This week, a deep dive into the new No7 Beauty Company.
No7 Beauty Company, which spun out of Walgreens Boots Alliance in April as a standalone business, has a major advantage over other beauty enterprises: access to first-party data from over 100 million WBA customers.
WBA established No7 Beauty Company as a subsidiary to broaden the beauty division’s appeal to the North American market and accelerate global expansion, according to WBA’s announcement. Brands in the portfolio include No7, Liz Earle Beauty Company, Botanics, Soap & Glory, Sleek MakeUp and YourGoodSkin. Boots, part of WBA, founded the No7 skin-care brand in 1935, followed by Botanics in 1995 and WBA-incubated YourGoodSkin in 2017. WBA acquired Soap & Glory in 2014, and both Lize Earle Beauty and Sleek MakeUp in 2015. Annie Murphy, WBA svp and global chief commercial brands officer and international retail, oversees the new organization.
Under the new setup, No7 Beauty Company brands will expand beyond WBA’s 21,000 storefronts and e-commerce to join new retailers worldwide through dot-com sites, brick-and-mortar stores and mobile apps, as well as their own direct-to-consumer channels. Currently, Soap & Glory, No7 and Botanics currently sell through retailers like Ulta Beauty, while Sleek MakeUp and Liz Earle Beauty sell through U.K. retailer Look Fantastic. YourGoodSkin does not yet appear to have wideset distribution outside of Walgreens.
As reported in WBA’s third-quarter 2021 earnings in July, the company’s U.S. beauty retail sales in the quarter increased nearly 15% year-over-year. Overall retail sales increased by 1.4%, demonstrating the continued resiliency of essential retailers that sell beauty. More recently, No7 Beauty Company published its first-ever skin-care and serums report on July 22, which evaluated women’s preferences and behaviors in the space post-pandemic. The data was used to inform its new launches and marketing. The report accompanies new ad campaign spots about returning to the “real-world,” following a year of social distancing and isolation.
Glossy spoke with Anisha Raghavan, No7 Beauty Company’s North America CMO, regarding how the company leverages data from Walgreens Boots Alliance and its own brand portfolio consumers, and what internal changes it’s making to grow the business.
What was the impetus for No7’s carve-out from Walgreens Boots Alliance?
“The decision to have a division created called No7 Beauty Company was for several reasons: No. 1 is to have a presence as a beauty company; we are committed to creating beauty brands that serve everyone. And No. 2 is that the North American market is a huge priority for us. Our brands have grown year-over-year in North America, but they’re in their infancy. Establishing that presence and leveraging our advantages, such as data from Walgreens Boots Alliance, were some of the motivations.”
Can you share some of those specific data capabilities?
“A big part of how we use data is for ad targeting and using marketing tech to ingest that data for our media buys. We’re also studying transaction behaviors: what’s driving the category, where consumers trends are changing, [et cetera]. We have a data advantage in that we have access to 100 million loyalty members. A second way is our science and research teams are regularly conducting [digital] conversations [for feedback] with up to 20,000 consumers to track their beauty needs and wants. No7 as a whole has a testing panel of 70,000 women of all ages, ethnicities and skin types. We’re bringing in more data scientists and marketing technology specialists. Our entire internal [global] marketing workforce of 1,000 people also went through advanced digital training.”
What were some of the key takeaways from the recent serum report?
“We wanted to understand women’s changing skin-care behaviors post-pandemic. We’ve seen the skin-care category has seen a lot of growth. In the last four weeks, skin-care [industry sales] have been up 7%, and we see a 48% increase in Google searches for skin care. We know that serums have been a growing segment of skin care. Serum sales have been up 40%, and 50% of women in the U.S. are currently using a serum.”
How is No7 positioning itself for further growth?
“In terms of current growth, we’re growing ahead of the skin-care category. From an innovation standpoint, we stand behind our cutting-edge science [and will continue] research with academic partners like Johns Hopkins University or the University of Manchester, and the University of Nottingham. That drives our innovation and where we want to go, combined with our consumer survey research insights.
From a marketing standpoint, we’re [trying to] challenge conventional marketing methods. We’ve been able to significantly ramp up the effectiveness of our digital marketing and digital channels. From a return on ad spend standpoint, we’ve increased 4x or 5x, depending on the brand [under No7 Beauty Company]. We’re implementing marketing technology to increase our percentage of addressable media. We’re also focused on virtual consultations, and we’ll be investing more in building advocacy with influencers and ambassadors. We’re looking at influencers as a long-term partnership and are building those partnerships specifically around connecting on skin-care science. We’re [planning to] add value to influencers on their own credentials. You’ll see an announcement from us in September about how we’re going about influencer marketing differently.”
What are other brands, like Soap & Glory, doing?
“We’ve started implementing personalization strategies, and [it has led to] a 10x increase on Soap & Glory’s digital effectiveness and return on ad spend. We’ve run campaigns over the last 9-12 months where we’ve seen that growth. We set up an in-house content studio in the U.S. over the last year to do rapid content creation and optimization in real-time. We also have something called the Beehive, which is an in-house U.K. production studio. We also use content automation and are perfecting that.”
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