Chain Drug Review, March 16th, 2020

BEAUTY CARE REPORT COSMETICS Subscription box services a boon for retail sales NEW YORK Subscription box services from food to beauty have become a great avenue for getting products into consumers hands One of the most successful is the Walmart Beauty Box produced by Brandshare Launched in 2014 the Walmart Beauty Box is sent out four times a year typically tied to seasons for a flat rate of 5 to cover shipping The average value of the products inside totals 18 Sample boxes says Colleen McGovern senior vice president of customer experience for Brandshare are especially instrumental for helping consumers experience products that are sold in selfservice environments Department stores have the luxury of beauty advisors who can educate consumers Mass marketers need another way to engage shoppers with samples especially beauty products It isnt a onesizefitsall approach with the box when consumers sign up Brandshare customizes the box based on profiles such as skin care concerns or hair type We want to get the products into the right hands says Erica Solomon beauty director of customer experience partnerships for Brandshare The boxes produce a great return on investment Twentythree percent of product reviews posted on Walmarts site are by subscribers And the boxes court new customers with 18 of subscribers being new Boxes produce a great return on investment to Walmart and having a passion for beauty Twelve percent of subscribers spend more than the average Walmart shopper 32 shop the beauty category more than nonsubscribers and subscribers make 18 times more purchases at Walmart And for the busy Walmart consumer who may have a child in tow and a cart bursting with groceries the Beauty Box can be a treat they can enjoy at home The boxes are a great opportunity to reach Walmart shoppers adds McGovern Twentyfive percent of women are taking less time shopping for cosmetics so this is a great way to put products into her hands in the comfort and privacy of their homes where trial experiences are at their highest All categories resonate with consumers and those producing Birchbox is both in Walgreens stores and delivered to homes instant gratification get the highest grades Skin care typically takes a few doses to show results and the Brandshare team recommends offering a sample with more than one application Brandshare is also Walmarts partner in the development procurement and fulfillment of the retailers Baby Registry Sample Box and the Walmart College Bag programs Other popular subscription beauty boxes include Targets Macys and Sephora Play as well as Birchbox Fab Fit Fun Glossybox Ipsy BoxyCharm and Allure The boxes received a shot in the arm thanks to social media with influencers often unboxing on their sites Zendaya in fact commented on the Walmart box Each company tends to have its own calling card to differentiate from others BoxyCharm for example is known for fullsize products In order to get exposure with more consumers Birchbox inked a deal with Walgreens in 2018 Selected Walgreens doors have Birchbox stores within stores There are deals to sign up for Birchbox in the stores and for Walgreens the partnership brings in brands not offered at mass Smaller footprints are planned for this year in 500 Walgreens doors While the collaboration is considered a success Birchbox announced it would lay off 44 of its 94 New Yorkbased employees by May Birchbox chief executive officer Katia Beauchamp said in a statement that the company is looking to create more synergies across markets and is consolidating globally To reduce redundancies across the U S U K and Spain we made the difficult decision to downsize our team by about 25 globally This includes plans to move some of our U K operations to Spain managing the U K market from the Barcelona office Mergers and acquisitions continue to remap the industry NEW YORK There has been no slowdown in merger and acquisition activity in the beauty business E l f Cosmetics made good on its promise that it was eyeballing acquisitions and it was a big one clean brand W3ll People W3ll People brings a portfolio of more than 40 products that bear the Environmental Working Group seal One of its hero products is its Expressionist Mascara The buy for 27 million in cash catapults e l f into the clean beauty space along with founders who made it their mantra The 11yearold W3ll People was founded by former Nars Cosmetics global educator Shirley Pinkson dermatologist Reneé Snyder and James Walker a marketing veteran with Whole Foods Market and Young Rubicam on his resume They are all staying on Weve been observing this consumer trend for some time In fact over the past six years at e l f weve reformulated our products to move away from parabens phthalates and other ingredients consumers do not want to see in their cosmetics and skin care The acquisition of W3ll People dramatically advances our capabilities in clean beauty and gives us a brand that is both a real authority in the segment and has major white space said e l f s chairman and chief executive officer Tarang Amin The clean space is paramount for beauty brands with industry experts expecting it will be the norm in the future Another major deal bringing a big company into the natural space was ColgatePalmolive Co s buy of Hello Products Under the leadership of its founder Craig Dubitsky hello brand branched into beauty and beauty retailers like Ulta Beauty While emerging companies have eroded legacy brand share in many personal care categories like hair care the 40 billion oral care is still dominated by behemoths Crest and Colgate brands with Sensodyne as a third contender But hellos fresh approach to oral care has shaken up the category In the last two years points of distribution have exploded Hello is now sold in 44000 doors including giants like CVS Pharmacy Target and Walmart as well as well as on Amazon com iHerb com Thrive Market and Grove Collection along with its directtoconsumer site HelloProducts com those sites produce about 15 of sales according to Hello Its new CBD line hit 1190 Ulta Beauty doors recently Under Colgate hello is expected to expand internationally and into other categories The idea that we could potentially play in categories like skin care and pet is surreal and now thats all possible Were very excited about adding vegan lip care to our mix weve just launched CBD lip balm at Ulta and well have a lot of other new products to share over the coming months Dubitsky says Procter Gamble Co announced plans to buy Billie a booming subscriptionbased grooming brand targeted to women Positioned as a new body brand Billie gained attention when it showed womens pubic hair in a commercial as part of its projectbodyhair campaign to encourage women to shave or not depending on their preferences Beiersdorf purchased Stop the Water While Using Me a natural cosmetics line The two Hamburg Germanybased partners intend to jointly intensify the impact of sustainable skin care and to further their commitment to climate and resource protection Working closely together the companies plan to develop joint sustainability initiatives in the future and create highimpact solutions for more sustainable action Stop the Water While Using Me has been pursuing a clear mission since 2011 to protect save and donate water With refillable systems and biodegradable skin care products the brand systematically practices sustainability and promotes the responsible use of water resources The product range comprises solid waterless body and hair care products as well as shower hand body and oral hygiene items Late last year Nestlé sold its Skin Health business to a consortium led by investment company EQT and a subsidiary of the Abu Dhabi Investment Authority The brands included Proactive Cetaphil Benzac Loceryl Galderma and Restylane Skinboosters While some companies were looking to buy Coty Inc remains intent on divesting its professional hair and nail products which could fetch as much as 8 billion sources say Henkel and Unilever have been mentioned as suitors Coty which acquired Kylie Cosmetics last year is selling brands including Clairol Good Hair Day and OPI nail care as well as its business in Brazil Revlon or at least some brands under its ownership remains on the sales block The cosmetics company tapped Goldman Sachs last year to explore sales of all or parts of the company recently zeroing in on divesting smaller lines like Almay Sinful Colors or American Crew A sale that didnt happen was Edgewell Personal Cares proposed purchase of Harrys Inc after a complaint from the Federal Trade Commission The FTC said in a statement The loss of Harrys as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers one of whom is the acquirer Kbeauty innovator Peach Lily netted its first investor recently Sandbridge Capital The capital is expected to help Peach Lily founder Alicia Yoon expand internationally as well as ramp up innovation and instore experiences The products are sold in CVS Target and Ulta The latter has been a great venue for Yoon to hold master classes that help build traction for both brands she curates from Korea as well as her own items Strategic purchases assist companies in growing portfolios and markets Chain Drug Review March 16 2020 43