Overheard at the Glossy Beauty Summit: ‘The shrink problem is so severe.’

For companies big and small, relationships with retailers ranging from Sephora to big box stores are key for reaching consumers. But attendees, by and large, agreed they’re struggling to maintain retail as a positive channel, due to issues like shrinkage, or the loss of products due to reasons other than sales.   

“Retailer timelines are tightening. I just got a call from a major retailer saying they wanted to pull us in, and they’re giving us two months’ notice. So we’re scrambling right now.”

“The worst part of my shrink is coming up on Amazon, and undercutting my Amazon business.”

“I’m gonna have to stop a retailer relationship because the shrink problem is so severe. We’ll continue that relationship online, but I could not have imagined it would get to this point of severity.”

“The major brands are selling the merchandise to the retailer. If it becomes damaged or stolen, the brand has no ties with it, because they already sold the product off to that retailer.”

“Our testers are being stolen, which the brand is funding. And then people are stealing product and returning it for cash or store credit, which then the brand is also funding.”

“You need to educate your staff to look out for shoplifters, converters and such. We need the retailer to continue to protect our brand, too.”

“We met with some of our buyers, and they commented on how sales were going down. Instead of implementing strategies to help increase sales, these store managers were just removing the product altogether. They flat out said that they didn’t even have anything to really do about it.”

“If you’re having a big product reset, you can work with companies like Acosta, and they’ll go into the stores and set the stores for you. It is an expense, but your product will not sell if it’s sitting in the back room, in storage. Acosta is a great program to work with if you have a big product launch and you need to get the product out by a certain day.”

“Customers are waiting to shop. It may be due to the election, it may be other reasons, but they’re waiting longer and longer and they’re wanting deeper and deeper discounts. Black Friday is going to be later this year than we’ve previously seen. So it’s just a tough landscape.”

When to pounce on social trends

2024 has proven to be as hectic and unpredictable as ever when it comes to viral social trends, with movements like Brat Summer and “demure” rising and falling at ever-changing rates. In addition to working with their teams to sense trend patterns, beauty companies are seeking out data-driven methods to know when it’s worth participating in trending social content. 

“We’re always encouraging our team to think creatively. If we see something viral, we send it to each other. We have a standing meeting every week to talk about all the trends — what could be too risky and what could be just enough of a risk. Try to work on the barriers that cog the decision.” 

“A lot of it is a feeling, and all of us see it. But how are you choosing one trend over the other, knowing that so many are coming in and out?”

“Spate is really good at helping you to pinpoint where you are on the trend curve and helping you understand that data.”

“We’ll create new content with our creative team partners to get that content out. Or we’ll see if we can repurpose from our existing library. I think it’s based on your bandwidth and what you have to work with.”

Influencer costs

Working with influencers is no longer optional for beauty brands. But the rules are changing on how to determine the ROI on commissioning paid content. 

“Negotiate, negotiate, negotiate. Influencers offer prices out and you can pay them a quarter of that. So whatever the price is is not the price. A lot of them are also starving for business as budget cuts are happening.”

“We’ve had success on TikTok Shop recently and managed to turn around the tables a little bit on TikTok influencer work.”

“We work across a lot of brands and we found we were kind of bidding against ourselves. One thing that really changed the game for us was making sure that, across all the different brands, we were talking with each other about what we were paying, especially to creators that we used over and over again.”

“We’re trying to work with the ones that already shop with us or are already fans of the brand. See if they will be willing to get product, and they will be your long-term advocates for the brand.”

“We only leverage content that’s made. We send out product, and we’re like, ‘Hey, if you want to be in consideration for these partnerships, you better make great content.’ We’re not going to partner with someone and be like, ‘We want you to do these five points.’ It comes off so inauthentic.”