GDR NRF Newsletter May 2018

Digital retailer establishes brand by rejecting branding

Brandless sells food and household products online and its brand is based – ironically – on the rejection of branding.

The company buys all its products straight from the source and sells them directly to consumers, with every product priced at $3 (£2.30). This allows it to cut supply chain costs and avoid the overheads associated with physical stores.

“We can afford to do it because we are eliminating the ‘brand tax,’ or the mark-ups added by national brands with physical stores and multi-staged distribution channels,” says co-founder Tina Sharkey. Brandless claims it can sell its products for 40 percent less than traditional retailers.

Brandless’s straightforward product lines include food, cleaning supplies, beauty and personal care products and office supplies. Its packaging is also minimalistic, focusing on the product and its ingredients – i.e. non-GMO, no added sugar, gluten free – as opposed to the branding of its distributor.

A $36 yearly subscription gives customers access to B.More member-only benefits, which, among other things, includes free shipping for orders over $48.

Public Goods lets members access household products at cost price

New York-based Public Goods uses a unique business model for selling its range of personal care and household products.

The company claims to offer ‘healthy products without all the unhealthy profits.’ All items are sold at cost price while customers pay a monthly membership fee of $12 to access them.

The current range of items available consists of shampoo, hand soap, bar soap, conditioner, moisturiser, body wash, shaving cream, razors, toothpaste, bamboo toothbrushes, tree-free toilet paper, lip balm and sunscreen.

All items’ packaging contains minimal branding. The name of the product is included on the front of all packaging in black against a plain white background. The only other messaging is the name of the company, the weight of the product and the tagline "it’s all good." Ingredients in all products are natural, vegan-friendly and free of parabens and sulphates.

Co-founder Morgan Hirsh said: “Top quality natural products don’t actually have to cost a lot of money to make – it’s the supply chain that’s the problem.”

By selling products directly to customers and cutting out the ‘middle-men,’ Public Goods claims it can offer premium products at far lower prices than well-known brands.

Beauty subscription service cuts out the middle man to offer luxury products at fast fashion prices

Beauty Pie is a digital-only beauty brand and subscription service that provides members with full cost transparency and wholesale prices. The service offers customers luxury-standard beauty products at a low price point by doing away with traditional retail mark-up layers.

For example, a Beauty Pie lipstick will cost members £2.24 ($2.72), whereas non-members would have to pay in the region of £20 ($24). According to the brand, with Beauty Pie “You can buy a luxury lipstick for less than a latte.”

Monthly subscriptions cost £10 ($12) and users are locked into the system for a minimum of three months. Members are permitted to buy up to £100 ($120) worth of products every month.

Beauty Pie evades mark-up costs by cutting back on luxury packaging and leveraging factory space from premium international skincare and cosmetics labs and manufacturers.

Beauty Pie’s founder Marcia Kilgore also founded beauty brand Soap & Glory and shoe brand Fit Flop. Kilgore hopes that Beauty Pie grows into an active online community of dedicated beauty addicts who want quality products at a democratic price point. 

L’Oréal underlines the value of its production by promoting its brilliant scientists

Beauty brand L’Oréal is using the personality of its human staff to show that it is more than a faceless global monolith. 

In the face of increased competition from disruptive startups that question traditional supply chains and production processes, the brand has started pushing its employees to the forefront.

A great example of this is in the way it has promoted African American scientist Balanda Atis to become the manager and spokesperson of its Women of Color Lab in New Jersey.

Atis talks very frankly from her personal experience about how traditionally it has been difficult for African American women to find makeup that suits their skin. She also opens up about the scientific research being done in her lab to remedy this.

By promoting these types of conversations with its staff, L’Oréal is showing its human side, but it is also emphasising why its processes and thus its products are worth paying a relatively higher price for, compared to startups without the same infrastructure. In this way it is nudging consumers to rethink its value proposition.