With scale on one hand and data on the other, P&G Beauty and Walmart Inc. have joined forces to create new paradigms in brand incubation.
The manufacturer — among the world’s largest, with estimated beauty revenue of $14 billion in 2020 — has teamed with the world’s largest retailer on a genderless, Gen Z-focused hair care brand, called NOU. The name, which is an abbreviation for Next of Us, launched online with Walmart in August and is now rolling out to more than 2,500 doors. The eight debut stock keeping units are priced at $6.97 each.
In recent years, P&G has eyed new ways of thinking about brands. The company launched My Black Is Beautiful in 2019 in a strategic shift from acquisition to incubation. Earlier this year it launched DermaGeek, a Gen Z-focused skin care line, in an exclusive partnership with Walmart. Cocreating a brand with the retailer, though, is a new level of partnership for both companies.
“It definitely is a new model, but it’s not the only one we’re taking,” said Alex Keith, chief executive officer of P&G Beauty. “We’re always innovating, and at the heart of innovation is experimentation.”
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Keith identifies areas of focus based on qualitative and quantitative insights. The latter, she said, is where Walmart has become a valuable partner.
“We all are on a journey to appreciate the power of data, and some of us are further ahead than others. I put Musab [Balbale, vice president of beauty at Walmart] further along on that continuum than many of us,” Keith said. “Data is only as good as its interpretation.”
Balbale, who started as the retailer’s vice president of beauty last year, has been aggressively going after the Gen Z beauty shopper and updated Walmart’s brand matrix with partners — such as the makeup line Uoma by Sharon C. and genderless skin care brand Bubble — that address the needs and wants of younger consumers.
Walmart was among the mass market retailers that last year said they would no longer keep beauty products meant for Black customers in locked cases.
“Our ambition is to bring more thoughtful and impactful innovation to the consumer when she’s at Walmart. To do that, we certainly have brought in a lot of really incredible, strong indie brands into our assortment,” Balbale said. “But we also have to work closely with incredible partners, partners like P&G that we work with closely on a daily basis, to innovate.”
Part of gaining share of mind with younger consumers means catering to their newfound needs. “The Gen Z consumer is increasingly multiracial and poly-cultural. We were trying to create a brand that served curly hair textures agnostic of race,” Balbale said.
More broadly, Keith added that the brand was simply filling newfound gaps in the market. “Having the brand born within Walmart, the idea came from the fact that the Walmart shopper is looking for solutions for their particular needs, which have been evolving and becoming more complex over time,” she said. “The Gen Z Walmart shopper was looking for this type of thing. It’s a great way for us to reach that consumer at scale.”
Balbale pointed to P&G’s capabilities in research and development as key strengths the retailer was hoping to leverage. “Sometimes it’s easy to forget the sheer amount of resources a company like P&G can bring to the table: not just in media and marketing, but all the way back to the way P&G thinks about formulating products, the quality of the ingredients, the level of focus and intentionality on everything from manufacturing to packaging that really only a big CPG [company] can bring to bear.”
P&G’s aim isn’t to create brands to cater to every need that crops up, however. Keith’s rationale was that some of P&G’s legacy brands have enough consumer trust to move into more territories, but the right approach is contingent on its audience.
“The population has become more and more diverse and needs have become more unique. The ability to stretch all of those established brands into all of those spaces is extremely challenging and honestly, not authentic,” she said.
“When we look at it, we look at each individual need to try to determine if our big established brands can meet that need,” Keith continued, nodding to Head and Shoulders’ Royal Oils collection, meant for Black consumers with scalp irritation caused by protective hairstyles. “We thought Head and Shoulders’ equity and authenticity could stretch itself into that space. Whereas for multicultural, gender neutral, Gen Z consumers with different levels of hair porosity, stretching into that space might be more challenging.”
Balbale thinks of Walmart’s brand matrix just as harmoniously. “Sometimes, consumers are willing to trust the heritage brands they use all the time, and sometimes they’re looking for brands, from a formulation or personality perspective, that speak to who they are,” he said. “That’s the matrix we’re trying to bring into the Walmart assortment: heritage brands where there’s clear resonance with the consumer, and then on the margins, fill in those brands with products that are more niche, that speak to either a specific condition or customer.”
Thus far that strategy seems to be working. Keith said Nou’s sales were “exceeding expectations” in its first two months on the market but declined to provide detailed figures. She did say, however, that the brand’s visibility was strong enough for it to move into brick-and-mortar.
“All of our brands that are now huge brands started as small brands, and what we look for, at least at the outset, is consumer engagement. We launched online-only, and we had a TikTok, and we’ve already had 40 million views of our initial hashtag, #ThisIsMyTexture,” she said.
Both executives agreed that data analytics will lead to more cocreated brands between retailers and manufacturers. Last week Walmart unveiled a cocreated range of hair products from Garnier, such as Garnier’s Fructis Pure Clean Hair Reset collection, which targets product and oil buildup in hair.
“The piece that’s overlooked is that developing these muscles is going to make us better at our core jobs in the daytime,” Balbale said, acknowledging that any new mode of development would come with a learning curve. “Learning how to speak to the Gen Z consumer and how to cocreate brands will make Walmart better at bringing indie brands to life at stores and positioning them right. It will make P&G better at talking to the customer in a way that uses the vocabulary and the fluency that today’s younger customers use.”
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