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BeautyMatter FUTURE50 Insights and Inspirations

Published May 4, 2023
Published May 4, 2023
Joey Shangrila

Big names in beauty encompassing retailers, brands, investors, suppliers, and press came together on April 27, 2023, for the first BeautyMatter FUTURE50 event held in New York City. The day was packed with engaging panel discussions, presentations, and networking events designed to prepare the industry for what the future holds. Following are synopses of the wide range of discussions hosted by the BeautyMatter team.

Making Sense of the Beauty Investment Landscape

“Just call Carol” became a common refrain following Carol Hamilton’s opening presentation at BeautyMatter’s first FUTURE50 event.

Hamilton, L’Oréal’s Group Vice President, Acquisitions and West Coast Headquarters, said that despite a slowdown in merger and acquisition activity associated with the economy and bank issues, she’s on the prowl for deals.

Known for her uncanny ability to spot companies with potential, including Urban Decay, IT Cosmetics, and Youth To The People, Hamilton shared her unique perspective on the landscape with BeautyMatter COO John Cafarelli and how brands can catch her eye.

Growing via acquisition has been an important strategy for the world’s largest beauty brand. “L’Oréal considers itself a serial acquirer. The only brand we created in-house is L’Oréal,” said Hamilton of the portfolio, which also includes powers like Maybelline, NYX, and CeraVe, and recently acquired Aesop. L’Oréal also has a corporate venture fund called BOLD to invest in start-ups around the world.

Beauty is at the forefront of merger and acquisition activity, with attention stretching beyond strategics to “all types of investors,” Hamilton said. The fact all of these different financial teams are interested in beauty further validates this incredible category,” she said. “Everyone is competing for the same products.” The category, she noted, is one of the most stable industries, which makes it attractive to investors.

The industry is moving at a brisk pace. There were thousands of new products launched from more than 200 companies  last year, according to Cafarelli. Hamilton agreed that makes finding the jewels harder. “I used to know every brand and every shade. It has changed so enormously,” Hamilton said, while ticking off what catches her attention.

A brand needs a strong founder’s story and a reason for being. Founders and their expertise are important to L’Oréal’s growth, which has been fueled by acquisitions. Hamilton used Urban Decay as an example of a brand that filled white space, but also taught L’Oréal about social media, which was a novel approach at the time.

"Also, a brand has to have a perfect DNA and needs to be layered so that when the context of the times changes you can pivot and evolve. You are not single-focused,” she added.

While the founder’s goals vary after a sale, L’Oréal encourages the people who put their heart and souls into brands to remain on board. “Founders can stay forever,” she said, noting that Lisa Price of Carol’s Daughter continues to help shepherd the brand. Sometimes founders, however, get an itch and want to create again after a few years.

Hamilton concluded with advice to have fun along the way and never pass on opportunities. “Find a way on your calendar to do what is important to you.” And if you are looking for an investment, you might want to call Carol.

Retention Is the New Acquisition for Gen Z

Beauty companies better not dial in products or marketing campaigns for Gen Z. A sought-after demographic, Gen Z is ultimately misunderstood by marketers. Nico Perdomo is co-Founder and CEO of Catch, which is changing the way consumers pay for things online. He said a “growth at all costs” mentality that fueled marketers’ obsessions with customer acquisition is expensive and is not resonating with the Gen Z cohort.

“Gen Z shoppers are not signing up for the Macy’s credit card,” Perdomo said. “One of our partners told me, ‘I window shop all the time. I don’t pull the trigger.’” She pulled the trigger when she saw that a brand was speaking to her directly. “The key to this generation is that you can help her feel savvy and you’ll be rewarded.”

Moderator Kelly Kovack, Founder and CEO of BeautyMatter, said direct-to-consumer channels have higher margins. “As a brand, how do you keep customers shopping? The ecosystem that they’ve built, the samples—there are so many different touch points that they’ve built. If brands want to win over younger consumers, they have to meet them where they are to earn their loyalty.”

“At the end of the day, we have a great loyalty program called The Hive,” said Tiffany Marie Corpuz, Senior Director, Ecommerce, Farmacy. “The thing to do is think about the customer journey. We hope retailers will help build a consumer network. It’s also a community. They’re good shoppers.”

The Evolution of “Center Brained” CMOs

The digital revolution altered the relationships between brands and consumers while amplifying the responsibilities of chief marketing officers. A trio of innovative CMOs—Beautycounter’s Luana Bumachar, Haus Labs by Lady Gaga’s Kelly Coller, and Michelle Crossan-Matos of Ulta Beauty—shared their strategies with BeautyMatter CEO Kelly Kovack. They all agreed as CMOs that they “have their fingers in everybody’s sandbox.” 

Ulta Beauty combines the rich data at its fingertips with its boots-on-the-ground reports from stores to fine-tune its marketing for its guests, said Crossan-Matos. The retailer has one of the largest databases in the industry. “We have more than 40 million [Ultamate Rewards members] telling us exactly what they want,” she said. “With Ulta Beauty, the consumer is ahead of the industry. They can vote with their dollars. Everything centers on our guests. I like to put myself in our guest’s shoes.”

A piece in the marketing puzzle Crossan-Matos noted that doesn’t get enough credit is its associates. “We listen to people in our stores,” she said of the feedback gleaned from sales floors. Focusing on long-term growth rather than short-term gains is top of mind for Crossan-Matos. The data it has gleaned is used to design its stores with an eye on optimizing adjacencies. The information also opens up opportunities for Ulta to personalize marketing. Ulta Beauty strategies paid off as Ulta Beauty cracked the $10 billion sales market in 2022.

Haus Labs relaunched and redefined its brand last year with a clearly defined marketing plan centered on the intersection of art and science. "We are a brand innovation-first company. The brand’s DNA is what at the end of the day drives all of our decisions from how I built the team to how we all work together,” said Coller.  “It starts from there.” She pulls from her background in art, design, marketing, and retailing to reflect the vision of Haus' founder Lady Gaga. “Our structure is that of a small agency,” she added. “We are a very small team. We've planned out all of our marketing and creative for the next three years; but we can also move quickly.” 

Storytelling is at the heart of Haus’ message. "If you are not a storyteller, you won't survive, especially in digital." Conventional wisdom might suggest Haus Lab's fan base mirrors Lady Gaga devotees. That's a big part, but Coller said the power of the product lineup also appeals to beauty fans who are "obsessed the high-performance, pigment-rich products with marketing that speaks to them." Coller said. The brand creates its own TikToks, often tapping Lady Gaga as the star. One TikTok generated 10 billion views.

For Bumachar at Beautycounter, the brand’s calling card is its strong position as a trailblazer in clean beauty. Founder Gregg Renfrew’s efforts on Capital Hill have helped bring legislation to the industry. “For the first time since 1938 we have a new federal law,” Bumachar said.

Beautycounter’s key to success is its team of 50,000 sellers who will now be joined with physical exposure across Ulta Beauty. “The power of omnichannel opens up more chances to get this brand to more people. The more we build this community, the better it is for the next generation,” she added. 

“With Beautycounter you don’t have to compromise,” she said, adding that the products are not only made without a “never” use ingredient list but are effective. “Too often clean products are expensive and ineffective.”

In tandem with expansion into Ulta Beauty, Bumachar highlighted the reveal of the brand’s largest campaign to date called Raise Up Beauty. Regarding teaming up with Ulta Beauty, she concluded, “The consumer is driving the change. Beautycounter and Ulta want the same thing—to get cleaner products with more transparency to consumers.  It is a sweet spot when we come together."

The Future of Personalization Beyond DTC

The panel discussed the importance of tailoring the customer journey and product to unique client needs. “The reality is we do have incredible personalization,” said Alexandra Papazian, CEO of Function of Beauty, which specializes in customizable hair, skin, and body care products. “People give us information about their hair type and scalp, and we build a product tailored to their unique needs. Beyond that, it’s the whole customer experience.”

Sabrina Tan, Founder and CEO of Skin Inc., talked about the company’s latest innovations, including an LED treatment for “your 360-degree wellness. We curate customized skin health regimens made possible by artificial intelligence,” she said. “People’s needs change from pregnancy through menopause. It’s very up to the individual. Your skin is uniquely yours, so customize, don’t compromise.”

Asked by moderator John Cafarelli, COO of BeautyMatter, if there’s been any backlash to data collection, Papazian said, “We don’t do returns. It’s a very low percentage. Usually, people find the right product. It’s well understood by customers that we don’t sell their data. It’s really part of using information to craft something unique for you.”

Sarah Rose, Chief Product Officer at IPSY, a personalized makeup subscription box, said, “There are hero products in the box. We have an opportunity to do a lot more education on social media. Our customers understand the benefits of collecting data. If anything, we talk about how we can get more data from more of our customers.”

Building a Modern Heritage Brand

Bobbi Brown teamed up with her son for her second act and they’re building a different type of brand, leveraging what she learned from her iconic eponymous color cosmetics brand she sold to Estée Lauder in 1995. "When I started my first company, I didn't know what I was doing. I learned a lot on the job. Flash-forward, I know what to do, but more importantly, I know what not to do," Brown told BeautyMatter Founder Kelly Kovack in a one-to-one chat about Jones Road, the brand she founded after her non-compete expired in 2020 during the pandemic and a week before the presidential election. “And I did it from my computer wearing shorts and a sweater,” she said.

She’s also realized the value of being open to what she doesn’t know and much of that is the new rules of social media. She revealed that her secret weapon is her son Cody Plofker. “It is so bizarre that he’s my child,” Brown said. At first, Plofker didn't want to leave his career to join the family business. At first, he was consulting and filling in part-time; when offered the role at Jones Road, he said, “Absolutely not.” Today he’s the CMO; his wife is the Director of Social. “I’m really nice to them because I want to see my granddaughter,” Brown quipped.

Even with family at her side, jumping back into a brave new world of beauty was daunting. "I am fearless and I'm a worrier. Some things work and some things don't," she admitted. One video that worked was one Brown thought would get negative responses. After an influencer complained about her product, Brown “clapped back” in her own post that the user didn’t apply the foundation correctly. The back-and-forth became known as foundation-gate.  "Foundation-gate is a real thing," she said about the buzz the post created. "I called Cody a couple hours after I did it and said, 'Don't put that up.' He said it was too late. The train had left the station. It went viral and put the foundation on the map and quadrupled our business." She's had several posts go viral, including her debut on TikTok where she asked people to submit questions for her to answer.

It isn’t a strategy to blow through supplies. “Not that we tried to go viral. TikTok makes it hard to predict,” she said. Brown relayed the challenge of filling orders for Miracle Balm. When the team discovered 2,500 products in a warehouse, they thought their issue was solved. “But they were not in boxes, so I said, ‘Go to King’s [supermarket], get a wide sandwich bag and put the ingredients in it,’ and we sold it right away.”

“We're looking to do things with more staying power,” said Plofker. He credits Meta for doing a good job and YouTube is something the company is considering. Jones Road has also managed to stay in stock, although the Jones Road mascara had a waitlist last year.

Plofker and Brown were told to get an agency to handle its strategy, but the company has done fine on its own. Brown isn’t afraid to turn to young talent. “Our creative director is 25 years old and she's killing it. I want young people to learn from me, but I want to learn from them, too."  The traditional channels Brown used to build her namesake brand, like TV appearances and magazines, don't move the needle as much anymore. "I used to go into stores and see maybe 100 people; 100 people isn't anything anymore. On TikTok or Instagram it is thousands and thousands. Those things still matter to me, but Cody's strategies are what works."

Physical stores weren't in the blueprint, but a few sites were too good to pass up, and there are now locations in Brown’s hometown of Montclair, NJ, in Greenwich Village in New York, and East Hampton (fun fact, Jones Road was named while driving in the Hamptons on Jones Road). Jones Road is also sold at Liberty London, a favorite of Brown’s. “Some people don’t have a platform and need a physical store. But now I guess we have a physical strategy,” she said of the plans to open a few stores a year.

“When we sold the first company, they wanted me to sign a non-compete clause. I was 34 and figured I’d be in my 60s by then [the end of the noncompete] and there was no way I was going to work.” But as the noncompete expired, Brown found herself contemplating a new company. “Everyone said ‘Don’t do it’ but I did it. I feel like this is a playground for me. I have so many ideas. I love the beauty industry. I love the people and I'm having fun.”

Understanding the Indian Beauty Consumer

After lunch, the sessions continued with a conversation between BeautyMatter Founder and CEO Kelly Kovack and Priyanka Gill, co-Founder of Good Glamm Group, and CEO of the Good Media Co. division, which consists of POPxo, ScoopWhoop, Baby Chakra, and Miss Malini.

India is the eighth-largest market in the world for beauty, and Indian start-ups are hot, with a new generation of entrepreneurs building direct-to-consumer brands that have won favor with investors. During the session, “Understanding the Indian Beauty Customer,” Priyanka Gill, unpacked what that means for brands looking to scale in the Indian market.

“India is a very large and well-populated market,” said Gill, who is based in London, and invests in lifestyle brands and early-stage technology start-ups. “India is a very brand-poor country. This creates opportunities to launch new or new-to-the-market brands. It’s a very brand-friendly market.”

Important when launching in India is having an omnichannel strategy with brick-and-mortar units and an online storefront, Gill said. “Right now, shopping centers and area pharmacies carry our products. You have to have a brick-and-mortar and digital strategy.”

Brands don’t have to redefine themselves for the Indian market because “there are many similarities between India and the world’s brands,” Gill said. “The Indian consumer is very value conscious and interested in [sustainability] and the environment. If you’re looking to go to India, you have to respect the customer and who she is.”

“The Indian government is doing a lot of great stuff. It’s harder to transact in the US than it is in India,” said Kovack, the moderator of the session. “There’s almost been a paradigm shift. Luxury brands such as Christian Dior have been in India for more than a decade. The Indian customer is almost waiting for you,” Kovack said, referring to luxury brands. “There’s a perceived notion that luxury is better.”

The Evolving Art and Science of Product Development

Product development, perhaps more than ever, is linked to successful beauty brands. Innovation has become a critical differentiator, and a hot hero item is a powerful growth lever. Product development is the fusion of science and art—and now big data, social listening, and AI enter the fray.

By listening to consumers, Topicals identified white spaces in the market. Products to address those gaps have been a key to the brand’s success, according to Kamen, Vice President of Product Development. One inspiration was to develop options to commodity products like Eucerin in more aesthetically pleasing ways. The company has a lot more ground to cover. “There are a lot of conversations that are not being held. We must speak to every population,” she said.

Products that help elevate mental health is baked into the brand’s DNA. Upon its launch, Topicals, whose investors include Gabrielle Union and Kelly Rowland, swiftly became one of the fastest-growing brands at Sephora.

Kamen said she sees a lot of products moving to in-home solutions, which is evening the playing field. Additionally, there are new regulations brands must adhere to, especially in regard to conscious formulations. “My no-no list is getting long,” Kamen added.

Operational excellence is important in beauty creation, according to Lorne Lucree, Chief Innovation Officer, Head of Atelier by Voyant Beauty. The company works with brands at every stage of product development, he said.  “It is the less sexy part, but you can’t get a product on the shelf without operations.”

Technology is removing some of the friction. “We can do 20 minutes [research] that used to take days,” Lucree said, citing the example how at 4:00 a.m. the morning of the presentation, he was able to learn everything about his fellow panelists’ brand, right down to the type of consumers who gravitate to the products along with the brand’s they also like—that information can be used for future product development.

In five years, AI will change the world, according to Tony Jaillot, Global VP of Beauty and Personal Care at Univar Solutions. Jaillot also delved into the buzzy topic of sustainability, especially in a time of greenwashing. “Sustainability is a journey, not a destination,” he said. “Companies need to decide their goals and be transparent. Remember, nobody is perfect.” Natural is not always better, he explained, because sometimes acres of land are destroyed. “I'm a big believer in biotechnology. I see biotechnology in the future as a way to address sustainability."

The trio added that technology is a tool, but it won’t supplant creativity. “The magic is never going away; there is only so much ChatGPT can do,” Lucree concluded.

Redefining the Boundaries of Beauty

The panel looked at technology, science, and representation to express the boundless changes that are coming as advances in science and technology are accelerating the shifting beauty landscape. The three pioneers on the panel discussed rethinking the meaning and purpose of the brands and services they’ve created.

The Luum Precision Lash robot may be revolutionizing the process of getting lash extensions, which can take hours and cost hundreds of dollars. “Our mission is to create a robotic solution and foster human delight,” said Nathan Harding, co-Founder and CEO of Luum Lash.

Luum Lash works on the standardized system across all stores that is Starbucks’ modus operandi. “We want to build a globally recognized beauty brand,” Harding said. “We want customers to get the same perfect outcome from a little machine in Cleveland as they would in New York City.”

Humanoid Labs Inc.’s founder and CEO Sandra Soskic said of the brand, which is launching this summer, “We call it skinwear because humans have always expressed themselves in color. We’re taking down the barriers. Everybody deserves this joy. We call it unconforming. We want to be a brand where people have agency over their lives. We have the opportunity to expand to different models and different platforms.”

Junior Mintt, Founder and CEO of Mintty Makeup, described his journey to visibility as “one where I came looking for Paris is Burning and found Berlin Smoldering. I was the only Black trans woman producing a drag show in New York City.”

“I always see myself as a woman,” Mintt said. “The makeup is rooted in transformative properties for anyone who doesn’t want to be seen as a profit margin.”

Mintt said the brand is a tool for beauty to help uncover and discover and redefine traditional beauty rather than being prescriptive and telling consumers what to do. “Decorating our bodies is our form of self-expression. I want the brand to continue to grow and enrich the Black trans community. I’d love to see Mintty salons, I can see Mintty skincare and Mintty haircare. I could see myself opening stores where Black trans people live.”

Who Is the Luxury Beauty Consumer and What Makes Them Tick?

The luxury consumer is alive, well, and ready to spend. That’s according to Jessica Matlin, Director of Beauty at Moda Operandi and co-host/co-Founder of Fat Mascara, and Milton Pedraza, CEO of the Luxury Institute. They discussed the future of luxury beauty with BeautyMatter Editor Carla Seipp.

At Moda Operandi the consumer appreciates the premium and curated beauty assortment the online retailer offers. Some of the brands Jessica Matlin, Director of Beauty at Moda Operandi, highlighted include Westman Atelier (which she called “on fire”), ISAMAYA, and Surratt.

There isn’t just one demographic cohort in the luxury market, according to  Matlin. “I think it is short-sighted to just speak to Gen Z or Millennials. Brands need to speak to all women, across all generations.” Founders such as Gucci Westman, Gwyneth Paltrow, and Bobbi Brown are those who understand how to serve all ages, she added.

There are two types of luxury consumers, according to Milton Pedraza, CEO of the Luxury Institute: the high net worth and the ultra-high net worth. The latter represent 5% of the population, but 40% of luxury sales. The wealthiest look for great value from highly differentiated beauty products. “Wealthy consumers are underserved and under cared for in beauty,” he said. When it comes to serving them, he added, it isn’t even totally just about the product, but the relationships nurtured between the brand and the consumer. “They want to feel people are being nice to them and serving not because they are wealthy, but because they like them.”

Although a digital retailer, Matlin said Moda builds bonds and trusts with customers. The company has a private-client team who serve as personal shoppers. They have the ability to go right to founders to get questions answered or to provide advice on applications.

Both agreed digital can be just as luxurious as physical environments.

There are visual cues that signify luxury. For beauty, that represents a challenge to stay eco-friendly. Matlin pointed to efforts to maintain the heft and beauty of luxury product using faux leather and, increasingly, mushrooms.

Pedraza’s parting advice is to go upscale. “Follow the money. Go upmarket. Downmarket is just a race to the bottom. With technology like ChatGPT, people are going to be able to search the best price and delivery. Anything that is a commodity is going to be more of a commodity.”

Platform Play Creating Synergies and Scale

The session looked at incubators, platforms, and portfolios, which come in a range of shapes and sizes. One size definitely doesn’t fit all. The business models share a similar strategy of creating a centralized entity to launch new brands and operate existing ones.

Michael Brousset, Founder and CEO of Waldencast, a holding company and investment fund that incubates and powers early-stage beauty and wellness brands, said, “The ambition is, we want to create, acquire, and scale the next generation of purpose-built brands. We understand the benefits of big brands. We help brands scale with capital. The reality is that there’s a very limited number of brands that are able to stretch across categories,” Brousset said. “The majority of brands come from one and a half categories.”

Charlotte Knight, Founder and CEO of Brand Agency London, launched her brand, Ciaté London, in 2009, after years spent as an industry insider and well-known nail technician, working backstage at fashion weeks, in salons, and on sets. “I launched Ciaté when the category was on fire,” she said. “The brand launched in the US in 2011 and exploded. It catapulted us as a brand. We grew from being teeny tiny to having an office and warehouse.”

Then the world changed. “We went from being really hot to really not,” Knight said. “Our biggest problem was keeping in stock. A buyer said, ‘We’re shrinking the space.’ We had a huge inventory problem. Our category was shrinking at retail. When the business was tough, we built this huge overhead to prop up the rapid growth.”


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