How Walmart Is Injecting Agility and Innovation Into Its Beauty Business

In a year that has seen its fair share of beauty retailer makeovers, one of the category’s biggest players is getting in on the action: Walmart.

While the Bentonville, Ark.-based mass market player has always had scale and convenience on its side, innovation, experience and point of view have never been as prevalent.

This year, though, under Vinima Shekhar, the vice president of merchandising for beauty, the retail giant has recalibrated its beauty approach, modernizing its assortment, its in-store experience and its cultural relevance as it seeks to not just keep pace with the direction of the industry — but lead it, all while leveraging its reach of 4,600 stores across the U.S. with a customer base of over 145 million people who visit a store or Walmart.com every week.

“Our vision for beauty is to be the most trusted and accessible beauty destination for everyone — every day, every occasion and every life stage,” said Shekhar, during an in-depth tour of three stores earlier this year that illustrate the new approach.

“Gone are the days when customers only buy in one channel,” she continued. “Take a customer doing her grocery trip. She’s buying great-value pasta and she’s buying the organic tomato sauce. It’s the same in beauty,” Shekhar said. “She’s buying her everyday shampoo, but then she’s buying her premium skin care and she wants it all in one trip. That’s the beauty of Walmart. We can serve it to her in a way that is simple, easy and all in one stop.”

The push in beauty comes at a time when Walmart is doubling down on the style category, giving beauty, fashion and home prime real estate adjacent to the highly trafficked grocery or pharmacy departments in about 100 stores, with more to be added as the company remodels existing formats. During its most recent earnings call in November, the retailer cited its success in the fashion business, with incoming chief executive officer John Furner noting sales grew over 5 percent in the quarter.

Store 359, a supercenter in Fayetteville, Ark., exemplifies how Walmart is looking to catalyze style-adjacent categories. A large, specially lit beauty department sits next to the clothing department with brands such as Champion and Chaps, as well as its in-house brands like Scoop and Free Assembly overseen by designer Brandon Maxwell.

Skin care is situated front and center, with big brands like Olay and L’Oréal Paris given a full brand expression and shelf talkers that clarify the key points of hero stock-keeping units, reminiscent of a specialty store environment. New-gen brands like Bubble, E.l.f. Skin and ITK live in a Skin Care Spotlight section, while Neutrogena, Cetaphil and CeraVe are housed in a special dermatological section, with special call-outs and recommendations designed to capitalize on and reinforce the expertise of both the brands and Walmart’s network of pharmacies.

“We have pharmacists who understand the skin and body and we wanted to create a more elevated destination, so this is an area that we carved out to say, ‘how can we bring this to life, still staying within the format of Walmart,’” said Shekhar. “You can see it through the signage, the recommendations and through the brands.

“It’s not necessarily just new brands, but what’s new is our storytelling,” she continued. “We’re building trust through storytelling, and we’re providing the right set of navigational cues to help her in a journey that’s quite complex, like skin care.”

The team has deployed the strategy across categories. Hair care, for example, has been remerchandised so that it’s presented by hair type — curly, straight and wavy, textured — rather than by brand.

Depending on the store, trend-driven and viral products live in Beauty Finds, which features trending names like StarFace and Batiste, while interactive displays invite play, such as a L’Oréal brow pen that enables shoppers to see and feel the dual-pronged brush or a shelf panel in the hair color section with a QR code to scan for an instant virtual try-on.

Walmart is also trialing digital shelf talkers in some stores, a proprietary technology developed by the retailer to drive excitement and interaction in the aisle by sharing content, marketing assets and product information. Operationally, it also helps in-store associates with stocking and pricing. Such initiatives are key to reinventing the in-store experience, one of four pillars in Shekhar’s transformation strategy.

“We know that beauty is an emotional category and experience matters,” she said. “How the consumer feels disproportionately impacts conversion and basket size. By creating experiences where she feels inspired, where she can trust and where she has time to discover through fixtures, navigation and lighting, we are bringing the beauty experience to life.”

Product is another key pillar, with Walmart focused on exclusives, collabs and premium beauty as central tenets moving forward. Exclusives could mean brands — such as Nude by Nature, a clean makeup brand out of New Zealand, and Origen, a fragrance line Coty developed especially for Walmart — or proprietary products, like the recently introduced L’Oréal Paris Glycolic Gloss range, which was Walmart’s biggest hair launch of the year and helped propel L’Oréal Paris to the top hair care spot at the retailer.

Walmart uses its website and marketplace to play in trending areas like K-beauty, to assess what an in-store strategy at scale should (or shouldn’t) consist of. Earlier this year, for example, the retailer held a K-beauty summit in Korea, meeting over 100 brands. About 30 of those are showcased in a special department on Walmart.com.

“Sometimes people mistake the size and scale at which we operate to think we’re not nimble or agile enough to do things that are smaller or on trend,” said Shekhar. “But our maturity in digital allows us to do that, and we’ve added so many brands that are smaller, but meaningful. I always say what might not be important to you is important to me, so having brands not just that are for everybody but are for somebody is the approach we’re taking.”

In terms of premiumization, there are the brands in the BeautySpace set, some of which, like Mario Badescu, have entered the full-time assortment. Other prestige brands are working directly with the retailer, including Madison Reed hair color, which launched in Walmart in August 2023 with its price point of $34 a box, almost three times the price of mass competitors like L’Oréal Paris and Clairol. The brand is now in about 1,500 doors.

“The impact on our business has been phenomenal,” said founder and chief executive officer Amy Errett, noting that Madison Reed has successfully recruited a new and different consumer than the one who is shopping in its own salons and stores. “We believe it is floating all boats. I believe in making our products and services available to everyone and having as big and wide of a funnel as we can afford.”

Errett has cultivated a close relationship with Walmart’s merchants and made key adjustments to improve the performance of the brand in-store, such as resizing and redesigning its outer packaging to better fit the shelf requirements of Walmart. “We’re a productivity house — we measure sales by linear inch,” said Shekhar, “so they actually went back and redid the box so we can fit more product on shelf.”

“You need to understand you’re entering into a partnership and learn their system of how they do things, and be prepared to meet those needs and educate them on creative ways to do things,” said Errett. “If prestige brands do that, they’ll be successful. The notion that the demand for prestige brands isn’t there is just not accurate.”

Whatever price point a product is sold at, value is the third prong of Shekhar’s strategy. To drive trial, the retailer deploys a 90-day pricing strategy, called rollbacks, for promotions. “That builds trust with the customer,” said Shekhar. “It’s not like, I bought this and two weeks later I can’t get that price anymore. Historically, prestige has worked through sampling, but we don’t really sample in mass. With a category like hair color, what we saw quickly was that by offering a rollback, we gave the customer an opportunity to sample the product and it worked out well.”

Cultural relevance is the last strategic tenet. “We understand trend. We get it,” said Shekhar.

In addition to bringing in trending products and brands, Shekhar and her team are increasingly pressing their core vendors to deliver meaningful innovation. “Mass brands really need to listen to their customers. I always go back to the question of, ‘Are you solving a problem? Or are you falling in love with your own solution,’” she said. “How many more shades of black mascara do you really need — black, triple black, midnight black, blue black.

“There’s got to be a line of innovation in what you’re solving for,” Shekhar continued. “Beauty is a category where the customer wants to feel inspired and energized.”