If I had a dollar for every time I heard a man say he likes “natural beauties who don’t wear a lot of makeup,” I could live in a Park Avenue penthouse. Those women can be hard to find—unless it’s a makeup brand doing the searching. According to Karen Grant, VP and global beauty industry analyst at market research firm NPD Group, 61% of women ages 18 to 55 wear makeup.
This broad age range belies incredible nuance in the cosmetics industry. For instance, baby boomers tend to purchase skincare products, while millennials fill their vanities to the brim with colorful palettes of makeup for their face, eyes, and lips. And the way consumers purchase makeup varies, as well. Women on a budget tend to gravitate to brands like Revlon, CoverGirl, and Maybelline, which dominate drugstores and mass merchants; women who splurge on makeup often select brands like Smashbox Cosmetics that cater to prestige markets and have less widespread distribution. Smashbox, for instance, is primarily sold in specialty stores like Sephora and Ulta Beauty, or online.
This shouldn’t be considered a limitation; according to NPD Group, sales of prestige cosmetics brands increased 11% from 2010 to 2012. Further, in 2012 prestige makeup represented 40% of total cosmetics sales. “That percentage, however, varies widely by makeup category,” Grant says. “For example, in face-product sales, prestige generated 51% of sales; in nail products, prestige generated only 3% of sales.” This statistic underscores the complexity of the cosmetics industry, which markets multiple products to a vast array of consumers who often follow fast-changing style trends. To say the industry is highly competitive is as much an understatement as saying it’s easy for the average female consumer to re-create the dramatic looks that professional makeup artists apply to top models who grace the pages of publications like Cosmopolitan and Vogue.
Smashbox’s positioning in the prestige makeup industry gives it a unique set of marketing challenges. It competes with mainstream brands, even though purchasing Smashbox products isn’t as easy as popping into the local CVS—a disadvantage since, Grant points out, mass merchant benefits like product availability, competitive pricing, and more distribution points can lead to a broader reach and appeal.
In fact, in 2012 47% of women bought their makeup from mass merchants, 46% purchased from drugstores, 36% bought from beauty specialty stores, and 12% made their purchases online, according to an NPD survey. And although prestige brands like Smashbox sell in department stores, the competition is even tougher than in mass retailers, with assertive salespeople often wooing customers as they stroll the aisles—a seemingly effective tactic: NPD’s findings show that prestige makeup sales in U.S. department stores increased 8% in the first half of 2012 to $1.8 billion.
Smashbox’s origins are unique: The company began as a photo studio in 1990, founded by the great-grandsons of cosmetics legend Max Factor. Smashbox Cosmetics launched six years later, and in 2010 the studio sold the Smashbox line of business to makeup manufacturer Estée Lauder. But unlike some of its prestige competitors, such as MAC Cosmetics, Smashbox doesn’t have any branded stores—so its presence in specialty shops places its products across the aisle from other high-end competitors.
“Where we play in Sephora, we don’t have our own beauty advisors in-store,” says Denny Downs, VP of global marketing for Smashbox. “We have to work even harder, prepurchase, to create that engagement and loyalty, so that we’re top of mind when[customers are] in [the] store.” This is why Smashbox invests heavily in content marketing, bolstered by search and social media strategies.
For instance, Smashbox’s best-selling product is primer, which creates a smooth canvas on the skin that evens tone and helps makeup stay on longer. Downs refers to this as a product that “bridges skincare and makeup,” appealing to both younger and older women.
Smashbox’s sales figures for primer reflect this appeal: It accounts for 22% of the company’s total business.
Nonetheless, the untapped market for primer is larger still. Downs points out that 70% of women aren’t wearing primer today. In addition, Smashbox certainly isn’t alone in vying for the business of these unprimed women; its competitors all produce primer products, as well.
The solution to this competitive challenge for Smashbox is education. About two years ago when Downs had just joined the company (after a stint as VP of marketing for Clinique North America), the brand revamped its website and created a landing page called “It’s About Prime.” It was part of the company’s attempts to engage its potential customers prepurchase, so when consumers walk into a Sephora or other specialty retailer, they’d head straight to the Smashbox aisle or, even better, bypass competitors entirely and purchase directly from the Smashbox site.
The It’s About Prime website landing page features such content as the five W’s of primer, a primer finding tool that helps consumers select the right primer for their skin type; videos on how to use the product; and a tab that allows consumers to write product reviews or purchase the product. The content-filled section is working: It’s About Prime accounts for 5% of Smashbox’s website sales.
“We try to approach [content] as if we’re publishers,” Downs says. “We’re trying to create compelling content that’s going to generate engagement, and that engagement is going to drive loyalty, which hopefully drives purchase intent.”
It’s About Prime isn’t Smashbox’s only sales-generating content. Six percent of unique visitors to the site check out the “Get the Look” section, a portal filled with written and video makeup tutorials. Each tutorial has a pop-up with a featured Smashbox product, creating an easy path-to-purchase. Additionally, viewers can initiate a live online chat with a Smashbox makeup artist to discuss the look. The section drives 8% of Smashbox’s website sales.
The sales success of these content-driven areas of the Smashbox website has shown that the approach is highly effective. Consequently, delivering content that answers customers’ questions and concerns, rather than promotes products, is a top priority for the cosmetics company. In fact, much of Smashbox’s content is shaped from feedback obtained through Facebook and email. For example, Downs says that Smashbox advised consumers to only use a “peasize” amount of primer in the It’s About Prime section after learning that a customer wasn’t applying it correctly.
While Smashbox has certainly benefited from educating its customers, it has also reaped the benefits of consumers educating each other, as seen through the brand’s Social Shop. The Social Shop, which also premiered during the website relaunch, allows consumers logged on to Facebook or the brand’s website to buy, share, comment, or like a product, creating a Facebook feed right underneath the featured product. In addition to opening a consumer-to-consumer dialogue, encouraging word of mouth, and generating engagement, Downs estimates that the Social Shop accounts for approximately 5% of Smashbox’s sales. He also notes that Smashbox is in the process of updating the Social Shop with new technology to further enhance sharing and purchasing experiences.
Another way Smashbox benefits from peer-to-peer education is through reviews, but they aren’t the typical five-star beauties. Smashbox asks a reviewer to unveil a bit more about herself, including an overall rating, where she’s from, age range, skin tone, eye color, how long she’s been using the product, and if she would recommend the product to a friend.
“We wanted to give you, as a fellow shopper, as much information about the person writing the review as possible, because you might relate to her,” Downs says. “If you see somebody who has a similar skin tone to yours, you might see that it’s more relevant to you…. Putting a face to that reviewer creates more interaction with other clients.”
Downs says that there are more than 9,000 reviews on Smashbox’s site, 93% of which are four stars or higher, and that an average of 15 reviews are submitted daily.
There’s also a tremendous amount of digital information that, though not directed to Smashbox specifically, nonetheless might influence the company’s business. For instance, digital marketing agency iProspect helps Smashbox identify beauty-related queries coursing through various social networks and search engines. Using aggregated information from Google, Bing, Experian Hitwise, and the Search Monitor, iProspect identifies what beauty industry categories and subcategories consumers are responding to the quickest, what search terms are rising or falling, and what competitors are doing in the space. By monitoring keywords Smashbox can better understand its consumers and competitors’ activity.
This analysis also helps iProspect determine and recommend which search terms—both branded and non-branded—Smashbox should invest in and how it should strategically position its content in search engines. For example, if the company can’t compete with a highly aggressive sale from a competitor, it can temporarily give up a first-place search ranking, keeping cost-per-click (CPC) down, says Andrea Wilson, iProspect’s VP, strategy director, and luxury practice lead.
“What we’ve done is taken a chance, and in some instances let that [competing] retailer own that top spot and be the dominating player while their sale is going on, with us taking a strong second,” Wilson says. “In that instance, we’re still prominent for those searchers that want to experience the brand site, but we’re not driving up our own costs through aggressive bidding.”
But Smashbox also markets online at a more individual level. Retargeting plays an important role in attracting customers who’ve performed product searches or visited the Smashbox site. If the consumer doesn’t make a purchase, the various ad networks Smashbox works with will fire out a customized banner ad that displays a product similar to the one viewed on the site, or that contains an offer that will hopefully lead to a conversion.
“Through digital marketing, Smashbox is reaching the consumer through her online journey,” iProspect’s Wilson says. “We’re trying to share with that consumer the most relevant story and give her the information that she’s most likely to take action on quickly.” By optimizing its search and retargeting strategies, Smashbox has seen a 10% user conversion rate, increased its marketing budget profitability by 32%, and lowered costs by 28%.
A twisted path
The ultimate goal, says Smashbox’s Downs, is to educate customers along the entire path-to-purchase. He knows that today this path isn’t always linear, which is why brands need to stay in touch with consumers at multiple touchpoints.
“The expectation that you’re going to see this instant path-to-purchase where she’s going to search [and then] buy doesn’t happen today,” Downs says. “It’s important that we’re building engagement and that education piece so that we’re top of mind when [a prospective customer] is at the moment of purchase, whether in store or online.”
As Downs notes, education is the foundation of Smashbox’s marketing strategy. And behind every initiative lies a “makeup junkie.” Whether they’re shaping Smashbox’s content with their social chatter, determining the next big trend with their searches for the perfect shades to create that smoky eye or pouted-lip look, or consulting one another for the best primer for oily skin, consumers color each and every one of Smashbox’s strategies. And while no marketing strategy is completely flawless, starting with a base coat of customer feedback can help marketers put their best face forward.