Glossy+: Inside beauty brands’ love-hate relationship with retailers

As beauty brands work to move the industry forward, retailers are proving an obstacle.

At Glossy’s first Beauty x Wellness Summit, held this week, executives from the beauty and wellness industries gathered to talk through their effective strategies and future plans, and the challenges they’ve faced growing their brand. On the latter, a theme resonated throughout the event: Though wholesale retailers often provide a quicker and cheaper route to sales, they can be difficult partners.

Attendees said retailers’ scale can make effective training for associates a chore, if not impossible, and their popular agenda of appealing to a wide audience impedes evolution. It’s forced many brands to increase focus on their direct-to-consumer business, revamp their retail network or break ties with wholesale partners altogether.

“Our vision is to reinvest the distribution of beverage products to consumers, without the assistance of retailers or distributors or brokers in the process,” said Zak Normandin, co-founder and CEO of Dirty Lemon. “Those layers take away from the experience customers are looking for; retailers can’t provide a quality experience at the level we can.”

That experience, he said, includes same-day or next-day deliveries on all orders, a frictionless ordering process and a direct channel of communication for customers. He also called out the company’s focus on remaining authentic to the brand and maintaining the operational infrastructure to support the rapid creation and sales of products. Retailers don’t fit the model.

Lack of product innovation
Putting new, innovative products on store shelves hasn’t been retailers’ strong suit -- but they’re getting better, realizing they’re losing business as consumers shift their spend to emerging, exciting DTC brands.

“A lot of the brick-and-mortars are really trying to [modernize]. They now have really cool brands,” said a beauty brand executive, in a town-hall discussion. “For brands, it’s a good thing. Having that show space, where people can get their hands on something and actually try it, smell it, feel it is important."

Another said that, 10 years ago, when she first approached department stores about selling her organic skin-care brand, nobody was interested. She decided to go it alone, launching an e-commerce site and selling through some luxury spas. Now retailers are knocking at her door.

“When we were launching two years ago, most people rolled their ideas at the idea of our wellness oils,” said Shrankla Holecek, CEO and founder of Uma Oils. “I sat down with key buyers, and they pushed back, saying, ‘These are never going to sell, not a single one,’ or ‘Your oils smell too authentic.’”  

On the cosmetics side, executives blamed retailers for many brands’ slowness to offer foundations across a wide spectrum of shades.

“[Diverse offerings] are a big movement happening now, but when we would go to retailers to pitch a wider range of shades, they would only take certain colors,” said an executive with 17 years of experience working in cosmetics for prestige brands. “We’d go in there with 20, and they would say, ‘OK, we'll take these eight.’ They didn’t have the space to merchandise all of them, so they took the shades that were sure to sell. It was really the retailer that pushed brands into that small window of what they could offer. You can’t do the [minimum] 5,000 units of a product and sell them all on your own e-commerce site.”

Absence of storytelling
Retailers are becoming more nimble, but brands have learned to be choosy in terms of those they'll partner with. Brand alignment is a big reason, execs said, and another is the increased importance of a strong, unique brand story. If a retailer can’t provide education to customers that’s comparable to what the brand is offering (many brands now offer free access to doctors and nutritionists, raising the bar high), the brand will find another one that can.

“We only partner with prestige beauty retailers, because we really want to build the brand in a meaningful way,” said Walter Faulstroh, CEO and co-founder of Hum Nutrition. “Storytelling is important, so finding those retail partners who can execute the type education we do on our own site is important.”

When Amazon fell short, Hum Nutrition pulled out of the marketplace in favor of increasing focus on the DTC business, as well as partnerships with Ulta and Sephora.

One executive at a new beauty brand said the founder is personally going to 250 Ulta stores and training the staff so they know “exactly what points we want to make and really drive home what the brand is all about.”

Holecek said she meets with associates selling her brand for hours at a time. “I really break down and evangelize [the brand] concept to package it in a language that works for their audience,” she said. “They get captive audiences, so they need to be storytellers.”

Emmanuel Saujet, CEO of International Cosmetics and Perfumes, which owns Creed fragrances, has a similar strategy: Brand educators make the rounds, visiting product specialists to rehash the key points about each fragrance and the makings of the Creed lifestyle. He takes it a step further with an intense mystery shopping program, costing the brand $100,000 per year.

Education has to be at the point of sale,” he said. “And everyone has to buy in: the product specialist, the department store sellers, the department managers, everyone.”

#OH
Other brand execs on educating customers  

“For our brand, there's a lot of education that goes into it. There are a lot of ingredients that people think are unhealthy that are healthy; there's still a lot to learn on the clean and organic ingredient side. So we try to be educational with YouTube videos and Insta Stories by covering master classes that show, in real time, an artist teaching a technique while answering questions viewers are sending in. And we make sure to answer every question on Instagram. We're all about education and DM'ing people in a very personal way with lots of information instead of a quick sentence. Having a team in place to manage that is so important.”

“We really need to focus more on our marketing strategy and switch to working with YouTubers. We were really focused on Instagram influencers, and getting posts here and there, but our product needs more education than that. We realized that from doing in-person events with consumers.”

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