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The HBA (Health & Beauty Association) Global Expo was held in New York City from 18-20 June 2013. The expo hosted numerous exhibitors from the ingredients, packaging and beauty and personal care industries. Digital commerce was a key theme of the conference.
Graduates of the Fashion Institute of Technology’s (FIT) master’s programme in Cosmetics and Fragrance Marketing Management presented three sessions on “Beauty in a Digital World” as part of their capstone presentations. The three pieces were on digital analytics, digital marketing and digital commerce.
The digital world presentations focused on how the beauty business will look in the year 2020. The presenters included FIT graduates and industry veterans who discussed what beauty companies are doing now to understand and reach consumers, how the future beauty world could involve a richer understanding of consumers, the gap between today and tomorrow and what companies could do to bridge that gap. In terms of digital analytics, presenters talked about how manufacturers could collect more accurate information about product usage. Incorporating sensors into products would allow marketers to know when and where a product is actually being used instead of relying on consumer feedback. They gave the example of women in a survey who claimed that they apply five strokes of mascara to each eye when actual usage observation showed that they really use 50.
In the digital marketing session, the speakers talked about a new m3 model – micro-targeting + micro-engagement = micro-marketing. Here, human-centric marketing would involve micro-targeting whereby companies use advance predictive analytics to gain greater understanding of specific consumers. Micro-marketing would allow for personalised campaigns that target the right person with the right content at the right time. Speakers talked about the possibility of using facial recognition and predictive analytics technology to provide better service. In this scenario, a consumer walks over to a beauty counter, a machine recognises her face and can pull up her buying history, colour preferences and skin care concerns. The beauty adviser could then provide more personalised recommendations to the shopper without asking for background information.
Despite the rosy scenarios presented by the speakers, privacy and transparency will remain issues in digital analytics and personalisation. Most Amazon.com customers are happy to have the online giant use their purchase data and algorithms to provide product recommendations. At the same time, when companies are not transparent about their data collection and usage efforts, they can run into trouble. US department store Nordstrom had been using a service from Euclid Analytics which identified customers’ whereabouts through their smartphones. While Nordstrom had signs posted alerting customers to the use of Euclid’s technology, many customers were surprised to find that Euclid could track their smartphone’s presence even if they did not log on to use the store’s free Wi-Fi network. After news reports came out in May 2013 about this little known initiative, Nordstrom quickly announced that it is no longer working with Euclid technology.
In the digital commerce presentation, speakers talked about “beauty on demand”. Consumers could see a lipstick colour they like on a model, take a photo of the image with their smartphone, locate the item and buy with one click for same-day delivery. In this Amazon.com meets Shazam (music recognition app) scenario, “Every medium could be a retailer”. The future is buying everywhere, as devices and apps make it possible to shop anywhere. Convenience (free, same-day shipping), curation (provide valuable content) and customisation (enable her to shop when she wants to shop) are the keys to online success.
Panellists talked about the need to provide a seamless experience for customers. Shoppers want the same experience whether they are in the physical store or on the company’s website. French- based beauty specialist retailer Sephora was mentioned as a company that is a leader in technology.
Internet retailing of beauty products is currently a niche at US$20.2 billion, or 4.7% of total global beauty and personal care sales in 2012. This share represents a big jump from 3.0% in 2007 and is projected to continue growing strongly as smartphones and tablets proliferate.