The digital revolution of the 2010s created unparalleled opportunities for brands to connect directly with consumers. It encompassed direct-to-consumer (DTC) channels, social media, and e-commerce giants like Amazon. Because of this, the number of new beauty brands has skyrocketed.
However, the digital landscape has shifted dramatically in recent years. Customer acquisition costs have surged because of increased competition, platform algorithms have changed, and other technical adjustments are present.
As a result, many brands that adopted a digital-first strategy have had to pivot to an omnichannel approach. So, how can a beauty brand successfully navigate this transition?
Defining a Go-To-Market Strategy
The first step for any omnichannel strategy is clearly defining a go-to-market (GTM) approach. A GTM strategy is an action plan that specifies how you will reach target customers and achieve competitive advantage. Understand who the target consumers are, where they shop, and which channels they prioritize.
This process requires extensive thought, often with the guidance of investors and advisors who can provide valuable insights. If you choose to partner with an investor or advisor, choose someone who sees your vision and will support your goals.
Assessing Retail Readiness
Brands must also evaluate their readiness for retail and address any gaps.
Success in retail requires:
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Innovative products that add value to your customers’ lives
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High-quality products that comply with industry regulations
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A dedicated customer base was initially built through a strong online identity
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Appealing packaging that stands out on the shelf
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Unit economics that support profitability
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Supply chain capable of handling increased volumes and specific technical requirements
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Substantial capital base and a robust team
Getting Products on Retail Shelves
Securing shelf space in retail stores is challenging because of the overwhelming number of brands vying for attention. Retailers have an influx of pitches and evaluate thousands of brands annually. Additionally, buyers are more skeptical than ever before. It’s crucial to articulate clearly what makes your brand unique and why it deserves a spot on the shelf.
Networking through trade shows and LinkedIn can provide initial opportunities. Getting your foot in the door initially can be a huge challenge. When targeting major retailers like Sephora, Ulta, and Target, you may need help from a seasoned professional. These professionals can navigate the complexities of retail partnerships.
Things to focus on in your pitch to a retailer include:
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Whitespace your brand fills
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Product efficacy
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How the product fits in with the buyer’s profile
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The current traction you’ve achieved
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If you’ve had success at other retailers, be sure to include this
Achieving Retail Velocity
Once products are on the shelf, the primary focus for both the brand and the retailer is sales velocity. Sales velocity indicates how quickly you’re selling your products. It offers insight into how efficiently you generate revenue which is important to meet the expectations of retail partners.
Brands should employ a funnel approach similar to that used in DTC strategies. This involves:
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Driving awareness through social media and influencer marketing
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Engaging the community through promotional plans
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Optimizing the in-store experience with trained staff
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Compelling packaging and interesting displays
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Investing in a field sales and training team
The Importance of Omnichannel Strategy in Beauty
Digital channels have transformed brand-consumer interactions over the past decade. However, the beauty industry still relies heavily on in-person discovery, trial, and education. Despite the growth of online sales, about three out of every four beauty purchases are in physical stores.
An effective retail strategy that integrates multiple channels, both online and in-store, is crucial for sustained success. By leveraging the strengths of each channel and ensuring a seamless customer experience, brands can thrive in an increasingly competitive market.