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Eos expands into the medicated lip-care category

Eos, the lip-care brand associated with colorful round lip balms, is trying to bring its fun marketing and branding approach to the more clinical over-the-counter lip category.

OTC products refer to drugs and medicines sold directly to a consumer without a requirement for a prescription. In the case of OTC lip products, this includes medicated ointment for severely chapped lips or cold sores. Eos’ two new OTC products, called The Hero Extra Dry Treatment and The Fixer Medicated Lip Ointment, address both concerns, respectively. The launch of what Eos calls its Ultra Care collection represents not only a product expansion for Eos (which previously added hand lotion to its assortment at the end of 2019), but also a move outside the traditional beauty and personal care aisles. As the U.S. beauty market expects to see annual sales growth of 4.4% from 2020-2023, to over $91 billion, according to Statista, beauty brands have to find new ways to grow sales without oversaturating existing categories and product assortments.

According to Euromonitor data, based on sales in 2019, Eos ranks No. 4 in the U.S. among non-OTC lip care brands, behind Chapstick, Burt’s Bees and Blistex. Euromonitor does not track the OTC category, but some of the better-known brands in the space are Blistex, Carmex and Abreva. OTC products account for 40% of overall sales in the lip category and drive nearly $500 million in annual sales, said Soyoung Kang, Eos CMO, citing Nielsen research.

“When you think about the brands that sit within this space, the products are not particularly pleasant to use, but they never had to be,” said Kang. “OTC is a category that is a very significant size, and it’s one where nobody is innovating or delivering a better customer experience.”

Some of the attempts to upgrade the experience include offering fun flavors like strawberry and incorporating a silicone applicator tip, which deviates from Eos’ signature round lip balms. Kang said the tubes, which are red and blue with holographic features, are designed to be more appealing than a typical cold sore or chapped lip product; they’re meant to be eye-catching, sophisticated and premium-looking.

Eos ran a consumer study in Aug. 2019 with 800 people, where their eye motions were monitored while looking at an OTC lip product shelf in a virtual store. The goal was to determine what words and images consumers look at, and in what order, on the product itself. Over 80% of respondents stated a desire to purchase Eos Ultra Care versus the existing competitors.

“Products from Eos are often associated with eye-catching colors and clean, minimalistic packaging, and this will certainly play in the brand’s favor as it expands into other categories,” said Krista Corrigan, retail analyst at retail market intelligence company Edited. “Even if it’s not the sexiest product, consumers will gravitate toward merchandise on the shelf that’s aesthetically pleasing. Eos has an opportunity to leverage its strong brand identity to gain market share in OTC medicated lip care.”

Eos has a marketing campaign in the works, but it will not debut until the OTC products have rolled out to the planned 30,000-plus doors by the end of September, said Kang. She said the campaign would not likely differ much from Eos’ prior campaigns — for example, it will team with influencers — but will still be unique for the space since OTC brands typically do not employ similar strategies.

“Knowing what we’re doing here, and how excited we are about this launch, we think retail sales of $25 million within the first 12-18 months after launch is pretty easily within reach, and then some,” said Kang.

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