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Big Beauty Companies Struggle to Launch the Next Glossier

Major beauty conglomerates like Revlon, L’Oréal and Procter & Gamble have been launching new brands at a rapid clip to compete with indie upstarts. But they’ve had few breakaway hits so far. Here’s what they’ve learned.
Revlon's flesh makeup line | Source: Courtesy
By
  • Cheryl Wischhover
BoF PROFESSIONAL

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NEW YORK, United States —  Makeup brand Flesh introduced the world to "Firm Flesh Thickstick" foundation and "Fleshpot" gloss. Its Instagram feed is full of social-media friendly images like tiny, adorable shopping carts. It is skilled in the art of "shelfies," the ubiquitous Instagram practice of snapping a medicine cabinet full of beauty products.

The brand looks like the brainchild of an Instagrammer, albeit one with a PG-13 mind. But it was developed in the corporate halls of Revlon, an attempt by the cosmetics giant to attract young customers who were abandoning its namesake label in droves and to get a piece of the prestige makeup market.

But despite its memorable name — and a distribution deal at over 500 Ulta stores that would be the envy of most influencers not named Kylie Jenner — Flesh isn’t a runaway hit. Linda Wells, the founding editor of Allure magazine who served as chief creative officer for the brand, left Revlon in April, though she’ll continue consulting for Flesh. Ulta hasn’t introduced Flesh into additional stores. The brand is focused on growing e-commerce.

Flesh is one of a host of new brands incubated by the industry’s biggest players in recent years. In addition to Revlon, Estée Lauder, L’Oréal, Procter & Gamble and Unilever have all introduced new concepts. They’re trying to win back a younger audience that has spurned big beauty in favour of up-and-coming brands like Morphe and Glossier. Starting a brand from scratch is also cheaper than acquiring a buzzy start-up; conglomerates have spent billions of dollars buying up brands like Harry’s and Tatcha in recent years.

“I thought it was a smart move to launch a brand, because they’re now participating in the indie market that has been the biggest competitive threat to established brands,” said Mary Ross Gilbert, an analyst at Imperial Capital, on Revlon’s Flesh. “It has incredible potential.”

But for every Fenty Beauty — the LVMH-backed brand founded by Rihanna, which approached €500 million in sales in its first year — there are far more brands like Flesh, which have received a more mixed reception. Then there are the outright failures: Estée Lauder launched Estée Edit in 2016, with Kendall Jenner as its face and a Sephora distribution deal, only to shutter it a year later. Another attempt, Flirt, touted as an Instagram-friendly brand with Amber Rose as an ambassador, launched in mid-2016 and quietly shut down last year.

If we're not building a relationship and standing out and having an emotional connection, then we haven't got a hope for the future

The fact is, it’s risky to launch a brand from scratch, even with a big corporation’s massive research and development (R&D) and marketing budgets. In the social media era, beauty trends come and go at lightning speed, faster than the two years sprawling global companies often need to develop new products. Plus, corporate brands can feel … corporate. Consumers respond to founders and love to engage with them. It’s easier to put a face to Glow Recipe than an international conglomerate like L’Oréal.

“They have capital going for them, they have retail relationships and vendor relationships, so there’s no logical reason why you wouldn’t think they would be successful,” said Rich Gersten, a partner at the private equity firm Tengram Capital, whose current portfolio includes makeup brand Lime Crime and luxury beauty retailer Cos Bar. “But will they be able to move fast, be nimble and attract talent?”

They’re certainly still trying, even as the market grows more crowded by the day, with competition ranging from buzzy indie labels, like Kopari in skincare and Colourpop for makeup, to fast-growing private label lines from retailers like Target and Amazon.

This month, Procter & Gamble launched a haircare brand, My Black Is Beautiful and a skincare and supplement line for menopausal women, Pepper & Wits. In May, L'Oréal introduced hair colour service Color & Co. Last year, Johnson & Johnson launched C&C, an Instagram-friendly skincare extension of its Clean & Clear acne treatment franchise.

Unilever has been busiest of all, debuting a series of hair care and body care lines since 2017, including ApotheCare, Love Beauty and Planet and this year’s The Good Stuff, a small range of leave-in hair conditioners. Love Beauty and Planet, launched in early 2018, touts “natural ingredients” and is packaged in recycled plastic. The personal care line has been successful, with sales surpassing $50 million, wide distribution in mass channels, a growing product assortment and even an expansion into home cleaning.

Executives at some of the world’s largest beauty companies spoke to BoF about lessons they’ve learned from starting brands from scratch.

Have a point of view

Gillian Gorman Round, Flesh’s general manager, suggests that not launching a direct to consumer site from the brand’s inception may have been a mistake, but it’s all part of the process of working in a company that wanted to see if it could “behave in a different way” to launch a small brand.

Prestige makeup was a challenging choice for Revlon’s first foray into launching a new brand. Sales in the category declined to $7.3 billion from $7.5 billion in the past year, according to the NPD Group. But Revlon needed a US-focused prestige makeup line in its portfolio to complement Elizabeth Arden, a 2016 acquisition that sells well in Asia.

Like Fenty, Flesh plays up inclusivity with 40 shades of foundation. Its cheeky messaging and suggestive product names like Thickstick and Fleshpot earned plenty of coverage at launch.

Revlon is sticking with that branding, noting a positive response from its older Gen Z and young millennial customer base. A recent post of a (fake) green foundation stick to match the Statue of Liberty is one of its most-engaged posts.

You need to have a reaction to something. You cannot be vanilla.

“You need to have a reaction to something. You cannot be vanilla,” Gorman Round said. “We’re all competing in a market that’s saturated. So if we’re not building a relationship and standing out and having an emotional connection, then we haven’t got a hope for the future.”

The Estée Edit, by contrast, struggled to connect with consumers in part because it relied on Kendall Jenner’s famous face, but didn't use her star power creatively enough to drive interest in a generic product.

Choose retail channels carefully

In April 2018, L’Oréal introduced Seed Phytonutrients, a prestige hair, body and skincare line that includes plant-based ingredients and sustainable paper bottles that are shower safe. L’Oréal wanted to showcase its commitment to sustainability, and launched the brand in over 1,000 stores and websites to ensure its message reached the maximum number of customers.

That turned out to be a mistake, said Shane Wolf, who launched Seed and manages L’Oréal’s other professional hair care brands, including Redken and Matrix. Customers didn’t understand the product — or why it was worth the premium price.

“It’s something a lot of indie brands would kill for, and it’s something I should not have done,” Wolf said of the ultra-wide launch. “You cannot just put a $24 bottle of shampoo in a paper bottle on a shelf next to a $6 bottle and expect it to sell just because it’s in a paper bottle. We really have to communicate.”

Seed is in such disparate retailers as Neiman Marcus, Sephora, Aerie and Pharmaca, as well as an e-commerce site. Wolf says the brand is scaling back in the next month to focus on retailers who can tell Seed’s story. He said end-of-aisle displays at Ulta have proven successful.

Focus on community

P&G’s My Black Is Beautiful, which launched at 2,700 Sally Beauty stores, was inspired by the conglomerate’s 12-year-old community of the same name. The group has almost three million members, primarily black women, across social media platforms, with Facebook being the largest. The forums have been used to discuss issues — beauty and otherwise — that black women face. In addition to traditional focus groups, P&G has asked its community what they want in hair products. It’s similar to how Glossier used its loyal, engaged Into the Gloss editorial community to crowdsource its products.

It's something a lot of indie brands would kill for, and it's something I should not have done.

“We looked at the platform and it really had become almost a brand for us, with a lot of equity and trust and authenticity behind it,” said Lela Coffey, brand director at P&G. “Procter is very, very good at doing big things, and we are really developing the muscles to start to do some of these small things.”

Find a more nimble partner

P&G partnered with venture capital group M13 to help it build brands more quickly than its vast corporate structure typically operates and to launch brands in categories that don’t exist within the company. It launched an insect repellent brand called Zevo in house, but the menopause brand Pepper & Wits is the first to come out of this new structure.

P&G came up with the name, developed the products and started to sell it directly to consumers via its own e-commerce site as a test. But within M13’s Launchpad, Pepper & Wits is now its own C corporation, a shareholder-owned company that is separate from P&G both M13 and P&G sit on the board. M13 will build out the digital platform, build a community and likely launch more products with the help of P&G’s R&D team.

“We’re great at cutting edge venture innovation, great at finding entrepreneurial talent,” said M13’s Sabeena Ladha. “What P&G is great at is IP and scalability. We’re trying to combine those two worlds and build a flexible partnership.” The hope is that future brands will “exit” to P&G. Another personal care brand is coming out of this partnership at the end of the summer.

While all these strategies are different, there is one common thread in these brands, and that’s the fact that your parent company needs to see you in a different way.

“You’re having a baby in an environment when everybody else is at college,” said Flesh’s Gorman Round.

THIS WEEK IN BEAUTY

Lady Gaga is launching her new beauty line with Amazon. The superstar spoke exclusively with BoF about launching her makeup kits to multiple markets simultaneously and why she chose the online behemoth as her retail partner.

India's beauty market is growing. Beauty e-tailer Nykaa.com has been dubbed "India's Sephora" in a market projected to be worth $20 billion by 2025.

Kim Kardashian, is that really you? Fans were confused by images of Kardashian meant to promote her new KKW Beauty launch, the Sooo Fire makeup collection.

Space NK is in expansion mode. With double-digit sales growth, the UK-based retailer's new chief executive Andy Lightfoot plans to open more stores across the UK, Ireland and the US.

Jo Malone London taps its first-ever male ambassador, John Boyega. The force is strong with the luxury fragrance brand. Boyega (best-known as Finn in the new Star Wars films) joins brand ambassadors Karen Elson and Poppy Delevingne.

Ulta faces backlash over its Frida Kahlo makeup line. Fans weren't happy that the retailer digitally "plucked" Kahlo's famous unibrow.

Unilever makes its supply chain more transparent. The global personal care company released the names of its paper and board suppliers as part of an initiative to eventually "have zero net deforestation."

Indeed Labs finally launches in the US. The 8-year-old Canadian skincare brand (its former co-founder was Deciem's Brandon Truaxe) launched into Ulta this month.

Beauty executive Jeffrey Davidson dies in a motorcycle accident. The CEO of JD Beauty and Goody over saw brands like Ouidad and Wet Brush.

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