Kroger integrates premium beauty products with everyday essentials to transform shopping experience

By Cassandra Stern

- Last updated on GMT

"We’ve seen beauty shoppers migrate to the Ultas and Sephoras of the world, and there’s been very little action in traditional grocery to compete with these retailers.  A value priced offering that competes with higher-end brands like MCoBeauty has largely been absent, and grocers like Kroger are capitalizing on the opportunity to retain these consumers," said Chris Brown, Senior Vice President of Kroger Sales for Advantage Solutions. © Jacobs Stock Photography Ltd Getty Images
"We’ve seen beauty shoppers migrate to the Ultas and Sephoras of the world, and there’s been very little action in traditional grocery to compete with these retailers. A value priced offering that competes with higher-end brands like MCoBeauty has largely been absent, and grocers like Kroger are capitalizing on the opportunity to retain these consumers," said Chris Brown, Senior Vice President of Kroger Sales for Advantage Solutions. © Jacobs Stock Photography Ltd Getty Images

Related tags premium beauty brand extension

In a strategic move to keep beauty shoppers in-house, Kroger is partnering with MCoBeauty to bring premium, affordable beauty products to over 1,700 stores nationwide.

In an era where beauty shoppers are flocking to specialty retailers like Sephora and Ulta, traditional grocery stores have largely been left out of the high-end beauty market. We interviewed Chris Brown, Senior Vice President of Kroger Sales for Advantage Solutions and Shelley Sullivan, Founder & CEO of MCoBeauty to discuss how Kroger aims to change this dynamic by integrating premium beauty products from MCoBeauty alongside everyday essentials.

This move not only aims to retain shoppers who typically leave grocery stores for their beauty needs but also to provide a value-priced alternative to luxury brands right where customers do their regular shopping.

CDU: Could you elaborate on the decision behind integrating premium beauty products alongside everyday essentials in grocery retail stores? What factors influenced this trend? ​  

Chris Brown (CB)​: We’ve seen beauty shoppers migrate to the Ultas and Sephoras of the world, and there’s been very little action in traditional grocery to compete with these retailers.

A value priced offering that competes with higher-end brands like MCoBeauty has largely been absent, and grocers like Kroger are capitalizing on the opportunity to retain these consumers. The same shoppers that are in their stores every day for items such as meat, frozen, and fresh produce are not buying cosmetics.

Those shoppers are traveling to retailers like Sephora, Ulta, and even Walgreens and Walmart. By bringing in MCoBeauty, Kroger is trying to keep those shoppers in its own stores.   

CDU: MCoBeauty seems to be pioneering this movement in the U.S. market. What motivated the decision to launch in over 1,700 Kroger stores specifically, and how has the partnership with Advantage Solutions facilitated this expansion? ​  

CB​: MCoBeauty’s strategy in Australia was to use channel-exclusive partners. In Australia, the largest grocery chain is Woolworths. Its counterpart in the U.S. is Kroger. It was important for MCoBeauty to use channel-exclusive partners, and Kroger was a natural fit.   

Using channel-exclusive partners generally motivates a retailer to lean on a brand, and Advantage Solutions assisted MCoBeauty in securing an exclusive audience at Kroger that other companies like theirs would otherwise struggle to obtain.   

Shelley Sullivan (SS)​: Since we launched MCoBeauty in 2016 in Australia, the brand has quickly become category leader in our exclusive grocery partner Woolworth’s, the country’s largest grocery retailer. I saw a gap in the market for luxe-for-less, well-priced beauty products at the same level of quality as luxury brands and capitalized on that by bringing the MCoBeauty brand to supermarket shoppers.

Expansion into America was a next logical step, with a +45% share of the cosmetics category in Australia we knew we had the scale and experience to take on large markets internationally, starting with the world’s largest beauty market. Our leadership teams at MCoBeauty and VidaCorp have also worked in CPG in the U.S. and brought that knowledge to the table. We felt the time was right to bring the proposition to the U.S., so we met with the Advantage The Kroger Co. team in Cincinnati where they are based. The feedback was compelling to get the brand in front of The Kroger Co., particularly this message around helping them win incremental customers who are already shopping at their stores to become loyal category buyers in the beauty sector.

By partnering exclusively with The Kroger Co. we are targeting shoppers who want a luxury experience at an affordable price, and with the convenience of being able to buy it at their local supermarket.

CDU: Traditional high-end brands like Charlotte Tilbury and Drunk Elephant have typically been associated with specialty stores like Sephora. How does MCoBeauty plan to capture the attention of customers who might not typically associate premium beauty products with grocery retailers? ​  

CB​: MCoBeauty is a recognizable brand, and the company does a great job with its social media presence and marketing plan. It has a cadre of influencers that drive traffic, not only to its products, but directly to the retailer that carries them.   

A lot of brands that go viral are not channel exclusive. But MCoBeauty, with its social media engine and influencers, can talk about its brand and drive consumers to the retailer. It also does a remarkable job at selecting influencers who are recognizable to its target consumers. That’s what gets a retailer very excited about it.   

SS​: We rely heavily on our army of influencers to promote the brand. They review our products and say, “Hey, here’s a beauty product of amazing quality and great value, and it’s only available at this retailer.” That combination of product and the message that's put into the market unlocks an enormous level of incrementality in our brand.

The effort paid off at Woolworth’s, where we converted 2% of all Australian households into becoming loyal cosmetics shoppers at the supermarket chain, where it is also the overall No. 1 selling cosmetics brand. These were shoppers who were already in that supermarket buying food and other items, we believe we can have the same impact at Kroger. When customers learn that MCoBeauty products are available that are of the same quality and much better value as high-end beauty products, they will pick those up and try them.

Then on their next visit, they'll try something else and gradually that basket penetration grows. The ultimate compliment is seeing customers leave specialty beauty stores to shop at supermarkets. We are seen as the ultimate channel-switching brand. We get customers who leave David Jones, Mecca, and Sephora. Statistics from data science company Quantium shows that we have drawn 140,000 new customers into grocers.

CDU: What are the challenges and opportunities associated with entering the beauty and wellness market through supermarket, drug store, and mass retail channels as opposed to traditional specialty stores?​  

CB​: The biggest challenge is that the shopper in those channels isn’t necessarily trained to be looking for those types of items in those stores. To overcome that challenge, the implementation of marketing and social media tactics is crucial.   

Displays also play a key role. You can’t just throw an item on the shelf and walk away. You’ve got to make a splash in a big way, and MCoBeauty is doing it with fixtures that you wouldn’t normally see in a grocery store. The goal is to get the target consumer to instantly walk over and engage with the brand.   

Finally, relationships and connectivity with the retailer are essential. That’s where Advantage Solutions came in. Our full-service offering ensures that the right assortment of products is available in store and online. We have images of every product up and available for online delivery, pick-up, and shipping. We drew planograms and shelf sets, installed those sets, and made sure the omnichannel strategy was in place for both the brand and the retailer to maximize success at launch.    

SS​: As shoppers are in a 'swipe and go' frame of mind, this can present a challenge, rather than behaviours learned in a department store where salespeople are on hand to teach customers about the products in hand. However, this presents a new challenge: how to help customers make informed decisions without the presence of knowledgeable salespeople.

Innovative solutions like digital screens and strategic signage are stepping in, guiding customers and adding a touch of sophistication to the shopping experience. Research may be done online with the brands before shopping, so the customer doesn’t have to spend their time learning and researching in store, they are shopping with a list in mind, which fits the supermarket model as a ‘grab-and-go’ item.

Accessibility of the product is paramount as to whether a product goes viral or not.  Our highly engaged social media community want instant gratification, they want to be able to go into their local store and find that hot new product as soon as they discover it. Woolworth’s being the biggest supermarket in Australia, with over 1,000 stores and always very well stocked, means our products are very accessible to customers.

CDU: In what ways does MCoBeauty plan to adapt its product offerings or marketing approach to resonate with the diverse customer base of U.S. grocery retail stores? 

SS​: When it comes to marketing to U.S. consumers, MCoBeauty will be following the strategy that worked so well for it back home. We've been working with a lot of agency partners on media, influencers and the like, and the overwhelming feedback is that the way we talk to our consumer in Australia and New Zealand is exactly the same way we should be talking to our U.S. customer base, which is around this message of quality and value with hyper on-trend products that are constantly innovating.

What MCoBeauty will be doing, in a super targeted way, is activating an army of influencers with a very specific follower base. We know where that base lives in the continental U.S., and we're able to overlay how that connects with Kroger's retail footprint so that there's a strong correlation to that traffic then reaching a Kroger store.

Dealing with international markets is always really challenging, with the time difference and the language barrier. And with beauty, everything is so market centric. What works for one region won’t work for another, and vice versa. So, you must understand and respect their market and their differences.  

CDU: How do you foresee the integration of premium beauty products into grocery retail evolving in the coming years, and what role does MCoBeauty aim to play in this evolving landscape? ​  

CB​: If you use Woolworths in Australia as an example, this could totally change the landscape. It will change the way the consumer thinks about the entire beauty category in a traditional grocery channel – while also converting consumers who are shopping for daily essentials into buyers of beauty products.  

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