It is no secret that the world of consumer packaged goods (CPG) is under threat from multiple directions.
In one corner, Amazon is slowly commoditising and white labelling goods to compete on its digital shelf spaces (as well as buying physical shelf space). In the other corner, niche startups with laser focus chip away at market share, as consumers continue to be attracted towards specific solutions, at the expense of the generic product lines CPG brands can be synonymous with.
Today we focus on one of these new brands, from a startup we have explored before.
— FORM (@formbeauty) June 20, 2017
Form is the latest brand by Walker & Co, the startup CPG firm making health and beauty simple for people of colour. The company has had investment from famed VC firm Andreessen Horowitz (investors in Facebook, AirBnB & Buzzfeed among others), as well as the likes of rapper Nas and basketball legend turned business mogul Magic Johnson.
While it’s first brand, Bevel, is focused on shaving solutions for men of colour, Form is an inclusive haircare brand suitable for all women.
How does the sister brand match up and what lessons can be learned from its launch? Let’s find out.
Differentiation based on service and brand
While it was clear that Walker & Co were preparing to bring out a new female focused brand, it was not clear how the vision would be executed.
Based on comments Walker & Co CEO Tristan Walker made at Code Commerce, I had assumed that the company would be producing a very limited product range, with different versions for different hair types.
Form has gone further and delivered a service element that recommends a selection of products from its range, along with usage suggestions to fix the hair issues they didn’t know they had.
They do this by asking the user for information on haircare habits and lifestyle choices, which, combined with their insights, allows Form to provide the perfect products for their customer.
To sweeten the deal, the brand provides 1-on-1 consultations and offers to compare a sample of consumers’ hair at the beginning of usage, with hair after a month’s use, to prove the impact of the products.
This is quite a fundamental transition for the purchasing habits of most.
Many consumers buy their haircare products based on more artificial criteria, like marketing-induced habit or simply because they like the aroma.
At the other end of the spectrum, especially among women of colour where hair types vary a lot more, “product junkies” spend thousands annually, looking for the right combination of products for their hair texture and condition, with very little evidence or legitimate criteria for the results they are looking for.
Complementing Form’s service, which aims to be all inclusive, is branding that is overt in its egalitarian ideals.
This combination of brand and service positions Form as a budding pioneer in an industry that is battling with historical attitudes that served the 80% at scale, with generic products and potentially isolating beauty standards.
Form shows that service-enabled brands selling CPG-like products can offer a powerful value proposition. It begs the question, can bigger brands deliver value in this way?
Product range created based on need, not optimising shelf space
While Form is prioritising its service, it could be argued that it is limited in terms of product volume and variety, compared to other haircare brands.
The brand’s range consists of just 10 products total, each with a specific purpose in the consumer’s hair routine, from shampoo and conditioning, to styling and finishing.
As a comparison, Form has two products under shampoo; in the UK, L’Oreal has eight times the number of products listed under shampoo alone.
This Twitter conversation between Richie Siegal and Tristan Walker suggests this is very much by design:
The approach is more Apple than Microsoft, and seems to centralize demand and inventory. But I’m curious as to why. Are there exceptions?
— Richie Siegel (@rsiegel) June 25, 2017
CPG companies need more product in more places within a store to secure more $. We don’t have that same strategic need
— tristan walker (@tristanwalker) June 25, 2017
Rather than having several line extensions like most CPG brands, each of Form’s products serve a unique hair type or treat a specific hair issue.
According to cosmetic scientist and founder of indie beauty brand MDMFlow Florence Adepoju, Form’s choice of products, brand copy and ingredients combine great marketing with science:
Using environmental elements and hair type to recommend products is ingenious and really helpful to (women of colour) who have varying levels of awareness of how their hair works.
The brand copy is great; terms such as ‘define curl’ and ‘twist style’ make me feel like the solution to my hair woes are in the bottle. I’ve also had a look at the ingredients list and as a formulator, I’m impressed, as key conditioning and nourishing actives are included.
The idea of creating products to serve a specific need in a customer-experience driven ecosystem is sound; particularly as it works in tandem with its service oriented model.
In addition, while many haircare brands have various line extensions per product based on scent or flavour, they invariably serve the same customer – Form’s product range helps it serve as broad an audience as possible, but in an increasingly personal fashion, thus further enabling its value proposition and model.
All of this means that rather than having to remember multiple brands and products names, all consumers need to remember is Form.
This is key in an online world, where the serendipity of browsing shelf-space supply is being replaced by consumer demand expressed via search or peer recommendations and reviews.
Form’s product range raises the questions, “What is the value of line extensions and multiple SKUs with minimal differentiation in a service-enabled business?” Bigger brands should be asking how a change in product discovery is impacting product strategy?
Selling via segmentation; serving via personalisation
Form’s model is one that sells personalisation, but at this stage, how the products are sold better resembles advanced segmentation.
The segmentation and product recommendations are based on an in-depth survey which explores the customer’s haircare habits, exercise regime and even humidity of their home town.
The survey also produces snippets of advice based on which options are selected.
While this is great, it is not quite personalisation. However, the experience that follows is a lot more personal and has the potential to provide groundbreaking service in the future.
On top of the 1-on-1 consultations and a personal hair regime, as previously mentioned, the consumer’s hair is sent to a lab for before-and-after hair analysis.
Not only is this a deeply personal experience that would make many potential consumers at least consider the brand, and a considerable data point for building brand trust, it could also be the beginning of a critical data flywheel.
If Form is able to add real consumer data on the performance of its products at scale, it would allow the brand to:
- make better or new haircare products that better serve customers
- provide more accurate product recommendations and consultative judgments
- deepen the competitive moat between itself and others that attempt to emulate its model, as Form’s advantage will be built on the critical mass of hair data collected as part of its programme.
To be clear, those three bullet points are speculative on my part. However, the opportunity to be the authority in haircare based on the very real feedback of an increasingly diverse customer base is a mouth-watering opportunity.
This strategy shows that a physical product itself doesn’t need to be customisable in order to add a personal element.
There is much more to explore here, in particular regarding distribution and sales strategy (Form plans to sell in retail outlets next month and will likely add a subscription element in due course).
The implications of a world where commerce can be digital and a diverse range of customers expect personalised experiences are far-reaching and likely apply to many CPG (and similar) products across the board.
While it is premature to say Form has it completely right, they have certainly made a stellar start.