Many brands of beauty products have literally been around for centuries, following a business model that has not changed very much. But just like a woman might finally change her lipstick color after years of wearing the same shade, the retail market for beauty products appears to be adopting something of a new look. The innovations are coming from a new class of entrepreneurs, dedicated to the proposition that they can get exactly the products that people want in their hands, for less money, by using a direct-to-consumer strategy and online presence.

In interacting directly with consumers, beauty brands gain remarkable levels of information about what people want, and then they can produce and distribute those more personalized items quickly. Rather than standing in a store aisle, under fluorescent lights, trying to gauge which foundation color offers the best fit with their skin tones, shoppers can provide the information about what they need to sites such as Stowaway, Onomie, or Context.

The Glossit site emerged from a popular blog, Into the Gloss, where visitors expressed their beauty needs. The blogger thus became an entrepreneur and launched a site with a relatively small and precise product line that reflects exactly what contributors requested on the blog. The skin tinter thus is easy to apply, and the moisturizer includes a primer to ready users’ skin for the application of makeup.

The Bevel site resulted more from its founder’s own personal experience, struggling to find shaving and men’s personal care products dedicated to the particular skincare needs of people of color. The responses to Bevel’s offerings have been quick and positive, such that the site features testimonials from famous fans of the products, from Nas to Magic Johnson.

As these examples show, the direct-to-consumer brands also reject traditional models of advertising. They rely mainly on digital channels and electronic word of mouth. Another brand, Stowaway, collaborates with “mom bloggers” to promote the benefits of its products, especially the smaller sizes in which it sells its makeup. As the founders explain, the major cosmetic firms like larger bottles, because it costs them about the same amount to produce a 5 ounce or a 1 ounce bottle of their products. But the larger bottles often do not fit easily in a purse or diaper bags (and they cannot make it through airport security if they are more than 3 ounces). Furthermore, because makeup has an expiration date, consumers often wind up throwing out substantial amounts of the expensive products they have been forced to purchase in large sizes. By selling its versions directly to consumers, Stowaway avoids some of the expensive costs incurred by traditional brands and thus can profitably offer smaller sizes that appeal greatly to busy moms who might need to throw their makeup in their bag so that they can apply it in the carpool lane.

Discussion Question:

1. Why are these start-up, direct-to-consumer skincare and cosmetic companies competing so effectively with traditional retailers?

Source: Emma Bazilian, AdWeek, February 8, 2016