Entrepreneurs have been taking a stand against exuberant markups. Beauty Pie, stating that luxury products are sold at nearly tenfold their original production cost, built its business model on cutting out the middleman. Instead, the company replaced it with a subscription model that enables customers to purchase lower-priced alternatives to luxury products. The immense success of affordable skincare ranges like The Inkey List and The Ordinary show a consumer desire for lower-priced, results-driven skincare as skincare connoisseurs became aware of unsubstantiated product pricing and overhyped formulations.
In today’s economic climate, beauty budgets are more prevalent than ever, with 84% of Americans planning to cut back on their spending due to inflation. “The economic climate is driving the need for affordable alternatives, but also the general need for more transparency. Consumers are better educated than they were 10 or even five years ago and have different expectations of the brands they purchase,” comments Meg Pryde, founder of Brandefy. “Ingredient transparency is key. You still have some brands that make it difficult to find ingredients online, and they are falling behind. They are never going to make it with the educated consumer of today. Cost transparency is harder because of how different beauty companies define their COGS [cost of goods sold].”
As for the previous consumer belief that a higher price tag equated to a better quality product, Pryde believes this is “absolutely changing. Follow any dermatologist on Instagram and TikTok and they are likely sharing the message that expensive does not equal better—social media and the democratization of knowledge have played a huge role in that.”
After discovering that identical formulations would often be priced up under another brand name and updated packaging during her time as a graduate student, she wanted to offer customers the cold, hard facts about what’s inside their products and put the power back into their hands with side-by-side product comparisons. Pryde created the app while still studying for her MBA in Entrepreneurship at the University of Virginia Darden School of Business. She cashed out her personal retirement account to fund the beta version launch in April 2018.
The Richmond, Virginia-based company has taken part in the Lighthouse Labs accelerator program, receiving $20,000 in funding and mentorship during its launch year. The app features not only side-by-side product comparisons (compiled by Brandefy’s team of dermatologists, aestheticians, and beauty enthusiasts), listing prices, and similarities, but also helps users find cruelty-free, clean beauty, and more sustainably packaged alternatives to their favorite products. In community forums, users can post and reply to product queries from fellow Brandefy users and put together their own skincare routines. At present, the app has seen over 500,000 downloads and 20,000 users per month. The company also has a 300,000-strong following on Instagram.
The company reports that the top ten searched brands are Charlotte Tilbury, Drunk Elephant, Fenty Beauty, Tarte, Tatcha, Laura Mercier, Glossier, NARS, Glow Recipe, and Clinique―with vitamin C, setting spray/powder, and retinol leading the product categories. Pryde notes Hourglass, Laneige, and Contour as brands gaining steady popularity among the app’s users, and that younger demographics are looking for brands such as “Charlotte Tilbury and Rare Beauty, in the e.l.f price point range … while slightly older consumers who have had more time to build wealth are looking for alternatives to higher-end products like SkinCeuticals and SK-II.” Skincare was the reigning search category for a long time, but makeup saw an incredible uptick in early 2021. “You think of people as being extremely loyal to their foundations, but foundation has actually scooted to the top of searched categories. It shows that even consumers who are very loyal to a product are willing to make a change right now because of the economy,” Pryde comments.
With Brandefy Skin, she wanted to offer cruelty-free formulations that can compete just as much with the mid-range and luxury heavyweights at a wallet-friendly price― “accessible luxury products at an affordable price.” With the buzz around the app behind her, she managed to secure $1.7 million in seed funding in 2021 through investors such as Concept to Co, Red Bike Capital, The Community Fund, and Wander Beauty co-founder, Divya Gugnani. The company has continued to attract investment since. “I feel very lucky that Divya [Gugnani] is an investor and mentor and just a great supporter of female founders in general. When I created the app, I knew that if we could create a community, we would figure out how to monetize it later. I ended up taking on angel funding to be able to grow that community and eventually launch our skincare line,” Pryde explains.“It just became the natural evolution and course of the business and the more I learned about it, the more conviction I had around that we can make affordable products, take out the middleman, and give them directly to the consumer far more affordably. We've raised over $3 million to date.”
Given her background in consumer packaged goods, working on Brandefy Skin was a personal “coming home” for her, albeit with a new perspective. “I was so shocked to find out how high the margins truly are in beauty versus most other industries. Having seen our results and now with thousands of purchasing community members, I know we made the right decision,” she remarks.
Pryde partnered with Judi Steward, now Chief of Product Development at Brandefy Skin, who previously developed products for Estée Lauder and Chanel, to create the formulas over the course of two and a half years. The range debuted with the Daily Triple Serum in September 2021, which, priced at $34 for 50ml, shares five of the main ingredients in DRMTLGY Needle-Less Serum (niacinamide, peptides, hyaluronic acid, vitamin E, and panthenol) that retails for $69 at 30ml. Its latest and seventh launch, AHA + BHA Resurfacing Mask ($39 for 50ml) is said to rival Drunk Elephant’s T.L.C. Sukari Babyfacial ($80 for 50ml) thanks to a 25% AHA/ BHA 2% blend, boosted with chickpea flour. “We want the formulas to be at the research, science-backed level of efficacy, so we're not skimping on the actives. We're defying the big brands by educating the consumers and the community and being completely transparent,” Steward states.
The data the app provides them with directly impacts the product development process of Brandefy Skin, so Pryde and Steward can offer consumers the very product alternatives they are searching for. “Our whole purpose is to make luxe quality beauty products and make them accessible through our platform and product. We obviously identify the gaps in the market via the search bar,” Pryde says. “I love having the flexibility to say, based on your data, we should have these ingredients. We're able to reach out to our community and see what's their preference,” Steward adds.
But Pryde also hopes to create impact beyond her own brand, ushering in more democratic pricing principles. She states: “Up-and-comers like ourselves will naturally put pressure on bigger beauty companies to make sure they are charging for things that have real value versus marketing and labels. I am talking about innovation in sustainable packaging, real formulation research, and aspects of products that go beyond marketing hype and lip service.”
The customer figures show that Brandefy followers are rewarding that transparency in spades. With savvy consumers perpetually on the hunt for more affordable options to extravagantly priced skincare, the numbers flocking to the app are likely to continue growing exponentially and provide Brandefy Skin customers in-the-making.
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