Takeaways from Conversation with Walmart Beauty Executive
We recently attended a conversation with Creighton Kiper, Vice President of Beauty at Walmart, hosted by CEW (Cosmetic Executive Women). Throughout the conversation, Kiper emphasized the massive opportunity to make Walmart more of a destination for beauty shoppers despite the growth of specialty retailers in the U.S. over the last decade. Below is a summary of our learnings that showcase the importance of Walmart's initiatives for the entire industry:
- Walmart is not only the largest retailer in the world, but also the largest Beauty retailer in the world, which might not be commonly known by the average consumer.
- Walmart currently has over 4,700 stores across the U.S. and serves over 140 million customers online every week. Kiper believes that Walmart is a leader when it comes to “layout, location and labor.”
- Kiper wants to change the narrative for visiting a Walmart location to purchasing products “you want to buy” rather than just products “you need to buy.”
- Convenience might still be a factor that brings customers into the store, but Kiper is focused on converting those customers into Beauty purchasers as new brands, products, and merchandising is introduced to the category.
- Walmart’s proprietary customer database – termed “Luminate” – offers the retailer a window into consumer shopping habits, perceptions, and trends. Through this data, Walmart can quickly assess and adapt its pricing, promotion, and assortment decisions to better serve both its customers and its suppliers.
- The company views the Beauty category more holistically, recognizing that the definition of beauty has changed from being purely “looking from the outside in” (e.g., traditional color cosmetics) to more “considering from the inside out” (e.g., a broader set of products that address a holistic take on wellness and self-care).
- Kiper believes that beauty is for everyone and should be viewed with more inclusivity. Given Walmart’s scale, he sees the retailer being able to serve every customer that walks in the door. Kiper also mentioned that Walmart is focused on a “Unified Beauty” strategy, starting in the hair care category, that aims to serve a broader set of consumers both demographically and psychographically.
- Walmart has increased its focus on mixing up their average price points in beauty, while, at the same time, making sure that there are products available for all consumers, at all price points.
- Kiper recognizes that Walmart might be viewed as a retailer that appeals to more budget-minded shoppers, but the company has data to support the high foot traffic from affluent consumers who come to a Walmart regularly to buy a broad assortment of goods.
- As part of its initiative to launch Prestige Beauty, Walmart has launched BEAUTYSPACENK on its online store and in ~5% of its brick-and-mortar stores. BEAUTYSPACENK is a partnership with Space NK, an iconic British personal care and beauty company, that was announced in early 2022. Kiper explained that Walmart is very enthusiastic about the potential to bring many more prestige brands to its stores.
- Walmart’s recently launched The Hair Lab by StrandsTM which aims to be “Inclusive for all. Exclusive for you,” has coupled science-based hair analysis with personal-touch service to create a product that meets individual consumer needs. While Kiper admitted that Walmart is taking a patient approach to evaluating how this brand fares at retail, he also said that he believed the growth potential for a business like this could be “asymptotic” over time.
- Kiper acknowledged that mass product customization can be challenging for any brand or retailer to do profitably, regardless of the product category. However, Kiper did share that Walmart is able to market a far broader assortment of products online than it is in-store, and as such, he believes that Walmart’s omni-channel approach to retail is the right one, especially as it pertains to Beauty categories.
- Kiper appreciates the increased innovation in the Beauty industry as new products help keep retailer’s shelves alive, but at Walmart’s scale, there can be complexity in terms of how quickly new products can land on shelves given Walmart’s high SKU velocity, which could be a high hurdle for the Beauty category.
- Walmart’s already broad assortment of brands in the Beauty space is continuously expanding, and the retailer is keen to focus not only on well-established but indie brands as well. Kiper believes in trends rather than fads, but determining which brands have the most potential to succeed is a difficult task.
- The consumer possesses more passion and interest when shopping for beauty products relative to other categories, so Kiper feels that offering differentiated merchandising and customer service will be important.
- When Walmart offers to incubate a new brand in brick & mortar stores, they generally start by offering it in 900-1000 locations. While this is an amazingly large-scale opportunity for many indie brands, Kiper acknowledged that not all up and coming brands are ready to launch at this As a result, Walmart works with indie brands to ensure that supply chain challenges are managed so as to not prevent brands from succeeding once they get shelf placement.
- The company asks for insight, innovation, and inclusivity from their suppliers as Kiper enjoys being challenged and better informed about the fast-paced changes that occur in the Beauty category.
- Kiper argued that while many prestige brands have been pioneers when it comes to more environmentally friendly products and packages, there have been fewer companies to date that have been able to make these effective priorities for more affordable products when it comes to being cleaner, more sustainable, and recyclable.
To discuss further, contact a member of our Beauty & Wellness team.
Baird is one of the most active advisors to premium, high-growth brands that enhance and enrich the lives of female consumers.
Wendy Nicholson and Lauren Leibrandt on their findings of the last decade's rise of M&A activity in the beauty industry.