EP #50: Scaling personalization-led e-commerce growth in the cosmetics space like India’s Purplle

Dinesh (Host): Hello everyone. Welcome to yet another Super insightful episode of the MarTechno beat, a specially curated podcast series powered by Netcore smartech. I’m your host Dinesh Ahuja and today I’m joined by special guests from Purplle, leading Beauty and cosmetics shopping app Miss Neha Malhan,  director retention at Purplle. Welcome, Neha.

Neha (Host): Glad to be here.

Dinesh: Same here Neha. So to give a background, Neha is an economics graduate from Delhi University, from there she went on to complete her MBA from IIM Lucknow and started her career with BCG and then straight away jumped into the e-comm bandwagon with winter of for about five years solving problems on customer experiences, Revenue growth and personalization were some of the key focus areas for her. Later on, in the last six months, she’s joined Purplle, which is a phase-out of Bombay. She looks into platform marketing, CRM, and the most important Point Customer retention. So Neha, let’s start with the podcast and start with you know if you can just give a brief introduction of the story of Purplle.com. It’s an emerging key player in the e-comm space and if you can walk us through the genesis and the growth story of Purplle or together.

Neha: Sure. Thanks, Dinesh. So Purplle started in late 2011 and our co-founders had been debating about a bunch of ideas and they had two key errors of why they thought of this into the space to be in one as beauty and cosmetics as an industry go, they are one of the highest categories and also have margins which are good for business sense the second part is that at that time there was a customer need as well and Market Readiness of sorts because they did not have like a load of offline Beauty only large players who support us in the world Etc. We also did not have anything beyond the Lakme and L’Oréal which were doing a lot of personalization for customers for their beauty needs for their skincare needs and typically in these big companies a number of collections launch per year is also very limited. So it started in 2011 and then for the first night was like some 45,000 and sale and but four months later, it started gaining momentum would like a scale of 30% And today We are looking at a hundred million dollars and was Andres for FY 21. So the growth story is shaped to be on the two fundamental principles of saying that you know, there is a need for depreciation in the product your book and there’s a personalized sort of personal shopping experience because this duty is very personal. So compared to other categories Etc. Beauty needs to be solved at a user level.

Dinesh: Okay, sounds great Neha, a hundred million is a big number, but do you think so if I’ve understood it right there was a lot of clutter in the market when it comes to Beauty say Sales, and you know to improve or to increase the insights or you know, like I said entire sales perspective we came with a different approach which was not a very, you know, repetitive approach. It was an altogether new approach which you know focused only and only on duty as a category and not anything else. So that was wonderful, just to add on especially now, you know when covid-19 is turning out to be unmitigated. So there’s a hundred percent increase in online sales and we all realize that this shift is more formidable and long-term than one ever thought. What do you think as per you would be the emerging Trends in consumer Behaviour in online shopping or maybe a business trend that you’ve seen? I’m sure there’s a lot of trial error that happens but two or three trends that you for sure could vouch for it that this is here and it will be here to stay for a long time. What will be those if you can just speak about that at length?

Neha: Absolutely, so I think a couple of things so like you said that obviously because of covid white now the offline marketers you’re not really available for customers for both safety and Trust reasons also and they cannot step out or they’re not open. So online becomes a very important channel to capture all of that demand. A couple of Trends post forward from a business perspective that we’ve seen in order that people are looking at more, you know Essentials or are looking at more skincare routines face masks Etc. and makeup is also shifting in that sense because if you wear say or mask you will not prefer or lipstick which transfers on the mask, a lot of mates versus gloss lip takes will be sold Etc. So there are some of these business Trends which are emerging apart from the fact that when we speak to customers the whole safety and trust and hygiene Factor comes. From a consumer Behaviour Trend what we’ve seen is that one teen beauty and natural beauty is actually getting more searched and more bought. So the brands which are heavy on clean Beauty and are you know more chemical-free etc. Those are in demand, similarly, self-care is also on the rise both of the fact that people are not able to go to salons and also because there’s a lot of work from home scenario right Now. What happens is that like the cleansing toning moisturizing the basic CTM, proteins Etc. seem like almost 50% growth versus the pre covid times, roughly 1 in 4 women end up trying facial kids at home right now and experimenting with things like multi-masking where you have different areas of your face with different concerns and you mix up your masks to apply at the same time. So these are some of both consumer and business trends that we see emerging right now.

Dinesh: So Neha, when you say there is a lot of you know acceptance during a covid period where you know, women are trying to call the facial kits at home and trying to do their own makeup, How do you think as a business, you know Purplle is you know ready for this emerging change because like I said, this is your to stay right and this will continue to be even worse unless we have the proper vaccination in India, which is again about six months to one year from now. So, how do you think the business is shaping up. Is it ready? Or is it yet to be ready? What will be that space that you want to just call it out? 

Neha: There’s a lot of opportunities definitely because people are shifting online and there’s a lot of opportunities where  Purplle is very nicely placed in terms of having that data, right because right now when you try and shift certain needs from offline to online, it becomes a very big question of how much can you personalize at what time and how much Discovery and Assurance are you able to give, people how much in information are you able to give people in that small mobile format. So at Purplle level, we bought systems to help us get this entire piece in place very beautifully with data where we would be able to recommend that if say tomorrow you had been able to tell us that you know at may concern the next steps of the journey and whatever you are trying to get to, the end engine will be able to recommend And whatever goes well with your personal skin type and that is something that even at the offline level happens only probably say someone is half knowledgeable to even recommend basis your skin types. Plus there is a lot of scopes to scale up personalization when you are in a technology-enabled environment like Purplle and you can do it at scale. So you are able to do over your personalization and recommendations at in for So industry to be ready.

Dinesh: So on this note now Neha, I would just want to you know elaborate I would like you to elaborate that well where when you say personalization or when you say artificial intelligence or a machine learning which you know, why which you harness the user data and increase the retention, what kind of examples or you know, what kind of support that you want to share with listeners that how exactly personalization or the machine learning or the predictive model that you just rightly called out is helping you. Is it if I have to call it out in a number. Is it giving you about 10% or 20% benefit or what will be that you know Matrix that if I have to call it out with personalization AIML put together?

Neha: Okay, so there are some good things and bad things that are happening in personalization and when a company goes on a personalization journey, you need to figure out these things. So one is that you need to balance your recommendations, so say for instance that if I hide data that you are serious skincare bio and I continue to show you just skincare, I will never get you to say makeup. The second thing is that every user is different. So when we create a journey, we look at what you’re doing or thinking  Customs journey. So say, for instance, If you are a new customer versus a returning customer after some months, it’s a different perspective or what you’re looking for. Similarly, The third thing that we need to look at is doing it right scheme. So that becomes the biggest thing like say personalization I could have 10 banners on the homepage but my design team also needs to create it and that has to say every day and then it also has scalable systems to vote track, correct, and optimize it on a different level and this is because the assortment and beauty are diet-wise that this is where the personalization you know, kind of can help and also people need to be a little more cognizant of all of these things.

Dinesh: Sure, So thanks Neha. So on this note, I think you know when we talk about benefits of retaining a customer side, we all know the tension is the new acquisition and for example, somebody, some businessman thing that I’m a profitable business. I don’t need to worry about making sure that the Shoppers it into my app or website, but why wouldn’t you take advantage of this massive opportunity new customer acquisition is only getting more expensive right? High customer retention rates cut down on this cost which is one of the many reasons why retention is important to the business. So on this note, I also wanted to know how you looking to the year coming 2021-22  from a retention-specific point of view. What could be the top two challenges? What could be the top two opportunities within retention space?

Neha: Sure, so I would get to the opportunities first. So adding the two big areas of opportunities that exist is one in the world value field. So in and consumers are still looking for value and Beautiful role is what Purplle stands for and which means that it is not just this count but the value would mean things like great ingredients, exotic ingredients at great prices. So from argan oil to rosehip etc, the price points plus the combinations and solutions that are getting over at that value. The second bit is the fact that there is a loyalty program that we started at Purplle and that kind of program or anything else that our customers are where you giving him differential service, which is beyond discount. So this has special rewards for customers who become a part of the program itself to very nominal fee and it actually gives off a bunch of things for you. So it’s practically a reward program to get people to stick around because when people stick around and like That you mention that you know, an acquisition cost was a retention cost. Retention is what drives the engine for a business to grow and also signifies the health of the business. So those I would say are the two errors of opportunity. If you build the program’s right to be able to give reasons to people to stick around and then you can continue to give them value that should help scale up retention. The challenges I would say are just the fact that So staying top of mind right now in an environment where a lot of the e-comms and even horizontals are getting into the same space than staying top of mind is one challenge. The second is that there are certain tailwinds that shift in a different direction for a certain set of categories left or right now makeup used to be on the highest impulse categories before covid but right now because of the natural rate it of producing use cases of people going out needing makeup Etc. So these things now have shifted and makeup needs to set up a different way of getting that impulse back up in the minds of customers. So these two I would say are the challenges that you need to sort out.

Dinesh: Neha, just to add on this, you know, I just got this thought while you were speaking, do we also face challenges pertaining to a regional front say maybe some Market is different than other Market within India and if possible if you can explain how do you know to find the right balance between market? So I’m sure from the beginning stage for between cities, do you see that? There is a change of you know preference there’s a change of accepting certain products as a change of you know asking for a quality product or asking for a price point. Do you think they’ll think in India considering it diverse in nature so is this also a challenge right now and I’ll be doing anything to resolve this or we’ve already resolved this?

Neha: So I would like to answer it this way that other consumer Behaviour level, Yes. Consumer Behaviour differs across geographies. At a price point level, there is no differential if you were sitting in say Delhi or Bombay on what you would be paying for the product. However, what typically happens is that at an assortment of 40-50 thousand products, they’re able to meet the demands, The sales might be different in different geographies, the timing might be different to say a heavy-duty moisturizer will get shopped in the northern part of the country More sooner than the rest of the country just because of the seasonal difference. So things like these will exist part in terms of product pricing Etc. All of that remains standard.

Dinesh: Perfect. Thanks, Neha. So we’ve spoken about the growth story of Purplle started in 2011. The kind of business we’re doing right now. We spoke about the consumer and business Trends, especially, you know, post covid, we also spoke about certain opportunities and challenges one may look into e-coms phase life now and touch on how personalization artificial intelligence and machine learning is helping to the target or to enhance the consumer experience even more so we are at the end of the podcast and thank you so much Neha, it was an awesome insightful, you know discussion. I’m sure the audience will benefit greatly from all you know out of what we have shared today. Thank you so much for taking the time and joining us today.

Neha: Thank you Dinesh.