German conglomerate Henkel launched its newest brand, Authentic Beauty Concept, in the U.S. on Tuesday in a bid to re-energize its hair-care portfolio.
Sold in the U.S. through Ulta.com and SalonCentric.com, Authentic Beauty Concept is vegan, cruelty-free, and free of parabens and sulfites; in addition, it uses unretouched models in its marketing. Authentic Beauty Concept launched in Europe in July 2019. Henkel, which also owns Dial soap brand and Schwarzkopf hair care, in addition to laundry and adhesive brands, opted to incubate ABC, versus acquiring or pivoting existing hair brands.
In addition to being an outwardly progressive brand, the internal structure of ABC also represents a modern departure for Henkel. Traditionally, Henkel employees have not worked on specific brands, but instead on broad categories or products like hair care and shampoo. ABC, however, has a dedicated team of 11 people, giving it a “startup-style” functionality, said Matt Lowenthal, Authentic Beauty Concept vp of marketing.
“In order to create a brand that truly fits the way the market is moving, which is toward wellness, mindfulness, sustainability, veganism and cruelty-free, Henkel took the approach of building a brand from scratch,” said Lowenthal. “Authentic Beauty Concept was born out of a desire to fit authentically with the trends that we were seeing in the market.”
Henkel has been busy with mergers and acquisitions for the past 12 months, particularly in the North American market. Henkel previously acquired a 51% stake in California-based eSalon in July 2019 and acquired New York-based DevaCurl in Nov. 2019 — the brand has recently dealt with accusations that its products are damaging customers’ hair.
Reportedly, Henkel is a final contender for the acquisition of Coty’s professional hair-care division. On Jan. 1, the company gained a new CEO and CFO. Henkel withdrew its 2020 fiscal forecast on April 8 due to coronavirus and expects its beauty-care division to report a decline in organic sales of nearly 4% for the first quarter. Its hair salon business has been significantly impacted due to closures, but the organic sales growth of the retail business compared to the previous year was stable, according to a press release.
ABC and recent acquisitions are not the only recent update to Henkel’s hair-care business. According to its fourth-quarter 2019 earnings, the company is eager to build up its customer relationship management system for better engagement, provide more customized products and create an enhanced digital experience to help grow online sales across all beauty brands. Moreover, at the end of 2019, Henkel established a conceive-design-implement-operate process to integrate digital and IT teams across the company. At the same time, it also introduced a SalonLab hair analyzer in salons to offer customized products and started to roll out a new CRM in more than 50 countries.
Authentic Beauty Concept’s launch in the U.S. market has some key differences compared to its European debut, and not only because of current coronavirus impacts. In Europe, ABC more frequently works professional hairstylists into its Instagram content strategy, while the U.S. features a balance of professionals and platform-native influencers. For the U.S. launch, ABC is working with two paid celebrity hairstylists as spokespeople and 30 unpaid micro-influencers who were gifted products. Instagram and website blog content for the U.S. market is also heavier in content on how to use products and lifestyle content around wellness, compared to Europe. The distribution dynamics between Europe and the U.S. require ABC to market more directly to consumers, as the brand is sold more through professional salons in Europe.
U.S. launch events are postponed, but Lowenthal said he is hopeful to reschedule them for the third quarter.
Products first arrived at all Ulta stores on March 16, a day before stores shuttered. ABC does not sell direct-to-consumer, but it is planning to use its website, AuthenticBeautyConcept.us, to redirect customers to Ulta’s and Salon Centric’s sites — although this feature has not been added yet. ABC is also building out its search optimization through keyword ad targeting, focusing on phrases like “vegan hair care,” although Lowenthal declined to share ad spend.
“We have had to be nimble and readjust,” said Marisol Barrera, Authentic Beauty Concepts senior brand manager. “We’ve been trying to relay content that’s both informational and introductory to the brand that hopefully gets found organically. We are also showing more behind-the-scenes [content], such as the team working from home.”