Brandless, which launched in July as a pure-play consumer products site, has launched a beauty line, according to a company blog post Wednesday.
The company’s new Brandless Beauty & Personal Care Collection offers beauty essentials like shampoo, facial cleansers and body wash — cruelty-free and free of more than 400 "potentially harmful ingredients" like sulfates, phosphates, and parabens — for $3 each, Brandless CEO and co-founder Tina Sharkey said in the post.
Brandless has also apparently changed its shipping policy: Orders now ship for $5, or free for "B.More" members, who pay $36 each year and get free shipping on orders over $48. A promotional code announced with the release also offers users $1 shipping. At launch, the company offered a special $3 shipping rate, but regular two- to four-day had been $9.
Brandless aims to capitalize on the current appreciation for lower-priced private label consumer goods — a mainstay of drugstores and grocery stores for years that is enjoying popularity, especially among younger consumers. Millennials, who came of age during the Great Recession, are less brand-loyal than their parents and grandparents, which has provided fertile ground for retailers with high-quality private label brands.
The number of heads of households shopping at dollar stores who are under 35 years-old and earn more than $100,000 a year increased by 7.1% between 2012 and 2015, compared to 3.6% at all retail stores, according to Nielsen research. Some 29% of millennial dollar store consumers earn over $100,000 annually and accounted for about 25% of sales at those stores, much of it on no-name brands of common household items, according to market research firm NPD's Checkout Tracking.
Although it touts its elimination of a "brand tax," (marketing, retailer margin and other expenses that Sharkey says can drive up prices on brand-name beauty products by as much as 300%), the company is also taking a few pages from legacy retail. Its $3 across-the-board price tags recall dollar stores’ origins; its slimmed down assortment follows the no-frills German model ala Aldi, Lidl and Trader Joe’s; and its spare labeling resembles the old days of generic labels, before grocery stores brought more design to their private label lines.
Notably, the company doesn’t employ any "secret sauce" algorithm like Jet, which offers a host of ways for shoppers to save money, like delaying their shipping, combining their orders or giving up the ability to make a return. In fact, much like its label design, the emphasis appears to be on simplicity.
Like direct-to-consumer brands such as Harry’s grooming supplies, Brandless is the latest challenge for retailers and consumer brands, which are already battling intense price competition and the robust fulfillment and private label efforts from Amazon. Amazon's private label prowess has only been fortified by its acquisition of Whole Foods and that chain's 365 private brand.
The effort could be an answer to what Matt Sargent, senior vice president of retail for Frank N. Magid Associates, says is an emerging backlash against huge assortments that are overwhelming to some shoppers. Brandless could be especially appealing to Walmart shoppers, who, compared to Target or Amazon customers, tend to buy on price and convenience rather than brand or experience, but who so far have largely resisted online shopping, he said.
"Costco has actually done this for a really long time and done it successfully," Sargent told Retail Dive. "I think they’re on to a trend. How they execute it I’m not really sure, but I’m really intrigued by their approach of curating an assortment. As we’ve seen from Trader Joe’s and Costco it can be successful, but the question is, is there a space for it online? Could this be a way to deliver cost efficiencies that even an Amazon can’t match with its brand?"