The inside scoop from DSN’s first Inside Beauty Forum
Executives from Walgreens, Walmart and CVS shared insights into their beauty strategies with high-profile representatives of leading brands during DSN's first Inside Beauty Forum. Here are key takeaways from the event held in New York City on June 7.
Serving the Underserved
Although women comprise the majority of shoppers in drug stores, some segments feel "unserved," according to Heather Hughes, Walgreens group vice president of beauty, personal care and seasonal.
Pulling from her pharmacy background, where wellness is at the forefront, she discussed first-hand experiences. “Women are under-researched, they are misunderstood and physicians are under-trained on what women experience—they sometimes dismiss what they say.” That cascades into the beauty industry, as well. There are segments of the market where brands spend their dollars while not focusing on all sides of life stages.
"There is a lack of research for products for women," Hughes said. A few overlooked markets included women 50+ as well as differently-abled people that could benefit from adaptive products.
"I always say that a product developed for a senior consumer is good for everyone. If you make products that work for things like easy opening jars that work for everyone; it will be better for everyone and be more successful. The beauty world has an opportunity to have this mindset."
The good news, said Hughes, is that brands are starting to realize the need. “They are saying we hear you, but there is still a long way to go.”
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A case in point is Coty’s #UndefineBeauty which aims to undefine beauty rather than define what’s considered beautiful. Hughes applauded Coty’s efforts to push the dictionary to rewrite its entry for “beauty,” which currently includes words like young. “It is wrong as a society to define beauty related to age,” added Hughes.
With America becoming more diverse, Hughes said Walgreens is working hard to make sure multiracial shoppers feel represented but not overwhelmed. “We’ve been focused on how to deselect and localize better,” she said, noting that is a hefty challenge for a chain with nearly 9,000 stores. And the decisions are being made with what the future consumer will require 10 years down the road.
Men are also on her radar. "There are a lot more products for men. There is a premiumization happening as men discover beauty. There is a blend of making sure there are products for him while keeping in mind that 80% of shoppers entering the door are female—but they might be shopping for him."
Hughes gave a nod to Walgreens’ fleet of beauty consultants. “They go through rigorous training that occurs all year long,” she said. They are trained in various underserved markets, such as those needing adaptive products, diverse shoppers and men. “We make sure when customers walk in, they get a sense of caring.” That’s amplified by cross-training between pharmacists. Walgreens beauty consultants are trained to transfer a shopper to the pharmacists for needs that are health based.
“They [beauty consultants] are our boots on the ground,” she said. The merging of wellness and beauty has been a learning, Hughes said, adding the retailer is experimenting with new ways to merchandise in the best way to help people shop. “We are on a journey together,” she concluded.
The Power of Personalization
The customers’ path to purchase has changed exponentially since the pandemic. "Shoppers have really been influenced by a change in the definition of wellness. If you think about how our customers define wellness, even five years ago, it was about the back corner of the store and the products that lived in front of the pharmacy,” said Andrea Harrison, vice president of merchandising beauty at CVS Health. "Now when you ask customers how they define wellness, it is much broader—it is about physical health, sleep, nutrition, mental health, fitness and appearance."
The new shopper is savvy about the safety of their products right down to where ingredients came from, she added. "People's priorities have changed and the lens they are putting into their shopping decisions has changed," said Harrison. “Rather than just treating beauty shopping as a quick in-and-out purchase, they spend more time researching and choose to "spend their dollars with purchase."
Social media is having a big impact, especially on beauty. “I joke that I’m the only person in our building who says ‘TikTok’ a hundred times a day,” she said. “But we have to think about how to bring that external discovery and convert it in the store.” The recipe, she said, is to have the right brands, products and trends that are relevant so the customer can experience it on their mission in our stores and take a minute for themselves while they are serving other people in their lives.
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Experiences are moving to the forefront and CVS is experimenting with new formats. The first foray was in 2018 with the BeautyIRL concept that Harrison called a “learning ground.” As the consumer has evolved, so has the store concept. “We are trying to lean into our beauty consultants a little bit more through our Skin Care Center pilot. It allows customers to interact in a way that’s driven by them and can be married with their personal interests to drive sales.”
Social commerce has an impact on stores, acknowledged Krystal Walker, lead director beauty, beauty experience, at CVS. “Social commerce is definitely part of our tool kit—it is the digital version of a Tupperware Party.” It helps get CVS in front of customers.
Recent CVS introductions highlight how the retailer is reaching various market segments in a personalized manner. One is the retailer’s new store brand called one + other—a range of 200 personal care products from tweezers to body wash.
“I never thought in a million years I’d be talking about things like nail clippers and cotton balls,” Harrison said. She explained in the past, there were products in feminine packages and duplicate items to attract men.
The recently introduced collection celebrates individuality and reflects how people use products without SKU duplication as well as the need for accessible self-care for everyone.
The other is John Legend’s Loved01, a unisex skin care collection formulated for melanin-rich skin tones, created by the singer and dermatologist Dr. Naana Boakye.
“The motivating factor for both [one+other and Loved01] was to do a better job and work a little bit harder to reflect the communities we serve,” Harrison said. “It doesn’t matter what gender you are; you have nails to be clipped. With Loved01, we were intrigued with the formulation because it was created with skin with more melanin in mind.” CVS moved swiftly to secure the brand.
“We felt it was speaking to a consumer who might not feel seen. Personalization at the shelf is about feeling more reflected. The customer is looking for new [products] and we want to be where the customer is.” Legend even appeared in a store in Los Angeles, posting as a CVS employee for social media content.
New is great, but CVS is also focused on repeat purchases. "New DTC products coming to retail are great and exciting," Harrison said. "But volume is largely still coming from the iconic brands. The way we've been able to maintain volume and be successful is a balance. Some great brands will never go away and have built trust. We don't want to lose those in a sea of new things. But there are also great innovations that follow the customer."
Harrison used CeraVe as an example of a legacy brand that has remained relevant by being innovative, including exposure on TikTok and via dermatologists.
CVS goes deeper into personalization, harnessing its free ExtraCare loyalty program— roughly 1 in 4 people in the U.S. are members. For example, Harrison explained, just because a customer purchases a Gillette razor once, it doesn’t mean they haven’t been influenced to try something new.
“We can bring value to our members through highly personalized offers, savings and rewards, targeting those to what they buy on repeat and what we think they might want to try for the first time.”
Other uses for technology include testing virtual try-ons and skin assessments in Skin Care Centers.
The human touch is crucial, too. “We lean heavily on our Beauty Consultants. They are an aid in personalization. We get so many letters from guests talking about how they have helped them,” Harrison said.
Walker noted that the Skin Care Centers do a good job of being informative at the shelf as well as offering digital tools and trained beauty consultants.
The Skin Care Centers are designed to help demystify the category for shoppers in a category where new items debut at a breakneck pace.
Looking ahead, CVS is working to tap all the tools to build wellness and beauty, including virtual events (with a localized twist) and using its expertise to help simplify the shopping experience. This 360-degree approach is a competitive edge. “We are a convenience play, we are a wellness play, and we should always be at the forefront for when consumers are thinking about wellness needs,” concluded Harrison.
The Intersection of Health & Beauty
A lot is at stake as the boundaries between wellness and beauty blur. Per statistics from Mckinsey and Circana, combined U.S. sales of wellness and beauty exceed $1.6 trillion. Even in tough economic times, consumers have shown they won’t abandon products they believe contribute to healthy lives.
As the largest retailer in America, Walmart is positioned to lead the charge in bringing the best in wellness and beauty to consumers.
Walmart’s Vinima Shekhar, vice president of merchandising, wellness, and Creighton Kiper, merchandising vice president of beauty, shared their thoughts on wellness, beauty and how the two interact.
To Shekhar, the definition of wellness is multifaceted. “It is biological, psychological and social,” she explained. Mental health is a big component of wellness, she noted, and many shoppers are stressed and pressured. That’s unsurprising since the average person makes 35,000 decisions a day, she said.
There is a big cause and effect in wellness products. For example, Shekhar said stress leads to hair loss, and that has raised awareness of solutions such as biotin for hair health.
Consumers are more informed, savvy and aware than ever. They understand the link between wellness and beauty. That’s evident, she said, in interest in gut health and its impact on beauty from the inside out. “The hashtag #guthealth has been trending with 3.7 billion views on TikTok.”
Some trending ingredients in wellness she pinpointed included: superfoods, food as medicine, ashwagandha, turmeric and protein. “People are getting the idea that what you put in is what you get out,” she said.
Shekhar aims to enhance Walmart’s “live better” promise as the chain continues to expand its wellness offerings. That includes removing friction during the shopping experience and helping shoppers save money.
Within beauty, Kiper hopes to create a space where shoppers can escape and treat themselves without pinching their wallets. “People shouldn’t have to decide between food and beauty,” he said.
His goal is to be the most inclusive beauty retailer, offering customers accessible options to “confidently be themselves.” Beauty, he added, isn’t only about aesthetics but people being their authentic selves. “We are looking to democratize beauty,” he said. “We need to be responsible around the notion of what beauty is.”
His hit list of trending products included ingestibles with beauty benefits, hyaluronic acid, niacinamide, azelaic acid, ceramides and peptides, snail mucin and white cherry. To keep ahead of the curve, Walmart’s team has its ear to the ground and leverages its own proprietary search data.
Going forward, Walmart is also focusing on clean, sustainable and socially conscious brands that consumers have made clear are important to them. Earlier this year, the retailer launched Clean Beauty at Walmart to help customers find beauty products that meet their and Walmart’s standards at every price point.
The chain is not always first out of the market but wants to be the best. “The early bird gets the worm, but the second mouse gets the cheese,” he said.
Kiper identified underserved markets he’s building up, especially women 50+. Less than 5% of marketing dollars are put against that cohort even though in 2030, there will be more seniors than children in the U.S.
“This is an important, underserved, underappreciated segment. Walmart wants to better serve this community,” he said, adding the focus is on aging well.
Admitting the beauty shelves can be daunting, Kiper said Walmart is working to make it easier for customers, which includes tapping into technology capabilities.
In discussing how their businesses overlap, Shekhar and Kiper said they are trying to be more intentional about messaging wellness and beauty together and taking a data-driven approach.
In discussing how their businesses overlap, Shekhar and Kiper said they are trying to be more intentional about messaging wellness and beauty together and taking a data-driven approach. “We are meeting the customer where they want to be,” said Kiper.