Kohl’s has Sephora, Target has Ulta, and Walmart has been chasing affluent customers with BeautySpaceNK, and going after younger shoppers with Bubble, a skincare brand developed in Israel.
Dollar General isn’t hooking up with other beauty retailers or trying to score prestige beauty brands. Dollar General is partnering with Maesa to bring Believe Beauty and other incubated brands at optimized savings, exclusively to its customers.
Maesa is transforming the beauty industry by incubating and growing meaningful brands globally, said Daniel Woldar, Director of Marketing at Maesa. “Our deep understanding of the constant changing needs of the consumer allows us to create beauty brands that are newer, better, different, and relevant. Through design, formulation, value analysis, and quality of manufacture, we deliver exceptional performance.”
Dollar General is doing something that independent brands and prestige products can’t do: maintaining a level of control over the collection by partnering with Maesa.
“Believe Beauty was built on offering optimized savings, beautiful and high-performing cosmetics that can collectively be loved and shared,” said Woldar. “It’s a go-to brand for the Dollar General customer with unsurpassed accessibility and appeals to a wide audience.”
The brand incudes color cosmetics, skincare, fragrance, nail care, haircare and a new home fragrance line.
“We’re driven by a simple idea: that beauty should be approachable, lovely and fun for all,” Woldar said. “No matter their age or how advanced their routine is, this brand is for those who simply desire beauty they can purchase with confidence.”
Most Believe Beauty products are priced under $5. A recent visit to the website revealed an offer, “Spend $10 on all Believe Beauty products, including skin care, cosmetics and nail care and get $3 off.”
Customers are gravitating to lower-priced brands such as Believe Beauty and continuing to trade down to value channels like dollar stores, said Corey Tarlowe, Vice President of Jefferies. “They’re continuing to trade down into private-label categories.”
Consumers are being much more intentional with their dollars, Tarlowe said, adding that the customer is shopping at places where she can stretch her dollar a little bit further. “That really does, to be quite honest, benefit Dollar General to a really meaningful degree.”
Many retailers see a tough year already, with discount stores reporting mixed earnings. Dollar General’s recent fourth-quarter results saw comps rise 6%, and sales increase close to 18% in the quarter. The company is planning to open over 1,000 new stores on top of the 19,000 it already operates, and the retailer expects to gain market share across categories.
“The setup is one that’s actually very attractive for Dollar General as we look ahead,” Tarlowe said. “More consumers are shopping for groceries at Dollar General. That’s a lower-margin business.”
How does Maesa hit the mark with a broad range of consumers? The customer always comes first, Woldar said. “As a result, we’re all about trying to extract all the value we can for that customer.”
“We believe that beauty is not just in the actual quality and ingredients, but in the entire experience, and that includes the packaging,” Woldar said. “So, we’ve really placed an emphasis on trying to find those key ingredients, and key packaging elements that really make a product as strong and as luxurious and high quality as we possibly can and homing in on those elements.”
“Everything we do is for the Dollar General customer, that beauty shopper,” Woldar said. “When we look at a product we’re bringing to market, it’s not just about the ingredients, it’s not just about the utility of the product—it’s the entire experience.
“There isn’t any surplus value that’s not going to the customer,” Woldar explained. “That’s a winning formula, being able to grow a business while making sure you prioritize the customer. At the end of the day, we are serving them, and when we focus on that, we really deliver.
“We’re very straightforward,” Woldar said. “If we’re going to prioritize what goes into a product, we’re looking at those top priorities and making sure we do those right. Other brands may have elements that we think our customer doesn’t need to prioritize. We can take those out and give that surplus value back to the customer.”
“At the end of the day, our philosophy is that everybody deserves to look beautiful,” Woldar said. “The thing about cosmetics is, there’s a physical component to it, but there’s also an emotional component. Being able to make people feel good, makes it very easy to have this sort of mission statement for the brand.”
“As a low-cost operator, Dollar General is always looking to provide our customers with high-quality products at an affordable price,” said Katie Ellison, Senior Manager of Communications at Dollar General. “The main reason for increasing the amount of beauty products we offer is that store brands as a whole have been embraced by shoppers.”
Proprietary brands are a dependable “ally against persistent inflation and other personal hardships,” Ellison said. “In a survey by the Private Label Manufacturers’ Association, shoppers reported a high level of satisfaction with store brand products they purchased for the first time in certain categories. Even with inflation, they continue to buy them.”
“Right out of the gate, Believe Beauty has been very popular with shoppers, and especially, now, during times of inflation,” Ellison said. “Even people like TV personality Bethenny Frankel [of The Real Housewives of New Jersey] has used several of our products and she compared them to luxury brands, so you don’t have to spend a whole lot of money to get really good-quality products.”
Woldar, who has been overseeing the Believe Beauty business for a little bit over a year as the brand lead, said, “We started with our cosmetics business and then a couple of months later evolved into nail. Color was really our ethos of being able to be inclusive to a broader consumer. Making sure that everybody has the ability to feel beautiful. The price point is a key element of that. We want to include consumers who have been priced out of other brands.”
Believe Beauty consists of about 150 products across several product categories. In 2021, the company expanded into skincare. “We have a much smaller assortment, but it’s really focused on facial skincare and that’s been really successful,” Woldar said. “It’s been really fun for us to be able to expand our ecosystem and provide value to the customer in a different area of the business. In terms of what’s under my management, they’re not the same brand, but they’re in the same family.”
Woldar was referring to Root to End, a haircare business, which has the same mission statement as cosmetics of bringing beauty to the masses. “Our tag line and our ethos is, ‘Honestly priced and honestly good.’”
Maesa recently launched Kōze Place, a new home fragrance brand. “This is all about bringing high-quality products, and in the realm of Kōze Place, luxury packaging like the category hasn't seen before,” Woldar said.
“At the end of the day, we’re an inclusive brand and we want to make sure inclusivity extends from skin color tone all the way to income, gender, etc.,” Woldar said. “One thing that's different and sets us apart is that we're designed for this shopper. If you have a national brand, you can be inclusive, but you're trying to reach a lot of different people at once.”
Tarlowe said that Dollar General is actually in “a little bit of a unique position as consumers again are shifting a little bit more into what they need as opposed to what they want. And as they shift into what they need, they’re shifting into items like food, very simply.”
Dollar General has now brought its entire fresh distribution supply chain in-house, through an initiative called Dollar General Fresh. It’s unlocked the ability to drive higher initial markups on inventory purchases and actually drive much better profitability within this category.
So, at a time when consumers are prioritizing what they need over what they want, Dollar General’s “profitability initiatives to bring the distribution of these goods in-house really does play well into the current backdrop and bodes particularly well for profitability for the business over the next 12, 18, even 24 months,” Tarlowe said.
Dollar General is growing at a rate of 1,000 stores a year, Woldar said, adding, despite the shift online as a result of the COVID-19 pandemic, consumers are going back to stores. “Dollar General is making an incremental $100 million of investment into labor, which is really going to help to service the customer better,” Katie Ellison said.
