How D2C Personal Care Brands Are Personalizing Products to Win Consumers

Globally, the penetration of online BPC in countries like China, the UK, and the US is between 12-18 percent versus under 2 percent in India.
How D2C Personal Care Brands Are Personalizing Products to Win Consumers 

The cosmetic industry has always promoted a very homogenous idea of beauty, marketing a standard product to very different customers. Most of the brands have been bucketing customers with similar concerns and selling them a standard product that comes with a lot of harmful chemicals, preservatives and often didn't solve for their different concerns. 

This has been a big inspiration for many personalized beauty brands like Bare Anatomy, SkinKraft, and Vedix to name a few. These brands are trying to solve specific, individual concerns for each customer based on their unique profile. 

“We initiated the brand to break this notion of 'one size fits all' and create real, effective solutions to work for our unique customers,” says Vimal Bhola, Co-Founder at Bare Anatomy.

“We have recently the launch of our first-ever campaign - #iammytype, to celebrate uniqueness and debunk stereotypes. We feel that every individual has their own distinct personality, set of religious beliefs, habits, lifestyle, philosophies, political instincts, and professions, why should their skin and hair care be generic and not tailored just for them. With this brand film, we are trying to imbibe the same ideology that just like a woman’s individuality, her skin and hair is also unique; hence requiring a beauty and wellness regime that has been created and curated solely for her,” adds Chaitanya Nallan, Co-founder and CEO, IncNut Digital.

Similarly, Vedix uses knowledge of Ayurveda and leverage technology to understand doshas, which by the very virtue of our lifestyles and habits continue to fall out with each other. 

“Our approach is to understand every individual’s Prakriti, assess their doshas, and design a customized beauty regime for them. We have created ‘Vedix Personalised Questionnaire’ (VPQ), which is a set of detailed question designed by our in-house Ayurveda doctors to understand the concerns and problems of our customers in order to give them a uniquely crafted hair and skincare regimen,” Jatin Gujrati, Business Head, Vedix states.

Technology: A Game Changer

These brands use technology at various levels. Their application of technology starts from creating a personal questionnaire and these brands continuously refine it to help their customers share useful information to enable them to provide them with correct analysis of their skin and hair problems. 

Bare Anatomy is a premium, beauty-tech brand and leverages artificial intelligence to factor in real customer data via their hair and skin quiz and build this knowledge into their formulations - by way of this, they not only solve multiple concerns for their customers but also tweak their products to suit their lifestyle changes. 

“Both our skin and hair ranges use algorithm technology to record the customer's data points and then match those with clean, effective ingredients to work for their unique concerns. Our strong AI technology enables us to personalize product formulations as well as bring constant ingredient innovation to the market, helping us deliver tailor-made experiences to our customers,” explains Bhola.

“We thought it would be ideal to replicate a dermatologist’s way of solving an issue virtually. We are trying to identify how to make the skin healthier, instead of solving just the surface symptoms. SkinKraft relies heavily on the data collected from people, using that to build more sample ‘skin profiles’ for the brand algorithm, which are then matched to appropriate products. The variations in our products can happen at the base level and the activity level. For example, for the same base, we can vary the percentage of ceramide used. This alone gives rise to 150 variations, on top of that, there are variations of fragrance and color,” adds Nallan.

As customers complete this first step in their journey to engage with Vedix, the brand uses AI and analytics to provide them with real-time analysis of their doshas which they call ‘Dosha Profile’

“Once a customer signs up with Vedix as a subscription beauty service, we continue to engage with them on a regular basis. The first step is a detailed follow-up after 10 days of receiving the products to understand if they have seen any impact and benefit and if they would like further customization of the products that have been sent. This is followed up with another detailed assessment in 30 days to understand if efficacy is meeting their expectations or if product formulations are required to be changed further. This also helps us to get direct feedback from our customers and further improve our products. Such deeper engagement both from the brand and the customers has resulted in Vedix securing 60 percent plus repeat customer rate which is more than double of the industry standard,” asserts Gujrati.

Role of Data in Personalisation

The data that these brands collect from their customers forms the basis of formulations and the concerns they solve for their customers. 

“The customization journey begins with a quick yet detailed skin quiz on our website. Here, we factor in 20+ different data points like your unique skin type, skin goals, lifestyle factors such as diet, stress, etc. This data then goes through our proprietary algorithm which matches it with clean beauty ingredients/ combinations to solve their specific concerns. All our products are freshly formulated in our state-of-the-art R&D lab once customers place their orders. Our product formulations follow stringent quality norms and are backed by a strong in-house R&D team of experienced scientists. A user can always modify his preferences as his lifestyle conditions or hair/ scalp profile evolve and the product formula evolves with that,” shares Bhola.

“Armed with the information that has been scooped out through artificial intelligence, machine learning along with data, algorithms, and programs, the user is classified into one of 72 broad profiles, generating an individualized recommendation, also known as, a hyper-personal beauty regime. Post this, the team moves on to follow-up with the customers to understand their progress and rejig recommendations and product concoctions accordingly. Backed by the extraordinary SkinID profiling system and dermatologically validated ingredients, the company strives to provide the best care for all skin types,” says Nallan resonating the same thoughts.

“Our customers' feedback drives our product range at a macro level,” adds Gujrati.

Why Betting Big on D2C Strategy?

Opting for a D2C strategy in the context of a growing digital economy is a great way to capture an internet-driven audience and has allowed these brands to build direct consumer relationships. A strong digital presence is essential to build a high-quality personalization experience for the user - from taking the quiz to product formulation to collecting feedback and addressing customer queries.

“It has helped us build an authentic value proposition, identify customer pain points and deliver value-adding touches quickly. It has also been easy to resonate with emerging consumer trends such as toxin-free, organic, sustainable products, which is something traditional brands would find difficult. This in turn has helped us gain early traction and credibility with lakhs of users. A D2C model also allows us to leverage our in-house R&D capability for faster product innovation to launch products (speed to market) and collect customer feedback which further helps in fine-tuning the product formulations. Coupled with the rise of marketplaces like Amazon, Nykaa, and the audience shift from offline to online with the Covid scenario, a robust digital-first strategy has helped us scale faster,” says Bhola.

“D2C enables us to reach a large segment of our addressable market and make an impact at scale. Being digital-first has helped us to take our products across the country without investing large capital in setting up stores and operational costs of running offline stores. Secondly, being a customized offering, we are required to maintain multiple SKUs and D2C gives us the benefit to maintain it at a single location making it a more capital efficient business. Being asset light and capital-efficient, Vedix has been able to pass these benefits to its customers by keeping the price point as low as Rs 999 per month,” adds Gujrati.

How Bright is The Future?

The online beauty and personal care segment have a huge potential as it is under-penetrated in India. Globally, the penetration of online BPC in countries like China, the UK, and the US is between 12-18 percent versus under 2 percent in India. We are seeing many brands across sectors adopting D2C as their GTM strategy as COVID has accelerated the online shopping trend.

“Specific to personalization in the beauty category, D2C is the most preferred route as by nature of being customized, the involvement with the customer is quite high to create specific products which are designed on regular and direct feedback from the customers. Personalized beauty products will find it difficult to scale in the offline world while being D2C business growth and scale-up will be at an accelerated pace,” states Gujrati.

“I think personalization represents a huge opportunity in the market right now - given how the Covid scenario has impacted digital consumer behavior. People are more aware and actively gravitating towards custom-made products for their specific needs. It is also a tremendous responsibility - as a brand, we want to make sure that we only offer the best possible quality to our customers and nothing less so R&D becomes a very time consuming and thorough process for us,” adds Bhola.

“I think every one in three women will opt for customized products by 2025 due to the confluence of three significant trends - mass Internet adoption enabling feedback loops and user input, AI-enabled understanding of ingredient effectiveness, and modern manufacturing technologies. I can also predict that in the next five to ten years will be phenomenal for beauty care companies in India,” concludes Nallan. 

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