To conclude my digital business models journey, lets take a trip down memory lane! To make this concise, I will break this down into 3 segments based on Rolfe et al.’s (2001) reflective model: What? So what? Now what?
What did I learn from the module?
With no blogging experience beforehand, summarised below is what I learnt:
I felt writing my first blog post and reading BEMM129’s Week 2 content taught me that convenience is one of the most important commodities to our generation and I wanted to explore it more in business models.
With Mandy’s blog on Tesco, their “Click+Collect” model is a great example for convenience as it utilises both physical and digital locations and that even though currently their physical stores are declining, I voiced my opinion that I do not think that its a problem.
People still love shopping in stores! Free to use from GIPHY
When I came across Sara’s blog on Amazon, I raised a concern that even though Amazon has one of the most successful business models, was it really considered successful ethically? Even though they’re not breaking any anti-trust laws and it’s very convenient for consumers, it still neglects the interests of workers and rivals so shouldn’t it be changed?
Reading her blog made me think this may be a great example of not favouring technologies over business models. An article provided in BEMM129 explained that it is not the implementation of technology that makes an organisation successful but the business models and how one utilises assests instead. With many FinTechs jumping on the blockchain bandwagon (Medici, 2018), it was interesting to see TransferWise wasn’t- especially since they’re quite a successful money transfer service. This is why I questioned whether or not she thought TransferWise should be buying into blockchain- because I really don’t think they need to.
From writing both my blogposts on Sephora and Glossier- I learnt trends such as personalisation and user generated content were important when strategising digital business models. This is why I am trying to understand how it can be applied in different industries. Hence, when Tiphaine’s blog stated that “the number of users (have) recently been growing at a much slower rate” on Netflix, I researched more about Netflix to see how they could address user-generated content. And to my surprise, I found they had an interactive content section- with the latest interactive series launching in April!
Interactive content- gif created by myself from content on Netflix!
Now what will I be taking forward into my future learning and professional development?
If these stats don’t prove to you how successful Glossier has become, then I hope this blog will!
Can I first start off by stating that startups typically get $26 million from Series C funding, if they even make it to this stage. Glossier received literally double the amount of that. Valuation at this stage is backed up by continuous hard data if you want to receive this kind of funding. With currently a total funding of $87.4 million from thirteen investors in about 4 years, it is safe to say Glossier is quite profitable. But anyways, let me set the scene first a bit!
What started off as a side project while working as a styling assistant at Vogue Magazine, Emily Weiss, CEO and founder of Glossier, launched Into the Gloss as a blog about women’s beauty and grooming routines. From the connections she made working at Vogue, Teen Vogue and W Magazine, she started profiling their routines, rituals and recommendations into her blog.
Weiss was breaking the somewhat ‘traditional’ beauty industry of companies telling what consumers must or must not have. She was creating a social gathering online for consumers to share their experience with makeup and skincare products and to swap suggestions and support each other.
Hyping the crowd: Instagram launch
With all the collected knowledge from Into the Gloss, Weiss eventually started to consider creating products consumers were talking about. Her team used data collected digitally (i.e from Into the Gloss) to set up their new brand- Glossier. But before this direct-to-consumer company was launched, they created an Instagram account. They had about 20,000 followers and over 125 posts prior to the site launch. It’s safe to say Glossier’s use of social media as a digital business model is very successful considering they were to reach the $100 million revenue mark by 2018.
Glossier community sharing the products in action! GIF created myself, photos from Glossier
Customers are more willing to trust recommendations from friends and family over a company. And thats exactly what Glossier makes use of. By using Instagram as a two-way communicational and promotional tool, Glossier is not vulnerable to changes and new trends; it keeps up with it! By replying Instagram comments and asking about future ideas, Glossier has a high degree of product transparency which, in turn, gives them high brand loyalty and great customer experience. For example, when they asked their Into the Gloss community to help them create their new cleanser– which ended up being the famous Milk Jelly Cleanser that won ‘2015 Beauty Awards’ and ‘Allure Best of Beauty 2016’.
Non-expensive way to keep up with trends, photo from InstagramCute and relatable tone of voice when interacting with customers! Photo from Instagram
Leaving room for innovation
By collecting and analysing their comments from Instagram and Into the Gloss, they are being distinctive, which cannot easily be copied. This model allows them to review products often and implement changes if needed, quite efficiently and quickly.
When they realised a lot of people threw their face wash because of Airport’s ‘liquids rule’, photo from Instagram
When asked about their online and offline position, Weiss stated she has no intentions to sell the products through Amazon, Sephora or any other department or speciality stores. She prided on the fact that Glossier’s offline presence has a one-to-one connection with their consumers; which not many beauty companies have. Now you must be thinking that’s a very cliché reply, but hear me out! Well, not me, hear Emily Weiss out:
“There are other customer experiences that people want in particular when it comes to their fashion and beauty categories.. these are highly emotional categories… and so while Amazon makes it really easy to consume, it doesn’t necessarily make it easy to connect and when we think about the future of Glossier we really think about that emotional commerce and the social utility we can build.”
By doing almost all of their business online, Glossier has created a community with a strong sense of brand loyalty. They use social media in such a way that the customers feel they’re coordinating with Glossier on what products to create- to be honest they essentially are. So can this be copied? Well yes and no.
Not really for bigger brands with well established retailing or massive product ranges. Glossier has that authenticity and trust that other big and multi-brand companies don’t. Additionally, in terms of interactions, Glossier’s humanised content such as memes that speaks to millenials alongside product focused content generates more interactions than other companies.
On the other hand…
Glossier isn’t the only beauty company to successfully use social media for communication and advertising. MAC Cosmetics, Anastasia Beverly Hills and Sephora have a much higher number of followers, topping the list of highest number of followers in 2017. Moreover, even though they do use social media as a R&D method, which other companies don’t (they just use it for advertising), it can easily be copied if companies shift to listening to consumers more.
There’s nothing that excites me more than spending hours on YouTube learning winged eyeliner tutorials or whether or not to invest in a 10-step Korean skincare routine! Makeup and skincare varies greatly for each individual hence shopping for it is a very personal experience. This is why I want to talk about Sephora and the beauty empire it has created for itself.
By having product testers for all makeup and skincare items or offering free makeovers such as ‘Smoky Eye’ or ‘Flawless Foundation’ from professional makeup artists, Sephora makes use of their physical location to encourage customers with their decision making process.
But what makes the Sephora in-store experience more worthwhile is the fact that Sephora successfully adopts new tech such as their free Color IQ– a device that matches your skin tone in their Color IQ library to help you find your perfect foundation. Or the Virtual Artist service which takes product testing to a whole new level with the use of augmented reality. They provide iPads or a connected mirror with many looks for you to see on yourself. It is also available on their Website and mobile app. By making this service available online, Sephora has found a way to optimise the e-commerce platform.
Now on to the digital platforms! Sephora was an early player, launching their first website back in 1999. This broadened their brand by not only allowing customers to purchase products but to educate them and help them communicate with other customers. Sephora.com offers the Beauty Board; a social media platform to share and like looks and tag products used within the Sephora beauty community. By creating user-generated content within Sephora’s digital space, consumers would be much more willing to trust the products. Therefore, it was the combination of physical, digital but also social realms.
Each social channel serves a different communal purpose, which requires us to deliver different types of content. On Instagram, we use live, stories and posts, focusing on the quick eye candy. On Youtube, we post long-form educational content. We use Facebook and Snapchat for event coverage and Wishbone for polls and quizzes where customers vote on things like their preferred beauty looks.
Sephora wasn’t just using technology for the sake of digital innovation. They first learnt their customers’ needs and then decided how digital technology was going to provide for this.
With having both digital and physical locations, Sephora managed to blur the lines between them. Sephora “brought in-store and digital under one roof, along with customer service” said Mary Beth Laughton, whose title changed from being Senior VP of Digital to Executive VP of Omni Retail.
For those of you that haven’t come across the word omni-channel retailing, it is when the organisation provide customers a unified experience across all physical and digital locations. In Sephora’s case, earlier, when I mentioned the free makeovers, the makeup artist would now add the products used onto the customers profile, allowing them to shop for it in-store or online. Additionally, the Virtual Artist mobile app would also allow them to purchase the products online or find them in store- all this because of omni-channel retailing!
So with their brick-and-mortar stores, Website and mobile app, Sephora seized all platforms and transformed to an omni-channel beauty retailer. There’s a model I came across which describes five steps a consumer goes through when making a purchase; the second step being ‘Information Search’. Like the title, it’s the customers effort to ‘search’ internal and external business environments and collect ‘information’ that helps with the buying decision. “Sephora saw that 70% of customers who visited the retailer’s website before heading to a store to make a purchase did so within 24 hours”. With Sephora’s omni- retailing strategy, they know which platforms their audience are on hence ensuring their content is personalised and accessible; creating a seamless customer experience and convenient ‘Information Search’.
However, there are also challenges from operating in both digital and physical locations. With all the user, device and transaction data created from the digital space, sensitive data concerning customer movements needs to be a well kept secret. Hence, more and more regulations have been forming- one of which have caused some issues for Sephora’s U.K. and Netherlands customers.
On that note, the main idea I want you all to take back would be that instead of having a product-led focus on which type of retail guarantees profits, shift it to a consumer-driven focus; having an omni-channel presence with content your customers can connect with.
Roshni's blog 