The Rise of Social E-Beauty

November is arguably the most important month of the year for internet retailers and brands alike. There is “singles day” in China, which reportedly generated US$9 billion in sales this year, and, of course, the shopping weekend mayhem that is Black Friday and Cyber Monday at the end of the month. Despite Black Friday and Cyber Monday principally being a US phenomenon, with revenues reported at US$1.3 billion this year, they have been expanding into Europe and, specifically, the UK, which has the highest penetration for beauty e-commerce among mature markets at 9.1% in Tweet-This2013, while the global average remains below 5%.

However, the phenomenal rise of social media platforms that are hoping to turn their popularity into a commercial opportunity means that they are looking at the beauty industry as a good entry point for social commerce.

Twitter leads social media commerce in beauty

The ambition of Facebook and Twitter to become an online business success that can rival Amazon and Google is no secret. The information and access to the vast consumer base these networks have, creates a strong commercial opportunity. While Facebook continues gathering information, with its new advertising product Atlas tracking consumer shopping habits across platforms, Twitter has concentrated on selling directly to consumers from its news feed.

The Twitter “buy” button, launched in September 2014 during Burberry’s Spring Fashion Show, enabled consumers to purchase the nail polish used on the models. The company used this as a test-run for its commerce business and it showcased the strong potential of social media as a retailer as the nail polish sold out and Twitter announced plans to roll out the feature across its US users. Furthermore, in August 2014, consumers were able to buy Marc Jacobs Daisy fragrance from its pop-up tweet shop in Covent Garden, not with money, but with a tweet that contained the phrase “#MJDaisyChain”. Tweets used as monetary value on a regular basis may not be far away, especially as Twitter can now store consumers’ card details through its latest commercial offering, Twitter Offers.

Twitter Offers is expected to be beneficial for retailers selling beauty and personal care products due to both the relatively lower cost of products as well as the highly promotional nature of personal care. While both the “buy” button and the tweet shop work with luxury brands, Twitter Offers is dealing in promotions that are expected to benefit the mass market. What is most impressive about its Twitter Offers offering is that it can store card details to be used across advertisements, across retailers and across industries. It is also the first attempt by social media to directly link adverts to purchases, thus directly measuring the efficacy of advertising in social media.

Image-driven social media can shape the future

Instagram has been the talk of the town for some time now, with many bloggers and brands watching their follower base growing stronger than on their respective websites and Facebook pages. Its image-focus nature places it as the perfect media to promote and showcase products, but the limitation of adding external links to pictures has made it difficult to develop e-commerce opportunities. As a result, many external apps have taken on the task of making Instagram shoppable. The latest has been created by Marc Jacobs Beauty, enabling consumers to sign up on the Marc Jacobs Beauty website with their e-mail and Instagram handle. They then receive a weekly e-mail with product information from the pictures they liked on Instagram. While this is the first brand to develop an app to help consumers shop the products they like, it is still a far cry from shopping directly on Instagram, but could show its commercial possibilities.

The Fancy’s latest innovation is powering the Twitter “buy” button, although the company is also a growing social business of its own. Consumers are the curators, as they choose what products feature on it and the more consumers “fancy” a product the more likely it is that it will become available for purchase. The Fancy purchases the most popular products from the site and spreads inventory across the world in order to be able to offer express delivery to consumers. Beauty is one of the most popular categories on the platform and one of the few that offers next-day delivery. The platform is also attracting many luxury players due to the high image quality and the company’s no discount policy. Luxury players, even with their more affordable beauty lines, have been sceptical about increasing their online availability.

Digital commerce takes over

Social media’s influence in e-commerce is only expected to intensify, with smart phone penetration continually rising and Apple launching Apple pay. Social media already claim that half of their business is on mobile and, through their own apps, they have been fast at adopting the capability of their website on a mobile screen. This can benefit beauty players that are looking to expand their digital footprint. Social media give them full control of their image and access to consumers, their information, likes and dislikes. However, a key challenge for both social media and brands/retailers is consumer privacy. While many consumers are active users of social media and spend increasing amounts online, rising concerns about privacy are troubling lawmakers. Google’s right-to-be-forgotten initiative is just a small step towards addressing the growing concerns about the vast information online.

 

Learn more in our free e-commerce white paper