The past few years have been cataclysmic for the health and beauty industry; with new pressures, market forces and trends at play, from sustainability, issues surrounding representation and transparency of supply chain management and ingredients.
These moving parts have not been made easier by changes in consumer behaviour and a new way of consuming products, such as subscription services. These issues led many leading brands to invest heavily in influencers, social media marketing, gamification and AR as a means of building trust, loyalty and reputation…but is it enough?
The newest disruptors on the block see themselves as technology companies selling health and beauty products and it’s enabling them to grow their customer base (and market share) at rapid speed.
The top 20 cosmetic brands only capture 14% of all online sales, so turbulent times look set to continue with brands and retailers racing to take market share. But where do you start?
Creating choice overload
As more companies enter the health and beauty market and incumbent brands expand their online offerings to increase their market share, consumers are given more and more options. So much so that the Beauty Digital Brand Report in 2018 said that 65% of women felt overloaded with options.
Whenever a consumer becomes overwhelmed by the number of options available, they become uncertain and hesitant about making a buying decision. Without the education and insight that should accompany these purchases, customers become confused and abandon their shopping altogether or leave with products that are not right for them, meaning they’re unlikely to return.
In fact, our own research found that 42% of consumers reported abandoning a planned purchase because of too many options and 54% have abandoned a particular site because it was too difficult to find the right product.
This is particularly acute in the health and beauty sector where customers crave human interaction, guidance and support when choosing products. Because there is less ‘personal touch’ on digital channels, shopping for health and beauty products online instantly becomes a more sensitive and emotional purchase process for the consumer, who is resigned to making a decision all on their own.
Cosmetics Business & Your Beauty Club data found that almost 90% of consumers ask for help from a retail consultant when shopping for beauty products. By focusing on volume of products, brands now face the risk of losing once-loyal customers to companies that do a better job at addressing consumer wants and needs. The answer is not fewer options but delivering a digital experience that guides shoppers to the perfect products and bundles, based on their unique needs and preferences.
The human touch
In order to do this, health and beauty brands have to deliver meaningful experiences that are founded on trust and that feel real and human. In fact, there’s hardly any other industry where consumers expect a two- way conversation with their preferred brand as it is in the case in the health and beauty industry.
This means that businesses need to listen to every individual’s wants and needs and then engage with them across a multitude of touchpoints throughout the customer lifecycle, providing an individualised and adaptive experience.
At this cross-section of technology and human interaction is the digital consultant, which combines Artificial Intelligence (AI) with human-like engagement to help bridge the gap between the in-store and online experiences. AI-powered digital consultants address the human need for conversational engagement and individual understanding.
These solutions allow brands to engage with customers on digital channels and provide them with educational, consultative experiences. Instead of customers being left on their own with overwhelming choice overload, brands can deliver the same level of assistance, support, and helpfulness that they would deliver in-store, before and after a purchase.
Just as an in-person beauty consultant would guide a customer to a specific display, a digital consultant analyses a customer’s input in real-time and recommends the most suitable options available. Additionally, the digital consultant provides unique educational content and product highlights for every recommendation to help expand the customer’s knowledge and increase their buying confidence.
The hair care industry is one of the most competitive and crowded industries within the health and beauty space as a whole. For industry giant Clairol, winning over the competition in the online marketplace meant delivering solutions to customers to help eliminate choice overload and reduce product confusion.
The brand implemented a digital consultant, which gently led customers to the right product for their specific needs in just a few steps. Now, instead of clicking through pages and pages of shampoos, conditioners, and at-home colour products, customers can go through a conversational sales process as they would in-store, with a digital consultant showing the best recommendations for their specific hair type and hair goals. And this is just one example.
Other innovative brands like L’Oreal, Moroccanoil, Sally Beauty and Rossmann have turned to conversational commerce to drive huge increases in sales, some in excess of 100%.
The speed at which technology is advancing is disrupting the industry to its core. While it may seem contradictory, to use technology and AI to appeal to our most human nature and feel understood, it is here to stay – and is the only way to grow your business at scale.
Today’s consumer prioritises convenience, expecting a certain level of assistance from brands whether that be in store or online. In an omnichannel world, never before has the expectation for the seamless transition between online and in store experience been at higher demand. Research has shown that 54% of consumers have stopped purchasing from a particular site because they found it too confusing and overwhelming to make a confident purchase decision.
By taking the conversational, guided approach online as well as in store, businesses are providing support to customers, thereby reducing friction, choice overload and decision anxiety. Tailoring each transaction through conversational commerce and digital assistant strategies, brands can be sure that potential customers are receiving the necessary guidance to actually end up making a purchase and avoid missing out on the final step: conversion.
Sarah Assous, SVP marketing, zoovu