YSL Beauty’s web3 loyalty program offers a new version of CRM
After collecting 24,000 new wallet owners during its first NFT drop at the Vivatech Paris conference in June, YSL Beauty is expanding its loyalty program 3.0 through collectibles. So far, it has released three NFT collections to test new customer behavior around loyalty programs and customer retention.
Over the past year, luxury beauty brand YSL Beauty has been testing different types of NFT collections, from free collections tied to music artists to more limited NFT drops offered for purchase. The latter includes NFTs dropped in January that are tied to the hero collection, Black Opium. In October 2022 Launchmetrics data, at $7.2 million, Black Opium had the highest media influence value among fragrances for the month. Media Influence Value is a proprietary Launchmetrics metric that tracks the impact of influencers, print media, celebrities, official third-party partners and a brand’s own media channels.
YSL Beauty’s debut “Golden Block” NFT, 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 chose to link its January NFT release to the Black Opium product range. The first 2,000 people who purchased 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 for purchase. The decline was promoted via CRM communications, e-commerce banners and social media. “We love testing new things through the Black Opium franchise,” said Diane Hecquet, head of digital and marketing at YSL Beauty International, adding that it was also the focus of the brand’s first AR and gaming tests.
The ultra-rare “Beauty Night Block” NFTs came with a premium metal print of the NFT design, as well as a Black Opium product set containing bottles of Black Opium Eau de Parfum and the new Black Opium Le Parfum. In the fourth quarter of this year, buyers will receive additional benefits, Hecquet said. The NFTs sold out within 48 hours.
One goal of the NFT sales is to drive buyers to YSL Beauty’s own channels. “We always try to differentiate our DTC [experience] from the online experience YSL Beauty shoppers have at Sephora or Boots,” said Hecquet. “We see our e-store as a flagship, where we deliver the best brand experience through unique differentiators such as gifts with purchase. It is also easier to measure the maturity level of our customers through our own touch points, versus through [third-party] e-retailers.”
January’s ultra-rare NFT launch marked the first time YSL sold a collection of NFTs. These NFTs became available for purchase to all 2,000 holders of the “Beauty Night Block” NFTs on March 6th. Following the private sale, which was hosted on YSL Beauty’s web3 website, the brand released the NFTs for public sale on March 8. writing, 218 of 279 NFTs were still available, selling for 0.2 ETH, or $288.
The brand is not disillusioned with the sales; just as valuable is the resulting learning, which will inform the future approach to customer acquisition, according to Pierre-Nicolas Hurstel, CEO and co-founder of Arianee, who worked with YSL Beauty on the NFT collection’s wallet.
“Usually when there’s a campaign, the return or goal is to get more followers or emails. Now the question is: Does NFT work to acquire a new customer for fewer dollars than SEO or social ads?” YSL Beauty refused to disclose its investment in the NFT project.
“In our loyalty program 3.0, the idea is to do combinations – so that if you own both ‘Night Block’ and ‘Golden Block’ NFT, you get access to something else,” said Hecquet. “This plays into the gamification process of collecting NFTs, which we are interested in testing.” YSL’s NFT “Block” program will continue. For 2023, the brand plans several NFT drops with different components to test which web3 features are compelling to its mainly web2 community.
The brand’s web2 loyalty program, meanwhile, is a tiered program called the YSL Beauty Club. Based on a points system, it offers “elevated members-only experiences, from VIP access to exclusive gifts,” said Hecquet. It also enforces brand commitments, for example with dedicated sustainability initiatives. Hecquet declined to disclose the number of YSL Beauty Club members, but said the number exceeds that of the NFT community, which currently stands 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 so. “We want to reinvent the link between users and the brand; traditional CRM is more based on buying behaviour, while with web3 it will be based on engagement. With web3, we can have this long-term, always-on loyalty program with our community.”
YSL is focused on making its loyalty program 3.0 available. The “Block” collection will continue to be free, a big difference from NFT programs from brands like Adidas and Gucci. “When used to extend the YSL web3 loyalty program, NFTs are not so much about scarcity and exclusivity anymore. Rather, they are about introducing everyone interested in the brand and our web3 vision,” said Hecquet.
