Blog #3: YouTube- Cosmetics Industry

Industry Background and Opportunity

Improvement in the current lifestyles of the individuals is majorly affecting the cosmetics market. Consumers have now become more conscious regarding the usage of cosmetics in their daily life in an effort to step up their style quotient and overall personality. Cosmetics play an important role in enhancing one’s inherent beauty and physical features. Men are also increasingly using cosmetics in their daily routine including various types of fragrances and deodorants. This growing demand for cosmetic products has in turn led to the growth of the cosmetics market in the US and even across the world. 

In 2018, the global cosmetics market grew by an estimated 5.5 percent compared to the previous sales year. In recent years, consumers have been spending higher levels of disposable income on cosmetics than they had in the past. The growth in global economies, changing lifestyles, rising demands of skin, and sun care products due to varying climatic conditions encourage the growth of the market for cosmetics. A shift of preference fosters the growth of the cosmetics market. Rising demand for natural, herbal, and organic beauty products creates potential opportunities for manufacturers to innovate and develop new products in accordance with consumer preferences. In recent years as Generation Y has really entered the job market, they have become a big driver of the cosmetics market; especially in the United States. 

The cosmetics industry has always been one of the most competitive commercial spaces. Social media has provided a wealth of new ways to target more consumers. Consumers are around 41% more likely to be discovering new brands or products via ads seen on social media, and 47% more likely to be doing so via updates on brands’ social media pages. More importantly, millennials are completely integrated into the tech world which makes platforms like social media a prime opportunity for marketers to reach them. One report by Deloitte found that 47% of millennials say their purchase decisions are influenced by social media. Social media is reshaping this long-standing industry, bringing a whole host of new opportunities. 

Have you ever imagined that Youtube playing an important role in the cosmetic industry? Based on the statistics showing above, cosmetics-related content generated more than 169 billion views on the video platform in 2018. In 2017 there were 88 billion cosmetics-related video views on YouTube, growing from “only” 55 billion in 2016, according to Statista. Every month YouTube registers more than 700 million views of cosmetics-related content. Therefore, our consulting firm would like to recommend client firms who are in the cosmetics industry utilize Youtube to improve their business.

Fundamental Principles and Features

YouTube has been proven to be a powerful online video-sharing platform. There were an estimated 192 million YouTube viewers in the United States. Therefore, it helps businesses to reach their audience effortlessly. Businesses could utilize videos to teach viewers how to do something. “How to” videos make up 45% of all the cosmetics-related content on YouTube. It is a very effective way of reaching out to people. It also helps in capturing people's attention easily, which in turn increases the traffic volumes as videos are highly visuals mediums and it can be easily shared online in order to expand the customer base. More importantly, businesses could also think of collaborating with YouTube Influencers on cosmetics videos. The nature of videos allows digital influencers to easily demonstrate the benefits of the products they showcase video can have a greater impact than images as video watchers can view the beauty products being used in real-time and witness exactly how they would use the product to enjoy the same benefits. 

As YouTube continues to add features, its augmented reality try-on tool is another special and powerful way for the cosmetics industry to tell more engaging and virtual stories and better connect with consumers. For example, MAC cosmetics is the first partner with this feature. When watching the video, we could see a button that says “try it on” which will launch the camera in a split-screen view. The video will continue to play as we scroll through the various lipstick shades below, applying the different colors to see which one works best. 

Strategies for Future Client Firms

Based on those features of YouTube and opportunities for the cosmetics industry we have discussed above, our consulting team would like to share how we will use YouTube to promote our client firms who are in the cosmetics industry. 

Connecting and building relationships with cosmetics influencers on YouTube is one of the most important things we recommend our client firms to do. The cosmetics space on Youtube is more dominated by individual vloggers, not by brands. 95% of cosmetics content on Youtube is created by individuals, cosmetics brands have to focus more heavily on influencer marketing when using this platform. If the firm is looking to grow the brand presence with longer-form video content and influencer sponsorships, YouTube is the right channel for brands to add value to their audiences. It is perfectly suited to showcase your products in action. They can watch influencers apply products and find inspiration  Buyers are more trusting of user-generated content, making them more likely to buy a product after seeing an influencer use it. Customers trust third-party product reviews most, and influencer marketing sways their purchasing decisions. One thing our team would like to point out is to suggest firms to connect various influencers with different types of skin, different colors of skin, and so on. Not everyone has the exact same needs on products, consumers actively seek out influencers who share the same skin tones and even skin sensitivities, and they want to trust that influencers actually believe in and use the products they talk about. In addition, the influencer must have a good reputation with honest reviews. According to some surveys, consumers trust an influencer more when they are able to say the product did not work for her skin very well. If the business is local and tight on budget, our consulting team also recommends it to connect with micro-influencers to save money. Consumers often feel influencers with a smaller fan base tend to respond more to their questions and comments on posts effectively. 

Along with that, our team highly recommend the client firm to create their own YouTube cosmetics channel in order to increase their brand awareness if they have not done so. Exploring what is the best time to publish videos on YouTube in order to attract the most viewers. After dinner time could be the best time to publish videos for weekdays. Around 2-5pm and night time for weekends are considered as the best. Making sure you are cross-posting the video link to other social media platforms as well. It is also essential to hold live streaming in order to respond to questions and concerns in real-time with your potential consumers. Another hint is to check the comment section frequently to make sure you are engaging with your viewers and increase the accessibility as well.

Successful Experience

As we all know, most cosmetics stores were shut off temporarily during the coronavirus. The sales of most cosmetics businesses have declined for several months, and they were struggling with product sales, decline brand awareness, and losing profit. Blooming Cosmetics, a local business located in Oxford, OH had a hard time attracting customers and generating profits. They reached out to our consulting team in April for help. According to its issues, we evaluated their previous performance in different aspects based on the feature of the cosmetics industry. What our team found out was that even they had their own YouTube cosmetics, Blooming Cosmetics barely used it to promote their products due to lack of professionalism. Customers who commented on the main channel page never get feedback from the business. As a local business, their awareness is relatively low compared to others, and they are tight on budget spending on popular influencers on YouTube. Our consultant team did a survey among 100 females aged between 15-65 showing that 45% of people never heard it before on social media. 

According to our analysis, our team had provided Blooming Cosmetics strategies of using YouTube to increase their brand awareness. Based on their customer preferences, we have set up a specific schedule for the firm to publish their videos related to how to use their cosmetics. The "how-to" tutorial would get people to be familiar with the brand and capturing people's attention easily, which in turn increases the traffic volumes on the channel. Along with that, we helped the firm host weekly live streaming on YouTube in order to introduce the products to consumers in real-time, encouraging views to share the product to their friends, co-workers, and others, and having the time to answer any questions or concerns they might have. We encouraged the firm to provide incentives to its customers who have shared their videos with more than 10 people. We asked the firm to cross-posting the video links to their other social media platforms and their own website in order to increase awareness as well. Considering its tight budget, we helped the firm looking for micro-influencers which had smaller followers base. It would help the business to increase its brand awareness and save money at the same time. After some changes our team did for the company, Blooming Cosmetics has started growing followers on their YouTube channel. The number of subscribers has increased from 500 to 9300 in only three months. In the month of May, number of views of the videos Blooming made has increased from the beginning. In total, it generates more than 296,530 views in May.