The Health and Beauty Industry: Driving Repeat Revenue

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Health and personal care is the second-largest retail category in the United States, with $300 billion in revenue each year.  A growing number of consumers are shopping online for these products, with $12 billion being spent on health and beauty items alone online in 20171.

Personal care items are just that—personal— meaning that each individual has different beauty needs. In order to best serve these customers, it’s imperative that health and beauty retailers deploy targeted marketing campaigns. Sending customers email content with relevant messaging is a proven best practice for retention marketing. Through personalized content, retailers are able to build, and strengthen, their relationships with purchasers by making sure they receive the right message at the right time in their customer lifecycle.

This case study will examine how three health and beauty retailers: FacialCo, SkinMedix and Annmarie Gianni Skin Care leverage data-driven email marketing campaigns to positively impact customer retention. In fact, on average, these three retailers see 80% of their revenue from lifecycle marketing coming from repeat buyers.

01. FacialCo

The average online retailer experiences 60-70% shopping cart abandonment with only a 2% recovery rate of those abandoned carts. Windsor Circle clients experience, on average, recovery rates of at least 15%.

FacialCo is an industry leader in beauty and skincare in Australia, offering a wide selection of affordable, cosmeceutical, and luxury brands. FacialCo was looking for a solution to growing rates of shopping cart abandonment in their online store. Cosmetics are a high abandonment product, as customers often place multiple desired products into their cart before making a decision about what they will actually buy.

To address this problem, FacialCo created a three-step cart recovery email series. The first email is triggered hours after the user abandons their shopping cart, the second message is sent the next day, and the final message is triggered several days later, with a discount to entice the customer to follow through with their purchase.

These cart recovery emails have had a beneficial impact for FacialCo, garnering a 57.5% open rate and an 8.2% click rate.

Email examples

02. SkinMedix

SkinMedix.com, an eCommerce site that specializes in high-end cosmeceuticals, initially had an email strategy that primarily used batch and blast emails to market to their customers. Using Windsor Circle’s Customer Retention Software, SkinMedix.com was able to segment their customer list based on product and purchase history data, allowing them to send more relevant emails to each group with appropriate discounts and product recommendations.

Through segmentation, SkinMedix has seen great results. These campaigns contribute to more than $2 million in revenue that SkinMedix has amassed from data-driven marketing.

SkinMedix segments their customer list into four groups:

Best Customers

Purchased in the last 8 months and has made more than 3 purchases

Non-Purchasers

Subscriber who has never made a purchase

Churning Customers

Has not purchased in the last 8 months

All Others

Purchased in the last 8 months and has purchased less than 4 times

Email examples

03. Annamarie Gianni Skin Care

Annmarie Gianni Skin Care, an online retailer whose goal is to provide its customers with a clean, natural skin care experience, took the concept of retention automation and ran with it. They use automation to send pre-defined messages to give each customer a specialized experience as they go through the purchase cycle.

Annmarie Gianni Skin Care has set up more than 70 automators based on criteria such as purchase history, product recommendations, next predicted order date, etc. For instance, they trigger replenishment emails for customers who have purchased a certain product more than three times and have a predicted order date, based on an algorithm that looks for patterns in a customer’s buying behavior.

Beauty products are ripe for replenishment, because these items often need to be purchased on a recurring basis. The replenishment campaigns, along with all of their automated emails, have been very successful for Annmarie Gianni. In fact, these messages have an overall average open rate of 56% and 14% click rate. Additionally, the automated emails have made Annmarie Gianni Skin Care more than $1.8 million since they’ve been enacted.

“I know that no matter when a customer buys, they are automatically enrolled in the right email program and will receive timely, relevant communications based on their behavior. It saves me so much time, and makes every customer feel special.” – Kevin Gianni, Co-owner, Annmarie Gianni Skin Care

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Segments for Health & Beauty Retailers

As evidenced in this case study, customer segmentation is key for growing revenue and customer engagement. Here are two quick examples that you can create with our advanced segment builder to get you started running your own personalized campaigns.

01. Product Recommendation

A product recommendation is an easy campaign to implement for customers who have bought related items. For example, you can make a segment containing customers who have purchased shampoo or conditioner for damaged hair but have not purchased the reconstructive serum that is a part of the same product line. You can choose those who’ve purchased one or both of these products in the past year, then trigger an email recommending the reconstructive serum to them automatically.

To create the segment:

· Select customers who have purchased SKU DMG123456 or DMG123457, but not SKU DMG123458

· Set order date within 1 year

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02. Geographic Location

You can also segment by location. For instance, imagine you are sending a preview of a new summer makeup collection in April. However, for customers in some regions of the United States, the weather may not yet be warm enough for them to begin using these items. You can omit these customers from the promotion, so they don’t receive a message that is irrelevant to them.

To create the segment:

· Exclude customers who live in colder states like Michigan, Minnesota or Wisconsin

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Data That Drives Results

Personalization is especially important in the health and beauty industry. Data-driven marketing bodes well for customer retention, as evidenced by these three retailers. On average, these retailers have seen 80% of their revenue from data-driven marketing, coming from repeat buyers.

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Source:

  • Vertical Web Media LLC, 2017 Internet Retailer Health Beauty Report, 2017