“It’s not about distribution anymore. It’s really about: Are you relevant to the customer? And are you emotionally connecting to the customer?” said Hil Davis, founder and chief executive officer of BeautyKind. “I feel like this is a pretty new conversation for this industry.”
BeautyKind, a recently launched prestige beauty e-tailer, gives people the opportunity to donate 5 percent of their total purchase to a preferred charity. The company also proposes “cause”-based gift cards to new shoppers to apply against purchases and a rewards program allowing people to earn points from purchases made by their referrals.
Prior to BeautyKind’s launch in late 2014, Davis and his team queried a slew of women about what drives them to shop. From their answers emerged three main themes, dubbed “give,” “get” and “click.”
Giving back to a cause is important across all demographics, explained Davis.
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“Get” refers to people asking: “What’s in it for me?” That led to the rewards program being conceived.
“[It] is really about driving average spend, driving frequency, driving retention and stickiness,” he said, adding that rewards programs need to be refreshed perpetually, since 82 percent of customers chase the best offers. “They want options.”
Davis called cash the “holy grail.”
“If you can create a cash component, it resonates with [the] customer,” he continued.
People polled voiced frustration about their ability to easily replenish and discover products online — in other words, the “click” element.
He called the core principles of BeautyKind “head,” “heart” and “wallet.”
“Head” refers to the shopping experience, where personalization and convenience are paramount. BeautyKind, for instance, is rolling out an application that will be a one-touch reorder method. The company — which is expanding its bricks-and-mortar component — also believes in the opportunity to develop a personalized and free sampling program.
“We’re changing the conversation; it’s not where you buy, it’s what you buy,” said Davis, while discussing the “heart” principle. “So now a product is something so much more than just a product, it’s this emotional benefit that gives back to what you care about.”
“Wallet” is linked to people wanting to belong to the brand.
“We are going to profit share,” said Davis. “Five percent of our revenue goes back to the customer…not only for their purchases, but also for referring friends and, through that, raising money for causes.”
Such strategies are bearing fruit. BeautyKind’s average new customer order is $68, while that of its repeat customer is $89, explained the executive.
“The average customer is coming back 3.3 times a year for us,” continued Davis. “[They’re] spending over six minutes on the site and looking at 11 pages.”
He summed up: “What we think about when we develop this program is how can you create the most customer benefits, because whoever creates [that] will probably take the most share.”