While other retailers race to tie the hottest beauty brands up with exclusivity arrangements, CVS has a different philosophy. For the country’s largest drugstore chain, it’s OK to be second (or third).
“We don’t need to become something that we aren’t because what we have is pretty damn special,” said Michelle LeBlanc, VP of beauty and personal care at CVS, during a Beauty Independent In Conversation webinar in June for which she was joined by Jeannie Jarnot, founder and CEO of Beauty Heroes. “When our consumers and our merchants are listening to the pulse of culture and social media, and we start to see that those brands and those consumers are searching for more access points, we raise our hand, and we are happy to be there to bring them into our locations.”
For beauty brands looking to partner with and succeed at CVS, LeBlanc advised they assess whether they have enough awareness to drive traffic to its stores—its American fleet surpasses 9,000 locations—and a clear value proposition that can easily be communicated on shelves. She emphasized that value at CVS is judged by a brand’s purpose over price and noted that beauty brands that prosper at CVS are often wellness-adjacent and anchored in efficacy.
LeBlanc highlighted that CVS shoppers are typically in the chain’s stores for seven minutes or less searching for solutions to acute health and wellness problems. Among 20-plus consumer categories in CVS stores, beauty builds up their baskets. CVS carries around 15,000 stockkeeping units from about 500 beauty and wellness brands. Beauty’s growing intersection with wellness underscores its value. LeBlanc said, “From a health equity perspective, beauty helps expand that authority with our shoppers.”
Skincare is CVS’s leading beauty category, and dermatologist-led or -approved brands are skincare standouts. Personal care, encompassing oral care and deodorants, is another category that’s seen robust demand. LeBlanc is excited by innovation in burgeoning personal care segments like whole body deodorant.
CVS is fighting for beauty dollars as the drugstore channel contracts. According to financial services firm TD Cowen, the drugstore channel is expected to lose 3% beauty market share over the next five years as Amazon is forecast to gain 6%. While CVS’s second quarter earnings revealed an 8.4% lift in revenue and a 3.4% increase in same-store sales, operating income fell 21.8% and net income stumbled 42.7% in the quarter. CVS shuttered 900 stores over the past three years and is in the process of closing 270 more this year.
Acknowledging the tough landscape, LeBlanc said the key to retail resiliency is staying focused on the consumer. She stressed that consumers are looking for access to products that meet their needs, experiences or services that exceed expectations, value and convenience. She mentioned CVS’s historical high/low approach to beauty has been a competitive advantage as boundaries increasingly blur between mass and prestige beauty. Becoming more adept at social media communication has been a boost, too.
BEAUTY HEROES
Clean beauty retailer Beauty Heroes stocks nearly 100 brands. Skincare is the clean beauty retailer and discovery box concept’s strongest performing category, with personal care fast gaining steam with customers, particularly natural deodorant. Its smallest category by size, Beauty Heroes’ wellness assortment zeroes in on best-in-class products like Yina’s Lumi Drops Collagen Gummies, Juna’s Detox Drops and Osea’s Vagus Nerve Pillow Spray.
“We’re just mindful that you can get so much at Whole Foods or CVS or Target or Costco,” said Jarnot. “We’re very heavily curated in wellness, and we really try to educate on these offerings. I think people are overwhelmed with the number of wellness brands to navigate.”
Adhering to a standard that prohibits the use of silicones, petroleum-derived ingredients and synthetic fragrances, to name a few ingredients, Beauty Heroes has a limited range of makeup brands it will work with. As a result, it’s hoping to see more innovation coming from clean color brands in the future. Previously challenged by fragrance, the retailer is carefully evaluating the category again for potential partnerships.
Launched as an e-tailer and subscription box service in 2014 before it opened its 1,800-square-foot brick-and-mortar store in Novato, Calif., in 2019, Beauty Heroes was an early mover in clean beauty. Its stamp of approval lends brands credibility as they establish awareness with customers and other retailers. It provides brands an immersive storytelling platform that extends across events, web, subscription boxes and social media content.
“We just have really architected the storytelling in a way that nobody else is doing,” said Jarnot. She added, “When a brand does a collaboration with us, they get a report showcasing all of what we created for them. We’ve learned how to scale that and make it a way that reaches customers all over the world.”
BITE
While discovery is shifting online, beauty is still a category that thrives on in-person interactions. Next month, CVS and Beauty Heroes will be in attendance at BITE, a one-day live event produced by Beauty Independent where today’s buzziest beauty brands will showcase their innovations for retailers, investors, content creators and other industry professionals. Buyers from Ulta, Nordstrom, Bluemercury, Target, J.C. Penney and Free People will be attending BITE as well.
Set to launch 10 to 12 new brands this year, Beauty Heroes recommends brands research its standards before pitching it at the event. Suggesting brands skip the sales-y pitch altogether, LeBlanc said, “I want you to talk to me about why your product or your brand matters and how it’s answering a consumer need state or gap in something that exists today. Focus on your purpose and focus on your customer more than anything.”
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