In an increasingly competitive market, beauty brands are seeking fresh strategies to enhance customer loyalty and engagement. To this end, many are turning to innovative tech solutions known as “community commerce” platforms. These platforms blend traditional loyalty programs with social elements, allowing brands to cultivate closer connections with their customers.
In recent developments, beauty giants like Ulta Beauty and Glossier have formed partnerships with startups such as Kiki World and TYB. These innovative platforms utilize blockchain technology to establish rewards systems that not only incentivize purchases but also encourage social interaction among users. These collaborations signify an important shift towards leveraging technology to create dynamic brand communities that resonate particularly well with Gen-Z consumers.
The Rise of Community Commerce Platforms
Community commerce platforms represent a modern approach to consumer engagement, especially in the beauty industry. For instance, Kiki World, backed by Estée Lauder, recently announced a significant partnership with Ulta Beauty. This collaboration emphasizes a model where member engagement is rewarded, allowing users to earn points for a range of activities, from purchasing products to participating in community discussions.
Similarly, Glossier joined forces with TYB, a platform that has already attracted more than 30,000 members. This program features elements such as group chats and “challenges” that grant points for various tasks, thus driving both loyalty and social engagement. For example, Glossier rewards customers with 50 points for answering quiz questions and 100 points for sharing selfies. These loyalty points can be redeemed for discounts, making the experience both rewarding and interactive.
Meeting Evolving Consumer Expectations
The beauty industry is grappling with high advertising costs and customer acquisition challenges. As a result, many brands are shifting focus from merely attracting customers to retaining them. Community commerce platforms offer a unique solution by creating vibrant online communities. By fostering interactions among fans, brands are not only being perceived as more relatable but are also enhancing customer loyalty through direct engagement.
Shana Randhava, Senior Vice President at Estée Lauder’s investment arm, highlighted this shift in consumer behavior. She noted that as brands navigate this change, satisfying the increasingly sophisticated expectations of consumers is paramount. “The transformation of behavior and expectations of consumers is evident,” she stated. These platforms allow brands to remain relevant in a rapidly changing market landscape.
Building Engagement Through Innovative Loyalty Programs
The loyalty programs offered by community commerce platforms may be their most attractive feature. Brands utilizing TYB can engage members in “challenges,” rewarding them for various types of participation. For example, Topicals, one of the first brands to adopt TYB, transferred its loyalty program to this platform, providing unique incentives beyond mere purchases. Members can earn rewards for generating social content or sharing their product experiences, which can lead to participation in influencer trips.
Kiki World takes a slightly different approach by focusing on customer feedback in product development. This ensures that users feel valued and involved in the brand’s offerings. Users are rewarded for voting on product prototypes — an approach that emphasizes community involvement in shaping the brand’s future.
Creating a Sense of Community
The concept of “community” within brand engagement cannot be understated. Brands are constantly exploring ways to foster a sense of belonging among their customers. Over the years, this has evolved from private Facebook groups to today’s cutting-edge community commerce solutions.
Glossier, for instance, transitioned from a private Facebook group for its community to TYB, offering a space where customers can connect as if they are friends chatting. This platform provides updates, product announcements, and even allows for user feedback on products. Such initiatives enhance the overall consumer experience by creating an intimate, friendly atmosphere.
Moreover, brands are utilizing these platforms to enhance their influencer programs, engaging ambassadors in a more direct way than ever before. By leveraging group chats, brands can foster deeper connections not only with customers but also within their influencer communities.
The Future of Community Commerce
Community commerce platforms are still in their infancy, yet their potential is apparent. With firms like Kiki World planning to offer a “permissionless” version of their platform that brands can use independently, the trend towards decentralized community engagement is set to grow. Upcoming launches involving more beauty brands, as well as fashion players like Cult Gaia and Urban Outfitters, signal both innovation and a diversification of this model.
As brands continue to explore these platforms, the idea that increased engagement leads to loyalty remains consistent. However, what distinguishes today’s consumers, particularly Gen-Z, is their engagement frequency and the channels they prefer to use. The ability to articulate brand loyalty through community interactions will likely become a decisive factor in how beauty brands strategize in the future.
In conclusion, as the beauty landscape evolves, brands will need to rethink their engagement strategies. Community commerce presents a promising avenue, offering personalized experiences that speak to today’s consumer needs while fostering loyalty and retention in a dynamic market.
