According to Lindsey Robertson, the product development manager at 7-Eleven, it’s really an attempt to recreate the success of E.l.f. Beauty, which went public last September to the tune of $141 million.
Known for its uber-cheap pricing, with most products falling under $5, E.l.f. has garnered a rabid following among millennials and online beauty influencers including Raye Boyce and Jackie Aina. It was also one of the few national brands sold in 7-Eleven three years ago, when the brand began developing SimplyMe, the line of 40 beauty products it rolled out in late November.
“We looked at what was in the market today and kept coming back to the success E.l.f. has seen. We wanted to offer our version of that,” said Robertson, who is responsible for developing everything under the convenience chain’s umbrella, from motor oil to electronics.
E.l.f. And SimplyMe are equally trend-focused — they include highlighters, BB creams and eye-shadow palettes — and all are priced under $5. What’s more, the simple black packaging is nearly identical to E.l.f.’s, the only difference being the logo’s color (white for E.l.f., gold for SimplyMe).
“I think our packaging is more sophisticated and chic,” said Robertson, arguing that, compared to E.l.f.’s, it’s more geared toward millennial women who want to show off their products.
One reason for this launch could be to lure that cohort, as it’s said to be more lucrative than men: 64 percent of high-earning millennials are female, a group that’s much less likely to stop by a 7-Eleven. Although the majority of the chain’s customers are between the ages of 25-34, they’re also 75 percent male.
Efforts to connect with that consumer, promotion-wise, have been “grassroots” so far, said Robertson, including only one social mention via the brand’s Twitter account and the gifting of products to YouTube beauty vloggers including NicoleMarie TV and Safiya Nygaard, who then featured them in their episodes.
When 7-Eleven was still selling outside brands like E.l.f., it saw really good traction. “We realized we could build it into something that would be a really viable big business for us,” said Robertson.
Long-term growth in the cosmetics market overall, which is now a $46 billion dollar industry, only fueled that, she said.
However, though the color cosmetics category grew by 7.2 percent in 2016, much of that was driven by the premium segment, which is expected to outperform the mass segment for the third year in a row this year. A slowdown in the overall category even prompted E.l.f. to adjust its full-year outlook on its third-quarter earnings call, now expecting it to rise only 17 percent, to $270 million, compared to the previously given range of 24 to 28 percent.
It doesn’t help that the space is increasingly crowded, with new brands like NYX Cosmetics and Colourpop offering beauty on the very-cheap, alongside longtime competitors like Wet n’ Wild.
Nevertheless, Robertson is confident that SimplyMe’s products are of better quality and more in-line with consumer needs than what’s currently out there. “We did a lot more testing than many of those brands do,” she said, referring to focus groups the company held to settle on the brand name as well as test the products’ longevity. (An E.l.f. representative could not be reached for comment on its testing processes, though it’s been celebrated by PETA for not testing on animals — an accolade SimplyMe lacks).
The line is now in 90 percent of 7-Eleven’s 8,000 U.S. stores and has seen especial success so far with the lip gloss, mascara and eyeliner, said Robertson.
E.l.f., comparatively, has only 22 retail stores, but has massive exposure thanks to selling in chains like Target, Walmart and Ulta — it will roll into all of Ulta’s 1,078 locations in 2018. “This will be a major boost to E.l.f.’s revenue potential,” said Bob Glazer, founder and managing director of digital marketing agency Acceleration Partners, regarding the Ulta partnership. Unlike SimplyMe products, E.l.f. cosmetics can also be found online, an increasingly popular space for beauty sales.
However, 7-Eleven has at least one advantage over the buzzy brand, said Glazer. “Being open 24/7, for example, is a huge benefit to the chain,” he said. “They’ll need to leverage that tremendous foot traffic and convenience factor to create a significant foothold.”