Next-generation technology is fundamentally changing the beauty industry. “The boundaries that once constrained us are gone. The ability to connect with consumers in meaningful and relevant ways is changing the game for beauty brands big and small,” said Karin Tracy, head of industry for beauty, fashion, luxury and retail at Facebook.
Using its billions of Facebook users and 80 million businesses, the platform is building ways for beauty companies to tap into consumers. “Boy, do [those on Facebook and Instagram] love beauty. Type in beauty on one of our platforms and you gets thousands of posts, videos and now stories where people come to discover,” Tracy said. Instagram, in particular, is a popular platform for beauty with people visiting the app 33 times a day, a 63 percent increase over last year.
Tracy delved into the issues of reaching beauty consumers head on, notably the lack of attention span presented by distracted consumers who have less time for online and offline shopping experiences. And it has only become more cluttered — more than 70,000 points of distribution for beauty and more than 1,200 new product items have been introduced into the space in the past four years.
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Compounding the issue, especially for heritage brands, is the emergence of smaller players. Sixty-four percent of sales from the top 200 consumer packaged goods companies came from small and medium-size businesses. Because they never had “Madison-Avenue sized” budgets, she reasoned, they leaned in hard and early on social. “They created really robust direct-to-consumer relationships. There is a democratization of advertising happening as a result. For the first time ever, small, relatively unknown brands can compete head to head with the biggest brands in the world and shifting share.”
With these developments as a backdrop, Tracy detailed what Facebook is doing to leverage mobile technology to build sales. Artificial intelligence, she said, is beneficial in nabbing the distracted consumer. Technology is getting smarter and more intuitive and that’s why Facebook’s feed is curated for the user and also how the platform can recognize faces in pictures. “This is how businesses are now having real-time, one-to-one conversations with their customers over Messenger,” she said, recommending it is a function beauty executives should aggressively pursue as personalization becomes critical. Consumers, she explained, are inundated with messages and start filtering out everything that doesn’t pertain to them.
Consumers on mobile, especially younger ones, want fun and behind the scenes content. That was the genesis of Instagram Stories, which is exhibiting rapid growth, from 100 million to 300 million followers a day. She said that over one-third of the most viewed stories are from businesses.
Personalized, one-on-one experiences have always been endemic to the beauty industry. “But 80 percent of customer interactions will be non-human. This means you must all lean into immersive technologies such as AI to AR in order to connect with consumers,” Tracy said. “We can all relate to lying in bed and we can be shopping rather than when we used to have to go shopping.”
That trend encouraged Facebook to launch shopping on Instagram. The next step, currently in beta testing, including a trial with Sephora, is camera effects enabled with AR that happens in the Messenger platform. Sixty percent of people say they want to see experiences built into apps to make better buying decisions.
Tracy encouraged beauty companies to stop thinking 90 percent of sales still happen in stores and 10 percent online. Digital has a much bigger influence and can help tweak the experience shoppers encounter when they are driven to physical stores. For example, in the retail environment, customers want to be able to take photos and get product information. The biggest sales tool is actually in the palm of consumers’ hands, she concluded.