How consumer demand influences ingredient formulation and product development
Customer relationship management (CRM) platform Cohora puts a unique focus on the ‘relationship’ aspect of consumer engagement. According to market research firm Statista, “global sales through social media platforms were estimated at 992 billion U.S. dollars in 2022” and are continuing to grow. For beauty brands to best leverage marketing opportunities via social commerce channels, it is imperative to understand how to invest in facilitating consumer-brand relationships.
To learn more about Cohora and the ways that the brand is innovating consumer engagement for companies in the beauty and personal care spaces, including how consumer demand can influence the product formulation and development process and ingredient formulations, we interviewed Manu Mathew, CEO of Cohora for his insights.
CDU: Can you share some brief background about yourself, Cohora, and your relationship with the cosmetics and personal beauty care product industries?
Manu Mathew (MM): I’ve spent my whole career driving digital efficiencies & effectiveness in marketing. Prior to Cohora, I was the President of the Americas for Ad-lib.io, where I led the company’s successful entry into the U.S. market.
Before that, I founded Visual IQ in 2006, where we pioneered the launch of the industry’s first MTA attribution solution that would enable marketers to leverage their data to gain an accurate and holistic view of performance, better allocate their marketing dollars, and prove the impact of investments. Visual IQ was acquired by Nielsen in 2017.
I co-founded Cohora in November of 2022. Cohora is a platform that allows beauty and cosmetic companies to build brand-owned social customer networks that connect directly to an advertiser’s existing CRM or CDP platform.
Upon deployment, the Cohora platform is branded to match the company’s look and feel. The platform enables consumers to share tips, provide reviews, and interact with other customers.
These organic and authentic interactions drive business impact and increase conversions with activities that gets the word out about products to new and targeted audiences. In the process, users are helping to expand organic brand reach while building up loyalty points based on engagement, measured value, and meaningful interactions with the brand.
CDU: How does consumer demand influence cosmetic and personal care product formulation and development?
MM: Consumer demand impacts everything from product development to ordering and sourcing. In fact, there’s never been a moment quite like this one in the history of consumerism where shoppers are demanding brands to be sustainable, fair, and diverse. For cosmetics brands, this can touch everything from “does the foundation we sell have enough color variance to represent all skin tones?” to “are these products packaged in recyclable materials?”
The problem most brands encounter though is that there is not currently a two-way dialogue between the brand and the consumer. Instead, brands are shouting on social media to pay attention to them, and using review sites where consumers leave reviews that give hints as to what ingredients or products they like or want to see improve remain disparate – never mind being able to add color to traditional sales data the company may already have.
Yet if brands were able to better collect and analyze this user feedback, they’d be able to put it to work in developing and adjusting products to that they are more in line with consumer preferences.
CDU: What are some ways that manufacturers and suppliers to the cosmetics and personal care product industries can leverage consumer demand into their product development processes, particularly in ingredient formulations?
MM: The key to getting insight into consumer demand is data. Many cosmetic and beauty brands have sales data that they can parse out to predict demand or third-party data collected from online advertising efforts. However, adding zero- and first-party data to the arsenal can give a whole new level of insight into the kinds of products shoppers want to see.
Zero-party data unlocks robust insights into customers– ranging from demographics and interests to indicators of product usage. First-party data, like purchase history and website interactions, holds value in being transparent, consented to by customers, and focused on preferences and intent, extending beyond purchase history.
When added on top of traditional sales data, cosmetic and personal care brands can begin to more accurately see preferences on individual levels – meaning better insight into what is going to sell and when, and the formulas and features that resonate most with buyers.
CDU: How does consumer engagement impact future product development processes?
MM: Consumer engagement is key to developing long-term loyalty, brand advocacy, and getting visibility into behaviors that can influence product design and development. However, the problem right now is the best insights cosmetic and beauty brands have been limited to clicks and purchase history, and in some cases critical data is owned by an intermediary.
There are also TikTok and Instagram tutorials being done by regular people (non-mega influencers) who can share important insights, as can reviews that people leave on websites, social media, and other forums. Too often this kind of data – that could clearly demonstrate what consumers want – is not considered when making future decisions about product design, development, or demand. Sometimes – there is just too much data to process!
Yet when cosmetics companies bring consumers into the same space – ideally via a brand-owned channel – they can begin to not only get those reviews and content to inform future decisions, but they can reward their customers for sharing. When engagements result in loyalty points or rewards, brands open the door to a feedback loop that can give them more clarity into preferences and trends than they ever dreamed of.
Since the environment would be owned, brands can also get creative with when and how they engage with shoppers. For example, a personal care brand could directly ask consumers via a poll if they’d like to have a shampoo bottle made from recycled materials. If a whole community of people says yes, the brand knows that this should be a consideration for future and current products.
CDU: Other than through social media, what are some methods for cosmetic and personal care product companies to aggregate and analyze consumer demand for new product formulations?
MM: Cosmetic and personal care companies should consider launching their own brand-owned social networks, which is where all this interaction, engagement, and data collection can take place. This type of channel, where customers not only engage with the brand but also with each other in an exclusive social network, can unlock myriad insights.
From what products are being talked about or are trending most on the website, to reviews that are in your own environment and can be easily tracked, to polls that you can ask consumers about products and values, the feedback and dialogue that can happen in that space is almost limitless.
The best part is the feedback itself IS data that can be used to enhance predictive analytics that identify patterns and trends that may not otherwise be apparent. Likewise, because the network is owned, that data is updated in real time, which allows brands to better anticipate preferences and pivot accordingly.
When brands pay attention to what’s going on in their communities, they have a vehicle to better formulate, design, and stock the products that shoppers want to buy – leading to more conversions and revenue over time.
CDU: Does Cohora have any plans to further explore consumer demand or engagement in the cosmetics and personal care product spaces regarding product development and design?
MM: Cohora is always looking to improve our platform and better serve our customers in the beauty and personal care industry. From automation to more APIs, we’re exploring more ways to connect our platform into systems, improve insights, and propel marketing and business decisions forward.
