Endear
Endear

Jan 12, 2022

How to increase retail cosmetic sales using customer data

By utilizing customer data, retail marketers in the cosmetic industry can segment their most loyal, highest-spending customers to drive revenue growth like never before.

By Robert Woo, Writer @ Endear

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Look, Zoom filters are great. But they don’t compare to the real thing: makeup. Maybe it’s because we’ve mostly been focused on each others’ faces on either side of the video call for a couple years now, but the beauty industry is booming to the tune of $511 billion in 2021, up 4.75% from the previous year.

Cosmetics, specifically, is projected to see the highest amount of growth in the next few years, at 32%. And while you may think it’s all ecommerce growth, that’s not true; 81% of buyers are still doing their beauty product shopping offline, in brick and mortar stores.

It’s high time your retail business got a bigger slice of that won’t-kiss-off-on-the-collar pie.

Of course, that’s easier said than done. The beauty industry is incredibly competitive already, and it’s not like ecommerce shops are resting on their laurels either. Cosmetics retailers have to raise their game to stand out from the crowd, and the best way to do that is to truly cater to the customers’ specific needs.

Let’s examine how your cosmetics retail locations can leverage customer data to provide an in-store experience that has them coming back for more.

1. Personal, curated bundles

A Harvard Business study showed that bundling products together effectively increases sales compared to selling only singular items (though both should be an option). Couple this with a curated selection of cosmetics geared specifically to each customer, and you’ve got a winning method of increasing your Average Order Value across the board.

A thorough Customer Relationship Management (CRM) software can provide insight into each of your customers’ preferred cosmetic products, what they usually buy together, and even the cycle of when they might replenish their favorite items. Knowing this, your business can offer these ad-hoc bundles both in-store as well as through targeted ad campaigns.

Even if your business doesn’t have the ability to curate a bundle for every unique customer, trends will emerge from your CRM data that will show you what the most popular cosmetic bundles should be for next month’s campaign, allowing you to target large swaths of your clientele. Data makes bundling no longer a guessing game, and customers will also respond to that level of clienteling to keep them loyal to your store.

Speaking of loyalty…

2. Upscaled loyalty programs

Loyalty programs are like face primer: ubiquitous. Every business has an “earn points for rewards” system in place to encourage repeat business. But like guessing at products to bundle, this is a scatter-shot approach to loyalty programs that can be greatly improved by utilizing better customer data.

For example, your CRM can tell you the products a customer will likely repurchase with or without any extra loyalty points. So instead, your business can assign higher loyalty points to products that they would probably like, but haven’t purchased yet. A “2X Bonus” can incentivize a customer to give that new product a shot, making it a new item for them to add into their rotation.

Keep in mind that loyalty programs can also be used to gather even more customer data. More and more businesses are rewarding clients who swipe through beauty quizzes, answering questions on cosmetics options to provide a clearer picture of what they do or don’t like.

By personalizing even the loyalty programs your customers see on their devices, your store will see increased repeat business from your core shoppers.

3. Target high AOV shoppers

Of course, it’s important to know who your “core shoppers” truly are. Are they the most frequent visitors? Just because they come in the most, doesn’t mean they spend the most. Here is where your CRM comes in handy, providing you insight into your highest Average Order Value (AOV) customers.

What do your high AOV shoppers have in common? Specific products? A specific season? A specific type of bundle? Age group? Instead of guessing, dig into your data to come up with a profile of these clients. That way, not only do you know who to target when you’re selling, you also know the type of person to market to, in order to increase your business’s exposure to more high AOV potential customers that aren’t regulars yet.

[Video] Learn how Rebag used Endear to advance their customer education program

4. Personalized subscription boxes

The popularity of subscription boxes in the beauty industry has been a main driving force behind the growth of eCommerce businesses. And while your business should fully take advantage of mailing out subscription boxes to increase revenue, there’s also a way to leverage subscriptions to increase foot traffic in your stores.

Similar to personalized bundles, your CRM can tell you what each customer might most enjoy in their next subscription box by mining their purchase history. Then, you can establish an in-store cosmetics subscription program where they can come in to pick up their individual box each month. Of course, while they’re inside your store, your sales associates can upsell them on other items.

Your business won’t have the additional cost of mailing these subscription boxes, which means your locations can more easily and quickly create a month’s box on short notice. And a monthly reason to walk into your store is a huge boost to cultivating a clienteling relationship with each subscriber.

5. Become a trusted resource

A clienteling relationship goes beyond basic customer service. Clienteling happens when your sales associates become your clients’ trusted ally and resource when it comes to all things cosmetic. Your sales associate knows Emily by name, and using a CRM on a mobile device, can quickly bring up her preferred shades, tones, and products.

Your business can also further establish a level of expertise with in-store events that have professional makeup artists giving tutorials, demonstrations, and makeovers to your clients. Does your data show that you have a large amount of younger clients? A prom-themed makeup tutorial event can draw a crowd in June.

Let your customer data lead you to hosting events that cater best to their interests. If there’s a spike in interest in full coverage items, for example, bring in an expert to demonstrate the best ways to use those specific cosmetic products.

Example of a personalized message:

“Hey Emily, we saw that you’ve been checking out our full-coverage lineup. We’ll be having an in-store tutorial on full-coverage best practices this Friday. Here’s a 10% off coupon in case you decide to stop by."