When Angie Tebbe and Eric Carl launched their women’s ingestibles company, Rae Wellness, last September, they found that running it wasn’t dissimilar to their experience working as Target executives — though their budgets and resources were much more limited. Tebbe and Carl had helped carve out nascent brands at the Minneapolis retailer for about 13 and 14 years, respectively. Tebbe spent most of her time in fashion and home merchandising, while Carl concentrated on commodities, like health products and grocery.
In addition to fueling the founders’ interest in wellness and the supplement category, where Rae Wellness sits, their experiences at Target gave them insight into the mass-market female consumer, as well as where the retailer had significant white space or was looking to invest. They didn’t get pure beauty experience, but they got a landscape view that has become more important for founders today to possess.
“My experience specifically was in apparel and home, but it really was [about] understanding how to create a brand from scratch, creating assortments against those brands and then manufacturing products,” said Tebbe. “I built P&Ls from the bottom up and then understood the broader marketplace for women.”
Though the beauty and wellness industries have been flooded with founders from left field who have gone on to great success — think Tiffany Masterson with Drunk Elephant, who was a stay-at-home-mom prior to her life as a founder — a subset of merchandisers and product developers are now hoping to make their mark. These executives have experience getting ahead of the next big trends in retail and are ready to pounce.
“Some founders may have gotten pregnant or gotten a skin allergy and then started peeling away the onion in thinking about a brand [that answered unmet needs], and more power to them. But they didn’t have the experience,” said Tiila Abbitt, founder of clean and sustainable color company Aether Beauty, of founders with far-flung backgrounds. “I know I could do something better.”
In Rae Wellness’ case, its proposition is that no prior ingestibles wellness brands were made exclusively for the mass female shopper. Fellow supplement brand Olly, which sells at Target, appeals to the family with products for men, women and children. Moreover, wellness products by companies like Moon Juice, which is sold at Sephora, are much more expensive. Moon Juice products sell for as high as $60 for a monthly supply, while Rae Wellness’ are $14.99.
New clean hair brand Odele, which is intended to appeal to millennial moms, also fits this bill in having founders from the world of retail. It was co-founded by one-time Target executives Lindsay Holden, a former home merchant, and Britta Chatterjee, who spent time in corporate strategy. In a homecoming of sorts, both Rae Wellness and Odele launch exclusively in Target doors this month. In many ways, Odele is an outlier, most of the other lines that sit in clean hair at Target are from conglomerates like Unilever’s Love Beauty & Planet.
“If you walk the aisles, it’s a lot of existing legacy brands with one retail strategy, so I think it was critical for us to be a part of the brick-and-mortar business model but to also have a robust e-commerce strategy,” said Tebbe,
Rae Wellness launched out of the gate as DTC-only to support its subscription business. As of January, more than 25% of customers have opted into the model.
But this retail exec-turned-founder trend isn’t exclusive to Target. Two of Sephora’s newer bets include CBD beauty brand Saint Jane, founded by Sephora marketing alum Casey Georgeson, and Aether Beauty.
“So many people want to start a brand, but I always tell them to go work for somebody else first. I say that because newer generations may not understand the business side if they go at it alone first,” said Abbitt. “Working at a retailer, you learn very quickly what the big picture is versus learning about one silo or brand that may not be as transferable.”
Abbitt’s time working on Sephora’s first sustainable product initiatives, as well as having a firsthand look at its impending Clean program, directly informed her company Aether Beauty that launched in 2018.
“All of these traditional color brands were coming in to present for Clean at Sephora, and merchants brought me into those meetings. I had tried many of the brands in that space and was disappointed because I was such a Sephora girl, and knew what the Sephora girl was looking for. I helped traditional brands reformulate, and then I realized none of these founders had the kind of expertise I had,” said Abbitt.
That’s largely not experience that one sees in a Harvard or Stanford MBA program, which serves as the training grounds for many brand founders these days.
Though CBD beauty only began to permeate the beauty conversation in 2017, Georgeson saw how invested Sephora was in skin care during her years with the company.
“My time there helped me identify a white space. I felt so compelled that CBD was such a powerful molecule for the skin, but my Sephora experience didn’t help my relationships with vendors because no one wanted to work with me at first because of the perception of cannabis,” said Georgeson.
Saint Jane landed in Sephora stores this month, but it’s the most recent retailer added to its distribution docket. Since launching in early 2019, the CBD beauty line had been on-boarded at other luxury retailers dabbling in the category like Credo and Space NK.
Which is to say, past relationships with retailers don’t guarantee a foot in the door or for these companies to become the next beloved brand. Only Odele had its launch timed to its Target distribution, while Rae Wellness, Aether Beauty and Saint Jane relied on DTC or other retail channels before making their respective jumps into prime time.
“It wasn’t a sure thing, but our DTC business helped support what we thought was a white space, and that aligned with the Target consumer,” said Tebbe.
Georgeson agreed with Tebbe on that point: “It wasn’t like I was slotting in all the people I knew at Kendo and Sephora into roles at my company, though there were touchpoints that helped guide my business,” she said. “Launching a brand was still very much unchartered territory. For as much as I knew, I still had a lot to learn.”