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DEERFIELD, Ill. — Innovation is the lifeline of mass market beauty. There are significant changes in how innovation is generated, researched and applied, according to participants in a Chain Drug Review roundtable.
Heather Hughes
Walgreens beauty and personal care executives joined several beauty brands for an in-depth discussion probing how to keep up with the ever-changing world of beauty. The informative conversation also cast a light on the details of getting new products onto the shelves and getting them sold.
Retail executives at the roundtable included Heather Hughes, group vice president and GMM of beauty, personal care and seasonal at Walgreens. Also from Walgreens was Jennifer Volz, senior manager of mass beauty program development. Supplier participants included Jennifer Mulcahy, executive director of commercial North America at No7 Beauty; Dina Goodman, associate vice president of sales + strategic extensions at e.l.f. Beauty; Sharon Holubek-Bank, vice president of customer development at Kenvue; and Bob Stupay, senior director of national accounts at L’Oréal Dermatological Beauty. Scot Meyer of Racher Press moderated.
Innovation in beauty is just as necessary as it has ever been, but achieving it is evolving. Staying on top of trends is vital, but doing so is significantly more challenging in an era of social media, an increase= in customer information and a marketplace in which many developments are taking place — some are even contradictory.
Supplier partnerships are essential in sifting the mass of information available. “We really rely on our suppliers, which is why we’re having these conversations like we are right now, and on a day-to-day basis with our teams,” said Walgreens’ Hughes. “They’re spending their time understanding trends, including real research around what customers need and don’t actually know is an unmet need. When you can identify those two points, that’s when we find our suppliers come to market with wonderful innovation. What we’re seeing in the market, social media, our own research and our suppliers’ input is where we get most of our information about what’s trending.”
Suppliers are more than ready to respond, and what they have found is that, more and more, trend discovery relies on social media. “We love data, but what’s really also amazing is that we have over 14 million community members that show up at our doorstep across all of our social channels. They are hungry to talk to us, and we’re hungry to hear from them and learn from the things that they are excited about pushing for and sometimes demanding from us in terms of how we think about innovation,” said e.l.f.’s Goodman. “Sometimes they’re literally knocking the door in, like, ‘When is this coming to market?’ ‘When are you actually launching?’ ”
Jennifer Volz
Kenvue’s Holubek-Bank jumped in with a comment on how the Walgreens team makes contributions to innovation: “You bring all the insights that your beauty advisors are hearing directly from the stores. We really take that into consideration as we are then designing and redesigning our innovation.”
As a retailer, Walgreens plays a significant role in the social media space with Walgreens Advertising Group (wag), a full-service, personalization-driven advertising offering rooted in insights and first-party data. It adds the scale of nearly 9,000 Walgreens stores and 113-plus million loyalty members with advanced data modeling to deliver audiences tailored to brand goals and objectives. “wag has been a huge success for us. What we find is we’re more successful when we leverage the full 360 plan. We really like having the media out there to drive in the customer and then also having a place for customers to go when they walk in the door that they can see the product,” said Walgreens’ Hughes.
Goodman of e.l.f. Beauty relayed an example of wag in action. “It’s been great to partner with Walgreens in our recent expansion and rollout. We did a big announcement to let our community know that we are in more Walgreens stores. We went from two feet on average to closer to six feet, so you have more products and more e.l.f. on the shelf, and we wanted to make sure that our community knew that.”
When No7 wanted to bring the innovation of its super peptide blend to life, the company teamed up with Walgreens to debut the revolutionary formula first. The brand held in-store launch events in key markets like New York City, Chicago and Miami three days prior to the national launch.
Trends are developing faster than ever before, and both retailers and suppliers have to be more agile. For example, paradigms for product innovation that have worked well for decades may no longer be as valid. “We look at developing and using the recommendations of our dermatologist network for innovation, and that’s the guiding light we use as we innovate in the category. It’s really around our closing the loop between the dermatologist recommending and then driving to the pharmacy and into [Walgreens’] world through the beauty model. It’s really creating this ecosystem and trying to understand a patient-led model, a condition-led model, whereas the old way was around more consumer. What I’m excited about moving forward is the shift to that model. I think it’s long overdue, and I think that we are positioned well within the marketplace with the help of Walgreens to move that forward,” said L’Oréal Dermatological Beauty’s Stupay.
Bob Stupay
The model is already producing results. For example, DermatologistOnCall, a partnership that L’Oréal Dermatological Beauty has with Walgreens, is an effective way to have a patient be able to tap into the derm network while in-store and get a recommendation right at the shelf. There is connectivity between the patient, the derm, the pharmacist and the beauty consultant. In addition, education is provided so the customer knows exactly what she needs when she is standing at-shelf — at the point of purchase.
While the marketing issues that govern the direction of innovation are highly varied, health and wellness continues to be one of the major factors in the development of new products. “Health and wellness is absolutely top of mind,” said Kenvue’s Holubek-Bank. “We are focused on understanding health and wellness trends and then making sure that we are innovating in those categories to deliver on consumer wants with superior science as well as quality.”
To underscore the point, she pointed out that Neutrogena has launched a new campaign, Skin Vitals, that focuses on reminding consumers that when it comes to skin care, simple and science-backed is the best course of action to Boost Your Skin’s Vitals. Neutrogena is partnering with dermatologists and influencers to help consumers make more informed decisions regarding their skin care routines. Holubek-Bank also noted that Walgreens beauty and wellness consultants continue to work closely with the brand on several education initiatives, including the importance of sun education. Neutrogena Studios invited them to view In The Sun, a documentary created to inspire sun safety behaviors, as they continue to bring education and innovation to consumers, like the new Neutrogena Purescreen+ Mineral UV Tint Face Liquid Sunscreen.
Health and wellness also has a mental well-being dimension — look good, feel good. “I think health and wellness also starts with mental health and your personal feelings with how you feel about yourself and how you show up in the world. We’ve partnered with an paralympic swimmer who is blind yet still looks to beauty products to make her feel good when she leaves the pool. Helping her do that and making sure the products that we offer are making her empowered is our purpose. As we think about innovation, we want to make sure that you feel good on the inside but also on the outside, creating that holistic view,” e.l.f.’s Goodman said.
Dina Goodman
For Walgreens, health and wellness are its bread and butter. Almost the entirety of its product mix is oriented to providing health and well-being. “When we look at the beauty category, it has very much migrated away from just traditional beauty and into that trust factor of what are the types of products I can use and how can I take better care of myself? With the trends that exist within self-care, it’s allowing us to have a different conversation with our customers to help them think about their health and think about their wellness in a holistic way, which is inclusive of beauty,” said Hughes. “It goes into mental health; it goes into how they feel about themselves.”
As an example, Hughes cited a program that connects patients who are going through chemotherapy with its Feel More Like You program. Walgreens’ beauty and wellness consultants are part of the resource, and it is allied to the platform that educates about proper sun safety behaviors from Kenvue.
Walgreens’ Volz provided details: “We have many different ways of educating our beauty and wellness consultants to ensure that they are ready in aisle for each customer and patient that comes in, from DermatologistOnCall, to our Feel More Like You program. The Feel More Like You program is for those individuals that are living with cancer or the caretakers that walk into our store and are just wanting to make that individual feel comfortable in their own skin, feel comfortable with the changes that they’re going through. Sometimes it’s just wanting a really great red lipstick.”
Clean beauty is also an important factor, including sustainability and natural and organic ingredients. But it also has challenges, particularly in the execution of product development. “Clean beauty is absolutely a priority to customers,” stated Hughes. “We need clean beauty, we need to deliver against this trend, but we also need to be sure we’re delivering efficacious products that will absolutely deliver against the claims that we’re going to make and take care of our customers in a way that we know they need to be cared for.”
Holubek-Bank added that commitment to ingredient transparency is important, along with good consumer education. Sustainability is also key, and it is vital to take a global point of view to see how others are approaching, for example, refillable packaging.
Sharon Holubek-Bank
The many different issues of beauty, including innovation, product development and merchandising, are subject to the seamless integration of online versus in-store sales. Walgreens, for example, views itself, according to Hughes, as a convenience retailer. Walgreens has nearly 9,000 stores across the country, and that provides in-store convenience to a major portion of the U.S. population — in fact, an estimated 75% of the population lives within five miles of a Walgreens store. At the same time, the digital revolution has prompted consumers to expect goods delivered at an increasingly faster pace. To that end, Walgreens views its store footprint as nearly 9,000 distribution centers that can provide speed and convenience to customers via store to home delivery or store pickup. “What I love is that within an hour, if a customer orders a product, we can have it on their doorstep, and many times it’s under 30 minutes. It’s super important to us, and we’ve been working to make sure our customers are aware of the service that we have, and it continues to be a growth area for us with our customers,” Hughes said.
One of the challenges of digital beauty and skin health marketing is the absence of retailer-to-consumer face-to-face interaction and, for a health care company like Walgreens, the heritage of a health-oriented industry calls for that kind of communication to build and lock in a customer base. Walgreens has gone to some length to address this issue. “We partner with a lot of our suppliers to make sure we have the right education against their products, as well as creating a landing page. We have a hub for skin health, we have a hub against beauty. That helps direct customers for more general questions and then to be able to direct to product from there. Then we rely on our suppliers to make sure that the information that we are putting on our digital platform is reflective of what they would want to make sure the key callouts are for their products for our shoppers and patients,” Hughes explained.
The foundation of successful digital beauty selling — as well as all other aspects of beauty marketing such as innovation, consumer education and product placement is trusted partnerships between the retailer and the supplier. “Supplier partnerships are fundamental to all areas across the businesses, whether it’s in health and wellness, whether it’s in the grocery household business, whether it’s in our beauty and personal care businesses. Being able to understand the innovation, understand together the gaps and unmet needs of our customers and how we might partner together to deliver against that. Maybe sometimes that ends up in creating products that are exclusive to Walgreens,” Hughes said.
At Walgreens, the nitty-gritty of partnerships can take many different forms. For example, Walgreens can act as a consultant providing retail knowledge for suppliers when developing new products. That knowledge can encompass not only the product itself, but also how that product is presented to the customer in a viable and appealing way. Trusted partnerships, according to Hughes, allow suppliers and retailers to plan ahead, as well as to be nimble in reacting to new or changing consumer trends.
Walgreens’ Volz commented: “One of the examples of Walgreens really partnering and sticking to the promise of driving skin was the Future Renew launch.” Notably, the Future Renew products were exclusive to Walgreens for about the first month of its launch in the U.S. The partnerships Walgreens can do with all the brands include beauty events in store, demos, promotions and customer engagement in the aisles.
Jennifer Mulcahy
From the supplier side, No7 Beauty’s Mulcahy responded, “What I appreciate the most about Walgreens is it’s not just the partnership that you see with Heather and Jennifer’s team. You also see this at the store level, from the store manager perspective, from a supply perspective. Getting the right product to the right stores has been a huge benefit for us, particularly with the Future Renew launch. We’re talking to the beauty and wellness consultants; they’re talking to us about having the right amount of product in the stores that is needed for their consumers.”
L’Oréal’s Stupay lauded the partnership with Walgreens, which included not just the merchandising team but the teams for supply chain and advertising in achieving a successful transition of the company’s La Roche-Posay brand from prestige to test it last year in the mass aisle at Walgreens.
Goodman added, “I think what’s really incredible is the leadership position that Walgreens has with skin care. For us as a brand, we are a top 10 teen favorite when it comes to skin care. I think with the magic of this Gen Z, Gen Alpha, even now, Gen Beta consumer that’s excited about this, how do we partner together in the future to bring in a new person and a younger person who is looking to buy and start their skin care journey? I feel the future is really bright, and I’m excited about the partnership to continue.”
