During times of economic crisis, an interesting phenomenon occurs — luxury beauty products often see a rise in sales in the form of the “lipstick effect.”
The theory is, in response to a downturned economy, investment in self-enhancement beauty products like lipstick, makeup, and perfume will increase. Even though the COVID-19 pandemic is consistent with other global crises in that it has caused an economic recession throughout the world, this situation is unique because many beauty brands are not experiencing a “lipstick effect.”
Despite this, online retailer Adore Beauty has developed a successful strategy for its business in response to the COVID-19 pandemic.
Identifying What Customers Need
Since the onset of COVID-19, lipstick and lip gloss sales have dropped 24% for Adore Beauty — yet the beauty brand is seeing 3x as many new customers. The reasons for this impressive growth are myriad, though part of it is due to the brand’s ability to remain agile and responsive to the rapidly changing conditions. The company correctly identified what products customers are looking for during this time of need and unrest, and shifted their focus accordingly.
„It’s very interesting because everybody talks about the lipstick effect but that is not what we see,” Adore Beauty CEO Kate Morris told The Sydney Morning Harold. “We are seeing a big jump in anything hygiene related. People have got the message about washing your hands, we are selling triple the amount of hand wash and hand sanitizer that we were a month ago.“
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Based on the data they were seeing in their omnichannel customer engagement platform, it was clear to Adore Beauty that hygiene products have become crucial for customers in the wake of the Coronavirus. Other critical categories include self-care and self-improvement products: moisturizers, hair treatments, bath oils, and facial masks have seen a significant increase in sales.
Identifying and tracking the most popular products provided the brand with insight about how to better communicate with and better serve their customers during this uncertain time.
Offering Joy and Comfort to Customers — Not Just Products
Once Adore Beauty realized that luxury self-care products were helping to bring their customers joy and comfort during difficult times (and were, therefore, the most desired), they rapidly adjusted their communications to be more responsive and relevant to the situation at hand.
For example, Adore Beauty sent customers emails featuring the brand’s favorite “stay at home” picks, which included popular self-care products like a probiotic firming mask, microneedle derma roller, lavender bath oil, and luxury scented candles (because “self-care” also comes in the form of relaxation and tranquility).
The brand even went a step further in connecting with the customers by creating the Adore Beauty “Hangout.” The initiative was designed to, in their words, “bring the best of beauty (and us) together” in the form of beauty-related content and blog articles, curated music and podcast playlists, video tutorials, and a live Instagram hangout every Monday at 7:00 pm. With social distancing becoming a standard practice in many nations susceptible to COVID-19, establishing a community where customers could connect and learn about self-care and beauty tips was a powerful response from the brand.
A brand’s ability to remain flexible and adaptive in a time of crisis will to a large extent depend on the technology they use. Fortunately, Adore Beauty was using a customer engagement platform that allowed their marketing team to react quickly, and also easily modify their communications to respond to the current situation (since it could be done without having to get the IT team involved).
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Adapt, Connect, Deliver
The COVID-19 pandemic has created tremendous uncertainty for many brands. Yet, for the brands that have found a way to succeed and even thrive in spite of the economic recession, there are key commonalities: they quickly adapt to what is happening, they stay connected to their customers, and they continue to deliver value.
Adore Beauty was able to do this by tailoring their email and website communication based on the products their customers deemed essential, and the products that offered customers the greatest source of comfort. They also created connections to their customers and delivered value in the form of the Adore Beauty Hangouts initiative.
Although some product categories have seen a drop in sales, and business-as-usual is impacted, the brand found a way to continue driving successful business outcomes. They achieved this not only by utilizing an omnichannel customer engagement platform that helped them identify opportunities in their customer data and quickly update their marketing communications, but also by being mindful of what truly matters to their customers.
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