Data-driven personalization continues to accelerate as customers increasingly value the advantages of convenient and fast shopping experience. They're likely to spend more and add extra items to their baskets when the purchasing experience is specifically tailored to their problems and needs.
According to a study conducted by Epsilon, 80% of customers are more likely to buy from a brand that provides them personalized experiences.
Data is at the center of personalization initiatives
To understand customers' behavior and provide them personalized services to their needs, having rich sources of user data in house and a streamlined process of analyzing and using those data has never been more critical. Data-driven customer personalization is developed based on a combination of first-party user data - directly collected from consumers, and third-party customer data - collected from external organizations.
In the beauty industry, customer data such as typical skin type of shoppers, common skin problems, and the allergic ingredients to most of the customers are highly valuable for beauty brands and retailers.
How to utilize different kinds of data to yield better personalization:
Personalized beauty product recommendations
There're three types of data typically used for personalized beauty product recommendations. Those are contextual data, including shopper's location, weather; demographic data such as age, gender, skin concerns, skin goals, allergies; and behavioral data like browse history, abandoned cart, transactional data, search keywords as well as content consumed.
At Revieve, we also gather real-time data from skin analysis of the user's selfie image to instantly provide detailed diagnostics and individualized product-matching offers.
Hyper personalized beauty products
One of the rising trends in recent years is hyper customized beauty products based on information collected from skincare quiz around customer lifestyle, habits, location, combined with artificial intelligence to come up with the most effective formula for every customer.
From hair care to makeup and skincare products, brands like Function of Beauty, BITE Beauty, and Curology are witnessing rapid growth and positive adoption from customers. “Even if you had the same skin type as someone else, your skin needs can be very different than theirs. A personalized product is able to specifically address each concern specific to the individual that a mass-produced product cannot.” – said Dr. David Lortscher, CEO and founder of Curology.
Consumers now expect more one-to-one initiatives, not only in the interaction and experience with brands across different touchpoints but also from the products themselves.
Re-engage marketing campaigns
Recognizing regular customers or new visitors and tracking their browsing behaviors on the website thanks to associated cookies are the primary steps toward a highly personalized remarketing campaign. From behavioral data of visitors on the website, brands/retailers can set up retargeting ads campaigns reaching certain audiences based on specified criteria.
By doing this, the website’s conversion rate increases more effectively since resources are allocated to audiences who are likely to convert into customers.
Challenges of data collection
Given the importance of customer data in offering a personalized beauty customer journey, not every beauty brand or retailer can collect the right data or know how to process big data to generate meaningful insights and values for business development.
As for beauty brands, one of their challenges is the ownership of consumers’ personal and transactional data due to the indirect relationship and communications with customers. They depend on distribution networks in selling products. Therefore, they're at a distinct data disadvantage.
Without information, providing a personalized customer journey including product recommendations and individualized beauty products is impossible. As a result, more beauty brands nowadays are trying to diversify their distribution channels and less rely on partner retailers by selling through their own e-commerce shops.
Regarding retailers, despite having a massive amount of data in house, beauty retailers are faced with certain issues of the poor data centralization and lack of advanced technology in processing data to automate personalization solutions effectively.
Data privacy and security
The recent cases of high-profile corporations in abusing consumer data continue to raise concerns over how beauty brands and retailers can reach the right balance between personalization and customer privacy protection.
Data associated with payment methods or basic personal information such as gender and age can be considered as the number one issue. However, it's even more complicated in the context of AI-powered beauty technologies. AI/AR-enabled applications require detailed information about consumers' skin concerns and even their selfie images.
Therefore, a strong and advanced customer data protective infrastructure is a must for any beauty brands and retailers operating in an era of tighter control of personal data, especially when theGeneral Data Protection Regulation (GDPR) comes into force.
According to Salesforce, 65% of customers have stopped purchasing from brands that acted suspiciously with their data. Data breaches can significantly damage brand reputation and erode the trust and confidence of customers from sharing information about themselves.
To cope with these matters, beauty industry players are increasing their focus on protecting customer data and carefully choosing the trusted partners for collaboration. However, it can be an intensive effort, requiring companies to divert resources from other critical personalization innovations.
Ensuring the security and privacy of data-driven personalization can help build a sustainable long-term relationship with customers while boosting customer satisfaction and retention on business.
Revieve collaborates with leading beauty brands and retailers to deliver personalized and engaging beauty experiences for customers while staying compliant with global privacy regulations. We adhere to the strictest privacy and data security standards. We operate a secure, enterprise-grade CCPA andGDPR-compliant infrastructure for data transmission, processing, and storage with relevant encryptions, safeguards and practices in place to ensure the protection and privacy of any data passed through Revieve’s systems.