NYX by L'Oréal – Make up your Instagram | casem.

BÜCHLER, CLAHSEN, VRYGHEM, WIESNER, ZHENG (2017) NYX BY L’ORÉAL – MAKE UP YOUR INSTAGRAM 17-1260

EN

0

NYX by L’Oréal – Make up your Instagram

Case study

Reference No. 17-1260 EN

This case was written by Lisa Clahsen, Arthur Vryghem, Richard Wiesner, Daniel Zheng under

supervision of Prof. Dr. Jan-Philipp Büchler, at the HEC Paris.

© 2017, CASEM, FH Dortmund, Emil-Figge-Str. 44, 44227 Dortmund, Germany

No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form

or medium whatsoever without the permission of the copyright owner.

Abstract

With this case, students are able to increase their knowledge of digital marketing strategies in fast

moving consumer goods. The background, history and development of the NYX brand is explained and

analyzed. Students will learn to develop and evaluate influencer marketing strategies on the basis of

the best-in-class approach by L’Oréal managed NYX brand.

Learning Objectives

• Understand impact and relationship between branding, social media marketing, influencer word-

of-mouth, and customer engagement

• Learn about selection criteria and process for influencer marketing

• Key concepts: brand identity prism, limbic map, customer journey

Target Group

This case is recommended for students studying Business Administration, General Management or

International Management with a focus on Marketing. Students should have basic knowledge about

Marketing Strategies and Strategic Management tools.


EN

1

NYX by L’Oréal – Make up your Instagram

Make up your Instagram

Looking out of the windows of the L’Oréal offices in Paris, Anouck Bizien-Mourgue, digital director for

NYX Professional Makeup in Western Europe, thought of the past and the future challenges her

favorite make-up brand had and would face. The L’Oréal group bought NYX three years ago and the

group has seen year-on-year double digit revenue growth.1 But the story of NYX started not in a

corporate board room, but in the ingenuity and creativity of Toni Ko, daughter of Korean immigrants

based in Los Angeles.

NYX Professional Make up

She, like many other teens, worked for- or received some pocket money but spent her time going to

expensive department store cosmetics but having to try and re-create the same looks with basic

drugstore products. She realized there was no mid-point between basic drugstore cosmetics and the

higher-end and more expensive products. She saw an opportunity and took it.2 She first sold eye and

lip pencils at an 80% discount of her competitors’ prices.3 When in 2008, in the midst of an economic

crisis, low-budget shoppers started looking around for cheaper brands while still maintaining the same

level of quality, a broader public discovered NYX. Where NYX earlier on, sold to professionals at make-

up fairs and conventions, now consumers were also increasingly to the assurance of quality and the

economic value of this young, innovative, and sexy brand.

A simultaneously evolving trend further boosted the ascendance of NYX as a cosmetics brand: the

beauty vloggers on YouTube. The video platform gave young women the opportunity to share their

tips and tricks of cosmetics, with friends, family and the world. Around 2008, Ms. Ko realized the

potential of this subtler form of marketing when the sales of a discontinued type of white eyeliner

boomed entirely due to its popularity with a number of YouTube personalities. These “influencers”

proved to be a key aspect of NYX’s marketing strategy and its success.

NYX started sending out freebies to these social media stars and continues building relationships with

these thriving influencers. They do not pay them to review their products but work together in order

to create better products and sound out what their customers are looking for and appreciate in NYX’s

brands.

1 Cf. Kaplan (2014). 2 Cf. White (2016). 3 Cf. O´Connor (2016).


EN

2

The next step in NYX’s expansions was to access a larger customer base than professionals and early

adaptors. In order to do this NYX collaborated first with Ultra and subsequently Target, which helped

bring the NYX brand to a broader public and not only to connoisseurs. It was accessible and affordable

skin care, and it proved to be a great hit.

Ms. Ko had always had the ambition to sell her company one day and, after the entry of a private

equity group in 2010, it was no surprise that four years later, the entire group went up for sale. In 2014,

NYX was sold to L’Oréal for $500 million. Since the takeover, NYX has continued expanding and serving

its customers with the same level of quality and the same level of dedication.

Many challenges remain however. Upon the acquisition, NYX received some backlash from its most

fervent admirers that it was selling out to a corporate behemoth that permitted animal testing and

other controversial practices. Anouck feels bright about the future but has to balance a growing brand,

a multitude of influencers, and all stakeholders involved. Challenges are sure to arise.

Social Media as Marketing Channel

With the emergence of social media networks as platforms connecting people and managing social

interactions, user habits have changed drastically over the years. In 2016, the average US American for

example spent 20% of their total time online on social media.4 Globally, internet users committed two

hours each day to social networks, which corresponds to a growth of nearly 23% since 2012.5 Among

the most popular channels were companies with market capitalizations worth billions of dollars such

as Facebook, Tumblr, Instagram, Twitter, Snapchat, and YouTube. The prominence of social media in

people’s daily life also marked a changing landscape for marketers.

Social media did not follow the same rules as conventional marketing channels and thus represented

a new challenge to marketing managers. While traditional marketing used to be one-sided

communication from companies to consumers in an attempt to boost sales, social platforms

fundamentally altered this relationship. Consumers were able to post feedback on companies’

Facebook pages to make their opinion heard for example, thereby turning communication into real

dialogues. On the one hand, this represented an opportunity for businesses to engage with their

customers and extend the post-sales brand experience. On the other hand, consumers would also

resort to social media to voice their dissatisfaction about their own experience or other issues related

to the brand. Facing public expectations and pressure, brands were forced to respond appropriately

and in a timely manner.

4 Cf. Business Insider (2016). 5 Cf. Statista (2017a).


EN

3

Furthermore, social media had a dramatic impact on peer-to-peer interaction and raised the role of

word-of-mouth to a new level. Before, word-of-mouth was considered very effective in influencing

consumer opinion, but also limited to only a circle of personal connections. Thanks to new social online

platforms, electronic word-of-mouth was scaled up quickly, thereby expanding its reach beyond

personal acquaintances to thousands and millions of other internet users. Nevertheless, online reviews

did not suffer from credibility problems, but were considered trustworthy sources of information even

though expressed by complete strangers. These intersected developments contributed to the

increasing power of consumers,6 giving them more leverage and forcing companies to listen to them.

At the same time, some individuals have become increasingly influential with their ability to evaluate

products and trends in an interesting way that attracted the attention of a wide audience. Using social

platforms to publish their reviews and advice, the most successful influencers have developed into

small brands by themselves. Their content could be “how-to”-videos on YouTube, Instagram

photographs of their latest outfit, 10-second videos of their current activity on Snapchat, reviews

posted via Facebook or entire articles written on their personal blogs. Convincing these influencers of

your products could go a long way in creating a successful digital strategy.

NYX and Social Media

When asked about the key factors to success for NYX, Anouck answered: “NYX Cosmetics is every

beauty lover’s cult brand. We have realized that the new user generation are digitally obsessed beauty

junkies. It’s a global vlogging community and they already love and search actively for NYX products.”

Elise Ducret, Director of NYX France, described their business model as “an accessible professional

make-up brand, embodied by bloggers as ambassadors who are in direct contact with the customers”7.

Both pointed out that social media is a big part to NYX’ identity and its success.

Influencers and social media played major roles in promoting the brand to consumers. NYX influencers

were users who produced online content that gave advice to other young women on how to apply

make-up and which products to use. Although they partnered with NYX, they worked independently

and also gave evaluations on competitors’ products. Looking at key influencers, they had a reach of

over 38 million fans who followed them. On YouTube alone, NYX Cosmetics had over 2.5 billion

impressions produced solely by influencers while #nyx accounted for nearly 4.3 million posts on

Instagram. Today NYX has more than ten million Instagram followers (H&M# 10 of most followed

brands worldwide has 18.8 million followers)8. Considering that users actively sought out videos on

6 Cf. The Deloitte Consumer Report (2015). 7 Les Echos (2016). 8 Cf. Statista (2017b).


EN

4

YouTube and the impact Instagram pictures had on viewers, the quality of the impressions went

beyond the numbers. Most amazingly, NYX did not pay its influencers who promoted NYX to their

followers because they were convinced by the brand.

Fig. 1: Influencer Makeup Tutorials (Source: YouTube (2017)).

NYX achieved their online success because they understood that social media was not only a promotion

channel to boost sales but a platform that allowed them to build a closer relationship with their

customers and create a loyal following. This was done in two ways. Firstly, NYX involved their

influencers and social media in the development of new products. Thereby, the company stayed close

to newly-developing trends while simultaneously proving to influencers that their opinion was highly

valued. Their ties were further strengthened by NYX sending out new product samples to influencers

before the official release so they could already test them. The thorough analysis and direct

interactions via social media gave NYX superior consumer knowledge. Secondly, reversed the

traditional creating-sharing process between companies and consumers by spreading videos and

pictures created by consumers through their own official social media accounts. “On our Instagram

accounts, we tag the users’ accounts. We also let them represent the brand, amongst others during the

YouTube competition ‘NYX Face Awards’ which is open to everybody”, says Elise.9

9 Cf. Les Echos (2016).


EN

5

Fig. 2: Influencers as trend developers (Source: Instagram (2017)).

The reversal of content-sharing was a win-win situation for all parties. NYX received high-quality

material that displayed authenticity and increased engagement whereas influencers could reach a

larger target audience with their posts. NYX takes their commitment to user-generated content even

one step further. In their own stores, they display community walls and screens that show live feeds

from social networks with posts, videos, and pictures displayed by their customers. Taking online

material offline into their stores, NYX openly embraces the world of their digitally-native, make-up

junkies, which explains the ‘fanatization’.


EN

6


EN

7

Fig. 3: Customer Insights from NYX Professional Makeup (Source: NYX Professional Makeup (2017)).


EN

8

Fig. 4: NYX Store interactive community walls (Source: NYX Professional Makeup (2017)).

The Creation of the NYX Family

When NYX got taken over by L’Oréal, their business was mostly concentrated on the USA. L´Oréal was

now facing the challenge to turn this organically grown brand into a worldwide success. The decision

was made that social media and influencers should also be the main channel for the new markets

around the world. Luckily, they could use the learnings made in the USA and profit from the fact that

social media does not know any borders and therefore many important influencers all around the

globe were already familiar with NYX. Knowing that the personal relationship to the influencers and

exciting them for NYX was key they hired local social media managers on a country basis. These social

media managers were not only familiar with the NYX brand but were also scene experts and could

therefore identify with NYX professional make-up. Such a strong identification of social media

managers with the NYX brand was essential as they transferred their own view and understanding of

the brand to the selection of new influencers. Just as many other things about the brand, the selection

of new influencers was all about authenticity, agility and gut-feeling. Influencers were not approached

based on stiff frameworks and checklists but based on whether or not social media managers

intuitively perceived a fit with the brand. A trendy girl, an artsy profile, a professional approach

towards applying make-up – that was all NYX was looking for! In the following weeks and months to

come, they connected with the influencers on a personalized friendship-basis, which strengthened the

relationship between NYX and its influencers. Many coffees and lunches with potential partners later


EN

9

the social media managers were able to build up something Anouck is now calling the “NYX family”, a

group of friends that share a passion for makeup.

Influencer Management on a Big Scale

However, as beautiful as this sounds, just as any other family the newly evolving “NYX family” needed

constant support, focus and care in order to not fall apart immediately. If relationships were not

renewed on a constant basis through personal contact and careful attention, the bond formed with

influencers was weakened immediately. Especially, considering NYX’s principle of not paying

influencers, in order to not only save costs but also preserve authenticity, keeping them happy and

deeply connected to the “NYX family” seemed key in order to sustain fruitful relationships in the long

run. As a result, NYX’s social media management found itself under pressure to develop and establish

profound, overarching influencer management initiatives and programs. To foster influencer loyalty

and make the most out of their overall influencer base, they soon realized that an effective influencer

segmentation and corresponding treatment was key. Whilst top-influencers were to receive the

highest degree of attention as well as the most attractive offerings, medium- and long-tail influencers

were also given the chance to partner up with the brand and become part of the “NYX family”. Whilst

regular news updates, regarding e.g. new product launches, were sent out regularly, social media

managers paid attention to personalize the touchpoints they had with each influencer. Personal

comments were posted regarding specific influencer contents, admiring for instance a girl’s application

of a new eyeliner. Besides receiving exclusive product packages twice, a year, medium- and long-tail

influencers were invited to various parties and events giving them the chance to increase their visibility

and strengthen their network at the same time. Similarly, to medium- and long-tail influencers, the

top-influencers received product packages four times a year and were sometimes even given the

opportunity to receive newly launched products before anyone else. Furthermore, the events they

were invited to participate in were much more numerous. Besides the traditional parties, store

openings and product launch events, they were able to attend meet & greets as well as exclusive NYX

events in L.A. Whilst their attendance created highly valuable buzz for the NYX brand, these events

further strengthened their connection to the brand through excitement, personal contact and direct

integration into the “NYX family”. Ultimately, some of the influencers with the strongest reach were

even selected to give master classes to girls at NYX’s studios or participate in official NYX shootings.

Whilst this gave them a high degree of visibility, the master classes allowed them to build up a personal

relationship to their followers, thereby benefitting them as much as NYX itself.


EN

10

Using this well-diversified and thorough offering in its influencer management combined with its

familiar, personal and authentic approach, NYX not only managed to create one of the biggest

influencer networks worldwide, but also managed to grow it day by day until now.

The Future of Influencer Marketing Within L’Oréal. Sitting in her office and reviewing the success of

the NYX brand and how they had been able to successfully scale up their influencer base and its

management, Anouck was again struck by how well everything had worked out over the past years.

Considering that, they were able to grow the NYX brand to one of the most successful make-up brands

worldwide relying on social media and influencer marketing alone, Anouck wondered whether this

concept may be transferred to other brands within L’Oréal effectively. With its strong cost-saving

potential, it was surely highly attractive for other brands as well. However, she believed that NYX’s

legitimacy as a social brand as well as its young target audience were key success factors with regards

to its marketing strategy. More established brands would surely have a hard time shifting from

traditional towards influencer marketing, but some younger brands such as the newly launched hair

coloration brand “Colorista” might react well to the approach. She should potentially set an

appointment and share her insights.


EN

11

Bibliography

Business Insider (2016): Social media engagement. The surprising facts about how much time people

spend on the major social networks, URL: http://uk.businessinsider.com/social-mediaengagement-

statistics-2013-12?r=US&IR=T [viewed on: 15.03.2016].

Les Echos (2016): NYX Cosmetics, une marque qui appartient à ses consommatrices, URL:

https://marketingclient.lesechos.fr/ils-lont-fait/nyx-cosmetics-une-marque-quiappartient-a-

sesconsommatrices/ [viewed on: 09.03.2016].

NYX Professional Makeup (2017): n.n., URL: https://www.nyxcosmetics.de/ [viewed on: 12.03.2017].

O´Connor, C. (2016): Banking On Beauty. How Toni Ko Built NYX Cosmetics Into A $500 Million Brand,

URL: https://www.forbes.com/sites/clareoconnor/2016/06/01/toni-ko-nyx-cosmetics-loreal-sale-

richest-women/#25da3c777d71 [viewed on: 08.05.2017].

Statista (2017a): Daily time spent on social networking by internet users worldwide from 2012 to 2016

(in minutes), URL: https://www.statista.com/statistics/433871/daily-socialmediausage-worldwide/

[viewed on: 08.05.2017].

Statista (2017b): Leading brands ranked by number of Instagram followers as of February 2017, URL:

https://www.statista.com/statistics/253710/leading-brands-ranked-by-numberofinstagram-

followers/ [viewed on: 08.05.2017].

The Deloitte Consumer Review (2015): The growing power of consumers, URL:

https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumerbusiness/consumerrevi

ew-8-the-growing-power-of-consumers.pdf [viewed on: 17.03.2016].

White, R. D. (2016): Toni Ko's next fortune could be made in shades, URL:

https://www.latimes.com/business/la-fi-himi-ko-20160417-story.html [viewed on: 08.05.2017].

NYX by L'Oréal – Make up your Instagram | casem.

Documents

Transcript of NYX by L'Oréal – Make up your Instagram | casem.