write about a different company in the beauty industry and the more companies I learn about, the more I realize how much their level of predictive analytics determines their level of success. L’Oreal is at the top of their game with some of the most advanced data programs and algorithms, but Estee Lauder and other companies are not too far behind with top rankings in the Beauty Digital IQ index.
Lush is a privately-owned UK based “hand-made” cosmetics company that has blown-up in the past few years. They were one of the first all natural based cosmetics, skin and body care companies to emerge in an industry where advanced chemical technologies were popular. Lush is famous for producing 100% vegetarian soaps, shampoos, shower gels, lotions, moisturizers, scrubs, and cosmetics. I love their products, but never thought they would have become such a successful business. But thanks to perfect timing (because we ARE in a period of “all natural” and “no chemicals”) and a strong data analytics provider QlikView, they are saving £1 million.
What I like most about Lush’s integration of QlikView is that they are incorporating the system into employees in all divisions of the company, regardless of their technical experience. This means the C-suite, innovation teams, manufacturing, and retailers all have access to this data. So at anytime a retailer and manufacturer can both look at the same information on the most sold product of the week. This can let manufacturing division know how much of the product to send and the retailer to know how much to push or recommend great add on products.
In the innovation process we learn that sometimes a lack of resources can prohibit innovative ideas and suggestions from teams. And giving the ability for all employees to access data can help break those resource barriers. I understand that not all employees will be utilizing these analytic, but there will be those idea boxes that will use the data to back their ideas and innovations (like myself). The only thing I was not able to find out while researching the QlikView software integration was the level of training given to the LUSH staff. I would be curious to find out how much support employees have to best utilize the software.
MKT 630 – Spring 2014
Weekly Article Submission – April 16, 2014
Article: Beauty on YouTube: How YouTube is Radically Transforming the Beauty Industry and What That Means for Brands)
Pixability, an analytics based marketing and advertising firms, has launched a study on how YouTube has changed the beauty industry and they way consumers are discovering new products, recommendations and product usage. They study analyzed 168 brands and how 45,000 YouTube vloggers (video personalities) manage, produce and launch over 877,000 beauty related videos. The study also shows the lack of placement on YouTube from major beauty brands as well as a lack of searches of them on YouTube.
There are many important findings in this study but one I’d like to highlight for this paper is that teenage Vloggers are challenging brands and becoming YouTube sensations with cult-like followings.
I used the actual press release and part of the study results for my article this week, but the entire PDF is even more detailed. I wanted to address the “vlogging sensation” aspect of the article and I will go into more detail about the specific brands that were highlighted in my article next week. There is so much great information in this study… I thought this was by far one of the most interesting pieces I have ready thus far.
I’ve been keeping up with this company since the beginning of the semester. Pixability is a YouTube marketing company that focuses on analyzing data on YouTube. They use a cloud-based software along with various video analytics databases to help companies with their marketing and advertising needs. They do a lot of studies on various industries and recently launched this report on how YouTube is changing the beauty industry’s marketing game.
It was fairly surprising that only 3% of the almost 15 million beauty related video uploads were from the actual brands themselves. I figured is was small percentage, but I didn’t think it was that small! I would figure the larger corporations like L’Oreal or Estee Lauder would utilize YouTube as a marketing channel, but even if they do, their videos are only coming up or being clicked about 3% of the time. Some of the companies that have actually found success advertising on YouTube, such as e.l.f cosmetics, are much smaller. But then again, when I search for products on YouTube I usually search specifically for reviews or tutorials of the product and these smaller companies are actually creating tutorials.
Some vloggers like Michelle Pham are considered YouTube sensations. These vloggers have become so skilled at their reviews and tutorial videos that subscribers have established a sense of trust in their reviews and tutorials. The most intriguing part of it all: most of the popular vloggers are teenagers recording these product reviews and tutorials in their bedroom.
As a blogger myself, I have seen the growth of the beauty “network” on YouTube. You can pretty much search any beauty product ( different skin care products, makeup, fragrance, or hair tools) and find someone has posted a video on how to use it or a review on the product. Brands have caught on to the sensation and now actually sponsor some of these “vloggers” to review their products. I thought this was a very clever way to promote their products. For years, brands have been sending their products to beauty retailers and their sales staff to try the products and recommend it to their customers. So these brands have not created a new process, but are implementing it via a new channel.