Can Digital connections be authentic?

CAN D IGITAL CONNECTIONS BE AUTHENTIC? A study of how social media is transforming the beauty marketing landscape

RAVNEET SACHDEVA

M.A LUXURY AND FASHION MANAGEMENT MARCH 2017

INTRODUCTION • The Global Cosmetic market was $460 billion in 2014 and is estimated to reach $675 billion by 2020 • The United States is the largest cosmetics market in the world • Beauty continues to be one of the most dynamic sectors with a strong digital presence, backed by a sophisticated and influential creator community

THE BEAUTY LANDSCAPE • Beauty magazines are no longer relevant as digital influencers are becoming an important part of the marketing mix • A strong digital presence helps brands build relationships with consumers and anticipate consumer behavior patterns over a period of time

RESEARCH QUESTIONS • Why beauty?

• To understand the paradigm shift taking place in the digital marketing world • How is social media changing the way we make decisions?

• What are some key trends of digital marketing in the beauty industry?

• The importance of influencer marketing

LITERATURE REVIEW

THE DIGITAL BOOM Beauty ranks #1 among popular types of brands that female social media users in the United States interact with digitally

Source: Statista.com (As of February, 2016)

SOCIAL MEDIA One of the most powerful tools in the digital marketing world!

1.96 billion users in 2016

2.5 billion users by 2018

IMPORTANT PLATFORMS • YouTube • Instagram • Snapchat • Facebook Share of social brand interactions in US (2013-15) Source: statista.com

• Pinterest • Twitter

Snapchat user penetration in US (2014-20) Source: statista.com

INFLUENCER MARKETING WHAT IS AN INFLUENCER? A KEY OPINION LEADER with a large and active online fan base/following ü Leads to more credible brand recommendations ü Cost effective compared to paid advertising ü Boosts a brand’s visibility and raises awareness within a relevant target consumer group

60%

of beauty and fashion brands are employing influencer marketing

74%

of consumers identify word of mouth as a key factor in their purchasing decisions

92%

of consumers trust recommendations from other people

SUCCESS STORIES BECCA COSMETICS x JACLYN HILL • First collaborated on a product in 2015 ‘Champagne Pop’ • Sold 25,000 units within its first 20 minutes on Sephora.com.

• Generated an estimated $20 million in sales during the second half of 2015 • Paved way for further collaborations

SUCCESS STORIES CLINIQUE x AMELIA LIANA • The brand Invited top influencers to Marrakech, Morocco to experience their new collection first hand • Crossover campaign between beauty and travel • Amelia’s Instagram posts gathered an impressive 108,087 likes (averaging over 8,000 likes per post) while her YouTube vlog earned over 100k views

SUCCESS STORIES BURBERRY x “IN THE FROW” • The brand gave Victoria inside scoop on how to create an edgy but wearable face inspired by their Fall’16 runway look • Her promotional post on Instagram received over 16,000 likes – giving the brand exposure to her thousands of followers

KEY TRENDS • User generated content • Influencer collaborations

• Personalization and authenticity • Live streaming

METHODOLOGY

RESEARCH METHODOLOGY • Awareness of philosophical assumptions increases the quality of research • Ontology: What is reality? Subjective or objective?

• Epistemology: What constitutes good knowledge? How do we know?

• Constructivist paradigm: • Knowledge is constructed by human beings and their experiences • Reality is perceived to be subjective

RESEARCH PHILOSOPHY Post-structuralism • The interpretation of a text is dependent on a reader's personal concept of self • ‘The subject forms the object’

QUALITATIVE RESEARCH Qualitative research Inductive

Deductive

Inductive research approach

METHODS

RESULTS

I. CONSUMER SURVEY How many influencers are you aware of?

Jaclyn Hill 25%

Kathleen Lights 34%

Manny MUA 50%

Desi Perkins 15%

NikkieTuturials 50%

None of them 28%

Where do you look for inspiration/recommendations when buying make-up?

8% 0%

8%

Do you follow your favorite makeup artists across all social media channels or just a few selected platforms?

0% 50%

34% 100%

Online reviews

Youtuber recommendations

Employes at makeup counters

Friends/family

Personally trying the product at a store

YES

NO

II. KEY INFORMANTS

“

Word-of-mouth marketing is the most effective form of marketing and influencer marketing via social media is one way to tap into it. The number of followers is just one metric in determining influence. You can have 100 followers, but if those 100 followers are hyper-engaged, it can be really powerful depending on the situation.

DEEPICA MUTYALA deepicam.com

74,922 subscribers 65.1k followers

“

I work with beauty brands with products that interest me in some way. I figure if I find them interesting, other people will, too. There have been instances where I’ve turned down brand offers due to a clash of interest.

KAREN MONTERICHARD makeupandbeautyblog.com

40,984 subscribers 24.4k followers

“

What sets any influencer apart is how real their voice is and type of content they churn out. In between all the sponsored posts, it’s a must to keep things real with your followers and show them that there is a real person.

AKANKSHA REDHU

78.4k likes

akanksharedhu.com 83,179 followers

III. INDUSTRY PROFESSIONALS

Christina Gerald, Director of Brand Strategy at Julien Farel Group

Criteria for choosing influencers: Their ability to create brand-relevant content, their current aesthetic, audience engagement and audience size.

Non-traditional marketing methods are replacing traditional methods due to the consolidation of the media industry especially in beauty.

Influencers are now becoming an essential segment of the marketing mix.

We have done product collaborations with many popular influencers such as Grav3yardGirl, Makeup Shayla and HRUSH. Many products sold out within days of launching and have been best sellers for us.

Stephanie Urban, Director of Digital Marketing at Tarte Cosmetics

DISCUSSION How can brands create an authentic connection with consumers: What makes for successful social media strategies?

Right Influencer + Engaging Content + Focused Target Group

DISCUSSION Implications for luxury beauty brands • Focus on creating consistency • Concentrate on improving marketing communications and customer relationships through social media rather than focusing on mass consumption

FINAL THOUGHTS • Social networks bring companies in direct contact with the consumer • The conversations between them are seamlessly transcending geographical, temporal and cultural boundaries • As more people are connected to each other digitally, they now trust the voice of opinion leaders

INFLUENCERS=NEW CELEBRITIES Bretman Rock hosted Miss Universe 2017 Red Carpet

Manny MUA and Shayla Mitchell for Maybelline (2017)

James Charles became the face of Covergirl (2016)

Katy DeGroot hosted the makeup segment at the Grammy’s (2017)

TO CONCLUDE… • More and more intimate connections are being made over the internet • It is evident that digital connections are now fostering more authentic relationships

“

I grew up in a physical world, and I speak English. The next generation is growing up in a digital world, and they speak social -Angela Ahrendts, Senior VP of Retail, Apple

THANK YOU