JuE Wong: Yes.
Dana Telsey: As you think about the brand and the product, how are you thinking about new product introductions, timing and magnitude? How are you thinking about the core product and addressing either do you need to remarket it in a way? Or how do you think of being able to get that core customer back? And has any surveys that you’ve done given you indications of what people need to see or what they’d like to see? And what does this mean in terms of pricing and how you price the product in this more promotional environment?
JuE Wong: Thanks, Dana, for that question. Let me sort of like break it down. First of all, our product innovations and launches, as we have previously shared, we will continue to do 2 to 3 a year because we believe that by doing a very focused innovation launch anniversary, those launches will help with our retailers to partner with us to really drive representation, in-store and online and offline. In terms of our innovations to date, what you have seen in 2023, we have launched our 4D dry shampoo. And it is one — in fact, it is the #1 dry shampoo in all of the channels that we have launched in, and we actually do have an exclusive launch at the moment with Pro and with a specific Specialty Retailer. So it shows you how powerful it is even when the launch is exclusive, we still retain and gain #1 position.
In terms of studies and surveys of what we have learned, we continue to see very highly rank that recommendations by hairstylists on our products to their end consumer is key for the brand. And so this is the reason why you’ve heard me said during our prepared remarks that we are going to focus on an always-on No. 3 campaign, and No. 3, for all of us to understand, that is our core hero SKU. Even though all of our SKUs does very well because you can’t be the #1 prestige beauty healthcare brand without having all the SKUs rising, but No. 3 is our core, is our hero. And what we are doing is we are making sure that we have an always-on campaign to really educate, to message and to help stylists end consumers and our retail partners understand the usage and how it halos the rest of our offering.
Dana Telsey: Got it. And on pricing, JuE and Eric, how do you see pricing going forward?
JuE Wong: Eric, you’re on mute.
Eric Tiziani: Dana, so as you know, we’re a premium price product in the prestige category. We believe we’re at the right price for the consumer and relative to our competition. What we want to do is continue to offer our consumers and our stylists weigh into the brand, to trial the brand and in sizes and offerings that make sense for them. So we believe we’re adequately priced. Any promotional activity we do is only going to be focused on trial and building the regimen behind the brand. We’ve always said, we choose not to overpromote as a strategy.
Dana Telsey: Got it. And is the new cost structure of the business, would you say the cost structure going forward that would be a more normalized cost structure?
Eric Tiziani: What I’d say, Dana, is that we’ve recognized the need to increase our sales and marketing investments as the market leader in the category, and that’s consistent with what we’ve said in the past. We’ve just recognized we need to do more, and that’s what we’re doing in this recent year of 2023. We expect that to continue. And as we’ve returned to growth as we regain the leverage from that growth. And I’ll also add, as we improve gross margin, when that leverage returns, we expect that to help fuel the investments that we’re making in the business.
