Are holiday gift sets worth it for brands? – Glossy

October 26, 2021October 29, 2021 Mary

With the holiday shopping season well underway, I’m exploring the state of the tried-and-true beauty gift — the holiday bundle. Also, a look at how skin-care companies are adopting the wholesale model perfected by salons and Amazon.

As the global supply chain backlog of 2020 has worsened this year, brands across sectors are encouraging shoppers to make their gifting purchases earlier than ever. Amazon and American Girl sent out their holiday toy catalogs earlier this month, and other brands are calling November 1 the drop-dead date for timely presents.

Beauty is no different. Sephora is already advertising “All Set to Holiday” on its homepage, and Estée Lauder is calling out holiday gifts across its site, with its limited-edition kit of 29 Beauty Essentials leading its messaging. Luxury companies, heritage brands and household names are expected to engage in the earlier-is-better bonanza via holiday beauty kits, including with some new versions that one-up prior offerings. For example, the French house Guerlain is releasing its first Advent Calendar, adding to its standby holiday kits of red lipstick, fragrance and hero Abeille Royale product.

“As we approach the New Year with hope and optimism, we thought this was the perfect time to introduce our first-ever Guerlain Advent Calendar. With the hope of once again safely spending much time with friends and family and gathering in festive affairs, it seemed fitting that we compile a series of our most luxurious, pampering products to encourage the gift of self-care for a celebratory holiday season,” said Bertrand Pochet, head of U.S. operations at Guerlain.

Similar to many beauty companies, Guerlain is hoping to spur trial with the gift. “The Advent Calendar will also give our shoppers a chance to interact with products they may have never experienced. There is long-term recruitment value in people trying new, out-of-their-comfort-zone products, particularly with a house such as ours which has such a wealth of products and innovation across skin care, beauty and fragrance.”

Pochet added that, because Guerlain produces all of its products in-house, the brand has not felt the impact of pandemic-related supply chain issues as much as other brands, so “the Advent Calendar was a must.”

Newer brands, on the other hand, are on the fence about launching holiday kits, citing not only supply chain issues, but also additional Covid-19 costs and sustainability disparities.

“This is our first year in business,” said Tisha Thompson, founder of LYS Beauty. “So our choice to focus on our core product is intentional. We want to focus on our brand messaging and identity and not get drowned out by a bunch of novelty kits that don’t meet the true brand aesthetic and DNA.”

Though LYS sells at Sephora — where other startup brands, like Tower 28, Merit and Fable & Mane are indulging in launching holiday gift sets — Thompson doesn’t feel the pressure to compete, especially on price.

“With these holidays, you see brands doing bigger and better and flashy and crazy [launches] to play in that holiday frenzy. I felt it was too soon, being a new brand. We’re already super accessible and, on average, 30-40% cheaper than the average prestige cosmetic brand. Day in and day out, our tried and true products are already at an awesome value,” said Thompson.

Obviously, supply chain restraints were also a consideration in Thompson’s mind. “It’s hard enough to get our best sellers stocked and in stores, so do I really want to pay thousands of dollars to air freight holiday stuff to sit on boats for months and months? It wasn’t worth the stress,” she said, adding that she also didn’t want to then pass that cost on to the consumer.

Minori founder Anastasia Bezrukova agreed. The brand launched in June and is sold DTC and at The Detox Market. Originally, Bezrukova was considering coming out with holiday kits, knowing that giftable sets provide a major brand awareness moment. But, upon talking to her packaging teams in Asia, she found that minimum order values for proposed product minis were 4,000-5,000 units, with packaging costing $4 per unit.

“It seemed crazy to buy $20,000 worth of cardboard from China, and that doesn’t even include sending these components to my 3PL [third-party logistics team] to assemble the kits, which was going to be 25 or 50 cents per box. Being a minimalist beauty brand, we were trying to look at more sustainable packaging options, but the costs were prohibitive,” she said. Final pricing for producing the prospective holiday mini kits came in at around $5 each, so Bezrukova scrapped the idea.

Instead, Minori is selling three holiday bundles on its DTC site, made up of a lip duo ($35) and two lip and cheek kits ($65 each). Bezrukova said she did want to offer something giftable to her existing DTC shoppers, but mini sizes weren’t created for the bundles, to eliminate extra waste.

“We can’t produce something that’s just going to go into the recycling bin or end up in a landfill the moment someone opens it, so if we made a box, it had to be high quality, so that people will think it’s special and want to keep it,” said Bezrukova of the full-size items. Following the launch of Minori’s holiday bundles on October 25, the brand is expecting to see a 200% lift in sales and to double its DTC business during the holiday shopping period.

Sustainably-minded skin-care brand Versed has two kits available. The Calm, Clear, and Holiday Cheer Skin De-Stressing Gift Set ($20) is available at Target and on its website, and the Deck the Shelves Best of Versed Gift Set ($34.99) is being sold exclusively on versedskin.com. Brand director Deven Hopp said the rationale for selling two kits was that the brand’s 2019 and 2020 kits at Target sold out. Following the launch of the two 2021 kits launching in October, Versed will debut seven smaller holiday bundles in November.

Hopp would not state the exact costs of creating the kits, but said, “The difference in cost of goods between a mini and a full-size product is often less than a dollar,” but there’s also the added cost of assembling the sets, of course. “Yes, it is expensive, but the kits are a big revenue driver and a means of introducing new customers to our brand,” she said.

Brand awareness seems to be the driving force in why indies are indulging in the costly, time-consuming and creative exercise. And while sustainability can feel at odds with holiday packaging and minis, Hopp said Versed opted to use FSC-certified paper and PCR plastic in its giftable kits.

“Where we can reduce carbon emissions, like in using post-consumer recycled plastic rather than creating virgin plastic and shipping via ocean rather than air, we do. Whatever we can’t reduce, we offset. And with our Recycle Responsibly program, once a consumer is finished with the products, they can send them back to us and we’ll recycle them, along with any other plastic beauty packaging. It’s what we’re doing behind the scenes, the work that goes into every product — mini, full size, limited edition or core assortment — all year round that keeps our goals on track,” she said. ” Versed is also selling Versed refills this season to further its sustainable beauty mission.

For Lindsay Holden, founder of hair-care brand Odele, offering a kit via Target, with a separate one for its DTC site, provided a bit of balance in the holiday gifting wars — neither are holiday-specific, meaning you’re not going to see a Christmas tree or snowflake on packaging. This was key since it’s a known practice for retailers to offload unsold product back to brands.

A trio of travel essentials (Smoothing Shampoo and Conditioner and an Air Dry Styler in 3.4 oz sizes) that comes in a reusable Odele tote is special to the brand’s e-commerce site. However, Target offered the brand’s travel-size tubes of the Smoothing Shampoo and Conditioner in stores in 2021, and the Air Dry Styler is part of a broader hair holiday offering for the retailer.

“We have a bundle. It certainly is giftable and is conveniently timed to launch around the holidays, but we created the offering to drive trial among the brand. We’re still relatively new and unknown — we launched in late January 2020 — and trial size across all our products is something that is requested on the regular,” she said.

Negotiating sustainability concerns was also a concern for the Odele team. The brand used existing formats of the products, chose a reusable tote as packaging and used kraft pillow boxes (made from recycled materials and with no print) to ship products.

Holden said that holiday kits are a necessary tool. “It’s expensive. Minimum order quantities can be huge, you want the retail to be palatable, and shipping is expensive, but we consider these types of programs a marketing investment — a way to build awareness, drive trial and ultimately convert new people to Odele,” she said. “It’s not about making money on the kit; it’s about the long game. And we know that the proof is in the goop.”

Fellow Target brand Womaness that launched in April is also going the DTC route only for 2021, offering three holiday kits: The Gift of Pleasure, $49; The Gift of Hydration, $59; and The Gift of Glow, $46.

Though Womaness’ bundles are holiday-specific, Michelle Jacobs, co-founder and COO, said the brand is planning to make use of the bundles’ components, if they go unsold. “Everything within the bundle can be used throughout the year. This helps with MOQs, and with avoiding packaging waste and costs,” she said.

Still, even with supply chain disruption (Womanness added 5-10 weeks to all of its supply chain purchase orders), cost (“It’s expensive and time-consuming; you’re basically redesigning your whole line,” she said), and sustainability red flags, Jacobs considers holiday gifts a non-negotiable in beauty.

“People are browsing and shopping more than ever. Think about how much time you spend online shopping,” she said. “You don’t want to be left out of consideration when the consumer is thinking about gifts, especially given the countless options they’ll face.”

Jordan Samuel Skin takes a page out of the Amazon salon playbook

Much like Amazon, which made it easier for stylists to make a commission on referred product sales and also purchase hair products for clients in smaller quantities, indie brand Jordan Samuel Skin launched its own wholesale program for partners on its website this month. All Jordan Samuel skin-care products are available to purchase by licensed aestheticians and small spas with six treatment rooms or less, with minimum orders of $450. For end consumers, Jordan Samuel Skin is available via DTC in the U.S., Canada, New Zealand and Australia, and with Cult Beauty in the U.K.

“There was a barrier for small businesses to succeed,” said founder Jordan Samuel Pacitti, a former professional ballet dancer who transitioned to skin care. Certainly, beyond real estate costs, securing products for one’s spa environment was a factor that has plagued the greater skin-care community during the pandemic. Alongside Covid-19, skinfluencer and esthetician Sean Garrette mentioned that these issues were part of delaying his own pop-up in New York.

Still, buzzy estheticians such as Sofie Pavitt, based in New York, and Nerida Joy, who works in Los Angeles, have already signed up for Jordan Samuel’s wholesale program. To spur education and sales, Samuel Pacitti is hosting monthly Zoom meetings for extra education, tips and team building purposes.