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As far as longer term loyalty from customers is concerned. Something which was on my mind to some extent. I think that customer loyalty could be maintained by the technological advancements naturally occurring each year in the skin care market with new products coming onto the market regularly within the industry.
If I say, I went through the testing process and was then recommended several products from STC that were the best matches for my skin type available today .....would i then pack up and leave !....probably not because a year letter if i went through the process again there would be new more advanced products possibly available , which were not on the market the previous year . So if i wanted the very best for my skin i would remain a loyal member and take advantage of skin care product updates. Just a thought.
One assumes we ate somewhere between the ‘starts working’ and the ‘product market fit’ stage ;-)
https://nitter.net/pic/orig/media%2FFOVz2WcUYAQjzk_.jpg
Even if we just look at the acne market in the USA - the numbers are staggering. The treatments are obviously not doing that well - and there are varying degrees of severity but many people may be worried that they are exacerbating an already problematic skin with inappropriate products and IMO would try anything that would reassure themselves or improve their skin.
"Acne is the most common skin condition in the United States, affecting up to 50 million Americans annually"
https://www.aad.org/media/stats-numbers
we are slowly getting there..and forget not word of mouth. A happy client will definitely recommend this new brand to fellow sufferers. Then you get a snowball effect, economies of scale and scope, free publicity. All these in 2023 IMO
With a US skin care market of over $17 billion per annum...( and importantly these are not one off, once in a life time large purchases - but repeatable sales.). STC do not need to dominate the market but will do very well taking just a few percent of the overall market share. The rest of the world likewise.
" As of 2020, the world’s most lucrative skin care market is the U.S. market with a revenue of approximately 17.6 billion U.S. dollars. It is followed by Japan, which generated a revenue of roughly 17 billion U.S. dollars, ahead of China, India, and South Korea."
Just imagine if you had one of the many skin conditions - what would you pay to ensure you are using the best product to give you the best chance of reducing its severity. I imagine millions of people would be highly motivated to spend extra money to mitigate what can often be a deliberating condition.
Why wouldn't a health professional or GP recommend such a service so to give the patient the best chance of success and then on top of these customers we have the many, many more who just want to look the best they can.
I can easily see hundreds of thousand s of STC customers one day.
I believe the '15 years of research and 12,000 microbiome samples' Is actually what Labskin have provided them as have been testing for them for a very long time. They could easily expand their microbiome range, as they see this as the future of skin care, to hold hundreds of products. 'STC' would then be viable to be used for solely them. No7 do a photo analysis of your skin to recommend their own products.
It's all about aspiration, envy, and FOMO with STC. How many women, who should shop in Boots, Poundland, etc, will break their bank in order tailor their beauty products to their own bodies, just like the celebs, rich and famous will do?
Modern water is the future of clean, scarce water resources.
I might have called blast off too early, but IMO it will be difficult for this share not to multibag.
GLA
Does STC not, however, provide a threat to the skin cosmetic companies?
At present thousands of products are sold in stores, many of which may do very little for consumers skin. However, that doesn't stop customers buying them.
The poundshop, for example, sells all manor of knock off skincare products that probably do little. However, STC will shine a light on the products people actually need, which in time will harm the sales of the mass crap. Just think, every Christmas the likes of boots and superdrug chuck out gift sets of bog standard moisturiser and skin care products. The type of thing endorsed by celebrities etc. This cheap crap is unlikely to get a recommendation from STC and therefore STC would indirectly be damaging the mass crap market, which makes the likes of unilever a lot of money.
Unilever love the fact that some consumers buy 10 different tubes of moisturiser, desperate to find the right one. Whether they go stale in a cuboard or chucked in a bin, Unilever still make money.
In a world where people only buy what they know is right for their skin, does it not somewhat reduce the amount of products available and thus hurts someone's bottom line? The counter arguement is, of course, that there are more sales of the "right" products, but i feel the speculative gift pack/cheap tat market takes a hit. That in itself is also a greener way to go about things, but since when did big corporations put green ahead of money?
A devils advocate view, but certainly a consideration on the old SWOT analysis
...or does Unilever develop products approved by DeepVerge (Skin Trust Club) to rival existing products from other providers and compete on the same platform with like for like products. Unilever could compete favourably on price without completely obliterating competition and thereby retain the integrity of the Skin Trust Club concept of an agnostic provider.
Interesting. So a local French skincare provider only needs to have "the product", not the market budget. And therefore, if this miracle panacea cures all skin conditions it will be STC that spread the word via the recommendations. STC then takes a slice of the pie.
In an ideal world (for DVRG shareholders) the need for print, tv or internet advertising for skincare is null and void as the world and his dog (eventually ;-) ) simply take an STC test and let the the results dictate what they need. Brilliant, really. DVRG just need to get the world and it's dog to know what STC is. Hopefully the brands will start spreading the word "as recommended by STC"
exactly Dingo, STC should be in the words of Gerry a 'Hero' product, the customers will always get a product suitable for their skin, making them feel better... The cosmetic company spends less on marketing, sharing the value with STC, and gets happy customers.
I picked up also that cosmetic companies can start to enter new markets with no real market cost, which is a gamechanging marketing tool. If you are a boutique French brand, you can suddenly become global....
Happy consumers, Happy Cosmetic Customers, Happy Shareholders.
Good point Smeeno. STC are impartial, where as unilever would ram their own products down peoples' throats. It may we be that their products do the trick, but there would be that question of doubt if the market was restircted to the products of one manufcaturer. It would almost be seen as gimicky. "Sure, i'll take a test and it will ask me to buy Dove. Big whoop, i already buy Dove". An example of what average Mr Cynical would think
In that regard, the results of an STC test cannot be "bought" by a large corporate. If your product does not suit the customers skin then you won't be getting a recommendation, as ultimately STC is aimed at servicing the customer first. Said Mr Cynical would at least feel that STC would be impartial and that the recommendations be broader (even if there was doubt that STC would recommend products for the higher paying brands...)
I can see how folk connect unilever to labskin/STC, however I feel that is unlikely to happen, Unilever can get their own data, with 16,000 of their own samples they are on the road, it will take a lot of resource which they have.
Where STC wins, is that is is agnostic to customers, if Unilever had it, it would probably only promote its own products. Looking at it that way, Unilever may wish for STC to be out of the way, so they can do their own thing, but it would cost them a huge amount of money, Gerry and the board understand the value of what they have here. Therefore most likely Unilever continue down their road and STC down theirs....
I am pretty convinced now that STC is a proper business, much news to come down the track, but I really get what they are doing.
But the rhinocloud part of DVG is integral to all of the sub entities, so it's all or nothing or a license for that element which will only help the remainder.
I think that we are getting for blast off.
GLA
The data accrued over many years must have significant value.
Certainly looks like STC is on to something big.
Will it become a takeover target sooner rather than later? You'd have to say it would be easier for Unilever to buy STC (less DVRG and all of the MW stuff) than to develop a competitor themselves whilst STC continues to grow?
The question is, what would STC be worth to a unilever? Certainly more than the £20-25m mcap we have at present. I personally would like to see STC grow under DVRG and reap the massive rewards as a shareholder
This is like the anointing of STC for global success
With a turnover of approximately 52.44 billion euros they want their own 'Skin Trust Club' but are miles behind them. They are a customer and partner of Labskin. They've seen the potential. They're miles behind btw. Read it. https://www.glossy.co/beauty/unilever-is-delving-into-the-microbiome-the-next-big-trend-in-skin-care/