From left: Artemis Patrick, Isabela Chick, and Robert DeBaker

If you ask Sephora’s Artemis Patrick about beauty incubators, she’ll tell you Sephora has always been one.

The retailer has long aimed to look out for its brands and guide them along paths to growth, Patrick, Sephora executive vice president and global chief merchandising officer said. But the way that happens now has evolved, she noted, speaking on a panel with Isabela Chick, managing director of Founders Factory, and Bob DeBaker, group president at Luxury Brand Partners.

The beauty industry has seen a swell of incubator models — some more successful than others — pop up in the last five or so years. In part, that spike has been caused by general growth in the market, social media shifting the way consumers discover brands, and the success of indie brands, Chick and Patrick noted.

“Launching a new perfume used to be a thing of hundreds of millions of dollars,” Chick said. Today, that’s not often the case.

For Founders Factory, which uses tech incubation as inspiration for beauty brand building, testing and learning is a key part of the overall strategy, Chick said. The firm is focused on co-creation and community building so that it can test products on a highly engaged consumer group in order to know if things will work. The result is often shorter development cycles than big beauty brands have.

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Experimentation is a big part of the overall strategy.

“We’re working with incredibly early-stage businesses, some of them are pre-launch, some are very recently launched and find new ways to scale,” Chick said. Founders Factory backs Anatome, Bad Norwegian and Cosmose, as well as other beauty brands.

“One of the things we’re looking at is, what are the services you build around your product? Because it’s not just about the launch of a product brand in market anymore, but those product brands have got consultations or some kind of loyalty scheme or a subscription model and it’s actually trying to find the right level of service around a product and how to articulate that and bring it into market,” Chick added.

At Sephora, which formally launched an incubation program with Sephora Accelerate in 2016, incubation is centered around learning, mentorship and relationship building. For 2021, the program will specifically focus on brands founded by people of color.

“When we see a brand that meets an unfulfilled need or has a really unique story to offer, that’s when we make it our mission to help the brand succeed. The advantage of an incubation program is ultimately the access you get. Not only are you building a network of other brands that face similar challenges to yours, but you’re also getting access to experts in certain areas where your brand will need to be successful,” Patrick said, listing mentorship, merchandising support and access to the financial community as benefits.

The rise of incubators is resulting in brands that have more niche focuses, and more targeted and personalized communications, the experts agreed.

“What I love about the integration of the gut and the feel that you get from a founder-based business, with the technology, you can speed much more quickly to communication that is meaningful to the consumer, and you can build relationships so much faster because of the data,” DeBaker said.

“I find that the future means paying as much attention to content as to product development and the two meshing together at the beginning stages,” he added.

Patrick agreed. “New and innovative brands are increasingly looking at digital and immersive online narratives as a way to build their business,” she said.

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