Measuring Retail ROI: Key Strategies for Beauty Brands

Beauty brands are facing an important question: how can you truly assess if your marketing dollars are paying off across multiple retail channels? Whether you’re selling through Sephora, Ulta, Amazon, or direct-to-consumer (DTC) platforms, your marketing dollars don’t always convert where you might expect. If you’re solely relying on last-click attribution, you’re only seeing part of the picture.

To dive deeper into this challenge, we spoke with Nicollette Guido, Senior Account Director of Growth Marketing at Power Digital, who shared insights into the biggest pitfalls in retail ROI measurement and how beauty brands can make smarter, data-driven decisions.

Common Challenges in Measuring ROI for Beauty Brands

A key challenge for beauty brands is evaluating business performance in isolated silos rather than taking a holistic view. Guido explains that this misstep is quite common: “The most common thing that I see is clients siloing their business pillars. They tend to focus just on DTC or just on retail, without considering the full picture of their total business.” At Power Digital, she adds, they emphasize the importance of having visibility into the entire business to get an accurate measure of success.

Consumers often shop through trusted retailers like Sephora, Ulta, and Amazon, and even if digital ads are designed to drive sales on a brand’s DTC site, they frequently have a halo effect on retail sales. Without a strategy that accounts for this, brands may underestimate the true impact of their marketing efforts. Guido emphasizes, “When brands only focus on their DTC sales, they lose sight of the bigger picture. An ad may influence a consumer to purchase, but where they purchase is up to them. This is often their preferred retailer, regardless of the destination URL attached to the ad. Because of this, without proper measurement, brands are flying blind.”

Key Metrics for Evaluating Beauty Brand Performance

While many brands prioritize in-platform return on ad spend (ROAS) when evaluating success, Power Digital advocates for a more comprehensive approach. Guido explains that a “last-click platform-attributed ROAS shouldn’t be the sole factor driving investment decisions. By relying solely on attribution, you risk selling yourself short and undervaluing the true impact of your marketing investments.”

Instead of relying solely on ROAS, Power Digital uses match market tests (MMTs) and media mix modeling (MMM) to offer a deeper understanding of how digital marketing spend affects different sales channels. 

These tests allow brands to measure:

• Incremental ROAS across both retail and DTC channels
• The effect of digital marketing on in-store sales
• How consumer behavior shifts based on different ad placements and channels

How Digital Marketing Influences Retail Sales

In some cases brands assume pulling back on DTC spend won’t impact retail sales, but Power Digital has repeatedly proven this to be incorrect. Guido notes, “DTC efforts can and often do  have a halo effect on driving in-store sales. We’ve been able to prove that theory through our measurement tactics” Even when a client sees a dip in DTC sales and assumes they should shift budget away from digital, Power Digital’s analysis often shows that DTC-driven investment is benefiting both channels.

By analyzing geo-level sales data from retailers, Power Digital can pinpoint store locations and map them to zip codes to determine how digital campaigns are influencing in-store purchases. Guido stresses, “When a beauty brand understands the true impact of its digital spend, it can optimize its strategy to drive growth across all channels—not just online.”

Proving the Power of DTC Marketing

In one case, a leading hair care brand used Power Digital’s MMT to assess the impact of DTC driven Meta, Google, and TikTok ads on both DTC and Amazon sales. The results were striking! As Guido points out, “This data was pivotal in saving our DTC ad spend while showing the client that this investment wasn’t just benefiting their .com sales—it was also fueling Amazon sales. Had they shifted all spend directly to Amazon, they would have lost the incremental boost DTC marketing provided across the entire business.”

Want to learn more? Be sure to check out our upcoming case study “How Power Digital;s MMT Uncovered the Halo Effect in Beauty Marketing”.

Unlocking Growth for Beauty Brands in 2025

Looking ahead to 2025, beauty brands must move beyond last-click attribution and adopt more holistic measurement strategies. By leveraging MMTs, media mix modeling, and advanced data analysis, brands can unlock new growth opportunities and make smarter marketing decisions.

Guido concludes, “Power Digital’s approach to measurement allows beauty brands to invest smarter, scale efficiently, and maximize their impact across their total business.If you’re looking to elevate your beauty brand’s performance and understand the true impact of your marketing efforts, Power Digital is here to help. Contact us today to learn how our advanced measurement capabilities can drive both DTC and retail success in 2025.