“The fundamental issue is that legacy brands were not created for today’s consumer or its preferred distribution channels, and you really can’t change that.”
Those are the words of Katherine Power, chief executive officer of Versed skin care and Merit, founder of the blog WhoWhatWear and the powerhouse executive behind Powered Brands, a special purpose acquisition vehicle that raised $240 million in January.
Power said that beauty marketers aren’t necessarily getting it wrong when it comes to content, but rather, they’ve been forced to update legacy brands with new images, branding or talent partnerships.
“I do think there’s more to be learned on new brand creation,” Power said during an interview with WWD and Beauty Inc executive editor Jenny B. Fine during the Beauty Inc @20 virtual event. “You have to have a real reason for being, be something consumers can’t live without or can’t get somewhere else.”
Power said that she’s seen an influx of well-capitalized incubators looking to create a set of brands that share resources and create joint ventures with different celebrities. “It’s just not that formulaic,” Power said.
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For Merit, a minimalist makeup brand that will venture into skin care, Power says she used her gut instincts.
But generally, she uses a combination of gut and data, which she has a lot of access to given the 20 million monthly WhoWhatWear readers and her multiple brands.
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With Versed, Power tests products out with the community ahead of launch, asking for feedback on everything from product names, aesthetics, price points, ingredients and marketing. “We’re looking for an indication that a product might be a top seller,” she said. But for it to work, members of the testing group must “be diverse and representative of the entire market you’re going after,” she added.
“Our community has predicted 80 percent of our top [stock-keeping units],” Power said.
All of Power’s brands focus on women, mostly Millennials and Gen Z, who she said shop with a different value equation in mind. “It’s really a mind-set. They are digitally connected, they’re seeking to level up when it comes to wellness and they’re willing to pay more money for brands or products that have great value to them,” she said.
They also seek out more meaningful relationships with brands, she noted.
“Content is a way of really building that relationship,” Power said. “Sharing your values and educating, helping them to get to know your brand. It’s very important — content doesn’t just have to manifest itself in a blog post or some kind of story. It can be as simple as some contextualization.” Power said she considers words that describe products, or even the tone used, to be content, too.
With her SPAC, Power is looking to “create something fundamentally different than what exists today,” she said. She’s looking to buy beauty and wellness companies that are digital first, and rooted in environmental and social responsibility, she said. Founders, she noted, should have the “x factor.”
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