Why does this Estée Lauder-owned brand keep reformulating its hero products?

0:07Hi, everyone. Welcome to the Glossy Beauty Podcast, a show about the business of beauty and wellness. I'm your host, Glossy's West Coast correspondent, Lexi Lebsack. One of the biggest challenges in the beauty industry is NPD, new product development. It's time-consuming and incredibly costly, both of which become exponentially more difficult if you want to own your formula, launch with custom packaging, or complete clinical testing, all of which is slowly becoming table stakes in our saturated industry. Then there's pressure from retailers who are notorious for constantly asking for brand new products and categories.

0:47But even if you sell direct to consumer, it's newness that's often driving sales. Today, I'm speaking to Amy B., SVP of Global Brand at NIOD. NIOD, which is an acronym spelled N-I-O-D, short for Non-Invasive Options in Dermal Science, is part of Estee Lauder-owned Decium, a beauty company that also makes The Ordinary, an ingredient-first skincare disruptor that sells at Sephora with mass pricing. I invited Amy onto the show to talk about something very interesting they're doing over at Neod, iterative skincare. Instead of rolling out new products like clockwork, Neod is borrowing a roadmap from tech companies like Apple and updating its bestsellers instead of adding to their assortment.

1:38This conversation is important because Neod has a history of being an early adopter. The brand launched in 2015 with a copper peptide serum that's now their bestseller. And as you well know, copper peptides is the buzziest skincare and wellness ingredient out right now. Well, the industry took notice and Neod made its retail debut in September by entering Sephora. Let's get into it. Here's my conversation about iterative skincare and all of the details with Amy B, SVP of Global Brand at NEOD.

2:19Amy Bi: Amy, welcome to the show. Thank you so much for having me, Lexi. It's great to be here today. Yeah, it's truly my pleasure. We have a really exciting topic today that I've never really talked about with anyone, so I'm super excited to get into it. We first connected a few weeks ago when NEOD was going into Sephora. First retail partnership, how's it going? It's going so well. Yeah, we were able to launch with a bang in Los Angeles with a huge event with Steve Aoki, who's a friend of the brand. And it's been scaled across the U.S. and Canada, which has been super exciting and we're activating here and there.

2:53Amy Bi: And so the buzz is building. It looks great in store. And so, yeah, we're off to a great start. When we spoke a few weeks ago, we were talking about Sephora and Neon going into the retailer. And one of those questions that people ask or have the sort of awareness around when they go into Sephora is this new product development. But Niyad is doing things very, very differently. And you totally educated me. I'd never heard of this concept before. But Niyad thinks about new product development more like a tech company, more like how Apple would think about an iPhone than how the skincare market traditionally does.

3:28Talk to me a little bit about that.

3:30Amy Bi: Yeah. So Niyot is all about high science and high tech and then bringing it to the consumer in as simple of a way as possible. So it's very similar to an iPhone where, you know, if you want to go down that rabbit hole and learn about all the technology that goes into your iPhone, that information is there for you. But for the most part, consumers are just liking this simple thing that's very intuitive that runs their lives. And so we really took inspiration from that when developing Niat as a brand overall, which is get the fundamentals right in terms of what consumers need. And then as technology within skincare evolves, as research evolves, we simply upgrade our products.

4:12Amy Bi: So we're not constantly on this new product launch cycle that so much of the industry is on. We're actually just focused on maintaining our key SKUs, our key products, and then upgrading them when we see that there's exciting technology that serves the same benefit or there's a way that we can improve the texture, the efficacy, anything to do with the product themselves. So we're just upgrading them similar to how, you know, your iOS goes through a software upgrade overnight and then, you know, a bug is fixed or something has been simplified for you. It's the exact same approach. Wow. Was this more of a like sort of internal approach and how you're sort of thinking about moving the brand forward or was this consumer facing?

4:54Amy Bi: So the upgrades in terms of every time we, you know, initiate one is consumer facing. So, for example, I can't say too much, but our next product will be an upgrade as well, which is very exciting. And so it's been part of the ethos of the brand overall from the very beginning. And so the way NIAID looks at skincare is from a very holistic way. And we like to really look at what we call life cycles. So rather than just, you know, acne or pigmentation, we're thinking about the various life cycles that each of us are in at all times. So for example, a menopausal life cycle, a perimenopausal life cycle, a menstrual cycle, the cycle of aging, all of those are human life cycles.

5:40Amy Bi: And if we evaluate and break down what happens to our body and skin throughout each of those life cycles, it tells us a lot about what our skin needs. And so that is very much part of our overall formulation design. So rather than, you know, simply developing a product that's for oily prone skin, we're thinking about a specific life cycle and maybe what happens to skin at that certain point and then developing with that in mind. And so this makes it very similar to a lot of wellness brands that are out there, a lot of biohacking or even, you know, health tracking brands that are out there that are looking holistically at you as a system rather than just for like immediate needs.

6:23Mm-hmm. This idea of, you know, operating more like a tech company, you know, having iterative skincare. And then when I also look at the event you threw with Steve and with cold plunging, are you guys going after more of this like male wellness biohacking customer?

6:39Amy Bi: It's definitely part of who we see gravitate towards the brand, but, you know, a broad demographic, a lot of women are huge fans of the brand too. We have a lot of loyalists. So, So, you know, when NEOD first started, because of its science-y, tech-y nature, we actually first attracted a lot of people who were really deep into skincare, who understood the science, who understood the power of copper peptides, you know, long before they became trendy today. And who were saying to us, no, this is really special. Like, you have something here. And so it was a cult favorite for a long time within the industry.

7:14Amy Bi: And now, you know, as we get bigger, it's just great to see, you know, a larger, more wellness-focused demographic across men and women kind of, you know, show interest in the brand. So Steve is a huge part of that. I think what Steve represents is someone who sees his health as, like, holistic and as 360, so that's super, super well aligned with Neon. And then someone who, you know, is not going to be like a skincare nerd at the end of the day. He just wants simple products that work with him. So Case, for example, is his favorite product. He uses it every day. And he knows that within that formulation, you've got the super comprehensive, great age support preventative serum.

7:55Amy Bi: So it's a bit of a set it and forget it. And so that's also part of, I think, who Niat appeals to is someone who just knows that they've got the latest and greatest within, you know, within their, on their bathroom, in their bathroom shelf. And, and knows that like, as things advance, we'll continue improving it on their behalf. How many iterations have you done on any of your products so far? So Case is on its third iteration. iteration we have our antioxidant mist SEM that's on its second and then we also have um our hydrating skew that's on its second as well so um and more to come from there and then how much does the formula change or shift in order to I guess sort of like make it make sense to do a next iteration?

8:45Amy Bi: Yeah. So we look at a few things like, you know, typically when you have a customer base that loves a product, they're, they're probably loving like the format and the texture. So we're not going to go from like a cream to a spray because then you just have to completely re-educate everyone who loves the product and who might be interested in the product. And so we try to keep as much of the, you know, beloved aspects as possible. So if it's a serum, it stays as a serum. If it's a spray, it stays as a spray. But we're looking at new active ingredients all the time. So some of the, maybe the formulation itself or the technologies in there are going to change.

9:25Amy Bi: If there are any ways we can simplify the delivery mechanism, we'll do that. So for example, case, it's on its third generation right now. When it was on its Second, it actually came in two bottles because of the way that the format was most efficacious at the time. Then we found a way to bring it into one. So case three right now is only one bottle. And so when there are user experience improvements that we can make, we, of course, will do that. But we also don't want to make it something that's so dramatic that people are going to be like, what happened to the product I love so much? You know, last year sometime I reported on Skin Fix and this big industry anecdote now where they reformulated one of their creams and then customers didn't like it.

10:12And they were like, we want our cream back. And then they brought it back. But the whole journey, I can't even imagine how challenging that was. Have you had customers say like, we want the old one?

10:23Amy Bi: It's definitely a risk, you know. Certainly, you know, people get very passionate about what they know and love. So, for example, our current MIS, SDEM 3, we actually have the previous version still available on our website because we know a lot of people still love the old version. And so we want to give people an opportunity to transition as well without, you know, completely removing the thing that they've become attached to and they love. And so sometimes we will make that decision depending on, you know, customer feedback or the formulation. Do we think it's too much of a price point change?

10:58Amy Bi: Do we think it's too much of a consumer experience change? Sometimes we'll still have the older version. It's very similar to what you see, you know, at an Apple store as another example. You know, they'll have the old version and the new version. You're very educated on what the differences are. The new version is clearly going to be more advanced. But if you want, you know, the previous, it's still there available for you, at least for like, you know, the first little while. Wow. Do you see people like hoarding the old versions, like freaking out on the internet, wanting to make sure they can never have to go without?

11:30Amy Bi: For sure, for sure. Yeah. Whenever we communicate about an upgrade coming, we will definitely get those consumers to be like, oh my God, we don't know what the change is going to be. I'm going to stock up so I've got it just in case. But for the most part, you know, all of our upgrades come with true meaning and very genuine advances in the technology depending on the product. And so for the most part, it's well-received because people know they're getting, at the end of the day, a more efficacious product and a more cutting edge product. Sure. What has the price difference been in prior iterations?

12:06Amy Bi: It's we try to keep it as minimal as possible. We know that's a very, you know, sensitive topic for people and something that they don't want disrupted if it can be helped. And so it's often very minimal. And when we do it, we will explain why. And so all the more being able to offer the previous version for those who may just have a preference for it, we want to make that available too. It's about educating consumers and giving that level of transparency, which is very much part of Decium's ethos across all our brands to ensure that consumers know exactly what it is that they're paying for. How do you signify within the product description or name or marketing that someone is getting a new version or the next version?

12:50Amy Bi: Yeah, so we'll say it in the name. So if you go on the website, it will say copper amino isolate serum three. And so that, you know, is the third iteration of the product. And I mean, that's for people who want to know at the end of the day, if someone's coming to the website and they just want the copper peptide product that they heard Steve Aoki talk about, then it's there for them as well. But for those who have followed the brand for a long time and you want to get to know a little bit about how we operate, Yeah, it'll be in the name that will tell you which version it's on. When you think about, you know, how much science, how much innovation has to be there for you to come out with that next one, have there been any, you know, anecdotes or stories of almost getting there or maybe not enough and then holding off?

13:37Or have any of these iterations turned into other products completely? Like, how has iterative skincare impacted your MPD overall?

13:45Amy Bi: Yes, it's a great question. So, I mean, there's new research coming out about various technologies within skincare every day. And one of the great things about DECIUM is we have a full in-house lab team of over 120 scientists. So that's everything from research to safety, to clinicals, to microbiology. And so as new research emerges, that's one step in the overall process. The other is to make sure that we are vetting it through all of our safety and clinical standards to ensure that we feel that it's been well-researched and studied enough to go into skincare. And so that's something that our team is actively exploring.

14:29Amy Bi: Copper peptides are a great example of it. There are a lot of people right now who are experimenting with copper peptides as an injectable themselves. And that's an area that's not very regulated yet. And so much of that has been consumer-driven, right? Community-driven online, people who are, you know, talking about the positive changes they've had, the glow-ups that they've had, but it's still very unregulated and we think the safety is questionable. The difference with our copper peptides in terms of the topical application of them is that they're highly researched. They're completely safe.

15:05Amy Bi: We've gone through all the scientific rigor needed to make sure that these copper peptides will work for you at a topical level and that you're going to see long-term results. And so it's constantly being studied by our team. And only when we feel like, yeah, we've done enough testing and we can have true claims and clinicals that support the efficacy of these ingredients, do we then really fully come out with it. There must be a lot of other reasons why this makes sense. I mean, are you saving on packaging? You're saving on marketing. I'm assuming you're coming out with new products without having to do the big push, right?

15:41Or am I wrong?

15:43Amy Bi: No, I mean, it's one of the beauties of Decium and the reason why the company was built this way in the beginning, which is we do almost everything entirely in-house. So we save on a lot of the costs because our product development, our research, our manufacturing, our marketing, our creative, everything is done in-house. And so we work with some partners here and there externally, but for the most part, we've created a pretty self-sufficient island for ourselves. And as a result, we're able to pass along a lot of those savings to the consumer because our value chain is simply shorter. So we have built ourselves to be fully end-to-end in our ecosystem so that we can keep our costs as low as possible and keep our products as accessible as possible.

16:32Amy Bi: And so that's part of it. Another part of the overall ethos of Decian is to not go too high with our marketing budgets. So when we have someone like Steve Aoki, yes, we're so happy to partner with him from a brand standpoint, and he's an authentic partner for us. But our marketing budgets are still very modest compared to the average beauty brand. We really focus on putting the dollars into the product and into the ingredients themselves. And we try to run our business in that way. Now that Niyad is in Sephora, how will the iterative skincare work for them? Yeah. So we've got some exciting iterations coming up, some exciting upgrades coming next year.

17:14Amy Bi: And so we will be fully connected to Sephora when those moments happen. The products will be available in store. I think it's been a great partnership so far. And we're hoping that the Sephora loyalist continues to try and love our products. And so they'll be the first to know about any upcoming products that are on the horizon. What will the challenges be in terms of switching them out in store? Will the old ones have a second spot or will they just be completely swapped in in line? And then if you have extra ones, obviously you hold them on the site or wherever and people can buy both, right?

17:53Amy Bi: Yeah, we'll keep them on our DTC website for sure as we continue to upgrade. And then with respect to Sephora, I think we'll see how it goes. I mean, we haven't made any commitments yet as to exactly how it will operate. But for sure, we don't want consumers to feel like they've lost a product that they love. And so we'll make sure that we're mindful of the transition for any future upgrades. NIAID has been very early to the topical peptide craze, which we've already talked about a little bit. When you look forward for NIAID, what else is sort of on your horizon? What else are you guys working on that you're like, this is the next big thing?

18:32Is there anything like, what's the next copper peptide?

18:34Amy Bi: Oh my gosh. We've got a lot of exciting things in the pipeline. What I will say, some of the things that we're studying are the changes that our skin is feeling these days based on different life cycles and what we're seeing in the environment. So changes to pollution to our day-to-day environment are going to affect, are going to inspire and impact the new products that are coming, as well as what's happening to our bodies. So the emergence of perimenopause, as an example, and what happens to your skin as you go through that cycle, we've got some very exciting innovations coming that are very much inspired by those.

19:18Amy Bi: So more to come. It sounds like you guys are going after this Gen X older millennial client with perimenopause stuff, right? A little bit, yeah. But at the same time, we have a very strong, our strongest base in terms of a consumer is that like core millennial. So Gen X for sure, we've got great age support products, but you know, when it comes to our eye serum, which is like so comprehensive in nature, I think it's perfect for any millennial. We have an incredible hydrating serum called MMHC and a slew of others for pigmentation and whatnot that it's that Sephora consumer, right? It's that millennial man or a woman who's just curious about the science of skincare.

20:08Amy, you were at Nike for almost seven years. I'm curious, what lessons did you learn there that you've now brought into NEOD?

20:18Amy Bi: I mean, Nike is a master storyteller. That's the biggest thing that you're taught when you work in marketing there is just how do you bring inspiration, innovation, and romance to, you know, for Nike's sake, you know, footwear and apparel. So it's about translating technology into something that's very applicable to, in Nike's case, an athlete. And so it's very similar to NIOT, where we have something super advanced that, you know, the average consumer is probably not going to want to learn all about, but how do you translate that into storytelling and into an approach that's very digestible and relatable that to them, that they can see how it can fit into their everyday life and how it'll improve their overall wellbeing.

21:13I want to talk to you a little bit about this growing consumer base that is prioritizing wellness and longevity and optimization. What is the most important thing that a skincare brand needs to offer or have in order to appeal to this really quickly growing cohort of people?

21:30Amy Bi: Yeah, I think what we're seeing right now in skincare in terms of more products and brands being focused on longevity is the right approach because they're showing that skincare is a journey and that it's about building strength and resilience for the long run rather than simply the immediate quick fixes that you can get. And so overall, I think that is a very encouraging sign in the industry overall. It's exactly the space that NEOD wants to play in. And so I would say that's a very encouraging trend that we're seeing. And I think for the average consumer, also broadens the base of who's interested in skincare, right?

22:13Amy Bi: So someone who is looking at their body as a holistic machine. How did I sleep? How did I exercise today? You know, how is my stress level? What am I feeling? Your skin will tell you that probably more so than a lot of other places on your body. And so I think that there's an immediate role that a skincare brand can play in that holistic wellbeing. Like ultimately, do I feel good today? Do I feel like I'm managing the signals that my body is sending me? I think skincare can play a very active role in that. Amy, what will the skincare market look like in five years, in 10 years? And I'm asking you that because you guys were predicting the copper peptide thing 10 years ago, and now it is such an explosion.

22:58So what is this market going to look like in 10 years?

23:01Amy Bi: I think it's definitely going to become more holistic in nature. I think how you treat your skin and how resilient it becomes is not simply going to be topical. It already isn't. Look at the emergence of ingestibles, injectables, treatments, lasers. It's advancing very quickly. And I think the definition of how we take care of our skin is going to grow in that way. And so it's an exciting time in the industry overall. all. It's an exciting time for neon, but I think we should be looking at skincare in more of a holistic way than, than ever before. And I think that's what we're going to see more of, you know, in the coming years.

23:46Amazing. Amy, thank you so much for coming on the show. Thank you so much for having me. This was great.

23:56And thank you for listening to this episode of the Glossy Beauty Podcast. If you enjoyed it, please leave us a rating and a review on Apple Podcasts, Spotify, or wherever you're listening. And for even more coverage on the beauty industry and more, please visit glossy.co slash beauty.