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Though sometimes overlooked in the winner-takes-all conversation around beauty — with Sephora, Ulta and even Target and Amazon in the mix in the U.S. — Walmart has been quietly revamping its positioning. In January, Walmart completed a laborious, three-year revamp of its beauty department in its 4,700 stores, and like all of the aforementioned retailers, it has upped its beauty positioning around natural and clean.
In its fiscal results for 2019, Walmart reported $514 billion in revenue, and in the U.S., the company grew comp sales by 3.6 percent — its highest growth rate in almost 10 years. Walmart does not break out its beauty business — it falls under its consumables segment, which includes grocery. But with such a wide breadth of stores, its impact on beauty is significant. Competitor Target, which also plays in the mass arena, saw in 2018 $75 billion in revenue in its 1,800 stores and online — sales from beauty equated to $18 billion. Beauty retailer Ulta, with 1,200 stores, saw annual sales of $6.7 billion.
Of the recent beauty updates, Jody Pinson, Walmart vice president of merchandising for beauty, said, “It’s been an interesting journey, and our reinvention continues to evolve. Once you think you’ve completed something, it continues to change, and the customer continues to change. When you have over 4,700 stores, it takes time.”
Newness for Walmart, all which stay within its price positioning, include a focus on beauty from the inside out and also wellness, with the exclusive launch of Bobbi Brown’s ingestible line Evolution_18. Wellness is a category it hopes to grow. It’s also zeroing in on “derm solutions,” or dermatologist-recommended products containing ingredients like hyaluronic acid. In the first six months of this year, Walmart added more than 1,000 new items to its beauty department from brands like Profusion Cosmetics and Japonesque, the latter of which sells a line of makeup tools and brushes.
Ahead, Pinson breaks down what key changes Walmart has been making, what is resonating for its consumer and how it’s approaching technology and content.
When you think about your recent revamp and how that continues to develop, what is top of mind?
The benefit and challenge for us at Walmart is that we have 150 million shoppers weekly, so we have to look at what will make the most impact. What we’ve focused on in stores and online, and continue to look at, is how to make color cosmetics lighter and brighter for customers to shop, the navigation — and not just by brand, but also within a brand, so our customer can find things on her list. And then it’s: How do we highlight key trends, so if she sees something on social media or TV, she can find it with us quickly.
All of those initiatives seem to do with efficiency.
Time is not our shopper’s friend. We don’t have beauty advisors in our environment, which can be a challenge, but it’s also a focus for us. Simplifying the message is critical, so we have to use the right words in stores and on digital and social, so we can remain credible. For instance, derm solutions are a growing area within skin care, and the products our customer wants are solutions — so what is resonating are serums and the products that have the clarity of packaging and benefits spelled out. We talk to our shopper about that a lot, so that she is not afraid of aging and wants to embrace it. We just launched a derm page under our beauty and skin care section to offer customers more advice and give that perspective from us more. Creating more beauty content on Walmart.com is very important, and we are focusing our time on ratings and reviews to answer the questions our shopper is looking for. Messaging all of this can be hard, but it’s our No. 1 priority.
Dermatological-level skin care products may not be something everyone knows Walmart sells. What are other trending beauty and personal care offerings that are new for the company?
Our customer is shifting toward natural products and a more natural lifestyle, so more than ever, she cares about what she puts on her face and on her body and ingredients. We are staying one step ahead of that, in skin care, especially. Bobbi [Brown] has given us a lot of credibility to talk about beauty from the inside with Evolution_18. Things like those products, and making sure you are hydrated and that your gut health is strong, are going to make your skin and then your makeup look better.
What is Walmart’s price position in these newer categories, when many of your competitors sell products like this at a premium?
What our customers give us credit for is the right price and the right value. It can mean different things to different customers; in some households, it is critical to have an opening price that is the lowest in the market, and that’s our brand promise, but its not just about that; it’s also giving the best of the best at that price. In beauty, you can get Wet n Wild eyeliners that are fun and trend-driven for as low as 93 cents and then get something from L’Oréal and NYX Cosmetics that just pushes $10.
How is Walmart’s foray into better tech solutions going in stores?
A lot of brands are trying to figure this out, because we all know that brands need to connect differently with the customer. From a Walmart perspective, we take a brand agnostic point of view, and it has to affect everything we carry. Our expanded grocery pick-up program is all about the time-starved mom. She pulls her car into a stall and she never has to get her kids out of the car, so it’s an in-and-out way of shopping for beauty and everything else she needs. And if she does want to come into stores, our Walmart app tells her where to find a specific product. Some of our biggest stores are 200,000 square feet, so that can be time consuming and challenging, so better consumer-facing technology is very important, and then it’s the content that drives back to that.