1) Beyond fake reviews, counterfeit products take on the beauty industry.

WHAT HAPPENED: As the cosmetics boom continues, counterfeit beauty tools are threatening companies’ IP and posing risks to consumers.

Why it matters

  • Sham reviews aren’t the only fake things trolling the consumer economy. As cosmetics companies face rising competition, they’re also increasingly dealing with faux products. Overall, the beauty market has the fifth-most counterfeit products after perfume, watches, shoes, and handbags, which rank first place, according to the Organization for Economic Cooperation. That said, within the beauty industry, beauty tools such as facial cleansing brushes and hair straighteners suffer more because of their higher price point. Not only do these products threaten IP, but some post real risks to consumers because of poor manufacturing standards, especially when operating electrically.
  • When it comes to beauty tools, practically identical counterfeit products win over consumers with their low prices; the Foreo Luna facial cleansing brush, for instance, typically costs $169, while an eBay knockoff is only $9. The good news is that shoppers increasingly want to know exactly what they are consuming or applying to their skin, as you read in Wild, Wild Wellness. Just as shoppers join Subreddits to discuss beauty products, they can also search various sites or apps such as Cosmethics, which allows users to scan a barcode on a product and read information about where and how it was manufactured. The question is whether ethical- or health-related concerns will dissuade price-conscious consumers from purchasing fake products. Unlike sneakerheads, for example, who are less inclined to buy counterfeit sneakers because of the presentational aspect and status tied to wearing bona fide Air Jordans, beauty buffs are using cosmetics products at home, which may make buying counterfeit items less of a problem.

WHAT HAPPENED: Trader Joe’s launched its YouTube channel in April 2019 as it expands its marketing and editorial strategy to cultivate a stronger brand identity.

Why it matters

  • In an age when the once small natural foods market Whole Foods is part of Amazon’s portfolio, Trader Joe’s is working to build loyalty with grocery shoppers as an accessible, personable alternative via editorial content. The company, which launched a podcast in May 2018, is expanding its editorial content to YouTube, where it currently has videos in four verticals—“How It’s Made,” “Recipes” (a partnership with Bon Appétit), “Who We Are” (animated shorts), and “Products.” Some of these videos include the company’s green-skinned pilot mascot, the Fearless Flyer, which shares the name of TJ’s pre-existing catalog meets comic book meets newsletter. The channel currently has 5,700 subscribers.
  • The Trader Joe’s YouTube channel is a marked effort to voice the company’s personality and self-promote outside its store experience. This is particularly important considering it has evaded ecommerce altogether at a time when online grocery shopping is growing (it currently comprises about one-third of total grocery retail in the U.S.). It also could be an appeal to younger audiences; the videos join the rise of cooking-related videos (think BuzzFeed’s Tasty) and even children with its animations and puppet mascot. But interestingly, Trader Joe’s has disabled YouTube comments. While the channel seems to be an attempt by the notoriously secretive company to grow transparency about the inner-workings of its private-label-only assortment, it may be a lackluster one, even if it ultimately grows brand affinity with this new content strategy.

3) CAMP, the toy store meets playground meets cafe, debuts a membership plan as it aims to create a feasible business.

WHAT HAPPENED: CAMP newly launched membership program points to the company’s need for greater customer retention.

Why it matters

  • CAMP opened in December 2018 as a toy store, cafe and recreational space aimed at kids and families with a rotating theme. This week, the company debuted its second theme, cooking, but its membership program is the more eye-opening development. At $50 a month for a family with one child, plus $25 per additional child, members receive exclusive access to new CAMP themes two days in advance of the general public, two free activities and one free beverage per day, birthday perks, and two guest passes and one date-night dropoff per month.
  • It’s smart for CAMP to create an experiential space built on changing themes, but it still has to make money—a challenge the company is clearly still working out. CAMP’s pricing is on the lower end as far as indoor recreational spaces in New York go. Given that the average American family has about two children, a typical membership would cost $75 a month or $900 a year, while the Toddler Gym at Chelsea Piers costs $150 per month and Play Kids in Greenpoint, Brooklyn costs $140 per month. But these spaces are playgrounds only and charge for visits, while CAMP is a freely accessible space to all that sells toys and tickets to exclusive events. Though some consumers may come once, the membership illustrates that the company wants to keep consumers coming back, and likely hopes that it can convert players into toy shoppers over time.

4) Unilever may purchase digitally-native beauty brand Drunk Elephant as acquisition activity between CPG conglomerates and startups grows.

WHAT HAPPENED: After purchasing Dollar Shave Club in 2016, Unilever’s next $1 billion purchase could be the digitally-native skincare brand Drunk Elephant.

Why it matters

  • After the announcement last week that Edgewell Personal Care will acquire Harry’s for $1.37 billion, all eyes are turned to CPG companies. Both the Harry’s merger and the potential Drunk Elephant merger are part of a growing trend as more large firms look to digitally-native players for growth: In 2016, Dollar Shave Club sold to Unilever for $1 billion and in 2018, Walker & Company sold to P&G for somewhere between $20-40 million.
  • After just five years, Drunk Elephant has an estimated $150 million in annual revenue and is the fastest-growing skincare brand sold at Sephora. If the acquisition goes through, the startup would help build Unilever’s “prestige” business alongside brands such as Dermalogica and Ren, while gaining access to the CPG company’s massive marketing budget and other mechanisms that will help it scale. The merger would also be a better match than Harry’s and Edgewell. Compared to Harry’s, which entered various wholesale partnerships, as well as launched a holding company in order to make returns to investors on its whopping $475 million in funding, Drunk Elephant’s sales have grown six-fold since 2016 and has only raised $8.3 million. Unilever, which made more than $56 billion in 2018 revenue is also in a better cash position than Edgewell, which made just over $2.2 billion last year and has a significant amount of debt.