Amazon as the New Sephora and The Pressure for Brand Transparency

AMAZON, THE NEW SEPHORA

Brands like Benefit Cosmetics and Urban Decay can thank Sephora for brand exposure in their early days. In a traditional department store (and exclusive) landscape, the beauty retailer served as an open door for emerging beauty entrepreneurs.

As Sephora expands, however, the barriers to entry rise for indie beauty companies, creating an opportunity for Amazon. While the digital platform lacks a full branding experience for consumers, it does offer a built-in audience and traffic, and now boasts 100 million Amazon Prime members for small brands to test the direct-to-consumer model. The online marketplace is currently overlooked by household names in the beauty industry, leaving Amazon's customer-driven searches open for product leverage from early stage beauty brands.

Mass cosmetics are the e-retailer's fastest-growing beauty category with a reported 60 percent annual increase in sales. Amazon is the new Sephora, prompting indie beauty brands to take the e-commerce plunge. We think it's only a matter of time before big players in the beauty industry start to take notice.

WALMART USES FEEDBACK FOR

A .COM REVAMP
Walmart is rolling out a more modern digital experience for its customers through a new site scheduled to go live in May.

The retail giant wants to create enjoyable digital experiences for both consumers and vendors. Walmart took into consideration feedback from current and prospective brands to curate its assortment offerings, and applied consumer suggestions for more personal experiences. President and CEO Marc Lore has high hopes that the changes will help brands better communicate stories.

With revamped visuals and site themes, Walmart.com will include an introduction to specialty shopping in the home and fashion categories. "We want each category to feel like you are shopping at a specialty store, and we plan to build out these specialty experiences for other categories starting later this year," says Lore.

THE PRESSURE FOR BRAND TRANSPARENCY

It's no secret that Gen Z's interest in products and companies derives from value-driven business practices and strong, authentic missions.

All brands are feeling the pressure, especially fashion retailers, to take stances on political, social, and environmental issues. At this point, picking a side is vital to preserving popular opinion and resonating with consumers. “Traditional brands can no longer sit on their hands and allow well-scripted corporate statements to shape who they are,” says Tripp Donnelly, CEO of digital reputation management firm REQ.

From the demands for workable wages in poverty-stricken garment producing countries to social media movements like #MeToo, #TimesUp, and #BoycottNRA, purpose is the new digital marketing advantage - when applied authentically.

WINNING IN E-COMMERCE

Digital brands are self-proclaimed experts in understanding consumers. Thank aggregated data dissecting every nuance of consumer behavior. This shift has brick-and-mortar retailers hustling to evolve into digitally-minded businesses, as the challenge of traditional retail is adopting innovation that delivers profitability. Collectively, physical stores can boost digital sales with exemplary customer service.

Noam Paransky, SVP of Digital at Gap Inc. attests to the benefits of integrating physical with digital to understand consumer behavior. Gap's mobile point-of-sale systems, allow tracking and connecting digital browsing on the website to in-store visits for shoppers who have created an online account.

Digital brands have been experts in getting in front of customers, but connecting physical interaction with existing user data is key.

THIS WEEK'S BRIGHT SPOT

UGG, a Deckers Brand company, earned the No. 1 ranking in Total Retail’s analysis of the top 100 omnichannel retailers.

The Australian footwear brand excels in improved methods of engagement and a seamless customer journey. Its loyalty program, UGG Rewards, lets customers earn and redeem points outside of purchases by adding items to their wishlist, connecting with UGG across its social media channels, or writing product reviews.

Despite its partnerships with wholesale retailers like Bloomingdales or Lord & Taylor, UGG has mastered its pricing strategy in maintaining consistency across the various channels. Hoorah, UGG!