Mass-Market Beauty Powerhouses Are Banking On Indies In 2020
Mega-retailers are putting purchasing dollars behind indie brands to build beauty sales as legacy cosmetics players continue to slump. CVS, Walmart and Ulta Beauty, to name three, are adding more square footage to burgeoning lines they feel yield a competitive edge in a crowded beauty landscape and attract younger shoppers.
CVS was early to the indie boom. In the past five years, it’s been integrating emerging beauty lines into new store formats. Executives at the pharmacy chain credit the lion’s share of recent beauty sales increases to fresh brands they’ve injected into the merchandise mix. Last year, CVS started testing a souped-up beauty department dubbed BeautyIRL in four stores and, based on positive response, has brought it to 48 units in big markets like New York, Los Angeles, Boston and Miami. In total, CVS has over 9,900 stores in the United States.
The latest iteration of the concept has a heavy emphasis on nascent lines such as Duke Cannon, C’est Moi, Urban Hydration, The Crème Shop, Karity, Peripera, Olive, Joah, Zum and Basin. Many of the lines’ products are presented on a wall reserved for digitally native, socially relevant indie and K-beauty brands. Smaller lines are presented on pop-up displays throughout beauty departments, too. Heritage brands get special treatment in BeautyIRL formats, with gondolas for each brand rather than just pegs on a wall.
To clear room for indie lines and off-shelf promotional displays, the space dedicated to BeautyIRL is one-and-a-half times larger than the space for traditional CVS’s beauty floors, which average around 1,100 square feet. The focus on up-and-comers at BeautyIRL is intentional, according to Maly Bernstein, vice president of beauty and personal care at CVS. The BeautyIRL stores also have a Glamsquad-staffed area for makeovers, blowouts, accent braids, makeup with add-ons like false lashes, and even ear piercing in a partnership with Studex. Harnessing the expertise of the Glamsquad team, CVS launched products called GSQ by Glamsquad that are merchandised across from the makeover station.
“One of the goals of BeautyIRL was to make up-and-coming, digitally native beauty brands, which our customers might not otherwise be able to explore in person, more accessible and tangible,” she told Beauty Independent. “We wanted customers to be able to discover and play with popular, social beauty brands and trends in a convenient, brick-and-mortar setting by allowing them to enjoy guilt-free, stress-free me-time when in our stores, especially since they are often there to fill a prescription or to get what they need to take care of others.”
“We’re continuously looking to discover and feature up-and-coming, relevant brands in the BeautyIRL stores and across our national footprint.”
Bernstein shares that CVS evaluates the results from an incubation period for brands at BeautyIRL stores to judge whether to expand productive brands into thousands of its stores. Karity, Zum and Essence have passed the incubation period to amplify their CVS presences. “This allows these brands to grow at their own pace and allows us to partner with them in the process,” explains Bernstein, mentioning rising brands can be tapped for CVS’s huge trial-size department.
In the BeautyIRL stores, CVS blends well-known classic beauty brands and surging socially-driven ranges to make a statement about its relevance in the evolving beauty landscape, and resonate with millennial and gen Z customers. Bernstein says, “This is a job that’s never considered complete as we’re continuously looking to discover and feature up-and-coming, relevant brands in the BeautyIRL stores and across our national footprint.”
Walmart has revealed several major beauty launches for 2020 and a hefty portion are exclusive or first to market for the massive retailer. Walmart is zeroing in on indie brands to address festival, neon, natural and scalp care trends. Some of the brands it’s picked up are Kiara Sky Dip Kits, LBK Nail Lacquer, which sports a novel way to show off shades, Kiwi, Cleen Beauty from Beach House Group, Earth to Skin and Found Cosmetics.
Other Walmart-only launches, especially in hair, are in the pipeline for 2020. Hairitage, a brand created by Maesa in partnership with Mindy McKnight, the YouTuber behind CuteGirlsHairstyles, is one of those launches. McKnight is the mother of twin influencers Brooklyn and Bailey McKnight. The cruelty-free and vegan line rolls out exclusively to Walmart this month, and WWD reported it could chalk up sales approaching $50 million in its first year. Walmart was attracted to McKnight’s appeal to families, especially parents and children with textured hair. She has two adopted kids who are black, giving her experience with textured hair. Textured hair is getting attention from Target as well. The retailer has installed end-caps including the brands Shea Moisture, The Doux and Alikay Naturals.
“The consumer is changing, and she is looking at the key ingredients in products.”
Despite the fact that entrenched national brands still produce 80% of beauty sales, smaller brands provide balance in the retail milieu, says Jody Pinson, vice president of merchandising beauty at Walmart. “They are fundamental to us delivering something new and different to the customer,” she says, noting the popularity of indies has spurred large established brands to rev up innovation, benefitting the entire beauty ecosystem. Aligned with bringing in indies, Walmart has transformed its beauty sections to have better lighting, discovery zones in skincare and cosmetics, and a fragrance tester bar. Pinson says the fresh look facilitates shopper discovery of indie brands.
Walmart is offering samples in stores along with mini makeovers in select locations within its almost 5,000-door portfolio. Pinson says, “The consumer is changing, and she is looking at the key ingredients in products. She wants clean and products that are good for mind, body and soul, but with some fun aspects like neons and super-long fingernails and eyelashes for festivals.”
Ulta Beauty revealed Sparked at Ulta Beauty during Beautycon in Los Angeles in September last year. The curated area spotlights brands Ulta thinks have potential. Now, the beauty purveyor is executing round two of the Sparked at Ulta Beauty selection. Among the latest brands Ulta has handpicked for the program are Petite ‘n Pretty, NABLA, The Route and Lake & Skye. Sephora has a similar initiative, The Next Big Thing, concentrating on makeup brands such as Patrick Ta, Kaja, Artist Couture, Violet Voss and Lunar Beauty.
Ulta officials declare Sparked has been well-received by shoppers so far. For Courtney Somer, founder of Lake & Skye, Ulta’s Sparked concept is a “good fit where we are at as a brand.” Lake & Skye launched in the fall of 2015 after Somer faced a health crisis while in her 20s. “I began studying alternative healing techniques and went on to study kundalini yoga, aromatherapy, meditation and nutrition,” says Somer of the inspiration behind the line that consists of signature fragrances, aromatherapy blends, candles and body oil. Somer doesn’t limit the brand to fragrance and has plans to stretch it to other offerings.
Ulta CEO Mary Dillon confirmed a slowdown in makeup sales last year, but stressed optimistically that skincare and emerging lines are succeeding with shoppers, importantly younger customers. Ulta recently reported a shakeup in its leadership following the departure of Tara Simon, the former senior vice president of merchandising for prestige beauty. Monica Arnaudo, who injected sizzle into the mass side at Ulta, has been promoted to chief merchandising officer in charge of the entire merchandising and assortment strategy. She’s considered a supporter of emerging brands, convincing many beauty industry insiders that the spigot at Ulta will remain turned on full blast for indies.
- Mega-retailers are putting purchasing dollars behind indie brands to build beauty sales as legacy cosmetics players continue to slump.
- At mass-market retailers like CVS, most beauty sales gains they’ve notched of late are attributed to emerging beauty brands.
- The latest iteration of CVS’s BeautyIRL concept has a heavy emphasis on nascent lines such as Duke Cannon, C’est Moi, Urban Hydration, The Crème Shop, Karity, Peripera, Olive, Joah, Zum and Basin.
- Walmart is zeroing in on indie brands to address festival, neon, natural and scalp care trends. Some of the brands it’s picked up are Kiara Sky Dip Kits, LBK Nail Lacquer, Kiwi, Cleen Beauty, Earth to Skin and Found Cosmetics.
- Ulta Beauty and Sephora have unveiled Sparked at Ulta Beauty and The Next Big Thing, respectively, to spotlight up-and-coming brands. Petite ‘n Pretty, NABLA, The Route and Lake & Skye are new brands in the Sparked assortment. Sephora’s The Next Big Thing selection features Patrick Ta, Kaja, Artist Couture, Violet Voss and Lunar Beauty.
- It’s expected that mass retailers’ interest in indie beauty brands will continue to rise as they attempt to appeal to millennial and gen Z shoppers.