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The New Growth Playbook for DTC Beauty Brands

June 19, 2022
June 19, 2022
ESW

Inflation and ongoing supply chain woes are taking a bite out of native direct-to-consumer brands’ growth playbooks. Coming on top of the higher customer acquisition costs caused by Apple’s iOS 14 privacy options, these significant complexities are forcing DTC brands across all sectors, including beauty, to rethink their business growth strategies. While just two years ago, digitally native DTC brands that had little-to-no real estate exposure were the big pandemic winners; today, a new roadmap is needed. With an oversaturated market, consumer spending reticence, and a higher cost of doing business, how can DTC beauty brands scale more effectively and stand out from the crowd?

Go Glocal: Enabling cross-border ecommerce is one of the most cost-efficient and effective ways brands can increase sales. The most effective strategies are ones of glocalization—global accessibility grounded in local market expertise. A fully localized global website gives consumers the confidence they need to purchase across borders. This means language fluency with a nod to colloquialisms, local currency pricing, promotions timed to a localized calendar, global access with local expertise, and shipping that is inclusive of local tariffs and taxes so that there are no hidden surprises for the consumers. Embracing cultural differences is another key success factor. Digitally native CTZN Cosmetics has mastered glocalization from its inception. Founded by three American sisters of Pakistani descent who grew up in Dubai and live in London, CTZN’s “nudiversal” colors match all skin tones, have been popularized by celebrities and TikTok influencers, and are shipped to consumers in the US, Europe, and the Middle East.

Be physically present: Giving brands an omnichannel presence with proprietary physical stores or by partnering with a select multi-brand retailer is another way luxury DTC beauty brands can expand. Physical store presence not only helps DTC brands meet growing consumer demand for in-person shopping but stores also serve as excellent laboratories for experimentation and engagement. Physical retail also heightens product discovery. The online customer journey from discovery to purchase often includes a stop in a brick-and-mortar location in order for consumers to immerse themselves in a brand even though they may actually wind up purchasing the product online. One of the best examples of an international omnichannel strategy is from superstar Rihanna’s Fenty Beauty. Fenty’s DTC internationally optimized site offers content and product descriptions in the local language with local currency pricing and localized shipping. Moreover, the brand’s partnership with Sephora has given Fenty a physical retail presence that enables its devoted consumers an opportunity to experiment with the brand in-store prior to purchase.

Be a tech pioneer: Brands that adopt a pioneering approach to customer acquisition often reap exponential rewards. Digital-first cosmetics, skincare, and fragrance brand Charlotte Tilbury understands that early adopters to new platforms and technologies have given her greater sales and exposure through the use of virtual reality and gaming platforms. The internationally renowned makeup artist launched her first scent with a VR experience with supermodel Kate Moss and has offered masterclasses and other digital events with Girl Gamer on Twitch. Trying new platforms before they are oversaturated and overpriced allows DTC e-commerce brands the opportunity to engage with global consumers in an organic and authentic way.

Act Sustainably: Today’s beauty consumers are loyal to brands that are working actively to leave the world in a better place. Using sustainable, recyclable packaging (and less packaging, overall), ensuring carbon-neutral logistics and delivery, and sourcing eco-friendly ingredients will allow DTC beauty, fragrance, and skincare brands to engage on a higher level with their consumers.

New growth opportunities can always be found despite challenging macroeconomic headwinds. The best DTC beauty brands will seize this moment to break away from their competitors with international e-commerce expansion, omnichannel presence, exciting new digital platforms, and a more sustainable ethos.