This week, let’s dive into the theme of powerful partnerships and innovative products.
In this edition, you’ll discover:
- Insights on Sephora’s collaboration with Korea’s Olive Young
- My analysis of the wave of new product reformulations
A Series of Beauty Battles Unfolding
For those who missed it, The Business of Beauty reported this week on Olive Young’s exciting collaboration with Sephora. To give you a brief overview: The South Korean beauty retailer is launching a selection of its most sought-after brands in 700 Sephora locations across the globe.
This initiative is significant.
While Olive Young plans to open its own stores in Los Angeles this May, it faces the challenge of adapting to a different market and a new type of consumer. This dual approach — launching both its own stores and partnering with Sephora — is a strategic move. The collaboration will not only familiarize US shoppers with Olive Young but also draw them into its LA outlets.
The advantages for Sephora are noteworthy as well. Their merchandising team, led by the impressive Priya Venkatesh, is actively expanding its global footprint by enhancing brand selection and boosting consumer engagement. This partnership with Olive Young strengthens Sephora’s K-Beauty offerings, an area where they had previously been limited, since they currently feature only 12 K-Beauty brands, including five recently added.
Sephora, a leader in innovation, finds itself playing catch-up. While Sephora has notable K-Beauty brands like Beauty of Joseon, recognized for its popular sunscreen, Ulta Beauty has built a robust collection of trending South Korean brands through direct collaborations and consultancies. Ulta’s success in acquiring favorites like Anua and Tirtir gives it a competitive edge, ensuring that consumers understand what Ulta represents within the skincare segment.
Olive Young is distinguished by its engaging shopping experience where product rankings elevate consumer excitement and stimulate competition among brands. This aspect can indeed serve as a benefit for Sephora. While many of Sephora’s initial contracts with emerging brands last around two years, the brand hasn’t established a fluid system for introducing and retiring products. This collaboration with Olive Young could change that, providing the necessary exposure and customer traffic.
Both Sephora and Ulta are tactically choosing their global partners, including Olive Young in Korea and their respective firms in India, the Middle East, and beyond. This ongoing race for global beauty dominance continues.
It’s important to note that each collaboration has its own structure; some relationships are more consumer-facing, while others focus on logistics. For instance, Kohl’s has minimal interaction with Sephora brands, while Chalhoub operates its own retailer, alongside a partnership with Sephora. As with all alliances, questions regarding ownership of brand relationships persist.
Will Olive Young maintain control over its connections, or will Sephora take the lead? My guess is that Olive Young will retain those connections, while Sephora simultaneously onboarding its own K-Beauty brands. Whether an Ulta exclusivity can be challenged should Olive Young wish to approach a brand remains uncertain, but we’ll soon find out.
The Motivation Behind Product Reformulations
Last week, just as I was preparing to send out Full Coverage, I learned Estée Lauder is reformulating its iconic Double Wear Stay in Place foundation, a product that has dominated the market for nearly 28 years, according to Yipit data. Lauder joins Armani, which recently reworked its famed Luminous Silk foundation, promising a lighter, more luxurious finish along with an expanded range of shades.
Justin Boxford, the global brand president of Estée Lauder, noted in an interview that “Consumer needs have shifted significantly in recent years, and technological advancements are remarkable.” The revamped Double Wear is expected to hit shelves next month after a long reformulation process.
Boxford’s point stands; advancements in technology are pivotal. This shift is evident in indie brand Makeup by Mario, which reintroduced a new foundation last year after releasing its first just three years earlier. The landscape of how consumers wear foundation is also evolving. A trend toward lighter finishes like skin tints or using concealers as substitutes is growing.
Engaging new customers is essential, yet brands must also anticipate emerging regulations. With the EU banning silicones like cyclopentasiloxane in 2024 for cosmetics—a substance integral for providing smoothness—changes in formulations are pressing. Brands have until mid-2027 to comply. Chantecaille was among the first brands to pivot accordingly, while Armani and Estée Lauder quietly adjusted their formulations without overtly announcing the changes.
According to Alex Padgett, a cosmetic chemist and co-founder of the skincare line Educated Mess, cyclopentasiloxane is particularly beneficial for foundations and sunscreens due to its quick-drying properties and velvety finish.
While reformulation seems straightforward, it’s anything but. A product often undergoes a 15 percent formula change during reformulation, leaving it to the consumers to assess if the new version meets their expectations.
