Coty Chief Digital Officer Jean-Denis Mariani shared insights regarding direct-to-consumer (DTC) trends on the fourth day of Beauty Tech Live.
“There is no digital strategy anymore, there is strategy in a digital world. Sometimes it’s difficult to give [a] definition to digital [but] it’s about customer-centricity, [putting the] customer at [the] heart,” Mariani said.
To support Coty’s DTC strategy, Mariani pointed to main pillars to focus on: Developing a strong digital mindset, building innovative DTC platforms in which the customer experience is the key differentiator and organizing to support the company’s ambitions. Coty recently built centers of expertise to support brands and country operations.
He said that digital creates opportunities across functions, from supply chain to HR, and that the role of the Chief Digital Officer is to speed up and scale up the business as a whole. He added that in a year’s time Coty’s digital footprint “will look totally different.”
Beauty in digital
E-commerce currently represents 19% of Coty’s business. While Coty is strong in make-up and skincare e-commerce, Mariani noted, fragrance poses the most challenges in the e-commerce channel, especially for launches. However, there has been strong demand from consumers for the category, he added.
Some 70% of women and 80% of men bought fragrance online during the first wave of the COVID-19 pandemic, according to the Mariani, and social-media platform TikTok posts related to fragrance grew by more than 400% during that period, he added.
Mariani highlighted that there are ways to digitally promote the fragrance category. For example, he pointed to the social-media campaign Coty developed for the launch of the Marc Jacobs’ Perfect fragrance last August. The campaign amassed 10 billion views on the social-media app TikTok and saw similar results in Snapchat.
“In fragrance things are moving and this [example] shows things are possible,” he concluded.
The DTC advantage
On the benefits of the DTC approach, Mariani said: “DTC is definitely a top priority because in the end you control the entire consumer experience, you control the price, gather all consumer data to personalize the experience and have direct connection to the consumer.”
However, he added that giving the consumer a reason to shop on a DTC platform is the most difficult part of the process.
“DTC has to be the most beautiful shop of the brand [and] should elevate drastically your brand equity,” he commented. “At the end it’s a flagship store offering the best from the brand.”
Mariani noted that, while its advantageous to be able to control product pricing, this is not the top priority in a DTC strategy. He reiterated the need to give the consumer the reason to shop DTC, whether this be through new services, limited-edition products, livestreaming live tutorials and masterclasses. “Personalization is probably the best way to differentiate [DTC] from other channels,” he noted.
“When thinking about DTC it’s not just about having a website, it’s about having a full ecosystem,” Mariani commented. It is more about giving consumers the choice, whether they want to purchase on DTC or if they want to take advantage of a livestream hosted by an influencer; the key is giving consumers the option of buying where they want.
Regarding DTC, the “main difference is about data, data nowadays is the new oil,” Mariani noted. Consumers now expect to get a personalized experience.
The difficulty with the model, though, is that it is not as easy as opening a shop in a pure player or e-tailing environment, he added. “When it comes to DTC, you have to put a lot of effort and investment, it’s not only about technology, it’s about customer care, supply chain, product strategy,” he said.
Leveraging social media
From the Kylie Cosmetics and Kim Kardashian-West brands, Coty has seen the opportunity of having a powerful community, social activation and the strenghth of its drop model, which is inspired by the fashion industry and means a limited number of products available in a limited time-frame. Influencers or brand advocates then create tease around future drop products, generating buzz around the drop.
Mariani said Coty is currently working on applying these strategies to brands like philosophy, Bourjois and Lancaster.
On influencers, Mariani noted that “at the end [consumers] are really more influenced by microinfluencers.” Microinfluencers, who typically have a following of somewhere between 1,000 and 50,000 followers, are seen more as peers by consumers. Mariani said the move now is to focus on how they can become social sellers and brand advocates.
Looking at the future, Mariani predicts that the next generation of DTC will be centered around service and, more particularly, with a focus on entertainment and education.