Beautycounter Embraces D2C Innovation With Purpose

No matter how innovative they are, companies still need to get paid. And not many companies this year have combined business model creativity with payments innovation more than Beautycounter. After starting the year by winning the top spot in Fast Company’s most innovative company for the beauty category, Beautycounter has followed with two payments deals – with Klarna and Canada’s PayBright – in an effort to keep themselves agile and engaged with customers.

“Our mission at Beautycounter is to get safer products into the hands of everyone,” said Chief Commercial Officer Patty Wu. “Partnering with Klarna and PayBright allows us to further our mission by providing customers with greater flexibility and convenience in shopping for clean beauty products. We’ve listened to our community and their requests for different payment options – more and more retailers are offering this as an option. It’s another service we want to provide to our customers so they can shop however and wherever they want.”

Beautycounter bills itself as the leader in what it calls “the safer skin care and cleaner cosmetics category.” Based in Santa Monica, California, one of its missions is to change the way the entire industry details its ingredients and manufacturing processes, including an advocacy effort to update federal regulations that have stood largely unchanged since 1938. It develops and distributes approximately 150 products across skin care, color cosmetics, advanced anti-aging, kids, baby and personal care collections sold through a tri-brid distribution model. Beautycounter has retail stores in New York City and Denver, eCommerce capabilities and approximately 60,000 sales consultants across North America. In addition to Fast Company, it has been recognized by Allure, Glamour, Refinery29 and WWD.

While all the innovations and the business awards are nice to have, the company’s CEO Gregg Renfrew has also made a name for the company as a beauty industry activist. Since its launch, Beautycounter has attracted national attention through its trademarked The Never List™, which details the use of more than 1,800 questionable or harmful ingredients in the industry’s product formulations. In December 2019, Renfrew testified as an expert witness before Congress in what was only the second hearing on cosmetic reform held in the House in the past 40 years.

“It’s been over 80 years since Congress has passed comprehensive legislation that would protect consumers from harmful ingredients in personal care and beauty products,” she said. “As the CEO of a manufacturer of products, I believe it’s our duty to use the safest ingredients possible. In today’s underregulated beauty market, however, doing so is extremely challenging.”

Those challenges have certainly ranged beyond just healthy ingredients. Beautycounter is focused on balancing a mix of direct-to-consumer (D2C) and traditional retail. The company’s ultimate goal is to apply that mix of channels to the customer journey and allow people to shop the way they want, with their preferred payment mechanisms.

“We are seeing that more and more customers want to buy directly from the brand, but in their own way,” Wu explained. “Some customers want the full-service, high-touch experience of working with a consultant, others want the convenience of eCommerce, some want to purchase in a physical store and others want the ability to mix and match all of the above. We want to meet these customers wherever and however they want to shop. In addition, we have strategic retail partnerships (e.g., goop and Sephora) when it makes sense for our consumers and aligns with our brand mission of accessibility to safer beauty.”

The pandemic has changed the concept of that accessibility. Wu pointed out that clean beauty is outperforming traditional beauty sales, and that new awareness of healthy ingredients has helped to drive its business during the pandemic. The company had one of its most successful product launches to date with its All Bright C Serum, which was released in May. It sold out of its six-month supply in just three weeks and garnered close to a 14,000-person waitlist.

During the pandemic, Wu said Beautycounter doubled down on all the digital tools in its kit. For example, although its stores were closed and in-person events were limited, the company launched The Virtual Counter, which offers one-on-one video consultations with in-house clean beauty experts. The service has been booked in advance since its launch. Beautycounter has also continued to lean into more live-streaming events on social platforms, hosted virtually by its consultant team.

“Our network of independent consultants numbers approximately 60,000. In the spring, we saw our numbers for new consultants almost double in March and April, and triple in May. In a time of so much uncertainty in the world, we are able to offer a unique business opportunity,” noted Wu. “Our consultants have always leveraged the digital medium to connect with their customers, and even more so through the pandemic. They are using all the digital tools available to them – from Zoom to TikTok to Houseparty.”

With the clean beauty sector expected to hit $22 billion by 2024, Beautycounter and Wu will continue to push the industry forward with product launches and advocacy efforts for cosmetic reform. One example of this is a recently released short documentary on its mica supply chain. Many reports have chastised the beauty business for using mica, which is a mineral used to give many makeup products their glitter or shine. It has also been associated with unethical mining practices and child labor. By the end of 2020, Beautycounter will have audited all of its mica mines and shed light on issues in the supply chain.