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Case Study on the Intensive Marketing Strategy of Nykaa – with CRO Solutions

by | Case Studies | 0 comments

Previously, we tackled the marketing strategy of Bewakoof.com – one of India’s biggest e-commerce apparel brands. In this case study, we will delve into the marketing strategy of Nykaa.

This case study is adapted from the research, analysis, and solutions of the student team from IIDE’s Post-Graduation Programme in Digital Marketing, consisting of Kirti Rohra, Megha Babu and Meghna Hinger.

As most companies have adopted digital marketing strategies to promote themselves online, the next goal post for them is to increase their conversion rates. CRO or Conversion Rate Optimization is a growing field in digital marketing which focuses on increasing the efficiency of the marketing done by the company by creating well-integrated strategies and automation. If you wish to learn more about the growing field of CRO, check out IIDE’s latest Conversion Rate Optimization course to get started.

This case study will cover the existing marketing strategy of Nykaa, the pain points in it and the improvements suggested by our student team to increase their conversion rates. Before we explore the multi-faceted marketing strategy of Nykaa, let us begin by learning more about Nykaa first.

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About Nykaa

Nykaa is an Indian e-commerce company, founded by Falguni Nayar in 2012 and headquartered in Mumbai. Falguni Nayar, a former managing director at Kotak Mahindra Capital Company, founded Nykaa in April 2012. In 2015, the company expanded from online-only to an omnichannel model and began selling products apart from beauty. It retails over 2,000 brands and 200,000 products across its platforms.

Nykaa founder Falguni Nayar | Marketing Strategy of Nykaa | IIDE

It follows an inventory-based model with warehouses in Mumbai, New Delhi, Pune, Haryana, Kolkata and Bangalore. Nykaa sells products that are manufactured in India as well as internationally. It claims to have over 200,000 products across 2,000 brands. In 2020, Nykaa was valued at ₹85 billion (US$1.1 billion) making it the first-ever unicorn startup headed by an Indian woman.

In 2020, in addition to its primary e-commerce business, it has an offline presence via 76 brick-and-mortar stores across the country. It has three offline store formats called Nykaa Luxe, Nykaa On Trend and Nykaa beauty Kiosks. 

Nykaa has a series of in-house brands within beauty and fashion. Some of them include:

  • Nykaa House of Brands – Nykaa Naturals, Nykaa Cosmetics, Kay Beauty
  • Nykaa Fashion – Nykd by Nykaa, 20 Dresses, RSVP, Mondano, Likha, Pipa Bella

In 2015, Nykaa launched its collection of in-house beauty products via Nykaa Cosmetics and later expanded it across categories of Eyes, Nails, Face, Lips. The Nykaa Naturals portfolio is a collection of skincare and personal care products In early 2019, the brand launched its Wanderlust Bath & Body collection, and later in the year introduced a beauty line with the iconic designer Masaba Gupta, Masaba by Nykaa

Now that we have in-depth information about the company, let us start with the research and analysis of their marketing strategy. But before that, we recommend you watch this video of Nykaa, on its journey of becoming a $13 Billion startup.

 

Marketing Strategy of Nykaa: Research

Nykaa, an omnichannel cosmetics retailer, gets the majority of its revenue and sales from digital channels. For a primary e-commerce brand, digital marketing is the most important element to its success. The student team has done thorough research on their digital mediums, from websites to SEO and Google Ads used by the company. Let us begin with the website analysis of  Nykaa.

 

Website Analysis 

According to the student team’s research, Nykaa’s website was very flat & not user friendly. They conducted an on-ground survey over the website’s user experience and got to know that many people feel that Nykaa’s website is too female-centric, and looking at the look & feel of Pink Friday sale, no male felt represented, lowering the purchase intent on the website.

Website Analysis | Marketing Strategy of Nykaa | IIDE

According to social media analysis, 30% of traffic on social media platforms is male it can be assumed that similarity could be there with website visits too. Along with the UI/UX issues, the student team also found that the website does not have a properly designed header.

Target Audience | Marketing Strategy of Nykaa | IIDE

 

Social Media Marketing Analysis

The brand has a strong presence over all the social media platforms compared to its competitors and is doing an excellent job across various social media platforms to promote its brand. 

Social Media Marketing | Marketing Strategy of Nykaa | IIDE

Nykaa targets its customers on social media platforms through influencer marketing. On its social media handles the brand posts product-oriented content and also posts the content created by influencers where they try out Nykaa’s products and create various tutorials and look or maybe review the new launches.

 

SEO Analysis

Nykaa has its own blog called beauty book, where they have blogs related to beauty, fashion, products, etc, they are really active with blogs too. They post product-oriented, tips, tutorials, review blogs for their beauty book. According to similarweb.com, 53.57% of traffic comes from search engines out of which they are ranking for almost 55.12% organic keywords, which means they are getting a major chunk of the audience through organic efforts. 

SEO Analysis | Marketing Strategy of Nykaa | IIDE

According to moz.com, they have a DA of 55 on their main website which is pretty good. Their top ranking keywords other than branded keywords are dusky skin, curly hair, perfumes, and haircuts. etc

  

GDN analysis

According to similarweb.com, 1.66% of traffic is from Display Ads, in which majorly YouTube is the lead contributor, followed by outlook.live.com and desidime.com.

Video Ads | Marketing Strategy of Nykaa | IIDE

App Analysis

Nykaa’s app is very much similar to its website, it has flat-lay images. The UI/UX of the app is very similar to that of the website, the first page itself has a lot of flat-lay collections of images one after the other, the UX/UI doesn’t seem personalized at all, which might not interest the user. 

Nykaa app Analysis | Marketing Strategy of Nykaa | IIDE

Another thing that we came across was that the  Nykaa app icon in android is being kept updated according to a campaign run by  Nykaa but in the App store, it is not being updated.

 

Solutions for Marketing Strategy of Nykaa:

After analyzing the pre-existing marketing strategy of  Nykaa, the student team has come up with many new digital marketing strategies to incorporate into the company. There are some new channels like email marketing and conversion rate optimization (CRO) being suggested by the students. Let us begin with their improvements to the website strategy of  Nykaa.

 

Website Strategy of Nykaa

As an e-commerce brand, Nykaa’s website is its main source of sales. In order to optimize the storefront, the student team have come up with these strategies.

  • Our Suggestion is that Nykaa should have an option for its first-time visitors to choose the gender so that it indicates more personalisation and better viewpoint to the TG, and we don’t miss out on our hot customers just because it looks like a female-centric website.

Website Improvements | Marketing Strategy of Nykaa | IIDE

  • Nykaa’s Landing page header should include a special discount code or any other offer just to give an urge to people to download the  Nykaa app and also give them an option to track the last order the user has placed. This point will make more app downloads and create ease for the user.
  • Nykaa’s landing page should have an attractive pop-up for new users which will collect the name, number, email id of the user which will help the brand to target this user who didn’t shop from the brand, not to mention again it should have some kind of offer or special discount for attracting customers and ultimately giving a push to the ones who are in the purchase stage and convince them to buy from Nykaa.

Improving Landing Page | Marketing Strategy of Nykaa | IIDE

  • Nykaa has a blog on their page stating products to buy from their famous Pink Friday Sale so we did an experiment to check whether the brand is ranking for its own brand keywords and campaign keywords but eventually the blog is not ranking on Google search engine by any terms. If we run ads for this blog, most likely we will get more customers for buying the hot sellers and as they are the hot sellers they will re-purchase those products, ultimately making them the loyal customers of Nykaa.
  • Creating a discount code on the checkout page so that the potential customer does not drop off the checkout page and actually buy the product and this code will be valid only for an hour to create urgency to push the customer to make them purchase it.

 

Social Media Marketing Strategy of Nykaa

The average YouTube story ads view rate is 31.9% Nykaa is not utilising these benefits as they are showing out specific product-focused ads and there is no such kind of story creating which will benefit the user maximum traffic of  Nykaa comes from Youtube. This data is collected from similar websites. So Nykaa should make good use of this platform.

Personalised GDN ads | Marketing Strategy of Nykaa | IIDE

It should promote YouTube ads that are story intended and benefit the user to actually buy that particular product. Along with that, they should reply back to queries with people considering buying from  Nykaa, not just the  Nykaa page but the influencer’s page too.

 

Conversion Rate Optimization Strategy

Even after increasing brand awareness, there is a lot to be done to make a lead convert. In order to scale up its later stage marketing, Nykaa can implement these kinds of CRO strategies as suggested by the team of students.

  • Push notification should be more personalized and to the point so that the user also does not find it irritating at a point
  • Nykaa sends an average of about 2-3 emails per day and has the same email content just the subject lines are different so instead of the same email copies they should send personalised emails with the user’s first name and very specific intent. Email copy creates a lot of urgencies, but the landing page does not show any kind of urgency, so there should be the same communication on both email and landing page otherwise it won’t create urgency in the user’s mind. Every email should have one specific communication through the email, and it should have relevant clickable links.

Email Marketing | Marketing Strategy of Nykaa | IIDE

  • Nykaa should start Whatsapp marketing and send relevant blog links and clickable shopping links to customers so that the customers would read the blog and get a direct action to buy the product.
  • SMS marketing should be very user-specific and show a valid intent with any kind of special coupon code creating urgency
  • Fair suggestions to improve the SEO and SEM for the brand and to show relevant searches to the new user too or else most likely they will buy from competitor E-com brands
  • People visiting any particular blog should be retargeted by using the pixel code installed in the website. People who have read a blog will be partially convinced that this is something they need something they were missing out on, so to create the FOMO within them we should retarget them with ads copies like only 5 left in stock or hurry they are in 25% discount only 1 hour left.

App Download Ads | Marketing Strategy of Nykaa | IIDE

  • Retargeting creatives should be focused on creating FOMO, with urgency resulting in sales.’

This marks the end of the marketing strategy of Nykaa and all the CRO based improvements they can adopt, as researched and suggested by our student team. Let us now conclude our learnings on the topic.

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Conclusion

Although Nykaa is one of its kind in the field of beauty, wellness and fashion, there is always room for improvement. Large e-commerce brands now dominate nearly every industry and this is due to the rapidly digitizing world. Now the next step for such e-commerce giants is to double down on their digital strategies in order to increase their conversion rates. According to the student team, their improvements can increase the CRO from 0.5% to 2%.

Digital marketing has become the big buzzword in the world of marketing, and that is for a good reason. No company can deny the importance of the field and all of them are employing it in order to gain an edge over their competition. That is why reputed companies are looking for digital marketing experts who can design comprehensive strategies for their setups. If you are interested in becoming an in-demand digital expert, you should join IIDE’s Post Graduation Program in Digital Marketing.

We hope this blog on the Marketing Strategy of Nykaa has given you a good insight into the company’s marketing efforts. If you enjoy in-depth company research just like this, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for reading the blog and if you have any thoughts on the matter, add to the discussion by leaving a comment below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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