5 Tips for Legacy Beauty and Health Brands to Compete With DNVBs
Cassandra Handley | May 5, 2020
Stagnation is a concern for any legacy brand, especially in the $532 billion beauty industry where successful digitally native vertical brands (DNVBs) — like Glossier, Prose, and Thrive Causemetics – have established stiff competition.
Born and raised on the internet, DNVBs focus intently on their relationships with customers. At the center of their strategies are nimble and ever-evolving direct-to-consumer (D2C) business models, captivating brand stories and product content, near-constant social media dialogue, and relatable, user-powered product experiences. (Their products are also excellent.)
These companies have rapidly amassed cult followings and $100-million-dollar annual revenues as a result.
But legacy beauty and health brands can compete effectively by noting and implementing what these companies are doing well — brand storytelling, immersive customer experiences, and innovative uses of personalization.
Here are five tips for legacy beauty and health brands looking to compete with these newcomers.
1. Build Brand Trust With User Content
Beauty brand Glossier, which began as a blog in 2014, rose to "unicorn" status — startup company valued at over $1 billion — using YouTube tutorials and Instagram influencers. (Glossier's valuation reached more than $1.2 billion after only five years.)
The secret to success for the brand is no secret at all: It boasts reliable products, and users are encouraged to post product tests and reviews on social channels. This user-generated content eliminates the transactional feeling of shopping and instead gives consumers a more emotional connection with the brand.
It also helps build brand trust, which has many benefits, including the fact that 80% of shoppers are willing to pay more for a product that comes from a brand they trust, according to the 2020 Salsify consumer research report.
This strong social connection to customers also creates an instant focus group for the brand. When Glossier wants to know what consumers want from its next product offering, its team can simply ask its 2.7 million Instagram followers.
2. Embrace Innovation and Technology
Artificial intelligence (AI) technology — when combined with approachable content — is another way to build trust with consumers. One year after its launch in January 2018, personalized shampoo brand Prose was on track to reach $1 million in monthly revenue. As one of the first "technology-powered beauty companies," the brand relies on AI technology to do the heavy lifting of order data collection on its website.
Such mechanical interaction can be viewed with skepticism by shoppers — as AI can sometimes feel cold and corporate. But for Prose, the carefully crafted messaging and experience help users feel like they're speaking with a stylist at a hair salon.
This conversational tone puts the consumer at ease while taking a well-explained and thorough online quiz to gather details about hair type, age, products and treatments used, and environmental factors. Using these answers, Prose's AI technology then generates an individualized formula by combining 76 natural ingredients — and has over 50 billion possible combinations.
By embracing new innovations and technology, brands can help drive engagement and capitalize on personalization opportunities — an aspect of online shopping with increasing demand.
3. Test Personalization and Subscriptions to Lure Consumers
Health and beauty care are intimate and personal by nature. Skin type, hair texture, pigmentation, and other attributes all vary from one individual to the next. It's a wonder beauty brands haven't prioritized personalization more.
The key element: From start to finish, every Prose interaction feels unique, one-of-a-kind, and decadently indulgent — all features legacy brands should include in their online product experiences. After the shopping is done, and as another personalizing touch, consumers can also opt to have their specially formulated products delivered on a subscription basis.
Personalization and subscription services are excellent opportunities for legacy brands to experiment. Not only does personalization help shoppers feel more connected to the products, but it could also help your brand evolve alongside changing health and beauty trends.
Subscription services are also excellent opportunities for bundling products and introducing customers to other products within your lines they may not have considered otherwise.
4. Highlight Brand Values to Build Loyalty
Coupling philanthropy with high-performing vegan makeup and skincare, Thrive Causemetics has quickly and quietly garnered a dedicated following of conscious consumers. By April 2019, the independent, female-owned beauty brand grew to more than $91 million in annual profits.
Living up to its motto, "Luxury Beauty That Gives Back," by June 2019, Thrive Causemetics had donated $40 million of makeup products and funding to women's cancer, homeless, and domestic abuse non-profits, among others. The brand highlights its philanthropic mission across its online presence, and many customers purchase from the brand because its values align with their own.
Customers are increasingly more likely to buy products from brands that align with their values, and 64% of U.S. shoppers say purchasing considerations are driven by a company's ethical values and authenticity, according to data from Accenture. By highlighting brand values within product content, brands can build stronger connections with their customers.
5. Engage Shoppers With Enhanced Content
For DNVBs, content is their brand's digital packaging. It's about connectivity as much as it's about selling. Shoppers increasingly demand more product content before making final purchasing decisions, as problems with product content lead 79% of shoppers to abandon a product purchase, according to the 2020 Salsify consumer research report. Brands must find new ways to engage shoppers online using engaging content experiences.
Enhanced content includes everything from comparison charts highlighting lipstick shades or skincare lines and videos showing popular beauty bloggers using the products to illustrations that highlight how to apply the product. This content helps shoppers gain a better understanding of the brand and products, and helps them make final buying decisions.
This content is especially crucial for beauty and health brands, as 69% of shoppers seeking these products prefer in-store experiences, according to a 2019 eMarketer survey. While this number may shift as more people move to online channels amid the COVID-19 crisis, enhanced content is one way brands can help boost conversion online, as it's been shown to increase conversion by up to 10% across most categories, according to 2019 Salsify internal data.
To compete with DNVBs, well-established brands must have clear and consistent content. Wherever products are shopped — or however they are discovered — the experience must feel rich and engaging.