In the New World of Beauty, Community is the Core and Technology is the Enabler

Brands like E.l.f. Beauty are embracing a new era of consumer engagement -- one where social media and even metaverse platforms are creating powerful vehicles for fostering community.
Photo credit: E.l.f. Beauty

Sasha Radic, Managing Director of the investment bank Jefferies, believes that beauty is one of the most exciting and “special” sectors in retail for two big reasons: its deep connection to joyful moments and its incredible resilience. Building on these characteristics, beauty brands of all sizes can differentiate and grow, especially as more shoppers join and participate in online communities.

“These brands are associated with positive experiences for consumers and I do think that that makes them extremely resilient,” Radic said in an interview with Retail TouchPoints. “When things are going well, people want to enjoy and participate in [those beauty moments]. And when things are feeling a little bit tougher, beauty and wellness are small indulgences that can create some positivity in people’s lives. That’s what makes the category so special.”

Because consumers are gravitating to digital channels and platforms to seek out these moments of joy, brands have a new, dynamic vehicle for connecting with consumers, cultivating passionate communities and creating innovative experiences using technology. In fact, Radic believes that beauty brands are some of the top innovators in consumer products and retail today — and that while community is core to any valuable brand, technology is the facilitator of those community moments and an enabler of deeper brand engagement.

“This is a way for brands to amplify and really deliver their message, whether it’s on a shelf with a visible presence that shows what kind of brand you are or whether it’s online through social with branded and user-generated content,” Radic explained. “At the most technology-driven end, you can have a personalized business model like Prose, where you’re truly using technology at the product level to showcase this one-on-one connection with the consumer, where you’re making products specific to their needs.”

Prose uses its deep data and analytical capabilities to achieve this level of customization. While that’s helpful for any brand, it’s not a requirement — there’s a whole spectrum of strategies, from dynamic storytelling to robust personalization. The bottom line: there’s no single linear “path” beauty brands should take to prove that they’re building products and experiences that consumers will love.

However, it does help if brands understand how consumers currently shop for beauty products, as well as the tools and capabilities that best support them online and in stores.

How do Beauty Consumers Shop?

A survey of 1,250 U.S. beauty consumers conducted by Harris Williams found that 95% plan to spend the same or more money on beauty in 2024 versus 2023. Overall, respondents aged 18 to 34 over-indexed on these responses. The report found that product efficacy and functional benefits were the primary drivers of purchases, with TikTok being a key channel (53%) for 18- to 24-year-old consumers to discover products. Across all generations, shoppers preferred to buy beauty products in mass retail stores (87.1%), on Amazon (79.6%), at in-store beauty specialty stores (79.5%) and through online mass retailers (76.8%).

A much larger survey of 26,000 beauty shoppers, conducted by PowerReviews, identified the content and channels that influence purchase decisions:

  • Customer ratings and reviews (88%);
  • Customer photos and videos (67%);
  • Recommendations from friends/family (63%);
  • In-store recommendations from store specialists (63%);
  • Instagram (34%); and
  • TikTok (33%).

Social Media Provides a Vehicle for Community and Creativity

When considering all of the different ways beauty brands can embrace digital, social media comes to the forefront as an obvious touch point. Every platform — from Instagram to TikTok, Threads and beyond — offers its own unique features and value drivers. But at the core of all of them are hardcore users that are passionate about sharing their feedback and experiences.

“Over the past few decades, social media has had a huge impact on how beauty connects and communicates with consumers,” Radic said. Their obvious value is that these platforms are designed for discovery and education, and many users go to social media to learn about new beauty brands and brands. That makes social media “a really important place for brands to tell their story to build communities around themselves in their products and really enable their growth,” she noted.

Although many beauty brands use social media to cultivate community, Radic pointed to E.l.f. Beauty as the “Gen Z darling” that has mastered social — especially TikTok, which is “a huge driver of conversion in beauty,” according to Radic. “You can see the incredible growth and results a public company like E.l.f. Beauty has seen — a brand that has talked about their strength and ability to leverage TikTok to drive communication and engagement with the next generation of consumers.”

A big reason why the brand has been so successful on social is its ability to “lean the e.l.f. in” and constantly reinvent itself.

“If we had a playbook, it would be published out there. But there is no playbook because we’re constantly reinventing ourselves,” explained Laurie Lam, Chief Brand Officer at E.l.f. Beauty, at the 2023 Retail Influencer CEO Forum in New York City. “The pages would have to be printed and pulled out every single day and with every single comment that we receive from our community.”

Lam added that while E.l.f. Beauty loves insights, it doesn’t wait for signals — and that speed to market and passion for creativity is an advantage, every time.

“Everything we’ve done has been built on the insight, but then you have to take your gut, put the two things together and run at full speed,” Lam explained. “You ground yourself in insight, but then you put your head in the stars and you start dreaming on what that could be.”

Many campaigns have showcased E.l.f. Beauty’s social media prowess, including integration with augmented reality (AR) digital try-on and filters via Snap. But one if its more recent media initiatives showcases the brand’s dedication to community-powered innovation. Vanity Table Talk was an entertainment-driven digital series where celebrities like Jennifer Coolidge sat down at the E.l.f. vanity to chat about their daily routines, favorite items and other topics. The kicker? They went through their interview while also applying the latest and greatest E.l.f. products. It was a social-first initiative, which means the show was amplified and repurposed across YouTube, Instagram and TikTok.


Metaverse Platforms Become a Hub for Co-Creation

Many beauty and skincare brands are building their ecommerce experiences to support their communities. For example, Covey Skincare integrates its social content and community feedback into its website, and encourages its “Flock” to engage through physical and virtual activations. These activities are part of a more long-term “club” strategy that will help the brand expand and nurture its community.

“The best brands, the ones that really understand and build community, are really trying to be more than products that are put on shelves,” Radic said. “Having a great product is fundamental, but creating a brand that has meaning and a broader sense of purpose is hugely important in differentiating within a relatively crowded landscape.”

But gaming platforms in the metaverse (think Roblox and Decentraland) are bringing the idea of community to the next level by creating opportunities for users to not just communicate and collaborate with each other, but with brands as well.

Rihanna’s Fenty Beauty is one brand that has built an incredible story and, in turn, community around its inclusivity mission — and the brand has successfully brought that mission and vision into the metaverse. For a special Roblox activation, Fenty Beauty created a series of games and interactive scavenger hunts that inspired users to learn about the brand’s products and ingredients.

The Fenty Beauty + Skin Experience, which was only available from June 30 to July 30, 2023, also had a virtual beauty lab where visitors could create customized versions of the Gloss Bomb Universal Lip Luminizer by choosing its ingredients, effects, bottle, lid and applicator. After naming their shade, they were able to put their new creation into a virtual retail display called the “Sephora Experience,” where others could vote on their favorite user-created item.

Behind the scenes, Fenty Beauty and Fenty Skin are pulling many data levers to build its digital Gen Z community. Specifically, the company is leaning into a micro-community strategy that supports more intimate connections, according to Sapna Parikh, Chief Digital Officer of Kendo Brands, LVMH, the parent company of Fenty Beauty and Fenty Skin.

“We are no longer able to talk to [Gen Z] as one big group of people,” Parikh said during the 2023 Retail Influencer CEO Forum in New York City. “We have to really understand each of our cohorts. And what [Gen Z is also] demanding of us is to really stay on top of the channels that are out there [in terms of] the way that we communicate with [them]. The micro-community strategy is demanding us to be smarter with our data, and smarter with our insights.”


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