AMZN Amazon.com Inc

By Alexandra Bruell 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 13, 2019).

Amazon.com Inc. is betting it has the marketing muscle to help an upstart beauty collection from Lady Gaga compete with the range of established celebrity-backed brands and industry stalwarts.

If successful, the tie-up announced this week with the 33-year-old musician and movie star could help Amazon woo prestige marketers, which have often limited or avoided selling their products on the platform for fear of losing control of the brand experience and undermining their image, marketing experts say. That could benefit not only Amazon's business selling merchandise but its increasingly important ad-sales operation.

Haus Laboratories, the startup founded by Lady Gaga, initially planned to sell its beauty line directly to consumers online without any partners or retail distribution, according to a company spokeswoman. But it began talking with Amazon in the fourth quarter of last year.

Haus thought long about whether Amazon was the best place to introduce its brand, said Ben Jones, chief executive at Haus, which is backed by Lightspeed Venture Partners.

Ultimately, Haus decided that the company's global scale and promotional muscle would work well with Lady Gaga's storytelling prowess, he said.

"Gaga's feeling was she wanted to bring a really high-quality product at a price affordable for her consumers and fans and wanted to make sure she was able to get the product to her people throughout the world," Mr. Jones said. "We feel comfortable with how we're going to be positioned, not only for launch but the foreseeable future in our relationship with them."

Amazon has built its retail reputation on disruption and efficiency, aggressively pushing its own line of generics and developing in-house lines that compete with outside brands it sells on its platform.

It hasn't previously done an exclusive global deal with a big celebrity-backed beauty brand, the company said.

Health, personal-care and beauty items accounted for about 7% of Amazon sales through its platform last year, according to research firm eMarketer, but the category showed the second-fastest growth, behind only food and beverage. Last month, the company also launched a professional beauty store, offering products and brands typically sold to stylists and barbers.

Much of the growth that Amazon has seen from the beauty and health category is likely from beauty sales, said Will Margaritis, senior vice president of e-commerce and digital marketing at Dentsu Aegis Network. He previously worked at companies including L'Oréal and Amazon.

"They're sending a message to luxury brands, and luxury beauty in particular, that Amazon's a viable place and it's not going to damage their brands but accelerate them," he said, referring to the Lady Gaga deal.

Amazon and Haus will begin to take preorders during Amazon's annual Prime Day promotion, a two-day event that starts Monday, ahead of the collection's full rollout in September. Amazon and Haus's own website will be the only places for customers to buy the line at launch, according to the companies.

Amazon will promote Haus on its home page, as well as through its social channels, including paid and unpaid posts, according to an Amazon spokeswoman.

"Amazon stands for much of what Haus is founded on -- global reach and accessibility," the spokeswoman said in an email.

Mr. Jones and Amazon declined to elaborate on the companies' arrangement.

"It's showing they can compete with the likes of Sephora, Target and Ulta, and showing that they're investing in this type of thing," said Cassie Stevens, global commerce director at Publicis Groupe's Zenith.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

July 13, 2019 02:47 ET (06:47 GMT)

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