Welcome to the Glossy+ Research Briefing, your weekly curation of fashion and beauty research insights. Glossy+ members have full access to the research below.
In this edition, we share focal points from Glossy’s recently released report on the display ad landscape and its role in marketers’ playbooks.
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61% of marketers use programmatic site display advertising
Ad position: web_incontent_pos1
Love them, hate them or simply scroll past them, display ads have been a go-to since the early days of internet advertising. And, for many marketers, they still are because of their track record as a reliable marketing tool for building brand awareness and supporting conversion goals.
Among all the marketing channels considered in Glossy+ Research’s CMO Strategies series, display ads were marketers’ second most-used ad channel, with more than half of respondents (61%) saying their company uses display ads.
The U.S. sports apparel industry, in particular, has emphasized use of display ads recently, as one of several strategies to build brand awareness. The industry is expected to grow to $130 billion by 2025, up from $98.9 billion in 2021, according to Statista. However, while long-term growth is anticipated, shoppers may be more selective about the brands they buy in the near term due to uncertain economic conditions.
Ad position: web_incontent_pos2
With shoppers hesitant to spend more on sportswear, it becomes more critical for brands to reach new consumers to bolster their bottom lines. And, since 59% of sportswear shoppers are likely to switch brands between purchases, according to a Kantar sportswear custom survey from February 2022, there is an opportunity for brands to drive discovery.
“Upper-funnel tactics — including Streaming TV, video ads, Sponsored Brand’s video, Sponsored Display and Audio ads — can be used to reach new-to-brand shoppers through education and awareness, which helps new sportswear shoppers consider brands they might not have considered before,” said Amy Zappia, head of sports and outdoor ads at Amazon Ads.
When marketers, like those in sportswear, aim to measure how well site display ads have performed, they consider a variety of success metrics. Clickthrough rates and impressions were fairly consistent key indicators across the ad tactics Glossy analyzed — programmatic and direct-sold site display ads and email newsletter ads. Because display ads can be used to support both brand awareness initiatives and conversion goals, finding close survey results across success metrics within programmatic and direct-sold site ads was not unexpected.
Key findings:
- Clickthrough rates were the leading KPI for programmatically bought site ads, with slightly less than one-third of respondents (32%) selecting the metric as their main indicator of success. Impressions and commerce and sales were almost evenly tied in second place behind clickthrough rates at 24% and 26% respectively.
- Direct-sold site ads also saw a near tie between impressions and commerce and sales, the two far ends of the purchase funnel, as their key performance indicators. Twenty-seven percent of respondents said impressions was the top success metric their company uses, while 28% said the same of commerce and sales.
Nordstrom, Ulta and Gap report earnings, as color cosmetics brands turn to Ulta.com for distribution
Luxury fashion retailer Nordstrom, beauty retailer Ulta Beauty and clothing and accessories retailer Gap are all expected to report their Q2 2023 earnings today. Nordstrom is expected to see revenue and earnings declines, while Gap and Ulta Beauty are both anticipated to report earnings growth for the quarter.
One area in which Ulta has seen success is as a distribution partner for color cosmetics brands. Ulta claimed the top spot as a distribution partner for color cosmetics brands in Glossy+ Research’s 2022 report on beauty brand distribution, outranking brand-owned websites as a distribution channel.
By comparison, Sephora, the other top performing beauty specialty store, lagged behind drug stores and big box stores as a distributor — though to note, Sephora only distributes prestige beauty while Ulta carries both mass and prestige allowing for a larger number of brands.
Within prestige beauty, Sephora is the most common retailer distribution channel, closely followed by Ulta. Both have shop-in-shop partnerships and, through these partnerships, brands have been able to reach new audiences.
Key findings:
- For color cosmetics brands, Ulta outranks brand-owned websites as a distribution channel. In the skin-care space, unlike in color cosmetics, Ulta and Sephora are neck-and-neck, with both at 63% representation. While color cosmetics brands have a clear bias toward Ulta, skin-care brands remain split.
- When viewing distribution by brands within the mass beauty price point, Ulta was the only specialty beauty store present in the distribution mix, indicating the wide range of product types and the varied demographics of beauty shoppers it attracts compared to other retailers.
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