New arrivals?

Sell the brand, not just the product Product quality must be as effective as advertised Always be ready Provide customers with something they can’t get elsewhere Become friends with customers Invite customers to join the community Amidst the continuous flow of new product launches and shopping conveniences, consumers are forming habits of seeking and comparing products from brands, rather than sticking to their existing beauty routines. The pandemic has created opportunities for many beauty and skincare brands to increase online sales volume. Along with shopping incentives, gaining new users is great. However, retaining new customers for beauty brands has become more challenging than ever.

New arrivals?
New arrivals?

According to data analysis company Metrilo’s report, the average customer retention rate for beauty brands is about 23%, equivalent to 1.6 orders per customer. Michael McNeil, Senior Vice President of Global Communications and Marketing at Huda Beauty, said, “Competition is increasing day by day. If a customer wants to buy another eyeshadow palette, they can simply do so with a click.” This is quite understandable, as the quality of brands will not vary much because it’s eyeshadow, not a high-end skincare product. Therefore, competition is significant.

To retain new customers, brands must deploy various forms and activities to tap into the loyalty of customers. BoF spoke with brands, retailers, and experts about retaining customers to bring them back more often.

Sell the brand, not just the product Even in a saturated market with new products, brands must find unique marketing strategies or risk being forgotten. Marcia Kilgore, founder of Beauty Pie, shared, “You have to ensure that the essence of whatever you’re selling has something people genuinely care about.”

“Make sure the essence of whatever you’re selling has something people genuinely care about.” Beauty Pie operates as a members’ club, where access requires monthly or yearly membership fees to access products. The brand advertises itself as offering prestige beauty at affordable prices. According to statistics, the brand’s membership has increased by 70%, and revenue has doubled since March 2020.

Beauty brands represent something that can offer an attractive proposition to customers, who may be part of a community simply by purchasing a product. This is particularly relevant because consumers are more likely to shop with brands they perceive to align with their values.

Huda Beauty’s founder, Huda Kattan, began as a beauty blogger and influencer before founding her cosmetics and skincare brand, attracting a large following of beauty enthusiasts. Today, the brand leverages its origins from the founders’ blogs, integrating her blog into the e-commerce website. Kattan produces numerous articles, videos, and beauty tutorials, featuring products from various beauty brands—not just her own. She also posts about social issues she and her followers care about.

How can the beauty and skincare industry retain new customers? Huda Kattan is a content creator focused on beauty care (Photo: Adam Browning-Hill) Michael McNeil, Senior Vice President of Global Communications and Marketing at Huda Beauty, said, “What we’re really selling is content, representation, and community. We’re presenting a philosophy, a community we want to build, a stance on representation—and makeup is just an accent of that.”

Product quality must be as effective as advertised This is the most basic requirement—a product must deliver on what it advertises. If customers rate the product quality below expectations, they’ll never return. However, if buyers trust a retailer or brand, they are more likely to try new products when shopping incentives are offered.

Peach & Lily, an e-commerce site selling its own beauty lines along with K-Beauty brands as a third-party, takes months to decide whether introducing a new brand is worth it. Alicia Yoon, the founder, said only 5% of the brands they consider make it onto the website.

“Your new reputation is crucial, and when people try it, everything must make a difference,” Yoon shared.

Always be ready Kristy Engels, President of Beauty Strategy Group, said, “Maintaining home care customer service is a good strategy. It benefits brands in all aspects, from product development to maintaining customer relationships. But it’s the most challenging job. Today, customer expectations are higher than ever. Whether customers are reaching out to the brand through email feedback or social media, they genuinely expect responses within less than 24 hours. Answers need to be helpful, quick, and relevant.”

Peach & Lily has never outsourced its customer service, mainly because it often requires a standardized protocol for responding to inquiries. Thus, the brand can address every issue in the best way for each individual, whether it’s usage advice, exchanging an unsatisfactory product for another, or offering a return and full refund.

As brands expand, the customer service department can easily become disconnected from other parts of the business. Emma Lawson, Vice President of E-commerce at Huda Beauty, believes brands should work diligently to integrate this department into all areas of the company. This is why the head of the customer service department should attend all important business meetings, to become the voice of the customer.

Provide customers with something they can’t get elsewhere For business brands, they need to give buyers a reason to go directly to their e-commerce site instead of retail partners. This can be a challenge, especially if retail partners offer privileges like free shipping or free samples.

Huda Beauty always launches its new products on its website first. Visitors will also find many things they can’t find elsewhere, from additional shades of new palettes to exclusive Huda Beauty merchandise, such as headbands, sleepwear, and indoor slippers—items Kattan wears in her tutorials and vlogs. The brand also offers options to personalize product bundles or purchase beauty tool kits with multiple products at a discounted rate.

Become friends with customers Beauty analyst at Mintel, Samantha Dover, said brands need to foster emotional connections with their customers. “It’s about ensuring that your tone of voice and communication with customers make them feel like you genuinely care about them,” she said, citing Glossier as an outstanding brand in this area. “Advisors always talk to customers as if they were their friends.”

Listening to customer feedback and using that feedback to develop customer care strategies is crucial. Additionally, brands need to ensure they communicate information, notifications on the platforms where customers interact with the brand, whether it’s on Instagram, Tiktok, Whatsapp, or email.

“Ensure that your tone of voice and communication with customers make them feel like you genuinely care about them.” Peace Out Skincare introduced text messaging in July 2020, sending delivery updates about recent orders and contacting buyers a few weeks after they receive their orders to ask how they liked the products.

Customers interact most with messages about new product launches and often respond to the brand with questions about skincare issues or product ingredients. Just after six months, SMS contact has brought in 11% of total business revenue. Pence, the brand’s marketing director, predicts revenue from SMS this year will more than double. Today, 82% of Peace Out’s direct sales revenue comes from mobile devices.

Brands need to carefully adjust their tone in text messages based on each customer. This may take time but is highly effective. Engaging with a GEN-Z consumer is very different from conversing with a 40-year-old consumer purchasing retinol for wrinkles. Therefore, personalizing tone and word usage through SMS to their consumers is essential.

Invite customers to join the community Customer participation in a community of brand enthusiasts can keep them thinking about the brand first, encouraging repeat purchases over time. For brands, establishing a community can also provide a wealth of customer data, both detailed information about what your customers want, and the ability to personalize their experiences.

Nail brand Olive and June offer a membership program, where for just $30 a year, customers receive free shipping and a 10% discount on every order, as well as other perks like early access to new products and free gifts with purchases.

Beauty Pie turns membership cards into a business model. Different membership tiers have different limits on the amount they can spend each month. While it varies among customer bases, most members come back to purchase new products every few months.

Customer loyalty programs that reward customers for returning to shop can also be an effective retention tool, especially if shoppers quickly see results. Ulta Beauty’s Ultamate Rewards program spurred 30 million members to make at least one purchase in the past year, with 95% of Ulta Beauty’s revenue coming from program participants.

For Ulta Beauty, prioritizing making the program simple, user-friendly, and understandable to encourage shoppers to sign up and use it frequently is crucial. Rewards for customers start by earning one point for every dollar spent. But the more money customers spend in a year, the higher their membership status, and the more points they receive when shopping. Program participants are also entitled to early access to new product launches.

Additionally, Ulta Beauty uses data collected from its rewards program to customize each customer’s experience with content, offers, and product recommendations.

With this article, hopefully, your business has learned how to retain new customers!

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