August 16 2020

Are Beauty Retailers creating experiences in their concepts? Experiential Retail

How experiential retail is changing the customer experience?

Millennials are no longer driven by product benefits and brands. they need experiences.

Covid19 has accelerated this change in customer’s preferences even more & has put Beauty retailing into various challenges.

Few of them are:

Non-usage of testers as precautionary measures by cosmetics brands
Low sales turnout especially if you are a physical brick & mortar retailer.
Growth of digital avenues but online sales are not enough to sustain the overheads of entire retail concepts.
Despite rent reliefs from the malls, the low sales traction is not enough to meet P&L objectives.
Retailers are pushed for short term liquidation strategy. (sales & discounting)
Pricing or COGS (cost of goods sold) is unstable to sustain Brick & mortar concepts.

An overall decline in the category but there are few categories which have shown growth in term of Eyeliners, compacts (daily usage for work from home women) and skincare.

Today’s beauty industry is different from 10 years ago.

Earlier, retailers used to focus on color pallets based on the target customer’s skin tone, used to order quantities from the manufacturers based on the number of stores (footprints of the brand).

Retailers used to push the products with some “How to use” videos and train their front liners and the product used to fly off from the shelves with little advertising.

Today, Instead of traditional advertising, beauty and cosmetics brands are largely digitally-focused, using social channels (and influencers) to reach and engage users.

Learn how technology is driving growth in beauty retail, click here.

How to drive scalability in the current scenario? Can experiential retail redefine traditional retailing?

Experiential retail is the answer.

Millennials are no longer enticed just by good product, but they prefer to accumulate experiences from either using your products or by experiencing the product benefits and the positive affirmations which they can share on their social handles i.e. creating shareable moments.

Are you creating shareable moments in your beauty stores?

With 100 percent confidence, I can say that none of the beauty retailers are doing so. (Barring a few).

Today, Beauty retail has evolved from Departmental (multi-brand stores) to mono-brand (standalone stores) to specialized experiential stores to specialized eCommerce stores.

Experiential retail is also another big source of investment, with campaigns allowing beauty brands and retailers to tap into the changing behaviors and interests of consumers.

Are you ready to embrace a new trend- Experiential Retail?

“Customer loyalty is a myth.”

If you as a beauty retailer is having a strategy based on increasing your customer loyalty then you are going to burn much of your cash resources.

With an increasing number of direct-to-consumer brands entering the beauty market, the fight for the consumer’s attention is now fiercer than ever.

Alongside this, today’s customer is overwhelmed with options, and that their loyalty is easily lost.

Reach out to your customers wherever they are on any of the platforms.

The customer can be online, on market place websites as well as on social media (Facebook, Instagram, Twitter).

You as a retail brand need to be more visible than ever before.

TOP OF MIND approach is more and more relevant today.

Case study: Boots

Objective– Reposition Boots as a big player in the beauty retail space

Strategy:

Boots partnered with Glamour Magazine on the ‘Glamour Beauty Festival’ – a live event giving visitors the chance to discover some of the new brands set to launch in Boots’ stores.

With interactive services such as skincare consultations and foundation matching, the event allowed both Boots and partnering brands to capture the interest of consumers at the same time the products became available to buy.

Watch video of last year’s Glamour beauty festival and how brands used it effectively to their advantages.

One of the international brand Charlotte tilbury’s (partnered with local regional retail powerhouse) did an activation in one of the leading malls in the UAE which saw a plethora of media, beauty fashionistas & influencers turning for the experiential event.

See the pics here.

Retail is not dying, Bad Retail is certainly dying.

Post covid19, as more of the stores open up for trading, there is a huge pressure on the frontliners to push for the sales, merchandising to ensure that the display and mini tester units are available, use & throw kind of testers, store operations to ensure that they maintain safety standards while welcoming their customers.

Basically, all the departments of the store are under pressure.

Learn how you can reach millions of people with just one phone ‘missed call’, click here

Stress is good: create experiential retail

Today’s customers want “shareable moments”.

Brands like Lululemon, are intended to build a community around the brand through activities like workout classes, group meditations, and scheduled events and invite their customers to engage with the brand using activities instore.

Buy Online & Pick up instore more relevant than ever.

Beauty retailers who have their own e-commerce sites must try to drive traffic from their sites to their stores.

Encouraging returns through stores or even making your stores as fulfillment hubs.

Watch my webinar which I presented to over 75 retail professionals on how they can thrive during covid19.

Using in-house influencers – your biggest influencers or ambassadors are your front liners.

Case study – Lin Qingxuan

During the covid19 outbreak, this Chinese beauty retailer was forced to close down 40% of its stores in Wuhan (where the virus started).

The company immediately pivoted using its sales team to interact with the customers on WeChat and encouraged their team members to become influencers for the brand.

By posting educational makeup videos on product usage, unpacking their gift sets, etc.

Result:

Despite lockdown, the brand was able to garner a 200% growth in its sales.

Do you as a beauty retailer innovate to sell?

Majority of the Middle Eastern retailers are having a mindset of Traders and not of a Retailer.

Historically, the Middle East region was evolved from a trading hub to a Retail hub. That’s the history of retail evolution in the region.

Innovation to most of the retailers means product development, packaging, or product usage only.

“Innovation can be deployed even in selling.”

Learn how Men’s grooming market is adding a new dimension, click here.

If any of my retail fraternity members, want to share their experiences with me or need my input towards their recovery plans, then they can reach me on riteshmohan@yahoo.com.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

Ritesh can also be followed on Instagram as @mohanritesh & on Youtube as @riteshmohan

October 20 2019

What is Experiential Retail? 2 case studies to energize retail.

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What is Experiential Retail?

Experiential retail is a type of retail marketing whereby customers coming into a physical retail space are being offered experiences beyond the traditional ones.

The physical store becomes the center of customer’s engagement, the brands are not selling here but are becoming advocators & taking a consultative approach towards creating a memorable experience that results in building trust for the customers.

In the recently concluded, the Middle East Retail forum, experiential retail was the trending topic.

The retail stalwarts came together for 2 days and brainstormed on the topics which are shaping our current retail concepts.

I have taken two brands i.e. Museum of Ice cream from New York and homegrown Project Chaiwala from the UAE.

Both these concepts embody the experiential retail in their brand’s salience.

What is the experiential retail engagement?

Experiential retail is a trend that is being practiced by the brands to create experiences over possessions, stories to tell over the product specs, create memories instead of selling products or services.

It is the new kind of retail marketing wherein building trust and engagement with the new customers’ i.e. Millennials are the priorities.

Case study 1: Museum of Icecream

The Museum of Ice Cream (MOIC), was co-founded in the summer of 2016 by Maryellis Bunn.

MOIC is an acronym for the “movement of imagination and creativity,” not the Museum of Ice Cream.

Since its start, the MOIC has approximately 394,000 followers on Instagram.

“Food is a language which we all understand,” says Bunn.

“When you have something as simple as ice cream, it’s something that’s spread happiness and brings people together in a way that’s unexpected.”

Store concept:

The concept of store color is Pink.

“For women…pink leads to happiness and good thoughts,” Bunn said, speaking about the soft millennial pink, the color that covers many walls of The Pint Shop.

It is a place wherein the women could come and connect with fellow friend and engage in sweet treats (ice creams) and create a memorable experience which is later shared on Instagram.

The brand encourages its customers to engage with the interiors of the store and share their experiences, it is a kind of pop-up retail revolution.

Start with your own pain point

When Bunn moved from calif to New York, she found that even in a city with more than eight million people, she felt lonely.

Insights:

“People are desperate for connection”.

“Everybody’s on their phones. Where do we have to go to connect?”

Bunn couldn’t find one, so she decided to create one with the Museum of Ice Cream. The pop-up, which Bunn referred to as a “passion project.”

But, the response was so overwhelming that the temporary museum moved to Los Angeles and Miami, and it’s currently in San Francisco.

Key Lessons from MOIC:

Experimental, physical, and sensory experiences that are seamlessly integrated with Instagrammable, social media-friendly moments are reinvigorating and redefining retail.

In other words, brick and mortar businesses are here to stay and are giving way to new, connective experiences.

Case Study 2: Project Chaiwala

During the Middle East retail forum, I met with Mr. Ahmed Kazim, co-founder of Project Chaiwala.

Ahmed along with his co-founder Justin Joseph saw a gap in the market especially for their love of traditional tea or chai (as it is famous in Southeast Asian countries).

The gap in the market:

To create an ambiance to showcase creativity in the tea business, in terms of brew, selection of finest leaves from foothills of Darjeeling, Assam.

Both wanted to create a concept that could bring creative, intellectual, artistic people together to enjoy a cup of finest chai in a traditional and more authentic way.

Hence Project Chaiwala was born.

They have created a simplistic and artistic ambiance in their store in al Serkal Avenue, al quoz, Dubai which is experiential.

Brand promise

Putting a smile on their customer’s face while providing them an ambiance which fulfills their creative urge while sipping the finest teas from the Indian sub-continent and providing them the experience which they relish back home i.e. authentic way of having tea.

Social responsibility:

Though the brand is new with 3 stores currently but the founders are following their corporate social responsibility from day one.

They source artisan’s matkas or popularly called Khullars (a type of cup made up of mud) from the rural villages in Tamil Nadu, India.

Thus ensuring they help protect the environment from plastic cups and in return, help uplift the rural artisans.

Result:

Today the brand caters to youth, especially females cutting across the geographies while enjoying a traditional cup of Karak chai. The brand serves various varieties of teas, herbal, Chinese, Japanese green teas and of course their famous signature chai shot.

What’s common between MOIC and Project Chaiwala?

Besides both being experiential retail concepts, there is a lesson to learn i.e. both the concepts are born from the pain-points experienced by their founders.

Hence I always say to my readers “Start a business and not a startup”.

Read my article on 4 tips to startup owners, click here.

To sum up my article, Mr. Ahmed Kazim, advises upcoming entrepreneurs, “Life is full of challenges and that’s the beauty of it, Keep hustling”.

This is a great statement that every entrepreneur should follow.

Read my article on Believe in yourself, click here.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.