MILAN — When the pandemic hit last year and reshaped consumers’ shopping habits and product preferences, Italian beauty label Skinlabo was in an advantaged position compared to competitors in the market.
Launched in 2017, the Turin-based brand had a wide product assortment, accessible price points and, most of all, a direct-to-consumer approach, comprising a 24/7 beauty consultancy service available via phone, chat and email. All the assets many local brands had to create after the COVID-19 outbreak to compensate losses caused by brick-and-mortar stores’ closure and to secure customers’ loyalty, Skinlabo had already tested and deployed.
Not that other digitally native brands in the country lacked similar strategies, but Skinlabo was more structured and not perceived to be too niche or only Instagram-oriented. Heading into the pandemic, its brand awareness among consumers was strong.
Plus, the brand’s core business is in skin care, one of the categories that thrived over the past year, to the detriment of makeup and fragrances.
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All these elements contributed to the acceleration of sales in the past 12 months. As of today, the company has more than 600,000 customers in its database and adds 60,000 new ones every month. It currently generates monthly revenues of about 1.5 million euros and forecasts to reach 20 million euros in sales and 1.2 million clients in its database by the end of 2021.
“The cosmetics industry is made of infidelity, because honestly, there’s not a real, big difference between products,” said Skinlabo’s founder and chief executive officer Angelo Muratore. “All products communicate active and natural ingredients, green and sustainable properties and overall, with small differences, all the premium-luxury segment is similar in terms of formulations.”
“So if we wanted to sell a product priced 35 euros to 60 euros, we would have had a hard time to find customers. But we understood that the gap to fill was one offering quality skin care products at democratic prices and that a consultancy service was essential to convince consumers,” added Muratore. To wit, Skinlabo’s price points range from roughly 10 euros to 40 euros.
The brand’s exponential growth was supported by two rounds of investments in 2020, that raised 3.5 million euros. These added to prior rounds in 2018 and in 2019, with Skinlabo raising 7.5 million euros so far. Muratore said the company expects to get another injection of 7.6 million euros this month, too.
More than 80 investors have financed the business so far, including Quadrivio Group’s founder and CEO Walter Ricciotti; Club degli Investitori, a community of entrepreneurs and managers investing in Italian startups and SMEs; the Luiss University’s investment club Luiss Alumni 4 Growth, and Maire Investments, among others.
All the funds raised supported Skinlabo’s expansion plans in terms of workforce, distribution and products. The company is currently available in 12 markets, including Italy, Spain, Germany, France, the U.K., Greece, Portugal, The Netherlands, Austria, Ireland, Poland and Belgium. This month it will launch in Sweden and, in September, it will land in the U.S.
“As a start-up, we didn’t have other options than to embrace the direct-to-consumer approach. We could have partnered with third-party platforms, but we preferred to sell exclusively on our own website, developing vertical stores in different languages. So we’re not talking to consumers in other markets in English but in their own language, having beauty consultants and customer care managers speaking their local language, which really makes the difference,” said Muratore.
This particular approach influenced the geography of Skinlabo’s best-performing markets. After the domestic one, Spain is the biggest market in terms of sales, followed by Greece and Portugal. “Consumers in these countries like to talk and create personal relationships with the consultants and the brand,” said Muratore, who added that France is becoming increasingly relevant, too.
In the longer term, Muratore aims to exceed 4 million clients across Europe and the U.S. and 80 million euros in annual sales by 2024.
Ahead of the big launch in the U.S., the founder said it won’t adapt its strategy, but instead continue the recipe that has worked wonders for him so far. To wit, Skinlabo has developed an inviting marketing activity to gain consumers’ trust, successfully repaying the company in terms of loyalty and credibility.
“To get noticed, we had to give them the opportunity to test the product for free, so the first purchase is indeed free. And I don’t mean a sample size, but a real product. Now, if you have the chance to try a new product paying only the shipment fee, won’t you do it?,” said Muratore.
Skinlabo’s assortment include 60 references, ranging from face creams, serums and masks to body scrubs and oils. The best-selling products are the ones targeting specific skin conditions and areas, such as eyes and lips, in addition to the brand’s signature “shots” of concentrated hyaluronic acid, vitamin C and collagen, among others.
With antiage products at the core of the offering, the brand has always targeted women and men aged 35 to 70, until it tiptoed into makeup earlier this year, launching a mascara and lipsticks. This expanded the reach to younger generations, too.
Next up product-wise, Skinlabo will widen its scope to include hair products and beauty supplements.
Asked if there are changes in sight in terms of distribution, too, Muratore said there are no plans to partner with other platforms or open monobrand outposts, revealing that the only physical format he could consider in the future are pop-up stores.
“The pandemic bought more and more people to buy online, and therefore discover and purchase indie, digital brands. It’s incredible to think that in brick-and-mortar channels the tendency to try new, niche brands is very low, with only 10 percent to 15 percent of customers doing so, while online it’s the opposite, as 80 percent of people are willing to buy indie brands,” said Muratore. He mentioned a wider assortment and variety of products, more convenient prices and a faster, simpler user experience among the pros of e-commerce.
“And that’s the beauty of the cosmetics industry: There’s so much space for indie brands, which is great because you can do business and scale up quickly internationally if you have good ideas and can implement them correctly,” concluded Muratore.