Glossy 50 2019: Beauty’s New Guard

Q&A with Philippe Lesné, President and CEO, Shiseido Travel Retail

Under the leadership of Philippe Lesné, Shiseido Travel Retail president and CEO, the division has undergone significant strides. In the first half of 2019, the group saw a 17% increase year-over-over earning more than $500 million in sales. The travel retail division opened a new office in Singapore in January. Its most elaborate endeavor was the opening of an art installation resembling a forest at the Jewel Changi Airport in Singapore in May. This experiment also included the Shiseido Sense pop-up featuring an augmented reality try-on feature and a quantum human scanner for visitors to create their own virtual avatars.

How has the travel retail division changed under your leadership?

There have been two periods: First, from 2015 to 2017, we built our foundation by creating our global travel retail marketing team based in Singapore. Since 2018, our goal has been to accelerate growth. 2018 was a very strong year; we grew faster than the [travel retail perfume and cosmetics] market.

Do you think travel retail can be a testbed for the future of beauty experiences?

It plays a vital role in influencing the way the beauty category engages with consumers. We can better understand purchasing behavior through our experiential and digital initiatives like pop-ups, AR and insights through personalized consultations.

How is Shiseido elevating its approach to travel retail?

Historically, it used to be that brands would launch first in a domestic market before expanding into travel retail. Now, we actually see the reverse happening. We are appealing to the aspirational side of consumers through experiences, customer service and products, so that they are inspired and compelled to purchase them.

Trinity Mouzon Wofford, Co-founder and CEO, Golde

Trinity Mouzon Wofford, Golde CEO, co-founded the company in 2017 with her now fiancée to make the wellness category available to a mainstream audience. When Golde came to market, it debuted with a single product: a powdered turmeric and coconut tonic ingestible powder that sold for $29. The line now consists of five products, including two superfood face masks.

April was a big month for Golde: It launched a 50-influencer ambassador program, which Mouzon Wofford credits with increasing the brand’s DTC e-commerce sales by 300%. It also launched in Sephora, adding to its retail network that also includes Goop, Free People and Urban Outfitters. At 26 years old, Mouzon Wofford is the youngest woman of color to sell her brand through Sephora.

“There is always room for luxury in the world, and I love it as much as anyone. But when you get down to it, people want to integrate products into their daily rituals and products need to be affordable,” she said. “For us, it’s about how we can continue to put out great products that are effective, delightful and do that profitably. ”

Shaun Neff, Founder, Beach House Group

As the veil over many beauty incubators has lifted, Beach House Group’s Shaun Neff has emerged as a zeitgeisty brand whisperer. In the last year, Neff has been responsible for some of the buzziest beauty debuts, including Millie Bobby Brown’s skin-care and makeup offering, Florence By Mills; Tracee Ellis Ross’s hair care brand, Pattern Beauty; Shay Mitchell’s luggage and travel line, Béis; and Moon Oral Care with collaborator Kendall Jenner.

“I’m in the business of first thinking about, ‘How can I set a category on fire?’” said Neff. “It starts with incredible products and incredible teams that bring them to life.”

In 2019 alone, Neff said Beach House Group was approached by 100 celebrities and influencers for brand opportunities. Thus far, the company co-created four brands and expects to hit $100 million in sales by the end of the year.

“A follower count does not mean that you are going to have a successful business,” said Neff. “I look at people who will be our partners, not someone who is looking for a hobby.”

Nabela Noor, Beauty and fashion influencer

In 2013, Bangladeshi-American, Muslim, plus-size beauty influencer Nabela Noor was doing social work, with plans to go to law school. She then began making YouTube beauty videos in her spare time, which grew in popularity thanks to their focus on inclusivity and body positivity. Three years later, Noor quit her day job to pursue being an influencer full-time.

Noor, now 28 years old, has become one of the most well-known faces in the influencer space — she has 750,000 subscribers on YouTube and millions of video views. She released her first beauty collaboration with E.l.f Cosmetics in October, which included a full line of brushes, highlighter, lip liner and liquid lipstick. Also this year, she was a judge for Sephora’s #SephoraSquad influencer incubation project.

“It’s been a crazy year for me,” she said. “Releasing my collection with E.l.f. was amazing, because the product is full of the things that make me, me.”

Now, Noor is focusing on her size-inclusive DTC clothing brand, Zeba, which debuted in June and also follows her mantras of self-love. So far, she has released T-shirts and crewneck sweaters, and plans to slowly enter more categories.

“I think there’s been a shift in how brands and content creators are working together,” said Noor. “Influencers have a responsibility to use their influence to make people feel comfortable being who they are.”

Q&A with Scott Oshry and Scott Kestenbaum, Chief marketing officer and senior vice president, Maesa

For more than two decades, beauty brand incubator Maesa has created significant private-label fragrance and makeup businesses for the likes of Zara and H&M. But over the last year, Maesa has shifted from exclusively making brands for beauty retailers and other companies to incubating its own.

Maesa hit $280 million in annual sales in 2018, and its Exclusive Brands sector accounts for 47% of its business. Current brands include Drew Barrymore’s Flower Beauty, Dollar General’s Believe Beauty and Kristin Ess Hair Care. The company expects that to grow in 2020.

While some beauty middlemen have bet on celebrities or influencers with built-in fan bases that can then translate to insta-customers, Maesa is charting its own path. One of the surprises of the year was its Believe Beauty brand for Dollar General that not only brought beauty customers into the retailer’s stores, but also made Dollar General rethink its online business. Behind that debut was Maesa’s chief marketing officer, Scott Oshry, and senior vice president Scott Kestenbaum.

Why did Maesa make the shift toward Exclusive Brands versus existing strictly as a private-label partner?

Oshry: Although we had been doing private label, we didn’t just want to sell products anymore. We thought we could bring a higher level answer to the market with brands. With that new positioning, we are just like a CPG company: We find a white space and service it at every level, including marketing activations, product adds and deletes, margins, market share, and heat mapping.

Why didn’t you attach a celebrity or influencer to Believe Beauty?

Oshry: That was an interesting case study. When it makes sense to work with a celebrity, we do. When it doesn’t necessitate that, we don’t. We wanted to create a very efficacious
color cosmetics line that was not made in China and had an average product price of $4. That was something that existed a long time ago in beauty, but brands have moved away from that positioning and price. Customers still want that.

Kestenbaum: Part of what we were thinking was, “What’s in the best interest of that brand?” In under six months, Believe Beauty organically drove foot traffic and digital traffic for Dollar General. And in September, Jeffree Starr walked into a Dollar General and bought the whole line. When he made a video about how good the product was, it was the No. 1 trending video for 48 hours on YouTube.

Q&A with Michelle Pfeiffer, Founder, Henry Rose

When Michelle Pfeiffer debuted her fragrance brand, Henry Rose, in April, it would have been easy to assume that she was just another celebrity attaching herself to the beauty industry via a licensing deal.

However, Pfeiffer is part of a new guard of celebrities that are upending that old model. In the case of Henry Rose, Pfeiffer was instrumental in establishing every aspect of the business, from its positioning (the brand is one of a handful of clean perfume lines on the market) to its DTC-first approach, at a time when designer fragrance houses have yet to figure out how to sell scent online.

What were your expectations of attaching yourself to a brand when you started exploring the beauty market?

When I first started out, I thought I would end up with a licensing deal. I actually came quite close to signing a deal with a large beauty house, but I ultimately decided to turn it down as I learned that I wouldn’t have full control over the transparency of ingredients. If I wanted complete transparency, then I would need to launch my own company.

The idea of clean fragrance is still a nascent concept; why start there?

When I became a new mother, I started to see the world through my children’s eyes, which led me to question our environment, the food my family ate and the personal care products we used. As I was searching for reliable resources to help me find safer products, I came across Skin Deep, a database founded by the Environmental Working Group, where products are rated by their hazard levels. I went down the rabbit hole. No one ever really questions fragrance, and everything is protected by trade secrets and proprietary information. Henry Rose launched to crack open that last black box.

What has been the customer reaction been?

Since launching direct-to-consumer, we’ve been able to grow our customer base to over 45,000 in less than a year, and partner with retailers like Goop, Perfumarie and The Conservatory. Our customers are responding to the fluidity of each scent and how they work for both men and women. And we’ve learned that our customers love to layer different scents together to create something that feels personal and unique for them. We just launched rollerballs in October, so now they are able to buy Henry Rose in sets of two or five, which makes layering easy. The feedback has been really fun for me to read.

Salima Popatia, SVP of global online customer acquisition and retention, The Estée Lauder Companies

Founded in 1996, the Estée Lauder Companies Online division has become one of the fastest-growing sales channels for the beauty company and its 29 brands. Tasked with maintaining ELC Online is Salima Popatia, vp of global online marketing and merchandising, who has been in her current role since 2015.

During Popatia’s tenure, ELC Online has seen sales rise, on average, 25% every year. Online sales accounted for 13% of total sales in the company’s fiscal year 2018, and there were more than 430 million brand-specific website visits, according to fourth-quarter 2018 earnings. But Popatia thinks of ELC Online as more than just a numbers game.

“Online has become more than a point of sale,” she said. “It educates and entertains, and it’s an equity builder, because people aren’t necessarily coming to shop. They could be there to watch a how-to-video, to chat with a makeup artist or to read ratings and reviews.”

To that end, Popatia and her team are working to evolve the online experience and keep customers engaged with Estée Lauder’s brands. During 2019, a major focus was bringing advertising technologies, including data analytics, in-house. In doing so, the company is enabling better data sharing across the organization, allowing all stakeholders to understand how customers are interacting and allowing for a tie back to digital advertising investments in Facebook and Google. Other recent projects include launching an interactive voice experience for Aveda on Google Home in January 2019.

“Acting nimbly and quickly is a requirement, and it makes or breaks a business,” she said. “Digital commerce is fast-growing, and the expectation of the consumer is growing; she expects us to react quickly.”

From Popatia’s vantage point, some of the biggest opportunities and challenges of the future relate to mobile. While ELC Online typically uses its North American market as a “guinea pig” for various launches before expanding them internationally, the team is closely looking to the Asian market to glean insight into mobile usage. Estée Lauder Companies saw net sales grow by 11% to $3.9 billion in the first quarter of 2020, according to earnings in October, due in part to its strong online business in China.

“It’s our role to empower the shopper and make her feel she is embraced by the brand, no matter where she is,” she said. “As you try to translate that into the digital world, you have to try, test, repeat and perfect it. But it never stops.”

Robert Rosenheck, Founder and CEO, Lord Jones

Robert Rosenheck co-founded his CBD-forward company Lord Jones with his wife Cindy Capobianco six years ago, way before the current preoccupation for all things cannabis hit critical mass.

“Cindy and I had a lot of experience in luxury lifestyle goods, like food and personal care, and when we looked at cannabis back in 2013, we knew it was a consumer product,” said Rosenheck. “This was not solely something for people who wanted to get high and not solely for people who were ill. In the middle, there was a consumer, and it was a huge, addressable market.”

That foresight gave Rosenheck a first-mover advantage and helped establish Lord Jones as a cut above the rest in a market flooded with CBD products in luxury, mass and indie channels. While Lord Jones started in confectionary products, like its signature gummies, it quickly added topicals to its repertoire upon realizing that less than 1% of sales in medical marijuana dispensaries were in skin care.

“The majority of people still didn’t know about CBD, but once they did wake up and find it, we had to be there,” said Rosenheck. “That was always our North Star.”

Lord Jones became the first CBD brand to be sold on Sephora.com in late 2018. Following the legalization of hemp, thanks to the 2018 Farm Bill, it became the first and only CBD brand to be carried in its stores in July. Canadian marijuana company Cronos Group quickly came calling and acquired Lord Jones for a hefty $300 million price tag in August.

“Mainstream consumers care about what they are consuming, they care about what they put on their skin, and they care about brand values, and they’re shopping for cannabis and CBD,” he said. “We wanted to explode the stoner stereotype, and that’s what we’re doing.”

Thanks to Lord Jones and others in the space, CBD is now one of the most actively searched terms on Google. In October, CBD skin care saw a 367% year-on-year spike in searches, proving its mass and zeitgeisty relevance.

While there is a lot of attention being paid to the cannabis landscape, Rosenheck said that with that comes continued consumer confusion. It’s even more muddled as there is not one set of standardized laws around cannabis use in the U.S. (i.e., federal and municipal regulations still conflict).

“We’re at the birth of a new industry, so you need to engage in education and innovation at the same time. Those have to be our two drivers,” he said. “We don’t want to dilute our message, but we know there are new customers to reach every day.”

Rosenheck’s way to get there: “We have to be nimble and pragmatic, take risks, and see where the opportunity is, all while staying true to the brand and what we have already built.”

Somer Tejwani, VP of global marketing, Too Faced

TikTok is widely considered the next “it” social platform for beauty brands to engage with customers and fans, and Somer Tejwani, Too Faced vice president of global marketing, got there first. In June, Too Faced became the first beauty brand to collaborate with TikTok, through its paid Damn Girl mascara campaign. That initiative has since become a model for competitors.

“Among beauty brands, there is not a lot of newness that happens on social,” said Tejwani. “But customers are hungry for something different, and it is our job to find out what’s next and go there.”

As of October, the campaign resulted in a significant lift in awareness for the Estée Lauder-owned brand, with growth of nearly 68% among the coveted Gen Z demographic. The campaign garnered approximately 25 million impressions in four months, and that number is still growing.

“People are obsessed with TikTok and always ask me how I approached it,” said Tejwani. “But the truth is that we said, ‘Let’s not overthink this. Let’s test and learn, and take risks.’”

Vicky Tsai, Founder and chief treasure hunter, Tatcha

When Vicky Tsai debuted Tatcha, a Japanese-inspired beauty brand with blotting papers as its hero product, her nascent idea was met with confusion.

“When we first brought Tatcha to the U.S. [in 2009], I tried to hire PR agencies, and they said, ‘You don’t have a story here. Nobody cares about Japanese beauty or natural, or blotting papers,’” she said.

But Tsai, who had sold her engagement ring to buy 10,000 blotting papers in Kyoto, was confident she’d find a like-minded customer who would use Tatcha and love it. She was right.

Tsai has steered clear of rapid product drops, usually launching just one item per year, and has kept to a focused distribution strategy including Sephora and QVC in the U.S., and Mecca in Australia. Both are unusual moves in a blink-and-you’ll-miss-it beauty landscape.

“It’s very easy to bring a beauty brand to market if you do it the fast way, which is going to a contract manufacturer, pulling stock formulas and stock packaging, putting your name on it and sending it out the door. As a result, you see a proliferation of beauty brands because this is all new and exciting, and there’s a lot of demand from clients,” said Tsai.

As for Tatcha’s approach: “We’re so old-fashioned; there’s nothing about us that’s trendy. The fact that the trend is on Japanese beauty and clean formulas right now is fabulous, but it is nowhere on our minds.”

That steadfast focus has led Tsai to big results. Tatcha is on track to do $100 million in net sales for 2019. In June, megacompany Unilever acquired the beauty brand for a reported $500 million without a formal M&A process.

Though there is much fodder about conglomerates taking the zest out of emerging brands, Tatcha will continue to follow its original focus of Geisha beauty, and take as long as it wants to formulate and launch products, said Tsai.

Moreover, the deal allows Tsai to align herself with purpose-driven beauty company Unilever — a must, given Tatcha’s partnership with girls’ education program Room to Read. Unilever has put cultural consumer values at the front of many of its brands, most notably with Dove. This year, Tatcha funded 3.5 million days of girls’ education through its ‘Beautiful Faces, Beautiful Futures’ partnership with the organization, and it has plans to fund more days in 2020.

“There are over 30 million girls out of school around the world, and as a woman today — especially in the beauty industry — you have the opportunity to help educate other women,” she said. “This is just our way of paying it forward.”

Nicola Kilner, CEO, Deciem

When Nicola Kilner took over as sole CEO of skin-care company Deciem during the second half of 2018, she was tasked with rebooting both the company’s manufacturing and its production, including its most popular skin-care brand The Ordinary. But after Deciem’s founder Brandon Truaxe died unexpectedly in January of this year, Kilner also needed to prove to customers that the Deciem they grew to love would not change.

Kilner jump-started The Ordinary’s retail relationship with Sephora again in January after suspending it in June 2018, and the beauty brand expanded to Ulta in May. A China expansion was also top of mind for Kilner. The brand launched on TMall in September and opened two standalone stores in Hong Kong in November.

“The first half of the year has been about getting things into a good place for Deciem, and the second part of the year has been about launches and creating growth,” Kilner said. “There’s a global demand for The Ordinary, so a goal for 2020 is to understand how to target new markets that want to purchase the brand. We want to give the right access.”

As of 2019, Deciem has shipped over 65 million products, and it earned approximately $300 million in sales in 2018, Kilner said. Moreover, Deciem moved into a new 70,000-square-foot office in its home of Toronto in September to put into practice its transparent message: customers are allowed a first-hand look at the manufacturing process of its products.

Now that the company has a global presence and is back on track for growth, Kilner is focused on bringing more attention and innovation to its other four brands: skin-care brands Niod, Hylamide and Chemistry Brand, and hair-care brand HIF. The vertically integrated company is launching three additional brands in 2020, and Kilner is looking for a second manufacturing location. She said that, within the next five years, Deciem will need a minimum of two more production facilities, likely with one in the U.S. and the other in Europe.

“We want to put the focus back on innovation, because Deciem was built as an incubator,” said Kilner. “It was built to take risks and create new brands.”