Appeared In
Special Issue
Beauty Inc issue 08/26/2016

The well-worn ritual known as the fall launch season is in full grind. But it is acquiring more of a digital ring each year as brands reach through the media clutter to grab a new generation of customers, with Internet teaser campaigns on the web running weeks before a product hits the counters.

This story first appeared in the August 26, 2016 issue of WWD. Subscribe Today.

While major brands stick to the store-based launch strategy, usually supplemented by magazine advertising with scented strips to reach a more targeted customer, a large part of the equation is shifting toward the web because the modern shopper goes through her day with the world in the palm of her hand.

“It is a big piece of the repertoire of the new product launch,” said Conor Begely, president of Tribe Dynamics, which works with about 70 major beauty brands.

He singled out NYX Cosmetics as “the first real mover” in digital launches, followed by Too Faced, with indie players staging blowout launches, like Becca Cosmetics and Kylie Jenner Cosmetics with her popular Lip Kits.

Now the majors are in the game. Daniel Annese, global brand president of Aramis and Designer Fragrances at the Estée Lauder Companies said, “If you look at yesterday— it was kind of linear. The launch started with a print ad, you then had scented strips, you invited customers into the store where you had the visual week and sampling and somebody helped sell it.

“What we are doing now is a concept we call ‘continuous digital dialogue,’ which means she is on her device constantly,” he continued. “Now the first touch-base on a new fragrance launch is digital. While she is investigating which one to buy—because there are over 1,600—she is still using her device. Even when she gets to the store, she is on her phone. We are developing strategies, starting with that first digital interaction. That is probably the biggest change.”

While the traditional retail strategy is still important to provide a 360 degree reach, it is becoming clear that what used to be transaction in a store is now a conversation. As for how this conversation is initiated, Lauder organized a spa trip in early June to the Peloponnese peninsula in Greece, then to the nearby island of Hydra. The event was built around Michael Kors and 16 influencers from around the world, focusing on Kors’ new Wonderlust fragrance. The bloggers transmitted social media and posted blogs. “The digital dialog starts right away when the influencers say, ‘Look! I was on that island with Michael, and [model] Lily [Aldridge] was fantastic.’”

It worked. Kors, who has 25 million social media followers, saw his new fragrance jump to number one among his eight scents during the two week exclusive period on his website.

Alexandre Choueiri, president of the International Designer Collections at L’Oreal USA, came up with two examples of successful launches that disprove the conventional wisdom that it is difficult to sell new fragrances online—the highly conceptual Replica collection of scents from Maison Margiela and Black Opium from YSL. Replica, which was first in Barneys New York and later Sephora, went online, and Choueiri didn’t expect much. Instead, more than 40 percent of sales came from digital. That compares with a general market average of 10 to 11 percent. Black Opium was sold on Sephora and L’Oreal’s websites, and the L’Oreal website ran out of stock “after a couple of days.” On sephora.com, the one-ounce size ranked number one from the first week, Choueiri said. Even though some retailers resisted stocking another Opium product, customers proved more open-minded. He noted that the strategy of creating buzz online triggered demand in stores as customers asked for the product. “It’s a combination of the right story that can be told online, and something that is different that the customers can relate to without smelling.”

“We have to think of online as an alternative way to create demand,” he said.

That idea is familiar to Aurelian Lis, chief executive officer of Dermalogica. He first started perfecting internet-primed product launches when he was previously at Benefit Cosmetics and he is applying what he learned with the launch of the Phyto Replenish Oil. “There’s buzz about this launch, which I’ve never seen,” Lis declared. “It’s going to be the largest thing the company has ever done in a single year.” Dermalogica began running dewy skin ads on Instagram, announced the new product on Aug. 8, and prepared for the Sept. 1 launch.

Generally, the first weekend of a traditional introduction can result in the new product can claiming 5 to 10 percent of a brand’s total business. On the internet, the new product can claim as much as a 35 percent share, according to industry sources.

Lis pointed out that digital launches provide two advantages in terms of timing: flexibility and frequency. Under the traditional strategy, the ads are placed, the goods are shipped and the manufacturer hopes for the best. “I can’t change my message on a Tuesday morning from one to a different one,” he said of digital.

Also, brands can keep repeating their message. “Every story only lasts for a couple of days nowadays,” he said. “I would like to have multiple bites of the apple.”

But problems can develop, according to Begley. Bloggers have become so influential and numerous (“We track 100,000 different people who are considered to be publishers.”) that the resultant buzz can de deafening or scarily silent. Since these are unfamiliar channels— unlike TV or print— the stores can be left in a quandary when it comes to forecasting sales, Begely noted.

Annese at Lauder summed up the significance of digital. “The big thing is that great content leads to sharing and pass along, so at the end of the day, it leads to engagement. The consumer is influencing and controlling the evolution of where we are going. They are driving the digital dialogue.”

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