After amassing 24,000 new wallet owners during its first NFT drop at the Vivatech Paris conference in June, YSL Beauty is building out its loyalty program 3.0 through collectible NFTs. So far, it’s released three NFT collections to test new customer behaviors around loyalty programs and customer retention management.
Over the last year, luxury beauty brand YSL Beauty has been testing different types of NFT collections, from free ones linked to music artists to more limited NFT drops, offered for purchase. The latter includes NFTs dropped in January that tied to its hero collection, Black Opium. In Launchmetrics data from October 2022, at $7.2 million, Black Opium had the highest media impact value among fragrances for the month. Media impact value is a proprietary Launchmetrics metric tracking the impact of influencers, print media, celebrities, official third-party partners and a brand’s own media channels.
YSL Beauty’s debut “Golden Block” NFTs, launched in June, provided mass entry to the YSL web3 ecosystem, giving customers access to future drops. As a result of its popularity and engagement, the brand opted to connect its January NFT drop to the Black Opium product range. The first 2,000 people to purchase a product from the Black Opium range received a “Beauty Night Block” NFT as a gift with purchase. In addition, 14 ultra-rare versions of the NFTs were made available to purchase. The drop was promoted via CRM communications, e-commerce site banners and social media. “We love to test new stuff through the Black Opium franchise,” said Diane Hecquet, chief digital and marketing officer at YSL Beauty International, adding that it was also the focus of the brand’s first AR and gaming tests.
Since January, each customer that purchased a Black Opium bottle on YSL Beauty e-shop (in FR, US, UK and AU) received a dedicated email with a unique link to claim a “Beauty Night Block”, in the either original or ultra-rare version. These came with perks: allowlisting for the March drop, voucher for a next purchase on the e-shop, exclusive content with Black Opium’s Master Perfumer and a Black Opium physical make-up kit. In the fourth quarter of this year, purchasers will receive further perks, Hecquet said. The NFTs were sold out within 48 hours.
A goal of the NFT sales is to drive purchasers to YSL Beauty’s owned channels. “We are always trying to differentiate our DTC [experience] from the online experience YSL Beauty shoppers have at Sephora or Boots,” said Hecquet. “We see our e-shop as a flagship, where we deliver the best brand experience through unique differentiators like gifts with purchase. It’s also easier to measure the maturity level of our shoppers through our own touchpoints, versus through [third-party] e-retailers.”
On March 6, YSL Beauty released the second chapter of the NFT launch as a crypto art auction, tying into the January launch. This marked YSL’s first time selling a collection of NFTs. These NFTs became available for purchase to all 2,000 holders of the “Beauty Night Block” NFTs on March 6, as well as previous holders of YSL Beauty NFTs. After the private sale, hosted on YSL Beauty’s web3 website, the brand released the NFTs for public sale on March 8. At the time of writing, 218 out of 279 NFTs were still available, selling for 0.2 ETH, or $288.
The brand is not disillusioned by the sales; equally valuable are the resulting learnings, which will inform its future approach to acquiring customers, according to Pierre-Nicolas Hurstel, CEO and co-founder of Arianee, which worked with YSL Beauty on the NFT collections’ wallet.
“Normally when there is a campaign, the ROI or objective is to get more followers or emails. Now the question is: Does the NFT work to acquire a new customer for fewer dollars than SEO or social ads?” YSL Beauty declined to provide its investment in the NFT project.
“Within our loyalty 3.0 program, the idea is to do combinations — so that if you own both the ‘Night Block’ and the ‘Golden Block’ NFTs, you get access to something else,” said Hecquet. “This plays into the gamification process of collecting NFTs, which we’re interested in testing.” YSL’s NFT “Block” program will continue. For 2023, the brand is planning more NFT drops with different components to test what web3 features are compelling to its largely web2 community.
The brand’s web2 loyalty program, meanwhile, is a tiered program dubbed YSL Beauty Club. Based on a points system, it offers “elevated, members-only experiences, from VIP access to exclusive gifts,” Hecquet said. It also enforces brand commitments, with dedicated sustainability initiatives, for example. Hecquet declined to disclose the number of YSL Beauty Club members, but said the number exceeds that of its NFT community, which is currently at 24,000 members.
“Web3 as an opportunity to reinvent customer relationship management, and it’s not about duplicating our web2 CRM in web3,” Hecquet said. “We want to reinvent the link between users and the brand; traditional CRM is more based on purchase behavior, while, with web3, it will be based on engagement. With web3, we could have this long-term, always-on loyalty program with our community.”
YSL is focused on making its loyalty program 3.0 accessible. The “Block” collection is going to continue being free, a big distinction from NFT programs by brands like Adidas and Gucci. “When used to grow the YSL web3 loyalty program, NFTs are not so much about scarcity and exclusivity anymore. Rather, they’re about onboarding everyone interested in the brand and our web3 vision,” said Hecquet.