1) Birchbox is opening pop-ups in 500 Walgreens stores, an initiative that could help revive the subscription box company and attract more beauty-goers to Walgreens.

WHAT HAPPENED: Starting this Friday and lasting through the end of December, Birchbox will expand its partnership with Walgreens from 11 permanent locations to 500 temporary shop-in-shops across the country. Birchbox displays will be at the front of stores and will feature Birchbox subscription gift cards and beauty product samples that encourage customers to curate their own boxes. The move comes after Birchbox significantly scaled back its physical retail footprint.

WHY IT MATTERS

  • Placement in Walgreens grants Birchbox widespread exposure and could attract a different type of beauty shopper to the pharmacy chain. Using Walgreens to expand its physical presence allows consumers who are skeptical of Birchbox’s subscription service to try it in real life without the company spending tens of millions of dollars to build an equivalent retail footprint. With no future around subscription boxes, Birchbox can now see how a broader segment of customers will respond to its offering without a monthly membership commitment. A temporary presence in 500 stores will give Birchbox an immense amount of consumer data, which could help further evolve its business model after a number of challenging years. But for a lasting impact, pop-ups won’t be enough.
  • Because Walgreens isn’t a destination for discovery, the drug store’s atmosphere could overshadow Birchbox’s presence. Given Walgreens’ premise as a store with everything from pharmaceuticals to paper goods to beauty, Birchbox will have a hard time standing out among Walgreen’s contained chaos. While the drug store carries a wide range of beauty products, the majority of its offering consists of legacy players like Maybelline and Covergirl, not the niche brandsBirchbox partners with. While Birchbox will allow customers to try new brands, Walgreens might not have full-size versions available in-store, which will either push customers to Birchbox’s website or encourage them to stick with the products they already know and love, which could defeat the purpose of the partnership.

2) Ferrari will launch a line of luxury clothing and accessories to elevate its brand, but transitioning away from licensing will not be easy.

WHAT HAPPENED: The carmaker will scale back its licensing agreements by 50% and will reposition itself as a luxury-goods brand, selling branded apparel and leather accessories. Armani will oversee the production of the Ferrari clothing line. Ferrari projects that non-car sales will generate 10% of the company’s total profit within seven to 10 years.

WHY IT MATTERS

  • Ferrari’s luxury goods initiative could help the carmaker differentiate itself from its competitors and increase its overall brand value. Amind a shift towards electric cars and an increasing skepticism towards overt displays of wealth, the company is working to reposition itself for the next decade. While Ferrari’s merchandise business accounts for less than 1% of its total revenue, a more extensive product assortment will invite a new type of customer to buy into the brand and also increase revenue. While this might not lead to direct car purchases, it will help broaden the brand’s customer base and create more entry points that still make a difference on the bottom line, especially with the limited production of its signature cars, which keeps demand consistent.
  • The company’s long-term reliance on licensed merchandise could challenge Ferrari’s transition to a well-rounded luxury goods brand. Ferrari currently sells branded hats ($36), t-shirts ($40), and bags ($49.99) that are licensed products sold at various retailers from Neiman Marcus to Macy’s to Amazon. But transitioning to a new manufacturer and increasing quality won’t be enough to establish itself in the luxury goods space. While Ferrari is a trusted household name for cars, the luxury apparel and leather goods sector is crowded and dominated by legacy players like Hermès and Louis Vuitton, who hold lasting brand power. Ferrari needs to look for ways to stand out from classic brands and balance its heritage and innovation to define its next chapter selling more than just cars.

3) Vince bought Rebecca Taylor and Parker to expand its brand portfolio, a move that could be distracting or help strengthen its rental platform.

WHAT HAPPENED: Vince acquired the brands from Sun Parker Capital for $19.7 million. The acquisition will add $84 million in revenue to Vince’s total sales.

WHY IT MATTERS

  • As the contemporary apparel market remains volatile, acquiring two more brands seems more burdensome than beneficial. Rather than focusing on brand acquisition, Vince’s energy might be better spent keeping its main business relevant. With the introduction of its rental service “Vince Unfold” and expansion into new categories, the brand reported a net sales increase of 13% in Q2 2019 compared to the prior year. But as department and specialty stores continue to shutter, contemporary brands need to find ways to grow their audience, especially as they are increasingly competing with digitally-native brands.
  • Growing its brand portfolio will help Vince expand its rental offering, which will allow it to attract more members. While Vince sells to a slightly different customer base than Rebecca Taylor or Parker, using their customers and products to invest further into its contemporary rental platform will grow Vince’s audience and strengthen its positioning. This acquisition could signal that Vince sees a multi-brand rental platform as a crucial differentiator, beyond the many single-brand ones that have proliferated. If these brand acquisitions will strengthen its rental business, the moves might make sense for this reason alone.

4) Kesha will launch a beauty line that complements her comeback album but there’s no guarantee it will equate to staying power.

WHAT HAPPENED: Pop star Kesha will launch her vegan beauty line Kesha Rose Beauty on December 3rd on the clean beauty website Hipdot.com. All products range between $26 to $120 for a collector’s box.

WHY IT MATTERS

  • Kesha’s lack of a built-in audience will make it hard for Kesha Rose Beauty to last. While there is currently a plethora of celebrities creating beauty brands (Rihanna, Kylie Jenner), many of which come with tens of millions of followers and fans, there are also various examples (Gwen Stefani, Eva Mendes and Melania Trump) of celebrity-led brands that prove a famous name doesn’t ensure staying power. The odds are against Kesha since the beauty space is overcrowded and there is little hype surrounding her launch. While she is introducing her line in conjunction with her latest album, she isn’t partnering with a cosmetic retailer such as Sephora or Ulta and her product line doesn’t feature any unique window into her as a performer or a person. Kesha would be better suited to partner with an already existing beauty company, especially since she’s just getting started.
  • The growing list of entertainers and influencers entering the beauty space means that lasting brands need to solve a real problem rather than follow an old playbook. Kesha told WWD that she started a beauty line to not appear as perfect, but to show the world who she really is. This explanation sounds very similar to Lady Gaga’s reasoning behind Haus Labs or Rihanna’s for Fenty Beauty. Beauty brands enable celebrities to monetize their massive followings, but they should also solve a problem. Brands like Fenty Beauty and even KKW Beauty (Kim Kardashian West’s beauty line) made color inclusivity a topic of conversation, which pushed them beyond just another celebrity business venture. As the ease of launching a brand continues to increase, anyone with any sort of following is looking to jump in the ring. But without a reason to do so and a problem to solve, there’s no guarantee that anyone will care or remember long after the brand’s launch.