The Secret to Win at Skincare & Wellness Marketing: Go Niche

The skincare and wellness industry has exploded over the last decade. Here are some of the best ways to niche down in a saturated market - especially when it comes to Gen Z.

If you've noticed more people around you with bit more glow than in years past, you're not alone. The skincare and wellness industry has seen rapid growth and transformation in recent years, driven by consumers' increasing focus on self-care and holistic approaches to well-being.

So, how does this tie in with the recession we’ve been hearing so much about in the headlines? Well, the good news is that for consumers, the situation seems to be greatly exaggerated for the moment: The start of 2023 has seen higher personal spending, which may be due to the resilience of the job market and increasing wages. This rosy outlook is set to continue in the skincare and wellness industries, with the former expected to see a 12% Compound Annual Growth Rate(CAGR) for the next five years, and the latter expecting a whopping 22% CAGR.

This means that now is a great time for skincare & wellness retailers to leverage every marketing opportunity to increase revenue, while the consumer spending trend is still high. And the most effective marketing tactic that we’re seeing in the space is personalizing your messaging to niche audiences. So, let's talk about it.

Understanding the Rise of Personalization in Skincare & Wellness

The era of one-size-fits-all skincare and wellness solutions is over, as personalized products and routines take center stage. Research indicates that consumers are increasingly seeking tailor-made products and services that cater to their unique skin types, preferences, and concerns. This desire for customization has given rise to innovative solutions, such as customizable skincare formulations, DNA-based recommendations, and personalized wellness coaching.

Technology is increasingly playing a significant role in enabling personalization in the skincare and wellness industry. Artificial intelligence (AI) and machine learning are being used to analyze customers' skin types and recommend targeted products. Companies are using imaging techniques and even people's blood types to determine products specifically for each customer. Yes, you read that - blood type.

As these markets continue to evolve, businesses that embrace this level of personalization in both their products and their marketing are likely to see increased customer satisfaction and loyalty, ultimately securing a competitive advantage in the long run.

For example, your skincare brand can segment your audience from the biometrics you collect, be it from simple quizzes to genetics-based recommendations, and create marketing campaigns specifically targeted to each segment with personalized products. When your customers know that the recommendations they see from your brand are that specific, not only does it increase loyalty, but purchase frequency and average order value, too. This is the power of hyper-personalization.

Getting Personal with Micro-Influencers

In the world of skincare and wellness marketing, micro-influencers are becoming increasingly influential due to their ability to form authentic connections with niche audiences. A study by Markerly found that micro-influencers, typically defined as those with 1,000 to 100,000 followers, tend to have higher engagement rates than their more popular counterparts. This is largely attributed to the perception that micro-influencers are like the people next door - relatable and trustworthy - making their endorsements more impactful.

Another factor contributing to the growing popularity of micro-influencers in the skincare and wellness industry is their ability to reach specific target demographics. A Nielsen report revealed that consumers are more likely to trust recommendations from people they know or those who share their interests, making micro-influencers particularly effective in resonating with niche markets. Furthermore, these smaller-scale influencers often have a more focused area of expertise, allowing them to provide valuable insights and advice to their followers.

Your brand can partner with a micro-influencer that exemplifies a specific segment of your audience and create content that feels incredibly personal. And since consumers are used to watching these influencers on social platforms, brands that have leveraged content styles like  Shoppable Stories (curated lookbooks that mimic Instagram & TikTok posts) have seen higher engagement as well as a higher volume of sales.

It’s a one-two punch of delivering curated product ideas right to their inbox, with their favorite micro-influencer as part of the marketing message.

Gen Z Is All About Personalized Wellness

Gen Z is a rapidly growing force in consumer spending, as they come into working age with their own income and their own tastes. Because many of them came of age during the COVID-19 global pandemic, Gen Zers have come to value health, in terms of both mental and physical health. In a recent survey by Vesta, Gen Z showed the most interest in personal supplements at 71%.

Gen Z also values transparency and sustainability in their products. The same survey showed that more than half of those surveyed said that understanding the science behind their products was important, as well as knowing that what they were purchasing were environmentally neutral. This is something to keep in mind when planning personalized customer outreach initiatives. Knowing what audience members value what information most is crucial to authentic conversations.

With this information, marketing teams can insert information in their targeted emails or SMS campaigns that resonate with these consumers, including the list of organic ingredients, how they were sourced, whether they are GMO-free, and the sustainability of the packaging. Showing that your brand cares enough to provide this information will endear customers to your products, as it fosters trust and loyalty.

More than any other generation, Gen Z is expecting a level of personalized care that extends across all stages of their purchase: from development to packaging. Each part is important to them. And this makes for great marketing campaigns for wellness brands that are prepared to tell stories about their products.

Ready to launch your own conversational campaigns with customers?

Give your retail teams the ability to drive engagement and sales whether someone's in the store, or not.