If the pandemic and its aftermath have taught us anything, it’s that the future is unknowable. So, predications should be viewed with skepticism. But, for what it’s worth, economists are largely predicting the United States is heading into a recession in the next 18 months.
With that possibility on the horizon, in this edition of Beauty Independent’s ongoing series posing questions relevant to indie beauty, we asked 18 beauty brand founders: What are you doing to prepare your business to survive and even thrive during a recession?
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Sally Mueller Co-Founder and CEO, Womaness All signs are that we’re heading into a recession. Hopefully, it will be mild, and we can bounce back quickly. While we feel Womaness is well positioned to weather the recession storm, we also feel that we’re not immune to the consumer pulling back on spending.
We’re focused on ensuring we’re offering the best value to the consumer and being more overt in our communications about our affordable price points and high-quality products. We’re also making sure every dollar we’re investing in the business is working hard for us and cutting back on spending that doesn’t have a direct ROI.
Investing in loyalty and retention is a top priority since it’s getting more and more expensive to acquire customers through Facebook and Instagram. Lastly, we’re focused on striking the right balance of driving growth, and managing supply chain issues and inventory levels so our cash is not tied up.
- Anisa Telwar Kaicker Founder and CEO, Anisa Beauty and Anisa International
There is a lot of speculation about an impending recession, and I'm certainly not immune to it. As an entrepreneur and business owner for 30 years, I know from experience that ebbs and flows in the economy are inevitable, so I've learned to be proactive and adaptable.
I have also learned—with no small amount of struggle—that the most challenging times can bring the biggest opportunities, not only to drive creative thinking and innovation, but to truly connect with your team and your customers.
As the CEO and founder of B2B and DTC companies, I have a unique dual experience that requires separate approaches to the difficulties a struggling economy can present. Spending decreases across the board, so I work with my team to find ways to pivot quickly and modify our offerings to still delight our customers and satisfy our bottom line at every point of the business. Examples include how it's delivered, priced and packaged to adapt to customers' needs that may change during a recession.
It's also important to be transparent. Challenging times teach you and humble you in ways that are so valuable. We make beautiful makeup brushes, skincare brushes and tools that add to someone's well-being and overall self-care. I feel good knowing that my products offer people joy while the road is bumpy, so I am driven to find ways to make sure they don’t have to sacrifice to get them. So, don’t fear it. Try to keep your eye on the long term and learn, learn, learn from the ride.
- Susan Fulton CEO, Vivant Skin Care
I don’t think anyone knows for sure if a recession is coming or not. However, its looming potential is a great reminder for all brand founders to keep a few things top of mind.
1. No matter how large or small the brand is, I think it is important to stay super lean. Everyone is coming off of a big e-commerce boom from COVID, but, during the high times, I think it is important to manage expansion by not going on hiring sprees. At Vivant, we are able to scale accordingly because we are one of the few companies that manufacture in their own labs and this helps us immensely in a variety of ways.
2. Employees are the backbone of your business. How you treat them reflects on the type of business you are. Hire people as you would invest in stock, i.e., invest in people you see working with for 10-plus years. During the short-down cycles, all the people you hire as band-aids will peel off and that is a detriment to your business.
Traditionally, the beauty industry has done well in economic downturns by selling affordable luxuries and, during COVID, we discovered Vivant has actually become a necessary luxury for our consumers because we deliver results. I think skincare as a whole is entering into this new caliber of necessity where brands can’t just make promises, but have to deliver results.
- Jordan Karim Founder and CEO, Flora & Noor
To prepare for a recession I am diversifying our marketing channels, evaluating our inventory and taking advantage of the current costs of manufacturing before they increase any more than they have already, nurturing our business relationships and building a cash reserve.
- Ada Polla CEO, Alchimie Forever
I felt the start of a recession at some time between the end of April and early May 2022. While I was hopeful for a fabulous 2022, celebrating the end of COVID “for real this time,” it became clear to me that we would in fact continue to face economic uncertainty, supply chain challenges, and now also have to deal with inflation, a bear market and shifting consumer priorities. Here are some steps we are taking at Alchimie Forever to continue to thrive:
1. Not overreacting. We have survived (and thrived) during a global pandemic, we can do this during a recession as well. We are aware of the current economic situation, proactive in our strategies, calm and in it for the long run.
2. Focusing on the consumer experience. We have been working on all of our consumer touch points to make sure we are highly engaging in every instance, from relaunching our website to optimizing the content on our YouTube channel to improving our rewards program.
3. Being strategic in our product assortment and inventory. Out-of-stocks are no way to delight a customer, and we can’t sell what we don’t have. We are continuing to manage our supply chain very conservatively, increasing lead times and order quantities.
At the same time, we are reviewing our product assortment to ensure every SKU is a strong revenue contributor and that we launch new products to strategically address any gaps.
- Jean Baik Founder and CMO, Miss A
I believe we are heading into a recession, and at Miss A we are making sure to keep our prices low and to continue to offer a wide variety of beauty products for those shoppers who want to save rather than splurge on their beauty essentials during this time.
- Akash Mehta CEO and Co-Founder, Fable & Mane
I am gearing up and making sure the business is ready for any change on the horizon, be it a recession or another wave of COVID. It’s important to keep a resilient mindset knowing that change can happen at any point.
Our priority is to protect our team, so I am being very conscious of our hiring process and ensuring we are prioritizing vital roles to continue to grow the business. We are creating new processes for every spend and evaluating the immediate and long term ROI of programming.
We are also taking outside expert advice and listening to the global market news. Keeping a close watch on industries outside of beauty that will have an impact on the overall economy is paramount and ensuring we have contingency plans in place where possible.
- Andrea Lisbona Founder and CEO, Touchland
From economic indicators, the market does seem like it will be heading into a recession. Therefore, we will operate with the premise that, even if we are growing in triple digits, we need to make ensure we are growing organically, profitably and without the need for external funding.
It would help if you focused on what really helps the business grow meaningfully. One of the main priorities right now is to spend consciously without running out of savings, so we keep a very lean structure that enables us to adjust to macroeconomic changes.
Last but not least, don’t think short term, think long term. Find what makes you unique and continue thriving at it. Recessions will go away, and the most innovative and successful companies are the ones that will survive the hard times.
- Maria Desmarais Founder and CEO, Athena Club
A lot of signs point to a recession. At Athena Club, we are preparing by putting a laser-focus on retention, LTV and CAC-reducing initiatives. We have a strong and incredibly loyal subscriber base, and we will continue to innovate how we delight and provide them the best experience possible.
In past recessions, people still spent money on personal care essentials and continued to prioritize affordable, high-quality products in their routines. We will certainly remain nimble and make adjustments to how we operate as the economy and customer behaviors change, but we are optimistic based on past recessionary periods.
- Ben Smith Founder, Disco
In my view, we've been in a recession for four to five months now. While we might not technically meet the definition of two consecutive quarters of negative GDP growth, the signs of an impending downturn became obvious towards the end of 2021. For some reason, most people were caught off guard when the markets began tanking in late Q1 this year.
On the Disco side of things, we just closed a fresh round of bridge capital, have cut down our operational expenses, pulled back on marketing spend, and are hunkering down for the foreseeable future to wait this out.
- Lisa Mattam Founder, Sahajan
I am not in a place to speculate on whether or not we are heading into a recession, but many experts suggest that we will and that the confluence of factors, the pandemic, the war in Ukraine and related supply chain shortages are what will make us more likely to be in a necessary. To plan for the recession, I plan to:
1. Use the pandemic as a case study. When the case numbers for COVID-19 began to surge, I could never have envisioned the multiple shutdowns, the implications for retail, the mail delays, but also the increased value for skincare.
There are so many learnings from the pandemic, and I plan to actively sit and review them. I also plan to take careful note of what behaviors and habits can translate. We have always been customer-centric, but, when the pandemic hit and people were at home, we noticed the increased stress and anxiety from our customers.
We took extra care in answering emails, we extended ourselves to phone calls when needed, and we provided content that was about Ayurveda and not about product because, within Ayurveda, we could provide tangible information that could support someone in their wellness (food ideas and stress management ideas for example).
2. Always connect in on backend operations. Your finance person is your best friend. I don’t believe we need to freak out, rush to layoffs or start planning for doomsday, but I have learned that the backend of a business—the operations, the supply chain and the finances—are often what are neglected in general.
If we start to observe an economic downturn, I will engage in a more active or frequent check-in on the financial and operational needs for Sahajan to ensure the long term health of the business.
- Marta Cros Founder, APTO Skincare
We think there is a high probability that the U.S. and Europe will enter into a recession. There are some businesses that tend to do well in this type of scenario, among them grocery and beauty. We are confident that our current mass distribution strategy will continue to thrive at a time where consumers will be driven to prioritize their expenses toward the type of items sold at Target or Walmart.
Even though we’re experiencing a period of inflation, we made the executive decision that our pricing will remain the same. We also believe our core value of affordability (all our products are priced between $5 and $20) will attract new customers and prove our commitment to accessibility to our current base.
Last, as a company, we will keep a leash on our cash flow projections and expenses, maintaining a lean setup that already proved to be beneficial in 2020 during COVID.
- Tonya Thompson and Sharie Wilson Co-Founders, DreamGirls
1. Analyze what marketing efforts have been driving significant revenue in comparison to other sources and focus on allocating costs to areas producing growth and cutting costs on marketing areas where you have seen little success for your business.
2. Explore other avenues of marketing. Your audience is not on social media 100% of the time, so it's important to connect with your customers through other media sources.
3. Be smart about your financial decisions, and make sure you are budgeting appropriately so that you are not spending more than your return is.
- Stephanie Lee Founder, Selfmade
Almost everyone is feeling the negative impact of current conditions, particularly when calculating how much value they are getting for the dollar. Since Selfmade was born in the pandemic, we’ve had no choice but to continually strengthen resilience muscles.
First, we're shifting our mindset into, "This is a marathon rather than a sprint." That looks like taking a brand wide mental health week off to play and rest and transitioning to a four day work week during Q2 for self-preservation in what is continually a difficult time. I've been transparent with the team about our financial health and wellness, and we've created habits to keep operating as efficiently and flexible as possible.
To thrive, we've revamped our junior advisory board of 40 young folks committed to mental health advocacy to be as engaged as possible in the conversations that are important to our target consumer. We've become well acquainted with the ups and downs of uncertainty, but that doesn't mean it makes it any easier to overcome.
- Natanel Bigger Founder, Monpure London
The trends that we are seeing consumers focus on seem to be independent of the economy, and we think that people will be inclined to spend more on things that make them feel good and help them to restore strength and confidence, even during the recession.
A brand like Monpure London addresses non-cyclical concerns like menopause, for example. If we can help people with thinning hair this, changes their life and their confidence. This is independent of the economy.
So, the fact that this is increasingly a topic of discussion is raising awareness of the importance of including scalp and hair health into a daily routine. We will need to continue speaking to our customers and deliver not just empathy, but also a service that goes beyond just offering a product as everyone is a little more on edge during uncertain times.
Obviously, we’re definitely not immune from the massive supply chain shock that nobody can quite explain, but the consequences of running out of stock are definitely more expensive than holding additional product, so we have bought in a lot more stock.
Being careful of carbon footprint is also important to us, so we are laying down stock in our key territories to reduce freight. It’s really important that we can respond to steep increases in demand like a luxury beauty salon looking to extend its own offer or a new territory opening up, for example.
- Linda Wang Founder and CEO, Karuna Skin
While I’m not an expert economist by any means, it definitely feels like we’re on the cusp of one. If a recession happens, budget will inevitably be a big factor for many people including our clients.
At Karuna, affordability has been and continues to be very important to me and something our customers can depend on us for. Economically priced products that don’t sacrifice quality are not only our passion, but a strength that keeps our business sustainable during uncertain times.
There will always be beauty needs and a degree of emphasis on self-care, we just need to make the transition as easy as possible and will continue to look for opportunities to help our customers save.
- Alli Reed Founder, Stratia
I think we're almost certainly heading into some type of recession. As one of the lucky millennials who graduated college into the last one, I feel mildly better prepared to survive and thrive through this. We're preparing by focusing on increasing revenue and decreasing expenses—nothing groundbreaking, but we're getting creative with it while still thinking long term.
Rather than cutting back on staff costs, I'll continue offering competitive salaries, excellent benefits and a strong work-life balance. In the long run, it would be much more expensive to replace talented staff and is overall penny-wise but pound-foolish.
Instead, we're streamlining our marketing spend with a focus on efficiency, reevaluating our agency partners, and embracing the scrappy and tenacious mindset to find cost savings.
We're also looking at the ways we can serve our customers better throughout a recession. Our products hit a powerful trifecta of affordable, effective and ethically made, so we plan to lean heavily into that messaging: budget-friendly without sacrifice.
A major focus of our social media is on science/skincare education, providing tangible value to our audience without a hard sell to ensure our following sticks around. We're also finding unique ways to surprise and delight our returning customers to make sure they stick with us not just through the recession, but for life.
- Britta Chatterjee Co-Founder, Odele
After living through three economic crises (the dot-com bubble, housing bubble and pandemic), I think we’ve always viewed the economy as being capable of anything. We stick to the basics: Build a great product, support it with the best team, and be conservative and patient with your expectations for growth.
In a world of get rich quick schemes, we’ve built a business that is about meaningful, sustainable growth achieved through delivering real value to the consumer. It’s been our true North Star and the upcoming recession will serve to test what we’ve carefully built. Resiliency is critical to becoming the next household name. So, game on.
If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, please send it to editor@beautyindependent.com.
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