Specifically, should they literally be giving away their product when they participate in the avalanche of beauty calendars that are launched each week?
(For context, luxury calendars are typically priced at $375, and that’s the low end of the market. The ubiquity of #Augustinusbader, #drbarbarastrum, #sundayriley, in such calendars shows that these brands are 1,000% committed to these giveaways.
If I were a brand owner, I would never participate in such giveaways and I’ll tell you: Consumers buy multiple calendars and then sell the used or unused products in the secondary market. (See the photo below from a Facebook group – that’s half a day of postings and a quick scroll on my part).
The sellers discount these products, and I’ve seen anything from 20% to 90%, depending on the supply of the product. Significantly, the final consumer of the product is ABSOLUTELY NOT the person purchasing the advent calendar…
WHAT DOES THIS DO FOR THE BRAND and THE MARKET?
i) CONTROL OVER DISCOUNTS:
Do brands intend to hand-over control over discounts to an unidentified third party seller? What does that do to you brand equity?
ii) PRICING:
the pricing (and all data stemming form it) are based on false assumptions. Some of the final consumers of your product are paying a fraction of the retail price AND you don’t know who they are. Period.
iii) CUSTOMER ACQUISITION + RETENTION:
Are you reliably acquiring new customers? Is long-term customer loyalty being tested when they see product being given away (and they pay full-price?)
iv) MARKET SHARE GROWTH?
I appreciate that more prominent VC-backed brands see this as a way to build their market share in a competitive market. But apart from destroying value for all participants (margins are just getting slimmer), how is ROI for the brand being measured? Intangible factors such as increase in brand awareness, conversion to sales should be thought of
v) INNOVATION?
As margins are reduced, innovation and new entrants are discouraged.
In summary, luxury beauty and skincare brands should carefully evaluate the pros and cons of participating in promotions like Beauty Advent Calendars.
While these promotions can boost short-term seasonal sales, they should consider the long-term implications on brand perception, profitability, and the competitive landscape.
Alternative strategies that maintain brand exclusivity and appeal to their target audience need to be explored..
(*Harrods, netaporter, cultbeauty, SpaceNK and lookfantastic Harvey Nichols, Liberty calendars over the past few years)
#luxurybrands, #brandidentity, #marketingstrategy, #brandimage, #customerloyalty, #roianalysis, #promotionstrategy, #businessgoals, #competitivelandscape, #innovationinbeauty, #retailstrategy, #consumerbehavior, #brandequity, #markettrends, #holidaypromotions, #exclusivity, #beautyindustry, #marketpositioning, #consumerinsights, #brandvalues
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