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 IV will be our wrap-up of takeaways). Here's Part II:
Opportunistic and Early-Stage
Earlier this week, I wrote about Walmart’s exclusive beauty deal with Hard Candy and the extreme makeover of Walmart’s beauty area that has been executed under the leadership of Carmen Bauza, Walmart’s VP of beauty and personal care. Although the changes in visual presentation within the beauty area have been dramatic by themselves, to even entertain getting a brand like Hard Candy and making it work in the Walmart environment (read: NOT a boutique) demonstrated that Walmart was continuing, and spreading, its mind shift toward opportunistic, even entrepreneurial, deal-making. The series of direct-to-artist deals that began with Garth Brooks in 2005 and continued on with AC/DC, The Eagles and other artists, set the tone. Walmart’s direct-to-studio deal with Dreamworks followed, and recent niche brand forays in home care have continued the free-form brand and product partnership vibe, even as the industry focused on the (literal) ins and outs of existing items.
Walmart's Big Fat Foam Advantage
Back to beauty and personal care: A more recent example is Walmart's launch of Fat Foam, a groundbreaking foam-based, no-drip hair color product. The temporary exclusive on Fat Foam puts Walmart ahead of a hair care innovation, one that originally wasn’t scheduled to hit the market until 2012. Taking the Hard Candy scenario a step further, Walmart aggressively went after the Fat Foam scoop and co-launched it, rather than waiting for the original launch date and swooping in. Colleen Sheedy, Walmart’s marketing manager for beauty and personal care, said, “In my opinion, [this deal] exemplifies Walmart's willingness and eagerness to partner with all suppliers, even smaller suppliers, to bring our customers true innovation that's exclusive to us for a certain period of time.”
Fat Foam was created and marketed by hair-care marketer Samy, based on a technology developed in Japan. It got on the radar of Michael Smith, Walmart’s senior buyer for hair color via a YouTube video from Japan where, said Smith, “the customer is having a very different experience from what we have the U.S. in hair color, which is not a positive one.”
Buyer Instincts are Back
Did you catch that? A Walmart BUYER got not just inspiration, but the seeds of a deal off of YouTube–and in a category that has been completely dominated by national brands up to this point. No marketing team machinations required. No “wait-and-see.” Done. Smith persuaded Samy to give Fat Foam to Walmart as a six-month exclusive. He said, “We wanted to… use our scale and our marketing muscle… to bring it early to the U.S.” By giving Walmart the exclusive, Samy got their product on the market at least a year earlier than planned, so it was a win-win.
John Frieda, a popular hair care line in the U.S., is playing catch-up, with plans to launch a foam hair color product, Precision Foam Color, in April, 2011. So, between now and then, Walmart’s deal with Fat Foam gives them a complete exclusive, not only on the product, but also on the foam innovation for six to seven months. That’s a heck of a long time in retail years.
In Part III, I’ll take on one more beauty brand launch, one that demonstrates how Walmart is getting even bolder in boutique brands, and putting real marketing muscle behind them!