How beauty brands are preparing for 2023

DS & Durga co-founder and perfumer David Moltz described the fragrance brand’s Russian debut in late 2019 as “a great launch party.”

Moscow luxury beauty retailer Rive Gauche has created a small room where you can immerse yourself in each line’s scents, including Burning Barbershop and Cowboy Grass. The shop used burnt scissors and wood to create a bespoke sarong. There, shoppers could sit back in modern barber chairs and experience the scent of burnt shave his tonic found after a fire.

DS & Durga’s market presence was short-lived. After Russia’s Vladimir Putin invaded Ukraine in February 2022, the brand ceased operations in the country, one of his largest markets outside the United States. Adding to the disruption to his chain of existing supplies in both Asia and Europe, Line needed to figure out how to quickly recoup lost revenue.

The brand has met its 2022 revenue projections. Last year, DS & Durga chose to launch only four permanent collection fragrances and his three candles in its line, introducing 11 limited-edition products for newness. There was a slight inconsistency in packaging and art decisions to keep the product in stock. We also launched a new e-commerce site.

“We have to make smart decisions. People don’t always understand why we don’t make this candle or that fragrance. It has a place in our line,” Maltz said. .

DS & Durga, like the rest of the beauty industry, is preparing for more disruption in 2023. The ongoing Russian war in Ukraine. Soaring Covid cases in China. supply chain disruptions; rising inflation and interest rates; And the lingering challenge of getting employees back into the office creates a bevy of obstacles.

“I couldn’t put it down any more [challenges] On a whiteboard … that leadership has had to face so far,” said Mary van Praag, chief executive officer of Milani Cosmetics.

Yet many beauty brands remain optimistic. Below, four beauty brands share the strategies he’s tweaking for 2023.

Stay ahead of inventory hurdles

Milani, which sources raw materials and packaging components in Italy, France, South Korea and China, has built a “joint business plan” with contract manufacturers to avoid delays in 2023, according to van Praag. Last year, the brand saw delays in packaging parts due to the shutdown of Shanghai, and had to ship its products by air mail, which is much faster than sea freight but much more expensive to meet demand. At various times of the year, the brand sold out of products for six to eight weeks at a time.

van Praag provided contract manufacturers with full-year forecasts for 2023. This includes a new inventory classification system. [product] It will take,” she said. (Previously, Milani worked on her nine-month supply his chain his schedule.) To prevent future Covid disruptions for him in China, Milani sources components in other countries. I am planning to

This year, van Praag has also invested in expanding its collection of hero products. The company has ramped up orders for core lines like Conceal + Perfect Complexion and Keep It Full Lip Plumper.

“Our top 50 products represent 50% of our business,” says van Praag. According to his Nielsen data, which ended November 5, 2022, Milani’s retail sales in the last 52 weeks exceeded his $130 million, a 24% increase year over year.

Charlotte Palermino, CEO and co-founder of digital-only brand Dieux Skin, uses up-front demand to make purchase decisions and spends a year placing orders.

“Some people are reducing overhead [to offset costs] …but for someone to come to our site and miss the opportunity to be disappointed due to lack of inventory, nothing beats having that inventory,” Palermino said.

Dieux facilitates a waiting list to retain customers during sell-out periods, and offers shoppers discount codes once the product is back in stock. The line is introducing refills this month. This is another of his safeguards against packaging delays that can reduce Dieux’s carbon footprint.

Expansion of retail business

In 2022, many D2C holdouts have abandoned the digital-only model and moved to retail. Beauty brands just entering the market usually partner or secure partners with retailers in the first few months.

Available at Bergdorf Goodman, Neiman Marcus and Harrods, DS & Durga opened its first store in Los Angeles in March and plans to open a second store later this year. In New York he operates two company stores. In 2018, DS & Durga will acquire “low single-digit” external capital from Monogram Capital Partners to raise additional capital to support the new stores. This includes hiring more staff and building inventory.ahuja malts

Palermino said Dieux will also use the new investment to support launches with retail partners in the second half of 2023. Cleansers are coming by the end of the year.

Milani is focused on getting more products from existing retail partners such as Ulta Beauty, Target and Walmart. van Pragg emphasized to retailers that Milani will increase the size of shoppers’ shopping carts and bring high-end consumers to the store. The brand is known on TikTok as Charlotte Tilbury and Dior’s Beauty Dupe.

“Sometimes consumers are disappointed because we don’t offer the full shade range that we have,” says van Pragg.

emphasis on value

Milani’s chief marketing officer, Jeremy Lowenstein, said that as inflation concerns eased toward the end of last year, Milani was able to offer more value to customers with jumbo-sized items and offer discounts on a variety of products. We are working on selling bundles.

“[DTC] The bundle has minimal complexity internally, yet offers a value proposition that is hard to resist. That’s what we’re trying to do more of in a recession,” said Lowenstein, whose Milani value kit is 20 to 25 percent off his regular price.

Emphasizing the value of beauty products can entice consumers to purchase, especially those worried about inflation or feeling financial pressure.

This is a strategy Milani hopes to further strengthen in retail. For the 2022 holiday season, Milani debuted his set of two of his three product values ​​called The Holiday Heist collection at his $14.97 price tag, along with his influencer Rocío Soria Beauty. The bundle was Walmart exclusive.

The value of the message is also important to K18.

The two-year-old Prestige Haircare brand, which ended with retail sales of $150 million in 2022, does not offer product discounts or promotional pricing online, in salons, or at retailers like Sephora. , co-founder and CEO Sveen Sahib said: Communicating that your product “does more and lasts longer” than your competitors will be a marketing focus in 2023.

In other words, the K-18 is amplifying the “cost per use”.

“Our leave-in molecular repair hair mask costs $75 and lasts three months,” says Sahib. “That’s less than a dollar a day.”