By Pritika Gupta
It’s never been easier to start a beauty brand. Scaling, however, requires distribution paths that … [+]
The beauty industry often confirms the veracity of an important business principle: New entrants can expect harsh reactions from existing players when the market is not growing and their market share is threatened.
The 5.86% revenue growth (CAGR 2022- 2026) of the $85bn US beauty industry (and particularly the 30% YoY revenue growth of the Prestige Beauty segment from 2020 – 21) allows for new entrants to serve niches without prompting a response from larger, more established players. A key component of becoming scale players in the beauty industry has been access to offline distribution. The rise of beauty accelerators in the US is increasingly empowering smaller DTC brands to meet this challenge.
Caroline Weintraub, Vice President at True Beauty Ventures (TBV), who sees upwards of 30 beauty pitches a week, explains, “It’s never been easier to start a brand. It’s not as capital intensive and the cost structure has changed given tools such as Shopify and the rise of social media marketing.”
“However,” Weintraub adds, “competition and access to capital makes it tougher to scale.” The primary hurdles of distribution are being solved, to some extent, by major retailers who are extending their own brand-building expertise and national networks through their accelerator programs. Target introduced 40 new beauty brands in stores and online through Target Takeoff, Ulta has announced their selection of 8 early stage BIPOC brands that will participate in their Muse Accelerator Program, and Sephora Accelerate introduced 10 more BIPOC brands in year 2 of the program.
The primary hurdles of distribution are being solved, to some extent, by major retailers who are extending their own brand-building expertise and national networks through their accelerator programs.
Despite the continued rise of e-commerce, small beauty brands rely on the offline networks of big … [+]
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It is important to note that these accelerators accept startups across different stages and categories. The Muse program requires “early stage with market presence, awareness or have DTC revenue” while Target requires that the, “…….