What you need to know:

• Australian luxury brand Aesop, which was bought for $2.5bn by LÓreal last year, has embarked on a digital transformation project and brought on Salesforce Marketing Cloud to build its online sales, marketing and customer engagement.
• Unified data and a solid, connected technology backbone globally are driving Aesop’s evolving local and global omnichannel offering. But its digital chief, Richard Lindmark, admits neither can truly deliver the goods without an emphasis on building customer trust to obtain the zero and first-party data necessary to delivering better experiences – and conversion.
• Personalisation through offers, product recommendations and content relevant to region, zone or country – increasingly leveraging AI - are all part of Aesop’s plans to win over lapsed customers or encourage more frequency of purchase from those already buying from the brand.
• An overhaul of search terms and retargeting are a further part of the plan to drive growth through new customers acquisition.
• But as big as his ambitions are, Lindmark warns other brands not to pitch a $30m end-to-end, holistic plan if they want to get buy-in for projects from internal stakeholders. He advises firstly to “Prioritise business and use cases to develop – identity what first addresses customer paint points and brings the most immediate value back to the business.” And secondly, it’s about proving value commercially before stepping up from there – “It’s about having a minimal lovable product showing value and ROI, then build on that,” the experienced digital leader says.

A 10 per cent new customer activation rate, 30 per cent win-back rate and 12 per cent growth in retention are all in the sights of luxury beauty brand, Aesop, in 2024 after kicking off a digital and data transformation and martech rollout.

Speaking at the recent Salesforce World Tour in Sydney, Aesop global head of digital product, Richard Lindmark explained how the luxury beauty brand as been working to get up to industry parity on its digital and omnichannel experience offering and connect the dots on customer data to drive personalised experience – all while retaining trust.

Many will be surprised to learn just how big Australia-based Aesop is. The group, which has been around for nearly 40 years, has over 400 points of sales including signature stores plus department store counters in 27 markets globally. The luxury beauty brand was acquired by L’Oreal in August last year for US$2.5bn.

But the brand was arguably late to the ecommerce game, only ramping up in 2017 when it relaunched its technology stack. In 2020, it saw a massive scale-up as consumers took to digital channels during the pandemic, doubling its digital and data team headcount in response.

Yet despite enormous growth in Covid, “we are below the industry benchmark when it comes to digital penetration and over the next three years we want to address that,” Lindmark told attendees at the Salesforce event.

A key strategic pillar now is to step up digital engagements between now and 2027 to grow digital share by 38 per cent. Under its new ownership, Lindmark said Aesop is going through a discovery process across company tech stacks to find ways to leverage capabilities sitting within L’Oreal. But Aesop had commenced its own digital transformation already to try and spur growth.

Aesop.com as a global platform incorporates 17 instances in one single stack, covering online production and content. To further its own omnichannel and customer engagement approach, Aesop implemented Salesforce Marketing Cloud in 2022.

For Lindmark, omnichannel CX strategy at Aesop needs to answer several questions. The first is how it can replicate in-store experiences driven by personal consultation within the .com platform. Another is how to sustain a more effective replenishment journey and build more frequent purchases across the customer base.

Customer research done by Aesop in December showed only one in three customers replenishing goods via Aesop.com. In addition, Aesop found a significant portion of lapsed customers on its database who would be open to considering more convenient replenishment services.

Another statistic Lindmark is keen to change is the fact more than half of online purchases (58 per cent) are unknown because they occur through the guest checkout.

All this points to the need for Aesop to build average revenue per person with more effective personalisation, such as product recommendations or matching content based on customer knowledge, Lindmark said. And he knows data and tech are key instruments to achieving it.

Yet it’s equally critical Aesop looks to retrospectively collect zero-party and first-party data from existing customers by incentivising a value exchange in order to build better, more personalised experiences.

“We are aware growth cannot come at expense of customer experience. We are very measured when it comes to growth. Ethical data collection is also so important to us,” he said. “Compliance can be challenging as a global online retailer where you’re working with different laws and legislation. While we want to have a consistent practice of collecting data in-store and online, this can be challenging.”

And trust is simply non-negotiable in the mix for Lindmark. “That’s not only as we’re collecting data, but ensuring customers understand how we intend to use their data in trusted, personalised manner,” he said.

Having these foundations in order will also provide Aesop with the ability to harness AI. Yet Lindmark again stressed the importance of responsible practices.

“What we first need to do is develop a policy around use of AI, and specifically how individuals and teams can use AI to empower themselves and do jobs better. It’s about productivity, better online customer service,” he said.  “I think the CEO of Williams Sonoma [Laura J Alber] summed it up best at [Salesforce] Dreamforce: When it comes to customers, there’s nothing artificial about the experience. It’s really important to us as a company that we put customers first.”

Key pillars for digital transformation

All these forces, ambitions and essential customer ingredients have fed into Aesop’s plan of data and digital transformation. Lindmark cited three key pillars. The first is untapping and identifying growing omnichannel customer segments. He pointed out these customers have the highest spend in comparison to single channel shoppers.

“To achieve that, we need to find a stronger USP for Aesop.com through things like exclusive products or offerings, and looking at a strong online consultation service,” he said.  

“Customer retention and engagement is another must and we want to grow that customer database, whether it be for marketing signups or customers creating an account. We need more consistent, effective engagement with customers through personalisation not just online, but in the retail network. One big thing I’d like to see is us empowering retail consultants in-store with more digital tools like a clientelling app.

“The ultimate outcome is to drive frequency of purchase, reduced lapsed customers and single purchasers.”

In concert is increasing online brand recognition. “Our organic and paid channel previously has been hamstrung as we’ve not been using certain keywords. We have unblocked those now – in the first half of year we’re repurposing a lot of content and have engaged an agency to help with indexing against search engines,” Lindmark said.

“A single tech stack globally had presented us with few challenges around that and being based on customer location.”

Aesop isn’t averse to paid activities to help its growth ambitions. Where Lindmark said the business needs to better utilise data is by creating look-a-like audiences using existing customer insights across social for more effective, targeted campaigns and to improve ROI on marketing activities.

“All this must be underpinned by strengthening that trust layer and only collecting, analysing and storing data that drives customer value and enhances experiences,” he added.  

Marketing Cloud: The initial steps

Since rolling out its Marketing Cloud, efforts so far have concentrated on four areas. At the basic layer, Aesop has a bespoke CDP, which right now includes largely transactional data on customers. The next phase is building a collection of new data points from first and zero-party sources, then unifying that in a platform such as Salesforce Data Cloud to get a single view of customer for improved intelligence, Lindmark said.

Aesop’s global vision for data application is a continuous loop between data operational use cases with addressing moments that map into business priorities, all fed by a customer feedback loop. Right now, the emphasis is on collecting, connecting and activating data, but Lindmark saw predictive and prescription insight with AI allowing Aesop to become predictive, reactive to real-time reactions, as well as distinctive brand interactions that establish unique value and preference.

The third step is delivering more personalised omnichannel experiences and engaging with customers in their channel of choice.

“We are a global retailer, the challenge is how to build at a global level but still allow for localisation at country, region or zone level. What works in Australia and the UK, for example, won’t necessarily work in Japan, Korea or France,” Lindmark said.  

“We need to know in the customer journey when to amplify or push digital in a journey, or bring in more geographic, personal data to recommend skin regimes at certain times of the year. It’s about creating strong data and vision, strategy, and achieving key always-on objectives to improve customer retention and engagement.”

Lindmark knows the mechanics to get there are more data capture, systems integration of.com, customer service and CRM, online and offline personalisation. The strategic North star is product subscription recommendations that are unique to each customer.

While Aesop is still in our infancy with Marketing Cloud, Lindmark claimed a few early wins.

“It’s enabled us to build greater internal capabilities in our BAU, and we’re about to deliver a consolidated solution for both online and offline collection of data and consent, as well as improved reporting / ROI on many marketing and CRM activities so we can see how we can improve and iterate further in that space,” he said.  

Targets set for 2024 include 10 per cent activation of new subscribers, as well as better use of data for social retargeting.

“We have to create a stronger value proposition for membership – either for our database or in terms of online accounts,” Lindmark said.  

Another ambition is 12 per cent growth in retention via CRM interactions through improved personalised and targeted communications, particularly by balancing content with product. The third aim is a 30 per cent win back rate of lapsed customer segments.

“To do this, we’re working on reactivation campaigns and targeting customers who haven’t made a purchase in the past year but still have engagement with our brand. We’re personalising these reactivation campaigns,” Lindmark said.

Tips on improving your own digital strategy strike rate

As to his tips on digital transformation for those who need a refresher or are still fumbling, Lindmark emphasised the need for a North Star, vision and roadmap. Prior to Aesop, Lindmark earned his digital stripes at consultancy QIC, working as digital product manager for a global real estate firm and oversaw marketing and digital team tech.  

“Prioritise business and use cases to develop – identity what first addresses customer paint points and brings the most immediate value back to the business,” Lindmark advised. “Prove ROI – it’s about having a minimal lovable product showing value and ROI, then build on that.

“Manage internal stakeholders better too – don’t ask for $30 million to implement an end-to-end solution. Start small, show value and build through stronger business cases.”

Other musts include creating a plan for ongoing support to tackle bugs during your immediate post-launch hyper care period, but also for iterations based on customer feedback and results of your campaigns. And spend the money on building in-house capabilities and skills on the tools.

“Not only are there benefits to the greater business, it’s a great opportunity to upskill and further develop their roles and carers. They’ll hopefully stay in your business longer as well,” he added.