How Beauty Brands and Specialty E-Tailers Can Win in an Online Environment Dominated by Amazon
16/11/2021 by The Red Tree
Although Amazon’s early pandemic reign over commerce appears to be fading a bit, its influence on digital shopping habits remains pervasive. In order to resonate with and reach shoppers in an online environment with such a massive player, non-Amazon e-tailers have to be extremely agile. For Dawn Francisco, CEO of luxury beauty e-tailer b-glowing, winner of the 2021 Beacon Award for Online Retailer, and a former VP at Dermstore, it’s a business imperative to be on top of of the latest tools and techniques making the e-commerce shopping experience sing. “Something new is emerging every day,” she says. To help us keep track of what to watch for that’s propelling e-commerce forward, we talked to Francisco along with two of her colleagues at b-glowing: Ashley Quincey, director of merchandising, and David Van Gorp, VP of e-commerce. Here are five topics they’ve been focusing on to stay ahead of the competition.
Supporting emerging backend technologies
“Emerging backend technologies are really changing the game for e-tailers” says Francisco. Some of us will be leveraging these technologies to offer high-touch experiences from the moment the consumer enters the online store to the time they receive the package. I think brands should be positioned to support these emerging opportunities. So, whether they’re drop-shipping platforms or omnichannel delivery, if [brands] can create something like a go-bag to support agile operational shifts, I think that’s going to be a best practice for them.” She mentions white-glove same-day delivery, personalized sampling and user-generated commerce as emerging opportunities she’s tracking.
Enterprise resource planning
Francisco recommends brands have an emergency plan in place for e-tail disruptions. “For example, having an engineering resource that can support changes with ERP [enterprise resource planning], for example, or APIs [application programming interfaces] to allow a new technology tool to plug into that brand, can be super helpful,” she says. “That can prepare brands to be early adopters of emerging technologies.”
Cultivating an intriguing unboxing experience has been critical for beauty brands and e-tailers alike, but Francisco envisions the delivery process possibly becoming even more of a critical interaction between customers and companies.
She says if “we would directly interact with the person who’s delivering the package, you can see how high-touch this can become.” She elaborates, “We could script our own idea of, What does that delivery person do. What does that experience look like? What type of a bag are customers receiving at their door—or is it a box? You can really curate that experience.” Francisco notes that retailers could crowdsource their own delivery networks rather than depending on Instacart or Uber, enabling them to tailor delivery experiences.
She adds securing distribution centers in different markets is becoming relatively affordable, providing brands and e-tailers enhanced flexibility in the delivery experiences they offer. “Previously, it wasn’t as cost-efficient,” says Francisco. “But, now, that we’re seeing rising costs on the side of the freight carriers and on the labor side, it’s good business. The consumer experience is the huge win there, but it can also be supportive of a positive EBITDA and your P&L.”
With values increasingly integral to consumers’ purchasing decisions, brands should seek retail partners aligned on what matters most to them, according to Quincey.
“Retail partners are an extension of your brand identity,” she says. “So, it’s very important to choose wisely, and your retailer’s values matter. We’re seeing that more and more as a brand of our own. Our values matter to our customers. We’re seeing them gravitate towards retailers and brands that reflect heir own ethos.” Quincey argues a retailer like b-glowing can highlight its values—and a brand’s—in a way that is “simply unattainable for Amazon.”
Francisco chimes in, “At b-glowing, you can actually speak to a human being. How the consumer customer service or concierge team interacts with our consumer is super important and also very different from Amazon.” Van Gorp highlights b-glowing’s community focus. After joining the company a couple of months ago, he restructured its customer reviews program. “My plan is to bring in more user-generated commerce and live shopping to the site, and to be able to increase this engagement with our community and keep our focus on our core values,” he says. “Retailers like us have the opportunity to expand on human connection, more so than a big marketplace like Amazon.”
The importance of diversification
Following the Apple iOS 14 update shakeup of the digital advertising market, Francisco emphasizes, “Diversification is super important.” She also points out the recent social media outage was a good reminder “not have all your eggs in one basket.” Francisco suggests retail and e-tail partners should be sharing the marketing burdens with the brands in their assortments. “The cost of conversions is increasing as more people have entered the space.
Understanding online conversion
If your retailer is requiring your digital spend to drive their online conversion, that should be a red flag,” she says. “You should be able to rely on your retailer to generate the traffic and the eyeballs and the consumers to meet your brand and get to know your brand online.” B-glowing is pulling advertising levers such as programmatic direct mail and influencer relationships.
In a post-pandemic beauty market characterized by a larger percentage of transactions occurring online, pure-play e-tail partners can be real sales movers for brands and assist them with having an impact in the digital shopping sphere.
“Historically, your online partner may have been one of your smaller retail partners as a brand. And I know now that we have situations where, with certain emerging luxury brands, we may be their largest source of wholesale revenue,” she says. “Pure-plays are now more able to scale as the consumer has pivoted from in-store visits to purchasing more online and discovering more online. Pure-plays can really be brand builders and provide sufficient income into the brand’s P&L.”
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