The industry is at a crossroads regarding the clean beauty debate, with some settling on the side of all natural, others on the side of synthetics, and others in the tried-and-tested traditional camp. Consumers have begun questioning the nebulous concept of clean, scrutinizing claims brands are making with controversy playing out on social and in the media, yet there is no discounting the category opportunity.
A little late to the clean beauty game, Walmart has launched Clean Beauty at Walmart, an online shop merchandised through the lens of the retailer's Made Without List (MWL), consisting of over 1,200 ingredients. Walmart said its definition of what counts as clean would evolve over time. The initial assortment consists of more than 900 items, with more being added. Clean beauty usually comes at a premium, but 80% of Walmart's assortment sells for under $10.
“To rigorously develop this list, we reviewed state and federal regulations, consulted suppliers and called on experts such as the Environmental Defense Fund,” Walmart Vice President of Beauty Creighton Kiper said in the announcement. “And we listened to customers—who increasingly desire products without certain ingredients as well as better transparency around what goes into them.”
Sephora launched its Clean At Sephora program and seal in 2018, and updated the criteria by adding a subcategory of products called Clean + Planet Positive for clean brands focusing on climate commitments, sustainable sourcing, responsible packaging, and environmental giving. Ulta and Target followed suit in their quest to capture the conscious beauty consumer launching their own clean standards.
Walmart might be playing catch-up to capture the conscious beauty consumer, but better late than never. The global clean beauty market was valued at $7.22 billion in 2022 and is expected to reach $14.36 billion by 2028, growing at a CAGR of 12% during the forecasted period of 2023-2028.
The Clean Beauty initiative is an extension of Walmart’s broader commitment to regeneration. Senior Vice President of Sustainability Jane Ewing said, "It’s all about meeting customer expectations. Walmart aspires to become a regenerative company, and this means working to have a lasting, net positive impact on society through our products, services and business practices."
She continued, "To do so, we adopt a shared-value approach to business, believing that we can create a strong, resilient world by addressing the issues on the minds of our stakeholders through our business. Our customers want to buy products that reflect their values, and for many customers, that means providing greater transparency into product formulations and products made without certain ingredients."
Last year, following on the heels of strategic tie-ups between Sephora x Kohl's and Target x Ulta, the world's largest retailer took the industry by surprise, unveiling a partnership with luxury beauty retailer Space NK. The BeautySpaceNK's in-store concept was launched in 250 Walmart stores with 15 brands and a curation of 600 products across categories from the Space NK merchandising assortment. Word on the street is the concept is working.
Walmart may move slower than its competitors, but on the retailer's Q4 earnings call, the company’s beauty offerings were highlighted by Walmart’s CFO as both high margin and a high priority. Health and beauty products, Walmart's second-biggest retail sales contributor, comprise almost 11% of yearly sales, but remained flat at 6% growth.
Walmart began its beauty evolution in 2021, launching 40 emerging brands and competing with the likes of Target, Ulta, and Sephora for launch exclusives with beauty's hottest new brands. One of the biggest challenges for Walmart is also one of its advantages—its massive store count. Rolling out new programs is a herculean task at this scale, but Walmart has undoubtedly made its mark in the beauty landscape.
The list of ingredients and products that have made the cut for Clean Beauty at Walmart have left many scratching their heads.
In the absence of “clean” regulations, retailers have led the way establishing what it means for a product to be considered clean. This role has recently put Sephora in the cross hairs for its "Clean at Sephora" program being slapped with a class-action complaint in New York late last year. The question is will this Walmart program move the clean conversation forward or add to the confusion. Only time will tell.
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