This week I look at Sephora’s ambitious customized-beauty play, which includes a new online and in-store partnership with Function of Beauty and the retail expansion of skin-care brand Proven.
Customized beauty is steadily taking off in brick-and-mortar retail. The latest development is the expansion of Function of Beauty hair care to 280 Sephora doors and Sephora.com on Tuesday.
For Sephora, Function of Beauty has developed a new exclusive line of bond-building hair products called Function of Beauty Pro. It includes four shampoos and four conditioners, for straight, wavy, curly and coily hair. It also includes nine product boosters for hair goals like anti-frizz and added moisture, which can be mixed and matched. Products retail for $4-$28.
This is not the first time the 8-year-old brand has expanded to brick-and-mortar retail. Function of Beauty first expanded to Target in Dec. 2020 with a similar concept of offering base formulas for different hair types and booster packets based on the desired end results. It continues to have an exclusive partnership with Target for these products. It is Sephora’s first foray into customized hair care, although it added the customized skin-care brand Proven to Sephora.com in January.
“Function of Beauty Pro takes [our brick-and-mortar concept] further for the more sophisticated beauty enthusiasts and for people with more demanding hair,” said Marianna Trofimova, CMO of Function of Beauty.
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Products were available on Monday as a 24-hour Sephora app exclusive. Online product pages include informative videos and static graphics explaining the science of the brand’s Adaptive f3 Bonding Complex. In-store signage includes a QR code that’s built into gondolas. It provides access to professional advice and product demonstrations to help people customize their routines. Trofimova said the Target retail experience showed Function of Beauty that shopping for customized hair care was desirable in-store but that the company had to make the purchasing process easy and intuitive.
“We see customization as a transversal category relevant and appealing across all channels: DTC, prestige and mass,” said Alexandra Papazian, CEO of Function of Beauty. “These channels are complementary, despite the products sold in each being different, which is also a pretty unique situation compared to most beauty brands. As such, we will continue to develop our omnichannel strategy and promote customization and its benefits, leveraging retail scale and in-store visibility to bring the brand to life in a very tangible and relatable way.”
The 8-year-old brand raised a $150 million Series B led by L Catterton in 2020 and reportedly sought a $1 billion valuation. Papazian declined to share any recent sales figures or expectations for the Pro line.
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Sephora is one of several retailers attempting to replicate the DTC customized beauty experience in-store more ambitiously. Target brought in Function of Beauty and picked up the customizable skin-care brand Pure Culture Beauty in Jan. 2022. In April 2023, it followed that up with two customizable brands: protein supplement-focused Gainful and Ritual vitamins. CVS has also sought to stake a claim in customized beauty amid a larger beauty push, launching Pure Culture Beauty in Nov. 2022. Meanwhile, Walmart brought in customized hair-care brand The Hair Lab by Strands in Aug. 2022, and it introduced beauty boosters for its Olay and Pantene brands in April 2022.
“Sephora is acknowledging all the latest market trends, and they’re very good at that,” said Trofimova. “It took probably five years for Sephora to fully develop the hair-care category, but when you enter a Sephora store now, hair is everywhere. [There are] appliances, premium hair care and also indie brands.”
Papazian added, “[Retail] exclusivity drives focus, engagement, co-creation and, ultimately, a shared vision.”
According to Circana (formerly NPD and IRI) data, the prestige hair-care category grew 13% year-over-year between January and June 2023, compared to 8% for the mass market. The mass market makes up 75% of total hair sales volume, but sales in the prestige market continued growing faster in the first quarter. And sales of prestige hair products that address hair health, such as heat protectants, leave-in treatments, scalp care and hair thinning products, outperformed the overall category.
Trofimova said the brand will take a 360-degree approach to marketing the Sephora launch, with a heavy presence on TikTok and Instagram via a suite of more than 75 paid and unpaid influencers and a custom song by Song Candy. Because the new line has “Pro” in its name, Function of Beauty will also focus on the stylist community. Function of Beauty partnered with celebrity hairstylist Justine Marjan (@JustineMarjan; 480,000 Instagram followers) for the launch. Though Function of Beauty is not a professional brand, the purpose of working with stylists is to “distill” their wisdom engagingly and playfully to show people how they can be their own professional-grade stylist, said Trofimova. Aside from driving sales to Sephora, Function of Beauty will focus on boosting its earned media value during the launch campaign.
“What we’re trying to achieve with this articulation of the brand [in Sephora] is unique and daring,” said Trofimova. “But all of this falls under a strong brand point of view on how we formulate and what kind of products we [create].”
In other Sephora news:
Proven, the customized skin-care brand launched on Sephora.com in January, is finally making its brick-and-mortar debut by August 18. It is the first entrance into retail for Proven and Sephora’s first move into skin-care personalization. Thus far, nearly 80% of those who have purchased Proven through the Sephora digital experience have become Proven subscribers, according to the brand. Ten Sephora stores will carry the digital experience, with four stores in California, one in NYC, one in Dallas and one in Michigan. Proven shoppers can buy a trio of a cleanser, an SPF daytime moisturizer and a night cream for $169.99 — with a subscription, the same set is $129.99.
“This has not been easy, but working alongside the amazing team at Sephora, we have built something unique that will allow even more consumers to build a long-term relationship with our brand,” said Ming S. Zhao, co-founder and CEO of Proven.
The brick-and-mortar experience consists of interactive video displays where customers can scan a QR code to take Proven’s 3-minute Skin Genome Quiz to formulate their personalized skin care. Sephora beauty advisors will be present to answer any questions. In 2018, Proven participated in Sephora Accelerate, the retailer’s brand incubation program that fosters business support for smaller, BIPOC-founded or -owned brands.
Proven’s sales grew nearly 60% in 2022 to over $33 million, according to its 1-K annual filing for the 2022 calendar year. The increase in revenue was primarily due to an increase in customer count, as well as the company’s mid-year acquisition of the fragrance brand Noteworthy in March 2023.
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