Beauty and the Beast Part I: Walmart Bites on Hard Candy
When Walmart gets intentional about accidental businesses, it's time to pay attention! Walmart's recent moves in beauty and personal care point to dramatic shifts in brand, merchandising and promotional strategy and that of course means that whatever works will influence other retailers and other categories within Walmart (as we always say, "Lather. Rinse. Repeat!") If the old Walmart was mousey brown, the new Walmart is sporting a hot pink mohawk!
We're spotlighting their recent moves in these categories in a four-part series (Part Four will be our wrap-up of takeaways). Here's Part I:
Loud and Proud
In a Women’s Wear Daily article back in May of this year, Carmen Bauza, Walmart’s VP of beauty and personal care, summed up the retailer’s situation by saying, “We were somewhat quiet about beauty. We had just been delivering.” By that time, Ms. Bauza had already delivered a precedent-setting exclusive to Walmart in the form of Hard Candy, a makeup brand that was a staple of high-end beauty boutiques. The 261-item line launched last fall and now has presence in 3,000 Walmart stores, with expectations that it will generate $50 million in sales the first year.
Baked-in Brand Cred
I recently wrote about how Walmart isn't just putting previously rationalized brands back on the shelf, they're also going after new brands with real authenticity and credibility in their respective niches; Hard Candy certainly fits the bill. Ms. Bauza forged a partnership with Hard Candy’s licensee, NuWorldBeauty, to re-create the brand as an exclusive for Walmart, going so far as to name one of its mascaras “Ginormous” (a word that she blurted out during a brand brainstorming session). The in-store presentation is an impressive, edgy addition to Walmart’s otherwise staid collection of national brands—although those too have been completely re-worked under Ms. Bauza’s leadership to create a more unified presentation. Back in BC (Before Carmen), each brand more or less managed its own space leading to an over-SKU’d, siloed, brand protectionist presentation. Ms. Bauza would have none of that pretty mess; she went on to challenge the brands to streamline assortments and to organize all offerings into three categories: lips, eyes and face. At the same time, Walmart undertook a larger re-visioning of its beauty proposition in everything from fixturing to marketing and promotion.
Demo Beats Bogo in Promo
As for promotion, I loved what Ms. Bauza said about how buy one, get one free isn’t a sustainable model since it takes customers out of the "buying cycle” when you give products away. An even more interesting and contrarian perspective on the heels of Payless' (the KING of BoGo) announcement that it has jumped into the beauty biz (along with a flood of other non-beauty players from apparel specialty stores to grocers). Just as it has in other categories including grocery and consumer electronics, Walmart is pushing toward leveraging in-store demos (more on that in the next posting) rather than give-aways.
High Touch & High Tech
Perhaps knowing that high touch isn’t a realistic option for Walmart’s beauty area for now, Walmart is testing a high tech “virtual mirror” in limited stores which allows shoppers to snap a face shot then play with various makeup shades. The simulation kiosks, provided by EZFace, are not exclusive to Walmart and in fact will be pushing into select Chicago-area Walgreens stores this holiday.
I think Walmart’s online review template, which includes the reviewers’ age group, how often the product is being used and star ratings for value, quality and other criteria, is a perfect match for Walmart’s beauty biz (not all categories on Walmart.com feature reviews - beauty does); newer brands can get a leg up via online endorsements and the reviews also back up Walmart’s re-focus on calling out new items, formulations and benefits – even better when customers are the ones doing the call outs, right?
We’ve had our eyes on Ms. Bauza, whose former gigs were at Walt Disney Co. and Bath & Body Works, and figured that the Hard Candy get would only embolden Walmart to step out even more in the beauty and personal care arena. On the heels of yet another brand launch (see Part II), she recently stated, “This is the beginning of the path we’re taking to continue to bring to market unique opportunities for our customers.” A few short months later and it’s clear that Walmart will continue to bat its high-volume lashes at unique, groundbreaking partnerships that promise to transform the way beauty operates in mass retail.
Beauty isn’t just skin deep at Walmart. In Part II, we’ll move into personal care.