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By Sharon Terlep
Online startups selling personal-care products from razors to deodorant are trying a radical new way to reach customers: the bricks-and-mortar retailer.
Starting Monday, Native Deodorant, an online-only line of natural deodorants and soaps, will go on sale in Target Corp.'s 1,800 stores, according to the companies, a move hastened when Procter & Gamble Co. acquired the three-year-old startup.
More small, internet-only consumer brands are turning to physical retail space for growth, a shift that is happening as companies encounter the limitations of selling directly to consumers and as retailers become more open to lesser-known brands.
Rising costs to advertise online are also driving brands back to stores as they find that buying shelf space, either with a dedicated store or by moving into an existing retailer, is a cheaper way to gain notice.
"We will see more and more of these online brands go into distribution in bricks-and-mortar stores," said Thom Blischok, chief executive of the Dialogic Group, a retail and consumer-products consulting company. "In a way, we're going backward."
Native will be on Target shelves alongside P&G's Secret and Old Spice brands. P&G bought Native earlier this year for $100 million.
It is a different strategy for P&G, which was left scrambling two years ago when online razor startup Harry's moved into Target with splashy displays, grabbing share from P&G's Gillette brand. Harry's entered Walmart Inc. stores earlier this year.
Native founder and CEO Moiz Ali said his plan had always been to get on the shelves of a major retailer, but that the move would have taken longer without P&G, which helped Native navigate negotiations with Target and provided a national supply chain.
As part of the deal, Native created a special scent -- Jasmine & Cedar -- to be sold at Target. Native also agreed to start off selling all of its products exclusively at the retailer. Adding specialty brands with exclusive products draws new types of shoppers to Target stores, said Mark Tritton, Target's chief merchandising officer.
Personal-care essentials are the latest wave of online brands moving back to stores. Online mattress seller Casper Sleep Inc. plans to open 200 of its own shops in the next three years, expanding across North America. Eyeglass maker Warby Parker, which challenged conventional retailers with $95 glasses and free returns, has opened dozens of its own stores in recent years.
Thinx, a line of period-proof underwear sold online, will be moving into retail stores in the U.S. early next year, said the startup's CEO, Maria Molland, who declined to name the retailer. The underwear is sold at department stores in the U.K.
Shoppers might be more likely to trust Thinx if they see it in a high-end store, Ms. Molland said. "They may be more apt to click on a Facebook ad if they see it in a store they trust," she said.
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(END) Dow Jones Newswires
September 16, 2018 13:31 ET (17:31 GMT)
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