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Mar 1, 20217 min read

Lessons from Lady Gaga’s tech-first beauty brand.

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by Klarna

Digital innovation within the beauty category accelerated rapidly amid the pandemic and is not slowing down anytime soon. The 2021 WWD Virtual Beauty Inc Digital Beauty Forum on February 25 brought leaders in digital beauty together to address this transformation head on, breaking down the key issues that will have a lasting impact on the beauty industry—from shifting consumer expectations to the rise of new technologies.

Ryan Kang, Head of Business Development and a Founding Member of HAUS LABORATORIES, joined Klarna’s Head of Strategy Natalia Brzezinski for a fireside chat looking at how Lady Gaga’s direct-to-consumer beauty business tackled one of the most challenging years in retail yet, and what’s ahead for them this year. Here, we’ve distilled the must-know moments from the session.

Building for change has paid off during the pandemic. 

“No changes are foreseeable. As long as you can build [your] organization in a way that can adapt to change and be versatile, the better you’ll be in the long run.” 

While the quick rise of e-commerce and mobile shopping spurred by the pandemic was a surprise to many brands and retailers, HAUS LABORATORIES was prepared. Because HAUS LABS is strictly an e-commerce brand, it didn’t have to make sweeping changes to its infrastructure in order to manage the shift towards online—but that doesn’t mean that the pandemic came without challenges. 

Over the course of the year, HAUS LABS had to make a variety of changes to its product, marketing and merchandising roadmaps to accommodate increases in online engagement, the rise of new technologies, and transformation in culture and society as a whole. Luckily, the company’s infrastructure was built in such a way that enabled them to address and resolve changes quickly. Ryan shared: “No changes are foreseeable. As long as you can build [your] organization in a way that can adapt to change and be versatile, the better you’ll be in the long run.” By building in processes that welcomed change, HAUS LABS was able to adapt to unforeseen factors quickly, and meet consumer expectations in real time.

Natalia and Ryan

Klarna’s Head of Strategy, Natalia Brzezinski, and HAUS LABORATORIES’ Head of Business Development, Ryan Kang, speaking at WWD’s Digital Beauty Forum.

To build a community online, put brand values first.

Part of what sets HAUS LABS apart from other e-commerce brands within the beauty space is its community of brand loyalists. The brand has built an engaged and empowered community of dedicated shoppers, even without a physical retail presence. While Ryan says that much of this stems from efforts that Lady Gaga has been involved in throughout her career, he also attributes this engagement to HAUS LABS’ brand ethos and values, which are front and center across all of the brand’s messaging and content. “It’s not only about racial inclusivity or gender inclusivity, it’s about economic inclusivity—which is part of the reason we partnered with Klarna,” said Ryan. HAUS LABS also donates $1 of every purchase to mental health, and is active in inviting members of its diverse community to be a part of campaigns. 

Consumers today are “speaking out with their wallets,” seeking out brands that share their values. Klarna research has found that nearly 81% of shoppers believe brands should give back, and HAUS LABS has also seen a more engaged audience driven by shared values and community, largely due to social trends driven by Gen Z. To develop closer connections with consumers, brands and retailers should form authentic values and messaging, and ensure that those values are showcased across all internal and external activities.  

“It’s not only about racial inclusivity or gender inclusivity, it’s about economic inclusivitywhich is part of the reason we partnered with Klarna.”

Leverage data to inform business strategy. 

Everyone’s talking about data, but HAUS LABS is really using it. According to Ryan, data informs every strategic decision that is made—from product assortment and variety, to the company’s retail sales channels. “Not only are we meeting consumers where they currently are from a spending perspective, but we are using the data from many consumers to back that up,” said Ryan. “[We will] continue to do that over the next month and next year in order to optimize processes, but also make our business better and create a business that consumers look at and say ‘everything they are doing aligns with how I’m trending and how culture is trending.’”

In fact, it was this approach to business that inspired HAUS LABS to partner with Klarna last year. Recognizing through industry data and consumer feedback that shoppers had become even more mindful of budgeting and open to alternative payment methods for responsible spending (73% of US shoppers made a concerted effort to shop smarter since the beginning of the pandemic), HAUS LABS integrated Klarna’s alternative payment options at checkout to give shoppers greater flexibility and convenience, and to make their products more accessible. 

What’s next in beauty retail? Livestream shopping, alternative reality, and wearables.

We are actually using AR technology on our Amazon store. . . and we’ve seen a lift in conversion.

The pandemic has left beauty at an inflection point due to the shift in how consumers are shopping and interacting with brands. As Ryan puts it, the industry has moved from a ‘browse’ phase—with beauty shoppers congregating to check out beauty products and trends on social platforms like Instagram and YouTube—to an ‘interaction’ phase, where shoppers are increasingly tech-savvy and open to engaging with brands in new, digital ways. This, Ryan says, is where digital innovation comes in. 

HAUS LABS has an eye on new technologies that are up and coming in the US but haven’t taken off in mass, including live-stream enabled commerce, which is expected to be a $125 billion market in China this year. Ryan is also excited about retail innovations that are iterations of existing technology like wearables and alternative reality (AR) experiences that are adapted for the beauty customer: “We are actually using AR technology on our Amazon store. When you go to our lip products, you can try those products on, and we’ve seen a lift in conversion. That trend will only continue to progress over time.”

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