Why Personalization Is Especially Important in the Beauty & Cosmetics IndustrySep 4, 2018 - by Mike O'Brien
Sephora.com sells 239 different kinds of foundation. It may sound excessive at first, but there are a lot of factors to consider before you decide on any beauty product. Is your skin sensitive, dry or oily? Whether your ancestors are Norwegian or Nigerian could also determine which products you use.
Maybe 239 different kinds isn’t even enough.
The point is, cosmetics are inherently personal because no two faces are the same. Which means the beauty industry has to really embrace personalization.
Diverse Products Are Differentiating — But Also Distracting?
Diverse product lines have become a differentiator for beauty brands. L’Oréal patented color technology to match individual consumers’ skin tones and textures with 33 different shades of products. Rihanna launched Fenty Beauty in the fall and her makeup line was widely praised for its inclusivity, with 40 different shades of foundation available.
That presents another problem for consumers. Which of L’Oréal’s 33 shades is their shade? To the naked eye, alabaster and porcelain are interchangeable, as are cocoa and cappuccino. How do you know if your skin tone is classic beige or more of a shell beige?
In 2004, psychologist Barry Schwartz wrote The Paradox of Choice about the sense of paralysis consumers feel when faced with too many options. If someone has too many choices, they’re less likely to choose anything — or be happy with their selection. Just like Netflix has taken that feeling out of the equation with its hyper-personalized recommendation engine (which saves the company $1 billion a year) beauty brands have figured out how to use personalization technology to make their customers’ lives easier.
CoverGirl does so with facial recognition. Last year, the brand launched an app, Custom Blend, that analyzes people’s skin color, intensity and undertone, generating a numeric indicator that matches them with the right products. The whole experience is personalized, right down to the packaging; people can select fonts and label colors, and even include their name on the bottle.
Similarly, Japanese beauty retailer Shiseido developed Optune, a skincare system that can determine someone’s skin texture, pores and moisture content with a simple photo. It even takes into consideration variables such as temperature and humidity, and… menstrual cycle. From there, Optune transmits the data to its IoT-enabled machine, which dispenses the correct serum and moisturizer combination for that moment.
How Sephora Stands Out
In Sailthru’s second annual Personalization Index, we ranked more than 250 retailers based various customer experience and personalization capabilities. Sephora was the clear winner both times, thanks to its relevant product recommendations and smart cross-channel strategies. This year, The Body Shop took second place, proving the importance of personalization in this category.
Sephora’s loyalty program, regarded as one of the best ones around, fuels engagement with tiers and relevant, personalized product recommendations. Within Sephora’s app, Visual Artist, a feature that combines facial recognition and augmented reality, allows consumers to “try on” different products. Skin tones have many subtle variations; so do cosmetics. And those differences don’t necessarily translate the way you think they will.
For example, Stormy Pink and Sky Pink are two shades of lipstick that look nearly identical on Revlon’s website. But don’t they look totally different (and distinguishable from one another) on the model?
Still, that model may not look anything like you, which Sephora’s Visual Artist has taken into consideration. Consumers can see what different products look like on their own faces. Visual Artist suggests the best shades for each person, factoring in hair and eye color as well.
Sephora is also known for creating personalized experiences with the use of its innovative chatbot. It provides product and beauty advice, and almost serves as a digital sales associate. However, the recommendations aren’t aggressive enough to make it seem like one. Is it any wonder that last year, Sephora recorded double-digit growth in profits and revenue for their parent company LVMH?
The Pluses of Personalization
It’s no secret that consumers crave personalized experiences. Simply putting someone’s name in a subject line increases the odds they’ll open the email by more than 20%. According to Forrester, 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
Personalization is especially crucial in the beauty space, where every product is inherently personal and designed to look different on everyone. Some cosmetic brands are even purposely shying away from Amazon because they can’t personalize the experience enough.
Plus, personalization results in more revenue. Imagine what that can mean for the beauty industry, which is already a moneymaker. SkinStore found that the average American woman will spend $300,000 on makeup throughout her life. To put that amount into perspective: The median home value in Salt Lake City is $295,000.
Learn about Sailthru’s Personalization Marketing Solutions and how they can help you create the best possible experience for your customers.