H20+ goes from bricks to clicks

Many retailers today are moving from an online brand to brick and mortar, but one merchant has taken the reverse route: H20+ closed its last store and now exists solely as a beauty brand ready for a relaunch. 

The 26-year-old brand has been renamed H20+ Beauty and under the leadership of CEO Joy Chen, formerly of Yes To, the brand is rolling out new packaging, new products and a direct-to-consumer business model that includes trial kits.

Chen joined H20+ in February 2015, and "it took about 30 days to figure out what I wanted to do," she told FierceRetail. She quickly ceased manufacturing in Chicago, the company's former home base, and outsourced to other facilities in the United States.

At its peak, H20+ operated 75 stores and did roughly $100 million in annual sales. But the last two brick-and-mortar locations closed in December, and the focus is now on a younger, more digitally savvy shopper.

"Our website is now our flagship store," said Chen. "We've made a major shift based on the consumer and how they shop today, which is omnichannel. We're also mobile-first, which is a big change for us."  

"H20+ has always been a brand, but owning our own retail is not part of the strategy anymore," said Chen. "[This] will allow us to be found by more consumers over time."

The new website launches this month and will be supplemented with brick-and-mortar partners more specialized in beauty, including Ulta with close to 40 SKUs.

But digital is the mantra. "Even when a brick-and-mortar retailer has a store, they also have a website," Chen said. "For example at Ulta, the launch at Ulta.com will be equally important."

The new product line in redesigned packaging launches May 16 and includes trial-size kits available for $15 (including shipping). Buyers get a $15 voucher to upgrade to a full size on their next purchase, a twist on the subscription box model.

The strategy may be minus flagship stores, but Chen hasn't given up on retail completely. The company opened a pop-up shop at its new San Francisco headquarters to showcase its products. The shop has performed so well that it will remain open at least through 2016.

Related Articles:
Ulta headed downtown with new HQ
Ulta grows e-commerce 44%
NRF names Ulta's Mary Dillon a retail Power Player