Introduction
The beauty industry, which encompasses color cosmetics, skincare, and fragrances, is highly lucrative and competitive. Based on the case study, the sector is worth $433 billion, and it is estimated to increase to $750 billion by 2024 (Avery 4). However, this trade has typically been dominated by multinational beauty companies, such as LVMH, P&G, L’Oreal, Unilever, Shiseido Group, and Coty.
While these big brands have controlled the largest market share for decades, tons of startups are introducing new beauty trends and are now beginning to own most personal household care brands. Among these emerging firms is Glossier, a niche outfit that has increasingly improved its brand recognition by implementing innovative ways to connect and respond to customer preferences.
Brand Equity
Equity is a value that Glossier’s brand adds to its products or portfolio beyond the functional benefits they provide. Thus, it is considered an intangible asset that represents the brand’s value in the marketplace. Various aspects of Glossier’s business strategy have created its high brand equity. Firstly, its community-driven brand, which encourages people’s opinions, views, and experiences, has enhanced inclusivity, making it successful at creating strong brand equity.
Secondly, Glossier emphasizes the natural beauty of its customers (Avery 2). Thus, unlike traditional brands, which tell customers what beauty products they should or should not use, the company reinvented the beauty experience for people aspiring to be proud of who they are by giving them a unique brand voice. Thirdly, the organization invested in research and development (R&D) to deliver multiple products that every Glossier customer wants and needs.
The Glossier brand has several sustainable competitive advantages, allowing it to continue gaining a massive market share. Firstly, unlike traditional brands that make consumers insecure about themselves, the firm has a strong brand portfolio that makes buyers feel good about their appearance. This has been supported by the company’s extensive R&D capabilities, which enable it to continuously innovate and introduce a new and carefully curated, hard-to-find portfolio of about 26 products to cater to different demographics and market segments (Avery 19). Being a brand with high equity, it commands a premium price and generates greater customer loyalty.
Glossier is a powerful brand with a reputation for celebrating women and focusing on their experiences, creating a sense of exclusivity and belonging. It has become synonymous with providing a carefully curated line of products that meet the needs and preferences of every customer. Glossier’s brand strength is supported by several factors, including its community-driven approach, strong social media presence, and large customer base. Its online platform, Into the Gloss, attracts 1.5 million different visitors and 10 million page views monthly (Avery 2). Advertisers like Lancôme rely on Glossier’s strong brand to reach prospective customers.
Customer Equity
Glossier has implemented several strategies to build customer equity over the years. For example, it has invested in R&D to offer a wide range of edited lines of products, including Milky Jelly Cleanser, Lidstar, and Glossier You (Avery 19). Additionally, the company has created a strong emotional connection with its customers because Into the Gloss focuses on the individual who wears the product rather than just the product itself. Furthermore, using user-generated content and social media, Glossier has continued engaging with customers, emphasizing their natural beauty. Consequently, this strategy has enabled it to tap into the trend of natural appearance by offering products that accentuate healthy skin rather than covering it up with heavy cosmetics.
Brand Consumer Engagement
The brand community’s role is a crucial part of Glossier’s success. This is because it is designed to foster relationships and boost customer loyalty. For these reasons, the “best friends” relational model may be effective for the firm’s desired relationships with its customers since it emphasizes a sense of community and belonging, which are significant values for the brand. What is exciting about this type of relationship is its potential benefit to the brand. Increased customer loyalty and engagement can act as a powerful marketing tool and drive the business.
According to the case study, in one month, Glossier managed to sell what it had anticipated would be a year’s worth of inventory, all attributed to the enthusiastic efforts of clients sharing their experiences through word-of-mouth. By the second half of 2017, customers had tagged @Glossier in more than 50,000 Instagram posts, with a total reach of over 17 million. (Avery 8). Nevertheless, what worries about this type of relationship is the possible backlash if consumers feel the brand is not living up to its promises.
Distribution Strategy
As the Glossier team contemplates the next move on how to bring its products to the market, options such as direct-to-consumer (DTC) sales, flagship stores, and partnerships can significantly impact its relationships with customers. For example, DTC can create more convenience for users in terms of speed and reliability of delivery, which is a critical factor in customer satisfaction since it eliminates all intermediaries in the supply chain (Kim et al. 2). Flagship stores can enable customers to have more personalized interactions with sales representatives, and showroom editors, which can lead to stronger relationships (Riegger et al. 141). Lastly, partnering with Sephora may provide the brand with a vast distribution network, allowing customers to easily access its goods.
Table 1 – The Different Distribution Options.
Based on the analysis of the various distribution options, it is recommended that Glossier continue to focus on DTC ecommerce. With this distribution model, the company is fully responsible for delivering products that do not go through intermediaries before reaching their final destination (Ma and Kwon 3074). This delivers value to the customers in terms of low costs, which may build brand loyalty. Additionally, the firm may consider partnerships with Sephora, which has a robust ecommerce platform to increase brand visibility and accessibility.
Recommendations
According to the case study, the beauty industry continues to be more competitive as big brands are responding by launching incubator and accelerator programs for nascent brands, acquiring brands currying favor with consumers, or searching for the next wave of ingredients and technologies. Therefore, the suitable way to deploy the $52 million infusion of capital Glassier has received from its Series C fundraiser is to continue focusing on developing more sophisticated R&D to maintain the innovation of new products. Furthermore, the company needs to launch a sales representative and professional influencer marketing programs, which may help it gain a competitive advantage. Lastly, the organization can utilize its brand community across the marketing mix by involving the audience in product development to meet the market’s needs. The brand community can be used to provide customer service and for promotion by acting as advocates and raising awareness for Glossier to increase loyalty and sales
Conclusion
In conclusion, famous brands, such as L’Oreal, and Unilever, have historically dominated the beauty industry. Nevertheless, Glossier has been disrupting the sector by introducing innovative ways to connect with customers emotionally and meet unique preferences. As the firm contemplates the next distribution strategy, the capital it has received from its Series C fundraiser is expected to enable Glossier to implement various programs. These include peer-to-peer sales representatives, professional influencers, and customer loyalty programs to stay competitive in this evolving market.
Works Cited
Avery, Jill. Glossier: Co-Creating a Cult Brand with a Digital Community. Harvard Business School Publishing (2019), pp. 1-26.
Kim, Naeun Lauren, et al. “Determinants of Consumer Attitudes and Re-Purchase Intentions toward Direct-to-Consumer (DTC) Brands.” Fashion and Textiles, vol. 8, no. 8, 2021, pp. 1-22. Web.
Ma, Youngsil, and Ki Han Kwon. “Changes in Purchasing Patterns in the Beauty Market Due to Post–Covid‐19: Literature Review.” Journal of Cosmetic Dermatology, vol. 20, no. 10, 2021, pp. 3074–3079. Web.
Riegger, Anne-Sophie, et al. “Technology-Enabled Personalization in Retail Stores: Understanding Drivers and Barriers.” Journal of Business Research, vol. 123, 2021, pp. 140–155. Web.