Cosmetic Executive Women (CEW) presented a stellar roster of digital experts at its Connected Consumer Conference, held this month at New York’s Cipriani 42^nd St. The event addressed digital growth in the beauty industry, and beyond, including digital platforms and their usage as they impact speed and analytics in current marketing strategies.


Jill Scalamandre, president, Global Makeup Center of Excellence, Shiseido Americas and CEW chairwoman noted that 90% of businesses today are implementing digital strategies into their marketing. She highlighted the conference agenda, which included brands, retail, social platforms and differentiation in the digital space, as well as artificial intelligence (AI), co-creation, and personalization.


The conversation was led by thought leaders from inside and outside the beauty industry.
 

A Diverse Digital World
 

Silvia He, head of merchandising, beauty, Amazon, commented on how shopping has become more fluid and less planned, noting Amazon’s customer personalization, ease of access and delivery via Amazon Prime, Alexa’s interactivity, music, special programming and wedding registry.


Clearly, today’s digital consumeris part of a crucial shift in the market, noted Carlotta Jacobson, president, CEW. She introduced Keynote Speaker Frédéric Rozé, president and CEO, L’Oréal USA, as the driving force behind L’Oréal’s transformation as it meets the needs of today’s digital consumer.


“The pace of change today is so inspiring. The world of beauty is in complete transformation, and everything is up for grabs,” said Rozé.
    

Among his key points was the notion that external transformation required internal transformation.


“It’s an exciting time to be a marketer. I feel compelled to say one thing; that is, we should never lose focus of what matters most in our industry, and that is products. Only the most appealing products can be successful, and in our digital world, they are successful only if they are the ones that consumers can’t live without,” he said. “The important part of digitizing marketing is to be there at every beauty moment, in the right way.”


His list of platforms for digital engagement included Pinterest, for customer discovery, and Snapchat, particularly appealing to younger consumers.


“L’Oréal was the first brand to utilize Snapchat to try on makeup and eyeliner,” he said, adding that engagement was 30 seconds, and the platform connected effectively with the millennial audience. He also described You Tube as a great story telling platform, and noted L’Oréal’s partnership with Google, through which a 6-second spot provided a quick look at the brand’s Root Cover Up; and cited Makeup.com and Skincare.com for tips and advice with engaging beauty content.


Kiehl’s personalized Apothecary preparations were cited for their bespoke skin care formulas, allowing consumers to leverage technology to achieve a beauty experience via digital outreach. He also noted Lancôme’s point of sale personalized foundation blending, which uses state of the art algorithms to create true skin tone matches, and cited L’Oréal’s Le Teint Particulier, which offers custom foundation, formulated before your eyes, and personalized with the customer’s name, as an example of personalization.


Beyond products, Rozé referred to the success of Makeup Genius, an app which relies on AI to allow consumers to try on makeup prior to purchase, and explore colors, products, and different looks; and the efficacy of the UV patch by LaRoche Posay, which minimizes sunburn through the wearing of a UV sensitive patch, reminding the user when to reapply sunscreen. Called My UV Patch, it contains photo dyes that are activated by sun exposure.


Finally, he emphasized the importance of developing an ecosystem of people to lead the digital beauty transformation, recognizing the Women in Digital program, which has created 2,000 female-operated companies, as well as a program offering digital training for all the teams at L’Oréal, to offer better engagement with consumers. “I’m convinced it is the best time to be a marketer,” said Rozé.
 

The Consumer’s Path to Purchase
 

Christine Barton, senior partner, Boston Consulting Group shared findings of an online mobile survey of US female beauty consumers. It presented a behavior lens describing who the connected beauty consumer is, as well as a break down by age, with under 20s, called Founders; Millennials, 20-34; Gen X, 35-54; Boomers, 55-64 and Pre-Boomers, 65-84.


Among Barton’s findings was the fact that more than 70% of Pre-Boomers are online; fragrance and makeup spending is significantly higher among younger consumers; and higher income beauty consumers participate more in online beauty purchase, with more frequent purchase, and more products in their baskets. Top reported online purchases included Amazon first, followed by multi-brand beauty specialty channels.


The online female consumer is engaging with brands that she is inspired and motivated by, and while there is a generational divide, appreciation and understanding the purpose of the brand are key drivers to purchase. Sampling and engagement with retailers and brands are key, however, the process is not linear. “There are steps along the way. A brand, a generational mix, and motivation are key for marketers in deciphering a somewhat ambiguous journey,” she said.


Barton provided a checklist for brands and retailers: Am I doing enough online video? Am I building experience? Am I doing enough brand mixing? Building communities? Content and editorial marketing? AI and social media strategy? In sum, she said, these points would be important in a brand’s digital future.
 

Make Beauty Personal
 

Personalization emerged as a key takeaway, and the mobile phone was a primary focus. Amy Eschliman, VP/GM-e-commerce, Sephora, said, “The customer is telling us she is evolving, and at the center of this is the mobile phone. At Sephora, we’ve had a 93% increase in our app visits and the consumer is expecting a seamless cross-channel experience.”  


She cited Sephora’s Virtual Artist as a product that enables consumers to try looks that Sephora has created, or customize their own. The product allows a point and click selection of colors, and virtual arm swatching.


“Right there on the product page, the consumer can try on the colors and looks she wants on her phone. The Sephora mantra, Make Beauty Personal, has created a Beauty Insider Community to share concerns. Whether you are a curly girl, new mom, or wish to share a beauty concern, a chat feature allows customers to connect with one another and create a bond with others to foster the person-to-person connection,” she said.

 
Video Impact
 

Jessica Rotnicki, SVP-North America Ecommerce, Estée Lauder Companies, regarded video as one of the assets that drive conversion.


“What kind of content really drives engagement?” she asked. “In Hollywood, it’s the movie trailer,” she said, noting that 50% of those who watched a trailer, actually went to see the movie.


The implications for beauty are key, as US adults are said to spend 22% of their time watching videos, and consumer behavior shows that video consumption is a preferred format. Every day, 500 million hours of video are watched on You Tube, and 66% of recent product purchasers said that You Tube encouraged their path to purchase. Among the examples she cited were Bobbi Brown’s How-To Gallery, which provides professional how-to’s with its Skin Solutions series, and the Smashbox Be Legendary Triple Tone Lipstick video, which shows the creation of an ombre lip. In keeping with the personalization thread, Bumble and bumble’s Dry Shampoo Challenge shows consumers comparing Bumble and bumble Dry Shampoo with another brand, to illustrate the experience and the product difference. “The video hub has created opportunity to gain information and enhance shopability,” said Rotnicki.


She provided five tips for video content that converts:
• Make the first 3-10 seconds of the video count;
• Take advantage of the medium;
• Ensure the format will work across channels;
• Consider pulling videos in from You Tube; and
• Include multiple calls to action.
 

Co-Creation
 
Doreen Bloch, CEO and founder, Poshly; Nathalie Kristo, GM/global marketing and business development, NYX Professional Makeup, and Karen Moon, co-founder and CEO, Trendalytics, discussed the phenomenon of co-creation in beauty. Kristo said NYX takes its inspiration from the beauty community to develop products.


“The co-creation of products is a loop, from product development to global reach, utilizing user generated content, strobing, and ultimately product launch,” said Kristo.


According to Moon, Trendalytics' staff looks at social media buzz, decoded signals and identifies actionable insights to help people develop products and to organize the data they look at, based on concerns, influences, reviews, ingredients, price and distribution.


"From castor oil products to magnetic eyelashes, Trendalytics looks at what consumers need," she added.
 

According to Bloch, Poshly collects millions of data points about beauty issues, from dandruff to dry skin.


"It is about enriching the product development process," she explained.


Since the insights can come from any place, Kristo said NYX uses an integrated approach.


“Social media is a primary source and our teams mine that data to find a need gap and a desire, for example, consumers seeking a bold lip,” she said, explaining how the NYX Vivid Color Lip collection was created and then launched at Coachella, and how it inspired rich content around the launch, which NYX shares back out to the community.


Leveraging consumer feedback to product development offers numerous benefits, according to Bloch.


“The vast majority of consumers want to participate in these activities; and having the right community is key for the development of products," she said. "You have to keep leveraging these consumers for creating targeted sampling solutions and more content."
    

Kristo noted that while the future for NYX might include AI and predictive intelligence, she noted that a full experience with the brand was key.

 
Transparency and Truths
 

Trevor Hardy, CEO, The Future Laboratory, emphasized the role of truth and connectivity today.


“We are concerned with early adopters’ behavior. Today is more about people and how their behavior is shaping the future. There is a much more connected and hyper aware community and we need to rethink our community connections in order to develop products,” he said.


"As consumers become increasingly skeptical, acquiring more stuff is becoming passé,” he insisted. “Qualities such as simplicity, longevity, and transparency are winning out, so it is key to look inside. Some brands are providing more transparency."


And it's not just about more things being available, it includes the hard science behind the products, as well as the ingredients, supply chain, pricing, and how companies are conducting their business and remunerating their employees.


"The real evolution is more honesty,” said Hardy. “The growing absence of trust has given impetus to a drive to reconnect with consumers, hence the role of brands and businesses to reassert themselves in the community via arts, services, and education, and playing a productive role in society that transcends the initial product and service you provide."


The idea is for the brand to be an educator as consumers look for more transformational experiences.


“The rise of wellness, care of the whole self, has encouraged consumers, especially women, to embark on a journey of self-care. Emotional intelligence, being a better person, and having empathy, are qualities that are rising to the fore. By 2020, customer experience will dominate as the key to brand differentiation,” he said, emphasizing that the physical needs a re-think.


“We’re seeing the emergence of service, a focus on the quality of the experience, and the boundaries between social media and shopping are blurring. People in emerging economies are seeing themselves first and foremost as global citizens rather than national citizens,” said Hardy, explaining that people are assembling and recombining their identities, and noting that cookie cutter beauty brands will not satisfy this group.


He urged brands to become transparent, play a civic role and provide the culture consumers are craving; to go beyond product and service to become a transformational brand, rethink the retail experience, from a retail place to a place where they can learn about themselves, think globally and plan for near and far.
 

Beauty: Beyond the Horizon
 

Anthony Koithra, partner, BCG Digital Ventures, said demystifying technology is key for brands today and companies need to assess where on the curve they are. He urged brands to think about AI, ML (Machine Learning) and data sharing.


“While consumers are hesitant to share at first, they will do it if the return is worth it. This is particularly true among millennials,” he said.


Koithra highlighted such futuristic beauty explorations as body modifications, bio and botox, next generation implants and interfaces, printable tattoos, customized prosthetics, virtual worlds, customized avatars, and gene technologies to isolate or modify a gene’s characteristics, and urged companies to be open to planning for a range of ventures.
 

Building Data
 

Vikram Bhaskaran, head of market development, Pinterest; Flynn Matthews, global insights lead, home & personal care, Google, and Karin Tracy, head of industry, beauty, fashion, luxury, retail, Facebook/Instagram, discussed the value of building data to advance brand marketing goals and connect with consumers. Moderator Jenna Menking, chief fechnology officer, Crosswalk, began with the role of data in consumer engagement.


“The objective is to target optimization, management and insight to inform a customized strategy moving forward,” said Facebook’s Tracy.


Bhaskaran, of Pinterest, said brands utilize their data to reach their customers.


“Some CMOs think of Pinterest as the world’s largest focus group,” he said.


Matthews, of Google, said, “From a social perspective at Google, we have applied Machine Learning to see how brands grow and decline. It is an opportunity for brands to take the information to see how products are resonating for consumers around the world.”


Bhaskaran noted that while Pinterest is available with free data, it also works with individual brands to address specific solutions for a specific problem, ultimately using the analytic tools that Pinterest provides. Google also partners with brands with whom they have special relationships, to provide information on the consumer’s voice and enable that voice to enter their marketing strategy.


Bhaskaran said, “The best marketers realize the differences that each platform offers.” Tracy added, “We can all agree that we can provide information based on the clear signals we receive from consumers. The consumer doesn’t think about online and offline. What we’re doing is understanding who is converting and where. This is a game changer and we can facilitate that for you.”


Creating content to uplift a brand is a key. Tracy spoke to the behavior of today’s consumer, saying,


“Our attention spans are shorter than ever, so those brands creating mobile first assets and offering short video content are ahead of the game. Video is growing on Facebook with unbelievable conversion rates.”


Matthews said the first five seconds are important, citing a case study they did with Clinique to create their print ads into a 6-second video brand message.


“Tapping into cultural trends, not just product is important. If you can be part of that, from an organic standpoint, that’s key,” Matthews said.  Bhaskaran added, “Pinterest is the largest human data set of taste. It expresses the visual aesthetic, the taste profile of the user. We can see a data set of taste at the granular level and where the consumer is heading. The Pinterest Taste Graph is a targeting feature which provides deeper insights into the consumer.”
 

Future Focus
 

Marc Rey, president, CEO, Shiseido, spoke with Trevor Hardy in the closing segment. Largely focused on the long-term vision of Shiseido, and the emotional side of consumer behavior, he said, “If I really want to do well, I have to disrupt.”


“What we look at outside the industry and how we connect with the consumer holistically are key. We look at how and why they disrupt. Beyond the connected consumer, we need to see how the disruptors work. Frontiers between industries are blurring and you can be made obsolete very easily.”


He cited a prescription delivery service called Capsule, which delivers a prescription to your door in two hours, as well as 24-hour consultation, as an example of a service that solves the rational and emotional problem of stress. But marketers must address the challenge of achieving depth of experience in a virtual environment.


“In the beauty industry, today’s trend is the simplification of the business model, delivery, timelessness, the right shade at the right moment," said Rey. "In the beauty industry, it’s already emotional. I have a lot of respect for data, but the consumer experience is largely emotional.”


He cited a mixture of AI and HI, as an optimal combination for the industry to find ways to learn about the consumer, and emphasized the place of pure creation, acknowledging François Nars, for “creating a brand that goes where he wants it to go.”


He reminded attendees to remember that how the customer feels, is the number one thing.


“Bringing the emotional connection makes it more long-term than short-term, and for marketers today it is important to manage well the combination of rational and emotional,” he said.


Sponsors of The Connected Consumer Conference included Beauty Amazon, Meredith, Mane, Arcade Beauty, 24 Seven, Perfect Corp, BareMinerals, L’Oréal USA, Batallure Beauty, Sephora, Castanea Partners, DCI-Artform, Birchbox, Canfield Beauty, Skyn Iceland, Beauty Inc, Consultancy Media, WWD, Kaplow, and Broadway Video. Additional information may be found at: www.connectedconsumerconference.com.