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Chris Hobson, CEO of Rare Beauty Brands, home to Patchology and Kate Somerville, breaks down the business of beauty: the insight that turned Old Spice around, what it now costs to build a brand, how to handle dupes, and the metrics founders should track.
Who is Chris Hobson?
He started a clothing brand in college in Canada, then joined Procter & Gamble in brand management, running Scope, Folgers Canada, Old Spice, and Secret before an MBA and a career building brands. "As a brand manager, you get trained as sort of the mini general manager of your brand."
How did he turn around Old Spice?
By finding an insight instead of denying the brand's age. Research showed a woman would borrow her partner's deodorant from almost any brand except Old Spice. "We came up with this funny tongue in cheek positioning of Old Spice as the last bastion of masculinity." The brand went from a distant fifth to third in Canada, and the positioning went global.
What makes consumers loyal to a beauty brand?
Product quality first, emotional connection second. "When you get that magic of the consumer insight married to really high quality product, that's the foundation of a brand."
What insight drives Patchology and Kate Somerville?
Two very different ones. "The insight for a Patchology consumer is I want a moment of joy... the act of putting on the mask slows me down from my crazy day." The Kate Somerville consumer is buying certainty from a clinic with 20 years and 250,000 facials behind it.
Should beauty brands chase trends?
Only in ways authentic to the brand, though Hobson is candid about the pull. "The science is sort of suspect, but hey, it's a $10 million opportunity. How do we not do it?" Brands lose themselves when they go wholesale trend focused.
Why did Patchology stop marketing its science?
Because consumers buy results, not mechanisms. Hobson watched women's eyes glaze over at talk of ten times more ingredient delivery, then light up when the patches came off. "Turns out all she cares about is the better results."
How long does it take to build a beauty brand?
Longer than founders expect, now that ad costs have erased the cheap growth era. "You've got to be prepared to raise 10 to 20 million dollars at least, and spend 10 to 20 years on it. That's the new reality."
Why is it harder for indie brands to scale now?
The economics of attention changed. "The advertising prices have come up and the ROI has come down, and so it's harder for young brands to make that leap."
How should a brand respond to dupes?
By owning the category so copies feed demand back to the original. "When a brand copies us, a rising tide lifts all boats." Patchology is up over 20 percent this year.
Do dupes steal customers from the original?
Within limits set by price and psychology. "They're wearing it and they're knowing in their mind, I'm not really wearing Chanel." Hobson argues most of those consumers come back.
Does getting into Target or Walmart grow a beauty brand?
Not without demand behind it. "If you don't have the demand generation capability in place to move that product off the shelf... you're out." Accessibility is a high stakes strategy, not a shortcut.
What metrics should new beauty founders track?
Repeat purchase above all, measured by cohort rather than revenue share. "The way we make money as brands is repeat purchase... if I had to go out and acquire a customer every single time, I'd go out of business."
What is the biggest business lesson of his career?
People. "You want to hire the A level person, even if they're a little threatening to you, because they're gonna do the job way better than you would ever do it."
Listen to the full episode with Chris Hobson of Rare Beauty Brands on Skin Anarchy, available wherever you get your podcasts.
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