Beauty Tech Live: The future of omnichannel beauty

Luxasia Group CEO Dr Wolfgang Baier

Businesses looking to develop an omnichannel strategy need to invest in the right building blocks and change the mindset to one of risk taking, Luxasia Group CEO Dr. Wolfgang Baier told attendees during a keynote speech on “The Future of Omnichannel Beauty” at Beauty Tech Live this morning.

“Omnichannel means a 360° view for the consumer where they can, in parallel, act in all of the points of sales,” said Baier. “It’s using in parallel all points of sales and having the ability to interact between them without losing the data. And this is where the future of e-commerce, or the future of beauty commerce is going to lie.”

Baier said companies and brands need to set a clear vision and strategy plan for omnichannel, invest in the right building blocks and embark on a learning journey. He emphasized that omnichannel is a trial-and-error experience and staff need to be allowed to learn from errors rather than fear being penalized for them.

“Omnichannel is also about failing, it is about learning of course, but first you need to fail because if you don’t push the boundaries to try things out, to get the consumers integrated, to try to bring systems together, you will never push the boundaries of your thinking,” he said. “So, we truly believe, at the very top of the company, we start reporting about what did not go so well first before we talk about all the beautiful things that we’ve achieved.”

Four pillars of omnichannel

Baier said Luxasia had focused on four key pillars to build its omnichannel business: Developing the right team with diverse talents and experience, understanding the consumer across the whole company, creating a network where everything—brick-and-mortar, social media, online commerce—interacts and developing one platform on the backend.

Baier said the need for robust CRM with an AI brain for collecting data and generating insights from the data so the company knows when and how to interact with customers was crucial. “Repeat purchase is the true testament of a good CRM. Whatever your current investments in CRM are, double or triple it.”

“You can see it works because we have grown two times the market rate in the last five years [since we implemented our omnichannel strategy],” Baier said, adding that “omnichannel is 50% front end, 50% backend.”

The backend involves a huge data flow that needs to be managed and integrated into all aspects of the business, commented Baier. He noted that the beauty industry still has much work to do on getting the backend aspect of the omnichannel strategy right, especially in terms of integrating online and offline inventories.

“It’s a lot of work in the backend, but it’s absolutely necessary,” he commented.

Baier also noted that setting the right metrics and expanding them over and above ROI to understand consumers and have an omnichannel view of their behavior was key to developing more targeted marketing.

On physical retail, Baier said Luxasia had adopted a strategy of having fewer doors with increased focus. He estimated that online sales will make up 30% to 60% of sales in the coming years, depending on the market and category segment. Baier said revenues at Luxasia’s Escentials stores in Singapore were growing far above beauty growth in Singapore and the company has plans to roll out stores across Southeast Asian markets.

“Treat online marketplaces as the new mall,” he said, adding that supercharging sampling efforts to make them simple and efficient to send to consumers was essential in a sensorial industry like beauty.

On the rise of social commerce, Baier said the format was “going to be a revolution” but the segment would remain fragmented for some time yet.