Ahead of news breaking that Coty was considering a controlling stake in Kylie Cosmetics, Seed Beauty and beauty leaders from NARS, Instagram and Tribe Dynamics gathered on stage for CEW's "Future of Social Selling" to discuss the evolution of beauty shopping.
First, what is shopping?
It's important to understand buying versus shopping, said Shirley Li, strategic partner manager at Instagram Shopping. Buying is intent-lead, meaning platforms must focus on taking friction out of the purchase experience. Shopping, meanwhile, is about the journey and exploration of product discovery and exploration.
The launch of Instagram shopping moved the platform from primarily exploration to purchase, addressing the serendipity of the shoppers journey with shoppable tags. Li noted that more than 130 million people a month click on these actionable elements.
The only question, then, is whether that is what the consumer wants.
Meanwhile, Checkout on Instagram offers native checkout to help those shoppers complete purchases within the app, which Li claimed was the preferred mode for consumers.
Li noted that brands need to give shoppers a reason to buy within Instagram, rather than a store or brand site. To better understand what works and does not, the platform partnered with a limited number of companies, including direct-to-consumer players and traditional brands at a range of pricepoints.
Does the customer want shoppable social?
Conor Begley, co-founder and president of Tribe Dynamics, noted that Google is also building in similar capabilities on its properties. The only question, then, is whether that is what the consumer wants.
Facebook, Instagram's parent, tried in-app shopping, which Begley claimed didn't work well. However, he added, Instagram is perhaps a much better fit because of the profile and expectations of the user base.
Instagram is not about chasing consumers but rather engaging with them on brands' platforms.
Previous to shoppable tags and in-app purchase functionality, users hacked their own workarounds to achieve similar goals. Efforts like these from the platforms themselves may render obsolete third-party services designed to fill the gap.
Much of the panel appeared to agree that social media commerce would likely remain a supplement to existing forms of product discovery and purchase, rather than a wholesale replacement.
While some behavior has pointed to consumer intent to purchase on Instagram, many are still using the platform for discovery, rediscovery and consideration...
Fierro noted that social commerce is complimentary to e-commerce but that the strategies need to be distinguished. Replicating e-commerce in Instagram is a losing proposition.
Li added that shopping on Instagram is not about chasing consumers but rather engaging with them on brands' platforms.
Connor urged brands to take social commerce seriously, noting that the format is "moving billions of dollars." The magnitude of social matters, he said, and cannot be replaced by e-commerce or search.
How brands go shoppable.
Implementing these systems requires a test-and-learn approach for brands, said Dina Fierro, VP of digital for NARS. The brand previously did a shopping tag exclusive with Sephora for one of its popular Orgasm products and experienced a rapid sell-out of its 2018 holiday advent calendar launch, which was tapped out within hours of release on Instagram.
That said, while some behavior has pointed to consumer intent to purchase on Instagram, many are still using the platform for discovery, rediscovery and consideration, Fierro added. NARS tracks what content and products drive engagement, which led the brand to transition from Facebook exclusives to Instagram exclusives.
Instagram serves as a defacto website for fast-beauty brand Colourpop...
For NARS, fresh, exclusive and and first availability product posts are most effective. The key is to habituate the internal team and consumers for at least three posts a day, including some with shoppable tags. That said, Fierro noted that the brand continues to receive comments from shoppers who don’t understand the shopping tag functionality.
Clearly, not all friction has been removed.
Instagram as brand home page.
Instagram serves as a defacto website for fast-beauty brand Colourpop, said Ashton Wall, the director of performance marketing at Seed Beauty, which owns Colourpop. The company launches its product sneak peeks on the platform, using other feeds such s Facebook and email lists to direct consumers to the platform.
Therefore, she concluded, ultimately shopping is content.
About 25% of Colourpop posts include shopping tags, Wall noted, adding that the brand's differentiator is its low pricepoints, which is a plus for social commerce. That said, the brand doesn't call out this value proposition but instead lets the tags speak for themselves.
Colourpop is launching new products every week, including virtual bundles, pointing to a high-tempo pace ideal for the Instagram experience.
Shopping is content.
Like any media platform, Instagram audiences don't typically follow anyone strictly to buy, said Begley. Therefore, brands must strike a balance between informative content and selling.
Beauty is a very considered product because it goes on one’s skin...
Fierro interjected that shopping doesn’t have to be solely transactional and should focus on brand narratives and storytelling. That said, people follow NARS and other brands because they love the products and so is a service for those fans who often flood comments with questions about products.
Therefore, she concluded, ultimately shopping is content.
What works and doesn't: makeup vs skin care vs fragrance.
Begley noted that images of products only typically perform worst on Instagram, compared to those that feature faces or highlight personal experiences. The goal, he said, is for the audience to be brought into the lives of the brands.
He added, beauty is a very considered product because it goes on one’s skin, so just one photo isn’t enough. Integration of reviews and other materials could help the process, especially on Instagram feeds.
But not all product categories are created equal. Fierro explained that color is most amenable to spontaneous purchases and that skin care or complexion products may be less so due to the complex decisions required to make a purchase.
Skin care brands can promote products that can be incorporated into day-to-day routines like makeup prep.
Begley added that influencers dominate color content creation, while skin care and scent benefit far less from this level of output.
While skin care is a booming segment, it is less prevalent on visually dependent social media feeds. Wall explained that skin care by nature is not as visually engaging as a new color cosmetic. There are no real swatch-style shots that can grab shoppers' attention. Meanwhile, results take time, meaning tutorials cannot offer instant gratification.
Tatcha did well by placing its brand with makeup-adjacent products. In addition, he said, skin care brands can promote products that can be incorporated into day-to-day routines like makeup prep, allowing them to be spoken of over and over, thereby boosting mentions organically.
Shoppable tags and their potential incorporation into feeds could potentially impact the creator community...
Wall agreed that marrying skin care and color is more and more powerful for consumers and so skin care brands must understand cross-functionality such as pre-makeup prep to keep skin healthy.
She added that the reality of cross-category routines could theoretically impact the way physical retailers present merchandise, which is often siloed by category rather than their place in shoppers' routines.
Disrupting the influencer relationship.
Wall explained that Colourpop works with many makeup influencers and, because of Seed's vertical integration, can work to co-create products with select partners. That said, Colourpop does not do pay-to-play.
Shoppable tags and their potential incorporation into feeds could potentially impact the creator community, said Fierro. Begley added that it may unveil who’s a top-of-funnel influencer and who’s a true converter.
Successful social media strategies are labor- and capital-intensive.
Wall noted that influencers are their own channels and so Colourpop may test concepts there to see who the real converters are.
Begley added that brands should understand that partnerships bring inherent value to influencers by delivering a brand audience to their follower base.
How big is your social team?
The brands represented featured relatively small teams. Seed Beauty has roughly two people dedicated to platforms such as Instagram Stories, totaling about 10 social/digital professionals. NARS is smaller, including five dedicated global social and paid media experts on staff. Digital and social responsibilities are also diffused in other parts of the company, said Fierro.
Shopping tags on video is new, but stories have a lot of traction for engagement.
Fierro added that successful social media strategies are labor- and capital-intensive. Brands can do more with less through content adjacency via paid partnerships or influencer agreements, as with Tom Ford's unexpected collaboration with comedian Celeste Barber.
What about IGTV?
Li, who doesn't work on IGTV directly, noted that the platform is designed for long-form vertical mobile viewing, which is ideal for tutorials, behind the scenes stories and raw content.
Overall, she said, the brands that have posted there do see increases in engagements and likes when they use it. It's not designed to be competitive with YouTube, she argued, and is instead meant to complement existing Instagram activity.
Not only did the Nelson siblings continue to optimize systems with vertical integration, they had the vision to tap into the rising tide of "social listening."
To date, shopping tags on video is new, but stories have a lot of traction for engagement. However, it's too early to tell what the final payoff is.
Fierro noted that content length is dependent on platform, while Wall underscored the rising prevalence of sped-up tutorials. She added that storytelling can accommodate longer form content.
EXCLUSIVE: Inside Seed Beauty's Disruption Team
Remember 2014? Ellen's Oscar selfie, Pharrell's hat, the Ice Bucket Challenge? That year, Seed Beauty was born, founded by siblings Laura Nelson and John Nelson, who had a vision of optimizing what they'd learned at their family's contract manufacturing business, Spatz Labs.
Not only did the Nelson siblings continue to optimize systems with vertical integration, they had the vision to tap into the rising tide of "social listening" that allowed nimble brands to generate product concepts around emerging consumer needs and wants.
The project was a success. Today, Seed Beauty is home to Colourpop, Kylie Cosmetics, KKW Beauty and Fourth Ray Beauty. While Coty considers acquiring Kylie Cosmetics (as of this posting), Seed is already prepping the launch of more brands later this year.
Prior to the CEW "Future of Social Selling" event, Ashton Wall, director of performance marketing at Seed Beauty, sat down with me to discuss the company's evolution, product development philosophy and what's ahead.
Building a fast beauty leader.
Wall oversees the company's performance marketing, including email, referrals, affiliates, paid social and search, and Web. She's also closely aligned with the company's social media strategy.
Seed Beauty is dedicated to remaining "as flat as possible" without sacrificing quality...
She noted that while Ulta Beauty contributes to sales of Kylie Cosmetics and Colourpop, most sales are generated through Seed's own channels
Colourpop was born in 2014, along with Seed Beauty itself, which landed it right in the heart of the industry's direct-to-consumer boom. Brands like Everlane and Caspr proliferated, and Colourpop drew from that same model and consumer excitement to generate a fast-beauty leader.
"As flat as possible..."
Seed Beauty leveraged consumer feedback and used its vertical integration to generate and revise products rapidly. To this day, said Wall, Seed Beauty's team "lives in the Instagram," tracking not only trends but, critically, consumer comments.
Hybrid makeup-skin care concepts are rising in demand.
Its brands are able to go concept to manufacture in five days for color cosmetics, though skin care development (for Fourth Ray) moves on a longer time scale of six to 24 months. Because of its vertical integration, Seed Beauty is able to produce quickly and to demand, minimizing waste by placing orders down to the week.
Seed Beauty is dedicated to remaining "as flat as possible" without sacrificing quality, said Wall. This means that feedback can come from anywhere, with everyone including interns having a say in the product innovation process.
Clean, affordable and new: what's trending.
While newness remains critical to the company's brands, Wall noted that affordable clean beauty free of the usual suspects like silicones, parabens and sulfates, is a growing demand, as are hybrid makeup-skin care concepts.
The company is also exploring ways to minimize packaging, particularly as digital brands leverage immense amounts of shipping.
Micro influencers with relatively small amounts of followers are often perfect for collaborations.
Price is a critical element, Wall added, as seen in Fourth Ray's $15 Rainfall hyaluronic acid serum, which gives the brand a leg up in the booming skin care space.
Wall said that the movement toward body makeup is a bigger thing, as seen with the KKW body foundation launch.
And, with the hair sector ripe for further disruption, it wouldn't be surprising to see Seed Beauty leverage opportunities in the space. Wall did not specify, beyond noting that she "loves what’s happening in hair."
Influencer collaborations are changing.
Wall said she and her team are inspired by artists such as Becky G, who collaborated with Colourpop on a series of products. She added that the company is currently thinking through "how big you have to be to collaborate with Colourpop."
Shopping on Instagram will change how brands interact with customers...
Micro influencers with relatively small amounts of followers are often perfect for collaborations that will allow Colourpop to grow with them as the build an audience. For instance, Wall pointed out that Colourpop's Disney Villains collection unlocked creatives on social media and helped the brand identify emerging influencers who had immense artistic skills ripe for collaborations.
As Wall would later say during the CEW panel, shopping on Instagram will change how brands interact with customers, but she added that while Seed Beauty gets a lot of buzz for its social media savvy, the company is primarily focused on democratizing beauty by keeping products affordable and of high quality, being responsive to brand audiences, being open about ingredients (particularly unique intense pigments) and application dos and don'ts, and delivering fast beauty sustainably.