Less than eight years since its launch, the MCoBeauty cosmetics and skin-care brand has become a juggernaut in Australia, rocketing to market share leadership in the major retailers where it is sold.
CEO and founder Shelley Sullivan saw a gap in the Australian market for affordably priced beauty products at the same level of quality as luxury brands and brought her brand to supermarket shoppers through an exclusive partnership with Woolworth’s, the country’s largest grocery retailer.
Now, through a deal put together with Advantage Solutions, MCoBeauty has hit American shores with another grocer — Kroger, the Cincinnati-based operator of more than 2,700 supermarkets throughout the United States.
By teaming with Kroger, MCoBeauty, with its line of cosmetics comparable to those of high-end brands Charlotte Tilbury, Drunk Elephant and others, is targeting shoppers who want a luxury experience at an affordable price.
“These are the types of products that are normally in the domain of beauty specialty shops, like bronzing drops and foundations and so forth, that are a completely different level of quality to what you otherwise find on a supermarket shelf,” says Jeff Froud, general manager of international markets based in Sydney.
The brand has come to dominate the Australian market. MCoBeauty converted 2% of all Australian households into loyal cosmetics shoppers at Woolworth’s, and quickly rose to become the grocery chain’s No. 1 selling cosmetics brand.
With its commanding share of the cosmetics category in Australia in stores where the brand is sold, MCoBeauty knew it had the scale and experience to take on large markets internationally. The U.S., the largest beauty market in the world, was the logical next step. And Kroger was ideal, Froud says.
“These were shoppers who were already in that supermarket buying food and other items,” Froud says. “We believe we can have the same impact at Kroger. When customers learn that MCoBeauty products are available and of the same quality and much better value as high-end beauty products, they will pick those up and try them. Then on their next visit, they’ll try something else and gradually that basket penetration grows.”
Chris Brown, senior vice president of Kroger sales for Advantage, says MCoBeauty and Kroger represent the perfect marriage between product and retailer.
“Beauty is a category that Kroger has targeted as a pillar for growth and a huge opportunity for (Kroger),” says Brown, whose team helped bring the two parties together. “And they love exclusive partners. This is something that Kroger was looking for and had already identified as a need, so this strategic intersection felt like it could fill a big gap that Kroger was looking to fill.”
MCoBeauty is hitting the U.S. market at a time when a wave of high-value duplicates, or “dupes,” are taking retail by storm. Nearly one-third of adults report that they intentionally purchased such products, according to Morning Consult. Among Gen Z and Millennial consumers — the social media set — the numbers are even more pronounced, with 49% and 44% seeking such products, respectively.
Advantage paves American entry
After a series of initial meetings with the MCoBeauty team throughout 2023 to devise the right strategy to present to Kroger, Advantage brought the brand and the retailer together for the first time last year.
Interest was high on both sides, and in August, after an in-person meeting with top-level Kroger execs, they landed at a number for the MCoBeauty launch: 258 SKUs in permanent sets at 1,300 stores for everyday distribution, as well as prime endcap locations in the health and beauty departments of 1,700 stores.
Advantage, Froud says, played a crucial role, “particularly this message around helping (Kroger) win incremental customers who are already shopping at their stores to become loyal category buyers in the beauty sector.”
The full sets, designed by Advantage, began going up in late January at around 30 Kroger locations. Endcaps, installed by Advantage, went live later in the month and will eventually be installed in 1,700 stores.
“Bringing this must-have brand exclusively to Kroger invites new customers to our stores to access highly sought-after products and offers existing customers more healthcare and beauty options, maximizing convenience with every trip,” says Kate Meyer, Kroger’s vice president of home, health and beauty care merchandising. “MCoBeauty is a great fit for Kroger and our customers, delivering genuine value with high-quality makeup products normally reserved for specialty retailers.”
Building a brand
Advantage has formed a dedicated sales team surrounding MCoBeauty, which includes a sales team leader, business analyst and associate business development manager to oversee systems, work contracts, deductions and administration, as well as a dedicated business analyst to mine data and continue to update MCoBeauty and Kroger on the success and the trends seen in retail.
For a business this size and scope, it’s all hands on deck at Advantage.
“We’re leveraging other parts of the organization,” says Brown. “Our retail division is going to execute the sharebuilder endcap program, we’re leveraging our digital marketing agency Advantage Unified Commerce to put together programming for Kroger Precision Marketing. We’ve used our internal digital team to ensure that all the product images and descriptions are loaded on Kroger digital for a seamless experience. And, of course, we have our sales team managing the overall relationship with Kroger.”
When it comes to marketing to U.S. consumers, MCoBeauty will follow the strategy that worked so well for it back home.
That includes leveraging an army of influencers to promote the brand.
In Australia, Froud says, influencers “review our products and say, ‘Hey, here’s a beauty product of amazing quality and great value, and it’s only available at this retailer.’ That combination of product and the message that’s put into the market unlocks an enormous level of incrementality in our brand.”
Stateside, MCoBeauty plans to activate its influencers who have a specific follower base in the U.S., Froud says. “We know where that base lives in the continental U.S., and we’re able to overlay how that connects with Kroger’s retail footprint so that there’s a strong correlation to that traffic then reaching a Kroger store.”
Since the products have started rolling out, even with no media or advertising yet, MCoBeauty is already performing above expectations at Kroger.
“We’re happy with the early results, and engagement with the brand has been extremely positive,” says Kroger’s Meyer. “We are looking forward to seeing continued growth throughout the year as marketing plans play out across owned platforms and social media.”
For Advantage’s Brown, “This is the perfect example of what can happen when a brand comes to us for help. Our team was truly the connective tissue between a domestically unknown international brand with zero distribution here and the largest traditional grocer in the U.S., consulting on strategy and leveraging relationships. The resulting business is a huge win for all involved — Kroger, MCoBeauty and Advantage Solutions.”
