From the Lab is taking the concept of direct-to-consumer very literally. The new online membership service, which launches on Friday, enables consumers to test drive beauty products before they are available at stores.
The brainchild of Steve Dworman, who for 12 years tracked the infomercial industry by publishing The Infomercial Marketing Report and developed the NuGlow skin-care line fronted by Nicollette Sheridan, From the Lab has inked deals with cosmetics laboratories to provide products that could ultimately be marketed by large beauty companies first to charter members who pay $19.95 monthly and regular members who pay $29.95 monthly. Members receive one to three full-size products per month, each of which will have a 30-day supply and could retail eventually anywhere from $40 to $200.
“We will receive lab runs of the products before they are mass produced, so it is a limited supply six to 18 months before they are in retail from the major brands,” explained Dworman. “The labs do not see this as being competitive with their other customers because we are only selling limited runs and only selling to our membership online. We can gather information about the products themselves, about what women like and what they don’t like. We are not selling the information, that is not part of the deal, but it enhances their ability to resell.”
After spending much of her career in marketing, From the Lab cofounder and president Lorraine Dahlinger, formerly a partner at shopper-engagement agency Lunchbox LP, welcomed the opportunity to work somewhere she said wasn’t disingenuous and didn’t pass marketing costs on to beauty customers. She recalled that once a big beauty brand that she helped to market spent millions of marketing dollars to raise a product’s price point by another $7 a unit to increase their profits. “They laughed about it. It stuck in my mind for a long time.” She continued, “I love makeup and skin care. I want to know what works and what doesn’t. Because of being exposed to that [marketing] side of the business, my ears perked up when Steve approached me.”
From the Lab, which will feature products in the skin-care, color cosmetics and hair-care categories, isn’t putting a lot of money into alluring packaging — customers get the products in plain plastic components used by the labs — or marketing. It’s depending on word of mouth to build its audience among women primarily 18 to 35 years old, although Dworman and Dahlinger believe From the Lab could appeal to women of all ages and two focus groups it held had women whose ages ranged from 18 to 81 years old. “Every one of those women were excited about the products. That was a real eye opener,” said Dahlinger, adding, “We think that women are going to love it because of the access to high-end beauty products before anybody else has them.”
Dworman said he’d be happy if From the Lab attracted 1,000 members in the month after its launch and that it can’t have more than a few thousand to begin with because it has only ordered 15,000 products for its initial quarter. By the end of the year, he estimated that From the Lab could draw 20,000 to 45,000 members. While From the Lab is planning to sell some popular products on a replenishment basis, membership and not replenishment will be the main revenue driver.
“We are always about what’s coming up next. We are not looking to be in retail or private label a single line. We don’t care if it ends up in retail later because we will be on to the next product,” said Dahlinger. Dworman chimed in, “This is a very difficult model, which is one of the reasons no one has attempted or thought about it.…It’s not an easy task, but I think for people who take the chance to sign up, it is going to be incredibly rewarding because the products are amazing. With the two focus groups we’ve had so far, we get calls weekly from people who have participated asking for more product.”
In addition to From the Lab, Dahlinger and Dworman are introducing a beauty content Web site called Inside Beautiful, which will be guided by editor Desiree Stordahl, who coauthored the book “Don’t Go to the Cosmetics Counter Without Me.” Inside Beautiful will have a daily blog and a weekly podcast that Dahlinger said would cover the latest beauty trends, money-saving tips, information about ingredients and much more. “We don’t accept sponsorship or advertising. We definitely want to be a source women can trust,” emphasized Dahlinger.