Morning Brew - ☕ Running down the box

How Ipsy has boxed out its competition.
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June 06, 2023

Retail Brew

Hello, hello. Hair care brand IGK yesterday announced a new dry shampoo made with matcha extract in collaboration with Chamberlain Coffee, so if you’re looking for an extra skip in your step today, maybe adding a little caffeine in your hair will do the trick.

In today’s edition:

—Erin Cabrey, Andrew Adam Newman

BEAUTY

Outside the box

Beauty products and an Ipsy bag arrayed on a mirrored tabletop Ipsy

In February, Ipsy used a TikTok video with the Saweetie and Doja Cat hit “Best Friend” and two people dressed up as living beauty boxes to introduce some big changes to its business.

The beauty subscription-box company announced that BoxyCharm, another subscription box offering full-size beauty products under the same parent company, Beauty for All Industries, would merge under the Ipsy umbrella. The move united Ipsy’s penchant for personalization on its boxes of sample-size products with BoxyCharm’s focus on full-sized items and commerce, CMO Jenna Habayeb told Retail Brew.

  • The two companies had operated as separate businesses since Ipsy bought BoxyCharm for $500 million in 2020, with a reported 4.3 million subscribers between them.

Ipsy has since seen “positive signals” from members, Habayeb said. “We didn’t know if people were gonna be really pissed off about a merge like that. We’ve had a lot more people sign up. We’ve had a lot of inactive members re-sign up.”

Ipsy, which says it is currently the largest beauty membership in the world, was founded in 2011, just a year after Birchbox pioneered the category that has since seen its ups and downs: Birchbox’s fate remains unclear amid struggles, while retailers like Target and Sephora have ended their offerings in recent years.

“It’s been a really great ride to be able to see so many great competitors come into the space but to be able to stand strong for the last 12 years,” she said.

Habayeb shared a few of the ways Ipsy has boxed out its competition, and where there’s still room to grow.

Keep reading here.—EC

     

FROM THE CREW

Your brand meets our Brewniverse

The Crew

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CUSTOMER SERVICE

What many prefer to customer service

A dentist with a drill, from the point of view of a patient in a dentist's chair. Peter Cade/Getty Images

“Thank you for calling Retail Brew. Your call is very important to us. Please stay on the line and your call will be answered in the order it was received. Your estimated wait time is 17 minutes.”

Doubtless, you’ve heard these words before and, if a new survey is any indication, they are not having a narcotic effect on you.

The survey, by Interactions, a conversational AI software company that focuses on customer service, asked consumers what activities they’d prefer to contacting customer service:

  • 38% would rather get a cavity filled.
  • 35% would rather assemble an IKEA dresser.
  • 28% would rather burn their mouths on hot coffee.

The survey, conducted by Cint, polled 1,000 consumers online in the US in March.

Swearing at robots: “We believe that customer service is at a two-decade low with satisfaction,” Peter Mullen, CMO of Interactions, told Retail Brew.

And he said the stakes are high for companies to right the ship.

“Over the next decade, customer experience will become one of the top predictors of annual recurring revenue for enterprises across the world,” Mullen said. “We are at a fork in the road right now, where companies are making decisions about what the customer experience is going to be like for the next decade.”

In the meantime, many consumers are seething, reporting that in the last year:

  • 48% became angry while communicating with customer service.
  • 38% hung up on customer service.
  • 33% raised their voice and/or swore on a customer service call.

“And that,” Mullen noted, “includes swearing at robots.”

Keep reading here.—AAN

     

RETAIL

Clear-cut

Macy’s Macy’s

Macy’s cut its full-year outlook after a tough Q1 resulting from consumer pull-back on non-essential spending, and a decision to convert to spring fashion a bit too early.

Net sales dropped 7% year over year to $5 billion. Brick-and-mortar sales dipped 6%, and e-commerce sales sank 8%. Macy’s is now anticipating full-year sales of $22.8 billion to $23.2 billion, down from its previous expectation of $23.7 billion to $24.2 billion.

CEO Jeff Gennette said demand trends “began to worsen” in the middle of March, and continued to decrease in April, as Macy’s customers “pulled back more than anticipated,” spending on food and essentials instead. Gennette said the retailer also introduced spring fashion “too early” in March, while temperatures were still low.

Keep reading here.—EC

     

SPONSORED BY SQUARE

Square

Stay retail relevant. E-commerce has transformed the way people shop, eat, and sell—and it’s always changing. Square partnered with Wakefield Research to produce the 2023 Future of Commerce Report, exploring how businesses are adapting, how consumer preferences are evolving, and the hottest trends in the marketplace right now. Uncover the insights here.

SWAPPING SKUS

Today’s top retail reads.

Tween spirit: Stores like Justice and Delia’s were once the go-to destinations for pre-teen fashion. Now, the pre-teen category has been blurred. (Teen Vogue)

Nothing to sniff at: From hand soap from Aesop to candles by Boy Smells, consumers are increasingly interested in creating a “bougie bathroom.” (Glossy)

Golden age: TikTok isn’t just for Gen Z—more and more brands are partnering with elder influencers. (the New York Times)

WHAT ELSE IS BREWING

  • Bed Bath & Beyond is in talks to sell BuyBuy Baby to Go Global Retail.
  • Diageo said Debra Crew will assume the interim CEO role as current CEO Ivan Menezes undergoes medical treatment.
  • Subway will open nearly 4,000 new locations in China.
  • JM Smucker Co beat expectations as demand remains steady amid higher pricing.
  • Great Jones, the millennial cookware brand, was acquired by Meyer Corporation.

SOCIAL GATHERING

A roundup of our favorite retail multimedia content from across platforms this week—from TikTok to Twitter. We’re keeping you hip, and you’re welcome.

Pet project: Matthew Bubear, CEO of CASCO Pet, an animal retail habitat supplier, shares an in-depth look at Petco’s new 44 Union Square location in New York City. (Matthew Bubear on LinkedIn)

Getting invested: Selva Ventures’ Kiva Dickinson and Madeline Kaplan, fresh off raising $34 million for their second fund, discuss opportunities in beauty and personal care and online vs. brick-and-mortar revenue. (The Consumer VC on Spotify)

Gotta have it: Sephora employees buck the de-influencing trend to share the products they think are underrated. (@makeup.by.jeanne on TikTok)

Gone quiet: Ben and Jerry’s explained why it’s halting its paid advertising on Twitter. (@benandjerrys on Twitter)

Can it: Food and beverage product collector account Bobby Beauchesne, aka Consumer Time Capsule, shows off a few cans for his soda can archive—Coca-Cola cans from 1955, 1963, and 1966. (@ConsumerTC on Instagram)

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Written by Erin Cabrey and Andrew Adam Newman

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