The Secrets To Running A Successful Makeup Brand As Growth In The Category Softens

It takes more than just color to shine in the color cosmetics category today. Modern makeup brands are drilling down on emotion and experience. 

“At the end of the day, no one needs anything of what we buy. This isn’t water. This isn’t an organ. This is makeup,” said Jeff Lee, co-founder and CEO of DIBS Beauty, during a recent Beauty Independent In Conversation webinar. “So, if you’re not making the emotional connection, you’re not setting yourself up for a viable business.”

For the webinar, Lee was joined by Lawless Beauty president Rachel Shelowitz and Patrick Ta Beauty CEO Kimberly Villatoro, who described color as the “eye candy” of makeup helping to draw customers in at the point of sale, but underscored the centrality of texture and application in creating winning makeup products. Offering products that fit seamlessly into target customers’ routines is also pivotal for long-term success. 

“That’s the piece that then adds that additional layer,” said Villatoro. “You’ve got the color story, you’ve got the application, and then it’s the magic of what this brand brings to a particular consumer in their makeup ritual because it really is like a ritual.”

That magic is especially important as color cosmetics comes off of a post-pandemic rush. In the first quarter of this year, data from market research firm Circana shows prestige makeup sales grew 5% from last year. In contrast, skincare, haircare and fragrance sales grew 10%, 11% and 13%, respectively. In the first quarter last year, prestige makeup sales were up 15%, while prestige skincare, fragrance and haircare sales were up 14%, 12% and 14%.

Founded in 2019, makeup artist Patrick Ta’s namesake brand is inspired by the colors, textures and application techniques he uses on models and celebrity clients. With prestige pricing and positioning, the brand landed at Sephora the year it launched and is now carried in all American doors at the specialty beauty retailer. Its bestseller is the $38 Double-Take Creme & Powder Blush Duo.

In a crowded beauty market, modern makeup brands are drilling down on emotion and experience to drive lifetime value.

Operational Challenges

Compared to skincare brands, color cosmetics’ brands lower prices and broader assortments can eat into profits. And prestige makeup brands have to contend with cheaper dupes. “The pricing is far sharper in makeup than it is in skincare,” said Shelowitz. “Consumers are so smart that they know they don’t have to pay a lot anymore. There are some phenomenal brands in the drugstore, and the price point is very democratic.”

Additionally, makeup brands can be stymied by a lack of differentiation. Shelowitz noted that ingredients have become a potent force in storytelling as color cosmetics brands scramble to stand out. “Generally speaking, that also made color operationally more of a challenge,” she said. “It was really expensive to get that message across with margins that were much more of a challenge.” 

Launched in 2017, Lawless Beauty specializes in high-performing, skincare-infused clean cosmetics priced from $21 to $52 for the beauty lover who “demands more,” per Shelowitz. The brand secured an exclusive distribution deal with Sephora soon after its launch. Its hero product is $26 Forget the Filler Lip Plumping Line Smoothing Gloss.

The second full-time employee hired at Lawless Beauty, Shelowitz has gradually enlarged the brand’s team in an effort to keep its organization small and agile. She initially brought on a CFO, CMO and director of supply chain and operations and hired later positions on a freelance basis before bringing them on full-time.

“We still consider ourselves a startup, even though we’re much bigger than just a small startup today,” said Shelowitz. “We really maximize every single role in the company before we bring in new people.”

Digital-first DIBS Beauty prioritized hires in e-commerce, product development and marketing out of the gate. Co-founded by influencer Courtney Shields in 2021, DIBS’ selection features multi-functional stick products designed to make application quick and easy. Desert Island Duo, a $36 double-ended blush and bronzer duo, is the brand’s bestseller. Its prices run from $22 to $38.

“DIBS is DIY makeup,” said Lee. “You don’t need a masterclass. You take the stick, it’s got two colors, and you figure it out yourself. You can’t mess it up.”  

Multi-functional makeup brand DIBS Beauty follows the habits of its core customers rather than the latest trends when formulating new products. 

Assortment Balance 

In a category particularly dependent on newness, color cosmetics brands must thoughtfully allocate resources between hero and new products to stay relevant with customers and retailers. Shelowitz stressed that brands have to figure out how to strike that balance properly. 

“Do you have a core hero SKU, and how much of a hero is it? Do you have the ability to take that hero SKU and make it into a hero franchise? Does that franchise have legs to jump categories?” she said. “If you want to offer your core consumer a full face, that’s a multi-category play. Do you want to take 10 years to do that or do you want to take three years to do that?”

Asked about how she would split $100 between marketing and product development, Shelowitz answered she would dedicate equal amounts to both functions, and she estimated between 60% to 70% of product development funds would be earmarked for core products. Asked the same question, Lee answered 70% of the funds would go toward product development versus 30% for marketing. He further specified that 75% of the product development money would be flagged for new launches.

Lee emphasized that DIBS’ product development is rooted in the habits and preferences of its core customers rather than the latest trends. He said, “How do we build out those habits with new products that make sense when they’re paired with hero products such as a powder for a cream product? That’s kind of the way that we go about iterating rather than jumping into the next trend.”