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Decoding Peace Out Skincare's Triple-Digit Recipe for Success

February 9, 2022
February 9, 2022
Peace Out

Peace Out has seen tremendous triple-digit growth year-over-year since Enrico Frezza launched the brand in 2017. Despite a general trend toward makeup and away from skincare, the holiday season was strong for Peace Out, which saw a 21% increase in Q4 YoY, exceeding projections and resulting in the largest holiday selling season to date for the business. Industry sources put the brand's global retail sales volume between $40 million and $50 million.

Junior Pence, Creative Chief Marketing Officer of Peace, shared that opt-in channels like email and SMS had the highest conversion rates during the holiday season, while affiliate marketing accounted for roughly 20% of the brand's Q4 sales. He said they, "tweaked paid media efforts in Q4, focusing on audience acquisition early in the quarter to get new customers familiar with the brand, then shifting gears pushing shopping and conversion with very direct ads, no frills, etc. We saw this strategy pay off – some campaigns had a 9x+ ROAS.”

As to be expected, there was a lot of discounting during the holiday season this year. However, the launch of Peace Out's Retinol Face Stick in early December drove a majority of December sales. There was no discounting on the launch, yet it was the brand's #1 SKU and had a halo effect on its sister SKU Retinol Eye Stick. Pence said the results "demonstrated that the ‘age-defying’ category is becoming increasingly important for Peace Out's business and that innovation continues to drive receipts. People are researching and exploring new brands, new products, and new formats."

The NPD Group reported the US prestige beauty industry generated $22 billion in 2021, representing a 30% increase in dollar sales versus 2020, but skincare saw the lowest growth of all categories at 18%, makeup was up 23%, haircare saw a 47% increase, and the fragrance category led the pack racking up 49% in growth. However, globally McKinsey predicts the skincare category will remain strong, seeing the strongest performance in 2021 growing 22%, and a further 10% in 2022. By 2024, McKinsey estimates skincare will account for 34% of the global beauty market.

"Our primary focus since day one has always been on innovative first-to-market products that target a single skincare concern."
By Enrico Frezza, founder + Chief Executive Officer, Peace Out

Enrico Frezza, founder and Chief Executive Officer of Peace Out, said of the category trend and future-proofing his business, "We don't consider makeup a competitor; we consider it an asset in our growth, because the more makeup being used the more skin concerns and conditions people begin to experience, which in turn leads them to us for solutions to the after-effects some skin can have using makeup. We hear this and see this with our consumers."

"We see how consumer shopping and attention habits have changed now; they are more aggressive and they are spending on what they want right now, not future-planning a purchase. They are hyper driven to sales, bundle value pricing and kits, which became a bigger play for us through holiday and end of year and will be a bigger sales driver for us over the next 2 years plus.”

Speaking about how the brand will future-proof the business given the trends, Frezza said, "Our primary focus since day one has always been on innovative first-to-market products that target a single skincare concern. This is step one of how we future-proof our business. We have a clear vision for our brand though 2024/25; this includes a robust product pipleline, growing our hero products, expanding our category pillars."

“Part two is strengthening our retail partnerships with Sephora. Our business has grown wildly year-over-year with them and for us supporting and expanding our product offering, growing our partnership through retail activations, marketing, and social media is a huge focus. Expanding our Sephora at Kohl's business, which was a win since launch, is also a very exciting area for us."

“Part three is driving another year of double-digit commerce growth; bigger and more aggressive marketing spend and objectives that will allow us to support global acquisition and retention; expansion of the brand into new territories and platforms; and a greater focus on understanding our next gen of consumers, current consumer, and evolving shopping habits. This strategy includes what we are calling ‘Generational Skincare Shopping,’ which we are seeing as becoming a major driver in 2022 and beyond."

In addition to the strategy above, the brand began addressing supply chain fragility in 2020 to support international expansion and growth. The business moved from a 3PL partner to an organization with global warehouses anticipating the need for localization to succeed internationally. It expanded its portfolio of trusted manufacturing partners capable of scaling in the current environment. And put more emphasis on planning and adjusting timelines to meet demand and deliver new product launches.

Peace Out projects another year of significant growth in all channels while opening a few new key partners like Amazon and delivering another triple-digit growth year for 2022. Taking the learnings from 2021 of remaining nimble, meeting the customer where they are, and letting the data inform decision-making.

While planning for success, Frezza predicts "2022 will also be a year of uncertainty due to COVID, supply chain fragility, changing purchase patterns from consumers, more competition than ever before… yet always remember that we must stay true to who we are as a brand but evolve and grow with the consumer."

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