The online market for personal care items such as toothpaste, shampoo, diapers might still be small. But the big players such as Proctor & Gamble, Johnson & Johnson, Unilever, and Colgate-Palmolive have realized they can’t ignore e-commerce and social media. That said, these companies have yet to develop a comprehensive digital strategy, according to the latest Digital IQ Index from L2. The result? A few brands are doing a stellar job of innovating online (Gillette, Dove) but most are “hamstrung by anemic site and e-commerce investments, limited direct-to-consumer data capture, and a fragmented approach to social media,” according to L2, a New York-based think tank that helps brands “navigate and influence the changing digital landscape.”
L2 research lead Andrea Derricks was nice enough to explain the results of the study and provide additional insights into the role product-detail page content plays in a brand’s digital IQ.
Few “Digital Geniuses” Found among Personal Care Brands
Content Ping: Your report mentions that only 4 percent of Beauty and Personal Care sales take place via e-commerce. What main barriers to selling online does this sector face?
Andrea Derricks: On the consumer side, there are several barriers that have prevented users from embracing shopping for personal care products online, such as a lack of free and faster shipping options and an inability to use in-store coupons online.
Brands have not done much to facilitate the shopping experience either. The handoff to third-party retailers is much less sophisticated than in other industries, with 18 percent of brands offering no handoff to retail partner sites from the brand.com and an additional 21 percent linking to the retailer’s homepage or a general brand search page (as opposed to “buy now” buttons on PDPs [product-detail pages] that link directly to a retailer product page for purchase).
Additionally, most personal care brands are not optimizing across digital channels to drive to purchase. Only 19 percent of digital display ads that we surveyed had a “shop now” call to action and 18 percent featured a coupon. Furthermore, a mere 7 percent co-branded with a retailer.
Email, one of the channels with the highest ROI return on investment for traditional DTC [direct to consumer] e-commerce sites, is also under-leveraged. Although 71 percent of personal care sites offer newsletter signup, only 48 percent of those follow up with a welcome message, and only 16 percent sent any subsequent emails over the course of the following month.
Few brands have employed a larger integrated digital strategy linked to business objectives.
Content Ping: Why do you think so few personal care brands sell direct to consumer?
Andrea Derricks: Beyond an unwillingness to disrupt the traditional model, there are several operational factors that contribute to the low percentage of brands (8 percent) selling DTC, including a lack of fulfillment infrastructure, the challenge around free shipping on low-cost goods, and a lack of investment in e-commerce talent within the organizations. The price of entry is also significantly higher due to Amazon Prime’s entry into the marketplace.
Content Ping: You mentioned Amazon. What was the most important e-commerce sales channel for this sector?
Andrea Derricks: According to Booz & Company, 74 percent of online shoppers in Health and Beauty prefer third-party retail sites to manufacturer sites for online shopping. Additionally, consumer searches for personal care products are beginning with Amazon, as opposed to Google. Therefore, although brand.com sites still play an important role (with shoppers trusting the content from them more than any other online source according to Harris Interactive, and shoppers who visit spending 37 percent more in-store than non-visitors according to dunnhumby and comScore), third-party retailers are the key destination for driving sales.
In regards to which retailer sites are seeing the most traction, 95 percent of Personal Care brands in the study link to Drugstore.com, but Amazon and Walmart are the two most popular downstream destinations for consumers.
Content Ping: Did you find any commonalities among the personal care brands listed as “gifted” or “genius” compared with the rest of the pack? Do they have much larger marketing budgets? Or an internal champion? Or something else in common?
While Amazon is a top source of traffic for many brands, less than half (45 percent) those brands include custom pack shot photos, videos, interactive demonstrations, or comparisons on their product pages.
Andrea Derricks: One commonality across gifted and genius brands is that many are multi-category brands, playing in more than one personal care category. This holds true for both Gillette and Dove, the two genius brands. Multi-category brands registered a 27 percent higher Digital IQ on average versus brands that only play in one category.
The diaper brands also did well overall, due to early investments in CRM [customer relationship management], ad and search retargeting, and building engaged social communities.
Content Ping: Have you noticed a strong correlation between better site functionality/content and high digital IQ, or between any one of your other main ranking factors and high digital IQ?
Andrea Derricks: As each dimension in the index was weighted equally, balanced investments across all aspects of digital (site/retailer investments, digital marketing, social, and mobile) were important in achieving success. For example, brands with a mobile strategy and those that are making search and content investments on third-party sites performed better than those without.
Overall, this industry has consisted of several brilliant digital campaigns (Old Spice‘s “The Man Your Man Could Smell Like” campaign, Dove’s “Real Beauty Sketches” video), but there have been few brands that have employed a larger integrated strategy linked to business objectives.
Content Ping: Did your findings get down to the product-page content level? If so, can you expand on any of those findings and talk about some best practices?
Andrea Derricks: We did a high-level review of brand shops as well as product-page content. We found on Drugstore.com that 31 percent of brands in the index had a custom brand shopfront and 5 percent were serving a banner on the search results page.
Brands need to ensure that digital properties aren’t simply billboards for the brand, but rather that they are all working together to put a user on the path to purchase.
Forty percent of brands registered Amazon as a top-8 source of downstream traffic, the highest percentage across retailers. However, only 24 percent of brands had a customized brand store, and less than half (45 percent) had provided some kind of media for the product page beyond text description (such as custom pack shot photos, videos, interactive demonstrations, or comparisons). CVS has been less of a priority, with 15 percent of brands having a brand store, and only 28 percent providing content for customized product pages. Lastly, 48 percent of brands are customizing some type of content Walmart.com.
Best practices include providing diagnostic diagrams or quizzes (Always‘s “Which pad is right for you” chart), cross-selling other products in a range or across the portfolio (Axe Shower Gel cross-selling the rest of the range), and providing other engaging branded content (Q-tips‘s “Arts & Crafts Tips”).
Content Ping: Do you think developing better site content is a necessary step for brands wanting to improve e-commerce sales? Or are factors such as social media presence and mobile optimization more important?
Andrea Derricks: In regards to brand-owned sites, there is definitely a lot of room for improvement. We found that 34 percent of sites had broken links, 16 percent had broken links leading to e-commerce, and more than two-thirds never updated the homepage over the course of a month. Many of the sites have been neglected and are not only frequently a “path to nowhere” but also are a poor representation of the brands. Beyond tactical errors, brands need to ensure that digital properties aren’t simply billboards for the brand, but rather that they are all working together to put a user on the path to purchase. Branded content on retailer websites such as product videos, diagnostics, and how-to diagrams not only improves the way products and brands are being merchandised but also helps encourage the user to complete the purchase.
Overall, there is a lot of low-hanging fruit for this category across all the dimensions you mention (site, digital marketing, social, and mobile), but ultimately, each brand needs to develop a digital strategy that ties back to key business objectives, in order to help guide investment decisions.
Andrea is a research lead and consultant at L2, where she has helped members such as NARS, L’Oréal, Labelux, Origins, and Moët Hennessy develop digital and organizational strategies. Before joining L2, Andrea was at Goodman & Company, a strategic marketing consultancy where she worked predominantly on B2B digital strategies for technology and software companies. Andrea serves on the board of directors of Marketing EDGE and received a B.A. in American Studies from Columbia University.