Despite the legwork, networking and pitching, securing a spot in a top retailer is not even half the battle.
“When you get into retail, literally, that’s when the work really starts,” said Paula Floyd, chief executive of retail staffing and strategy agency Headkount.
After a brief period in which direct-to-consumer brands were thought to have a disruptive advantage, the pendulum has swung back. Now, beauty brands — and their investors — understand that both wholesale and DTC are needed, and see wholesale as the key to rapid scale.
The growing popularity of top specialty retailers like Sephora in the US and Europe, Ulta Beauty in the US, Australia’s Mecca and the UK’s Space NK, and their investments in customer loyalty programmes, in-store events and curated edits have made their stores more popular than ever.
Retailers are keen to pick up hot new brands, but the increasing number of emerging indie labels has spread merchandising staff thin.
“Historically, at Saks, each merchant at Saks had nine brands. They could really nurture them and be their champion and custodian,” said Thomas Smith, founder of skincare line Skin At Work. “Now, there’s so many, it’s just impossible for retailers to take care of all of them in the same way.”
For some founders, the pressure that comes along with moving into big retailers can feel like an ever-moving goal post. Retailers have high expectations of brands, and want them to outperform, but aren’t always able to offer dedicated marketing and education support, leading to some brands getting choked.
“[Brands] that don’t have that marketing machine going…their chances of lasting very long in a store like Sephora are very limited,” said Floyd, adding that many promising brands become “one-hit wonders” that fizzle out.
It’s difficult for beauty labels to scale without some kind of wholesale presence, be that a big box retailer or even a taste-making independent retailer — even the original DTC darling Glossier launched into Sephora in 2023. But getting a foot in the door whilst ensuring any subsequent launch doesn’t stretch a company beyond its means is a fine line to walk.
Brands also need to be mindful to strike a balance between their own DTC channels and wholesale presence, and ensure their supply chain and cash reserves are stress-tested.
How To Get In
The value of getting into retail is so great that many founders are willing to pull out all the stops to make it happen. Kelly St. John, a retail veteran with more than 20 years experience, now offers a retail brokerage service where she pitches up-and-coming brands to her contacts at top beauty retailers. Other founders cold-call, approach executives via social media, or in the case of Shizu Okusa, founder of the supplement brand Apothekary, network their way in. Her brand launched in Ulta Beauty in November 2024, thanks in part to a connection made by an investor, who introduced her to someone at Nike, who made the introduction to Ulta Beauty.
It’s not enough to have a buzzy product. Thomas said brands need to be able to show retailers that they already have a built-in customer “tribe” — a group of super-loyal fans who do more than just follow the label on social media. “Real purchasing customers with lifetime value, who you know haven’t just responded to one viral moment…otherwise for the retailer, it’s just a share shift,” he said. Cassie Cowman, co-founder and partner at retail strategy agency View from 32 added that the business also needs to show its products are highly replenishable, rather than occasional purchases.
Apothekary’s pitch was successful partly because its products, which include the non-alcoholic tincture Wine Down, filled a white space for the retailer. The brand’s roots in Eastern medicine were also important.
“You have to pitch not just your product, traction and the velocity you can bring, but also a brand story they can get behind,” Okusa said.
Having a hero franchise — think Laura Mercier’s best-selling setting powder or Tarte’s Shape Tape concealer — can simplify things, serving as an introduction to the brand that is more compelling to retailers, and memorable to customers. Recalling his previous tenure at Sephora — Smith led a team that opened the first store in the US — he said even top sales staff have a fixed amount of information they can retain.
“If a beauty junkie with that kind of capacity can only absorb so much information, that’s the same for customers,” he said.
How to Stay In
A big purchase order represents a big cash influx for brands, but it can also contain hidden costs. Okusa estimated Apothekary’s recent retail launches, which also include the upmarket grocer Sprouts, have cost around $300,000. End-cap displays, a coveted spot at the end of an aisle that catches shoppers’ eyes, can also be up to $30,000 each time they’re fitted out, she said, but the brand also did affiliate marketing, influencer and press send outs, and out-of-home advertising.
Not understanding the dynamics of demand forecasting a different pitfall. Okusa said “the last thing” a brand should do is buy too much stock based on shaky inventory projections. Once the momentum has begun to set in, and marketing plans are more evolved and responsive to consumer appetite, the process becomes easier, she said.
Being featured on special edited walls or displays or a retailer’s homepage can also give a much-needed visibility boost. But to turn that buzz into longer-term growth, brands need to invest in education to ensure store staff are routinely recommending products to shoppers. St John said high staff turnover was one of the “most frustrating aspects” of modern retail, as store employees take valuable knowledge with them when they leave.
“It’s critically important for brands to connect with those key selling specialists,” she said, adding that in department and upmarket stores, many salespeople have very long-term client relationships.
Headkount’s Floyd said that brands that prioritise spending on field staff and customer events see more success — the agency books up to 500 events a month for its roster of brands which include cosmetics line Kosas and skincare maker The Outset. Routinely engaging with store staff, offering product gratis to employees and incentivising sales and sampling play a big role, but brands need to think carefully about whether to hire their own field team or use an agency. While agency staff aren’t tied to a single brand, they can offer a more flexible, agile and lower-cost solution — Okusa said salespeople have become the hardest role to hire for.
Cowman also advised transparency when it comes to forecasting if a brand also operates a DTC presence. She said some retailers end up “burned” when a brand doesn’t give enough detail about their typical sales volume, which can mean expectations are set too high or too conservatively, leading to either too-quick sell outs or a glut of inventory. With the former, “the next time, they might not order enough,” said Cowman. With the latter, brands may end up missing sales and losing momentum.
When a brand is just happy to have signed a big retailer, progress might feel inevitable, and aligning staff, marketing and inventory can feel like an afterthought. Setting expectations and gearing up is key, because so much in retail hinges on launching well.
“Second lives don’t happen very often,” said Smith.
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