Arriving on the scene in 2016, Beauty Pie was founded on the premise that beauty should be affordable without compromising on quality. With recent investment off the back of a year when sales grew 140%, can it change the landscape of beauty retail?

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Here are five things you should know about the disruptive brand from our Retail Week Prospect analysts.

  1. Based on the concept of beauty without the high price tag, Beauty Pie is one of a number of subscription-based beauty brands. Established players such as Birchbox and Liberty’s more recent The Beauty Drop showcase a number of well-known brands sent to customers on a regular basis. Beauty Pie differs as the subscription allows its customers to access its own-brand products at a substantial reduction to market value, at a time that suits them. Customers have the option of either free membership for 60 days to trial products or a £59 annual membership fee and product allowance cap. This model puts the customer in charge of both their purchase frequency and spend each year, offering flexibility that many other subscription services do not. 

  2. With people spending more time than ever in their homes during the coronavirus pandemic and potentially unable to reach their favourite beauty retailer, Beauty Pie reaped the rewards. In the year ending March 2021, sales ballooned 140% to £39.8m as customer numbers doubled. The growth and retention of this customer base is a vital pillar for Beauty Pie’s future success and continued product development remains a key focus.

  3. In late 2021, Beauty Pie closed a $100m series B funding round to support continued growth. It will use the investment for additional warehouses and pop-up shops, marking its return to physical retail after its Harvey Nichols pop-up was disrupted by the pandemic in 2020. Prospect estimates that by 2026 the brand will surpass £80m of sales, doubling in size. New markets such as Europe and Australia could also be in its sights, offering the potential for further revenue gains.

  4. With its ‘Why overpay when you can Beauty Pie?’ TV advert launching in the US and UK earlier this year, the retailer aims to attract new cash-conscious customers as the cost-of-living crisis bites. With “hundreds of thousands” of customers already on board, locking them into the Beauty Pie ecosystem represents a clear threat to established beauty brands, particularly Boots – the high street giant is suffering a period of uncertainty and underinvestment under parent Walgreens as it seeks a new owner.

  5. Not content with changing the beauty market, Beauty Pie has also branched out into the sleepwear and wellbeing categories. Loyal customers can now go to bed head-to-toe in the brand, including skincare, pyjamas and silk pillowcases. The business will undoubtedly expand its range in the future, adapting to the needs of its customer base to retain loyalty. Without the restrictions of physical space, Beauty Pie is in a strong position to experiment across a number of categories and products.

Strengths

Direct-to-consumer model – Beauty Pie has full autonomy over its brand. Its model allows it to engage with its customers quickly regarding new product development while retaining their data.

 

Customer base – Customers post using the #ILoveBeautyPie hashtag to Instagram, acting as great marketing for the brand.

 

Interaction – Founder Marcia Kilgore regularly talks to customers, giving the brand a personable feel.

 

Affordability – A key part of its proposition and an area to shout about due to cost-of-living concerns in 2022. 

Weaknesses

Locations – at present, the retailer only operates within the UK and US.

 

Web-only model – currently without any physical locations, its web-only model prevents it from acquiring the ‘pick-up’ customer. Stores act as both marketing and brand-building locations, as well as transactional spaces. Many beauty retailers are evolving these destinations into experiential hubs for customers to interact with their brands. Without this, Beauty Pie is losing a raft of customers who enjoy shopping in physical outlets. 

Opportunities

Store presence – As an online-only retailer, will physical space be something Beauty Pie explores again after Covid shuttered its Harvey Nichols pop-up after just a few days?

 

Headcount – Overall headcount more than doubled to 109 in 2020 and welcoming new talent will be key to continued growth and innovation.

 

Markets – Expansion to other markets outside the UK and US seems likely within the next few years.

 

Market conditions – With pricing being its most attractive pull, Prospect predicts it could grab market share from high street stalwarts Boots and Superdrug, where customers could be swayed from brands that operate at a similar price point.

 

ESG credentials – Beauty Pie could talk more about its sustainability strategy and steal a march on other brands in the industry by honing its plan with initiatives such as in-house recycling or carbon-neutral deliveries. At present, it uses FSC cardboard to package products, alongside PCR in its make-up product packaging and glass in much of its skincare.

 

Augmented reality – Many beauty brands have invested in augmented reality to bolster the shopping experience online. Beauty Pie should look to invest in this technology in order for customers to view and virtually try on its make-up range before buying, thereby bolstering sales.

Threats

Supply chain – Logistics issues could be problematic as the majority of products are imported.

 

Loyalty – Retaining customer loyalty is key to driving increased revenue.

 

Competition – The beauty market is fiercely competitive and Beauty Pie needs to ensure it has a unique selling point to continue to differentiate within the market. With price its biggest differentiator, could it withstand another retailer joining the market with a discounted range?

 

Subscription based-model – With Netflix losing customers as they emerge back to life post-pandemic, Beauty Pie could suffer the same fate. Its CX strategy has to remain a key focus.

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