EP249. Why retailers are asking for proof—and what it means for your beauty products

The beauty industry is facing a seismic shift and it's happening right on the shelves of your favorite retailers. So major players like Target, like Sephora, like Ulta, they're no longer just curating products to sell to you. Instead, they're now demanding that beauty brands prove every claim they make, from vegan to recyclable to sustainable. And as retailers are stepping into the role of unofficial regulators, they're not only shaping the standards for what's acceptable, but they're also forcing beauty brands to back up their words with real, often costly documentation. And with this increased scrutiny comes a tangled web of certifications and compliance requirements that can overwhelm even the biggest names in beauty. Smaller indie brands can struggle to afford third party certifications and some of the larger players undoubtedly are struggling to change their formulations to meet new consumer standards. And as shoppers continue to care more about conscious, clean and ethical products, the stakes have never been higher. So for beauty brands, the pressure is now on to substantiate these claims, often having to jump through multiple hoops just to stay on the shelf of these big retailers. And to make things even more complex, retailers are starting to track every ingredient and production detail. And some of them have developed proprietary so called clean standards or planet friendly standards that vary widely from retailer to retailer. So this patchwork approach from these retailers isn't unified and it complicates compliance whilst also raising questions about the future of transparency and beauty. Will AI retailer led certifications reshape the beauty industry for the better? Or are we heading towards a future where only the biggest brands can keep up if they even want to? So in this episode, we're diving into this brave new world of beauty accountability and who better to do this with than Kimberly Shenk, co founder of Novi Connect. I previously interviewed Yashi Shrestha, head of Chemistry and sustainability at Novi, back in episode 119. Go and cue that one up now to listen to it next if you haven't yet. And now we're going to go deeper to see how things have been shifting in the retail space. Welcome to Green Beauty conversations in which I challenge the beauty industry to become sustainable, creating champion, independent and green beauty and encourage you to join me in changing beauty for the better. I'm your host, Lorraine Dallmeier. I'm a chartered environmentalist, biologist and the CEO of award winning online organic cosmetic formulation school Formula Botanica. We have tens of thousands of students in over 190 countries around the world who study with us to become organic beauty formulators and entrepreneurs. Visit our website@formulabotanica.com to try our free online formulation course. And if you want to be the first person to know what's happening in green beauty, make sure you subscribe to this podcast now in your favorite podcast app. So in today's episode, I'm joined by Kimberly Shenk, the co founder of Novi Connect and Serial Tech founder and entrepreneur. Novi enables retailers and brands to meet surging consumer demand and to grow loyalty through sustainability programs, certifications, badges and other values based designations. As a result of their partnership with Novi, retailers such as Target, Sephora, Macy's, Ulta and now Credo use Novi's tools to drive transparency and sustainability in consumer packaged goods. In fact, the Novi platform now boasts an impressive 2,000 plus retailers and brands. In the shift towards conscious commerce, Kimberly is a powerhouse. She's been featured in many publications and was recognized as one of Inc. Magazine's female founders of 2023. She's led data science teams in many tech startups including Eventbrite. And before transitioning to the private sector, Kimberly served as a United States Air Force captain for five years, holding the chief Data scientist position at the Pacific Air Force headquarters in Hawaii. Hi Kimberly, how are you doing?

I'm doing well. How are you, Lorraine?

I'm really good and I'm so pleased you're here. I've wanted this for ages. Good to be here. Let's start with some introductions. Can you please tell us about you and about Novi? All right.

Well, my background is in data and data science. I've done that my entire career. And I got into this wonderful, crazy world of the beauty industry by actually starting a company before Novi by the name of Naked Poppy. And we were helping women find products and discover products that were better for their health, better for the environment, and kind of navigate the complexity of the space and. And through that experience uncovered how difficult it can be to substantiate and validate claims and stand behind our promise to the consumers that we were selling to. And so ultimately started building some software to help streamline that and help us better understand the sustainability metrics or health metrics of the products that we were selling on our site. And that is what led to us developing Novi.

Amazing. So how long has Novi been going for?

We started Novi at the very early days of 2020. So yeah, we're, it's crazy. We're almost into 2025 here.

Amazing. Just paint a picture for us like how big is the organization? How many of you are there?

So we're still a small but mighty organization just around 50 folks. We are North America and Canada based and we serve dozens of retailers and a little over 2000 brands at this point, helping them validate their claims and get their products on shelves with different distinctions or badges or seals to help them market as clean or sustainable or values based for conscious shoppers.

Okay, so how does it work then? Imagine there's a brand. There are probably many brands listening to this episode right now and they come to you and then what happens first?

Actually maybe just right before they come to us, they're recognizing that there's a really massive shift in demand. So consumers are looking for doing research, wanting to find products that meet their values. And so in that shift a lot of the retailers are putting together programs that help give brands some of this merchandising distinction. Labeling them as clean or labeling them as vegan or sustainable or there's a lot of different ways. And so brands are recognizing the value of that merchandising opportunity and saying, oh, okay, I know I'm going to drive an increased lift in revenue, I'm going to have more exposure, more discoverability. I would love to get this or this badge or this distinction. So that's then when they come to Novi, they're in that place of okay, I want to get this marketing opportunity. And what we're doing is as retailers are requiring a little bit more proof and substantiation behind these claims, streamlining that process. And so we do a lot of when we understand the basics of your product so we have your ingredient list, your product type and all of that which we usually ingest and make a very streamlined onboarding experience. We're coming in and saying here are the few things that, that need a little bit more information. Here's what you need. And we help streamline the process of what to provide and how to automate some of that verification. And then we actually give the badge and so or the seal or the distinction or the attribute and we send that over to the retailer and it populates the website or in store collateral or whatnot.

Gosh, that's so incredibly helpful for brands because things have changed so much in the last five to ten years, haven't they? Particular with particularly with all these retailers. So retailers like Target, Macy, Sephora, Ulta and many others, they now require brands to provide evidence or proof that backs up their product claims. So how did this shift in retailer expectations come about?

So interestingly enough, I think in the early, early days this desire for more transparency and clean information was very niche and it was Brands who had a strong mission around doing that, they were the ones that were leaning into. And then the size of the consumer set was small. So as the consumer demand really shifted and there was much more opportunity and a larger pool of these consumers, that's when retailers started to step into the scene and say, oh, we want to serve these consumers and we want to give them a better way to find these products and discover them and shop. Ultimately, though, with the lack of regulation in the U.S. it's very easy for any brand maliciously or no malicious intent at all, which is typically actually the case for just to say, oh, of course I meet those things. And so over time, though, sometimes without even meaning to, a brand might say one thing and it's not completely accurate. And so retailers started to see the need of okay, XYZ retailer. And me saying that this is vegan is actually me taking on the burden of proof or me taking on the need to make sure it's true. Because I'm on behalf of, of this brand saying it's this thing. And so that's requiring me to step into kind of regulator mode and require more information and substantiation. And that's actually where the shift has gone and why it gets so complex. Because now if you do that across thousands of brands, hundreds of thousands of products, which can get into millions of ingredient combinations, like, it's really impossible for a retailer to do that at scale.

And what sort of evidence do brands have to provide then?

Yeah, it's typically what we're seeing is a shift now, which is pretty incredible, to actual documentation. And so if you are, you know, making a claim on rspo, you know, like if you're using something that could be drawn from Palm, it's actually going and getting the documentation that that manufacturing process of that ingredient, the Palm feedstock or whatnot, was, you know, rspo. So that's an example of it. And so where if there's a percent concentration requirement, the actual percent of that of used in the product, or lots of calculations on, so it is getting down to the actual nuts and bolts of the data. But one thing I will say which I do appreciate is there's always that sensitivity around ip and retailers are not asking for full disclosure on the formula. They're only asking for the pieces that are relevant or matter to the claim. And so that's how it's been a really streamlined way for brands to provide just enough to get the claim but not have to disclose IP of the full formula.

Wow. Okay. So thinking about all these Retailers then they have all these requirements. Are they predominantly around that sustainability piece or do they also look at ingredients? Like what sort of things are they really asking for?

This has also changed and evolved over time. In the starting days, the early days, it was very actually honestly just an ingredient story. It was and very focused on just made without. And made without was usually a health type claim around good for you, good for your, you know, not necessarily leaning into environment. Then it, it started to evolve into more of the environmental focus and some of that's ingredient. And then that starts to get into packag and then climate starts to get into how the brand actually operates and their manufacturing process and things. So what we've actually seen over time is as the consumer demand has increased, as we know in this industry, it is all about differentiation. And so you don't want to be the same as the brand next to you. And so these claims, you don't want to always just have the same claims as the brand next to you. And so we're seeing these retailers start to diversify the types of claims a brand can make because not every brand leans into the same thing. And so that has actually allowed inclusion of more brands to be part of getting discovered by consumers, for consumers to shop their values because not every consumer cares about the same thing. But then also has led to honestly complexity because it's like, well you could have now instead of one of three claims, you could have one of 20 claims. And how are we, you know, tracking the proper information to make sure that you can get that claim?

Wow, okay, so can you give me an example of retailers allowing brands to diversify their claims just so we can paint a bit of a picture?

Absolutely. Yep. So it can be everything from like we just talked about the clean ingredients all the way to how the brand is giving back different things that they're investing in. The, you know, distinctions around woman owned, black owned. There's also things that are where the product is made locally versus you know, obviously made in the US for us locally because that starts to lead to carbon footprint emissions. And we're also seeing some responsible sourcing and supply chain, you know, are you treating your workers fairly? And that kind of gets out of beauty a little bit. But that's also something that's on Interestingly too, we're starting to see some stuff around efficacy a little bit more, you know, sensitive skin or things that are claims that do need proof and substantiation. And so it's, it's, it's really starting to broaden across not Just clean ingredients.

Wow. I mean, there's a lot obviously to consider. And how does Novi do this then? Because imagine you're a brand, you're trying to substantiate 15 different claims. Do you guys have to go through all the documentation or is that more AI generated? How does that work?

Yes, that is where we are building the technology and that's honestly where it's so exciting how AI has really matured and in great timing for us, largely because that typically would have been a very manual process to have to mine through documents and do it at that scale. And so now we can actually intelligently look at documents and ensure that you didn't upload a picture of your driver's license, you know, you actually got the right document for the claim and that honestly, we're taking on the burden of proof on behalf of retailers. And so it's really important that we're sitting in that, although very agnostic, we do not define what is good and bad, but we are doing it accurately. The data accuracy is really important to us.

You must have seen a huge change even in the last four or five years since starting Novi.

Yes, yes, massive change. It's been really exciting to be a part of. But also it's starting to change the way brands think about how they develop products from the get go, which has been very interesting as brands that were, we before were talking to brands as they were already on the shelf and trying to get more and more marketing distinction and having to go back down into their supply chain and say, oh, let me pull this document to now saying, okay, we don't even want to cut a PO for this new formula until we know we have these things so that we it's easier to go ahead and get the claim because it's so valuable to us.

Wow. Okay, so I'm obviously thinking about the smaller brands who might be listening to this podcast and thinking, my God, this sounds like an enormous undertaking. Do you see a difference between how smaller brands can deal with a lot of these claim requirements or the substantiation requirements? Or do the bigger brands struggle with this too?

I've actually seen and is a generalization, but it seems to be pretty common. Smaller brands, although less leverage, totally understand, like less leverage in the supply chain, are able to be more thoughtful and are spending a lot more time in vendor selection, all the way down to like which ingredients are using being part of that conversation. It's harder to get data, obviously, but with the shift in what we're seeing, if you're working with the right partners, they will disclose. And so it's really just like being rigid about saying, no, I'm going to work with the partners who disclose. So I set myself up for success, I'll say with the larger brands, a lot of it is they've built the product, they have the partners. It's either getting the data or uncovering that they don't have the right things. And that kind of shift is massive. It's a lot of money to undergo. So while they have more leverage, it's, you know, if I got to swap out an ingredient, that's kind of a challenging situation to be in. So I will say, yeah, I think the smaller brands have more of an opportunity to do it right from the beginning. And I think we're seeing that more. They're showing up and saying, oh yeah, I meet all these standards because I've been thoughtful about how I put my products together from the get go.

So do you think these standards will effectively start to prioritize the brands that are really engaged in meeting these claim requirements with these massive retailers?

I do. And so some of the things that I've been so impressed by our retailer partners with in order to support the small brands is how they navigate and balance certification, third party certification. So especially for a small brand, for example, to get the vegan badge, you know, one of the ways is just to go partner with one of the organizations like vegan.org and you can get the badge. But that can be super time intensive for a brand. It can be very costly. And so these small brands only have so much money that put into different things that they're working on. And having to go invest in a bunch of certifications is very expensive. And so the retailers have made an approach of an and or so you can have the vegan.org license and share that and that's your substantiation or you can, as we screen your ingredient list, we'll identify all the ingredients that could potentially be derived from animal byproducts and then you can just get that sort of documentation from your supply chain, provide it. And now you have the vegan badge and so that it's allowing more brands to participate without having to put the expense into actually getting a certification. So that's how they're trying to support all brands of all sizes in helping them achieve things, to help them get exposure from the consumer and without having to do all of the back end cost that maybe a larger brand can afford.

I'm thinking about the retailers because I can see that the Brands must love that they can come to your platform and that they can instantly meet all those requirements. But similarly, the retailers must also be delighted that there's a tool that just sort of dovetails with what they have, because otherwise, how would they sift through all of that claim data as well?

Typically, the pain point when we enter, which is this all lives all over the place. It's in Slack messages and emails and Google Sheets. And one of our retailers is so large you can't even manage it in Excel anymore. You know, it has to be in a database format. So ultimately, the piece that we're streamlining is we're connected directly into their website. And so, yes, there's interfaces and workflow within the platform to have communication back and forth, but when you go to.com and you see a badge, that's just a direct integration, which makes it so easy and seamless, you don't have to go knock on the door of your IT team and tell them to do stuff manually, which is where most of them start.

Everyone must be very pleased when you come knocking. I can imagine that, given that retailers are setting standards and they're now requiring proof of claims, are they becoming like the de facto regulators as a result?

I think about this a lot in the eu, where there's a lot of regulation, obviously standards are much higher and it's more of just known that products are developed better and have different ingredients. And in the void of what the US has, that retailers have felt that filled that vacuum and have needed to, because there's nobody else doing it. And so I do see that happening. What's interesting, though, is because more and more and more of them are starting to fill that space and come up with different ways and definitions. It's complex because, like, in the eu, there's one regulation, I mean, it's still complex. There's different country. Every country has their own way of interpretation, but here it's. Every retailer has their own interpretation. And so it is complex for brands to navigate, I would say, for sure.

And are retailers getting it right all the time? Because, I mean, when I remember when those lists came out initially, when they were like, these are all the banned ingredients, and all the chemists were like, why the hell are you banning all these ingredients? Most of them are absolutely fine. Are they getting it right then?

I do think there's a fine line they have to balance between the known science and the consumer perception. It's so tough because no matter how much you want to educate a consumer, if they have, if it's gone viral that something's bad, you're not going to change perception very easily. And what hill do you want to die on as a retailer trying to make money? So I do think there's that balance for sure. What I will say, which has been really exciting is there's very few retailers have strict made without lists anymore. Like, of course, there's the banned ingredients, but there is more and more restriction and less and less banned. And so the restriction is where it starts to get interesting and very nuanced. Nuanced and understanding. Like, oh, well, obviously the basics, if you use it at this percent in this product type, you're fine versus if you use it here, not fine. And so really starting to get to those nuanced restrictions that I think is supporting science in a better way.

Yeah. Gosh, it's fascinating. What a minefield. And do you think this shift towards regulators, retailers effectively becoming like regulators, do you think that shifts here to stay, or do you think there are some regulatory changes that have already been coming in the U.S. mokra, obviously the cosmetics regulations came into force. Was it this year? I've lost track. But even for Mokra, I mean, everything isn't fully known yet. So do you think that eventually legislation might catch up?

I wish I had a positive outlook on this. This is Kimberly speaking, fair enough, but I would love to see that happen. I just don't believe it's going to happen very quickly. Obviously, even just with moca, it was supposed to be in effect this time last year and. And here we are and it's still really not in effect. And mocra, in my mind, was the starting point of starting to document formulas so that we could make informed decisions about what was going into our products and then start to make regulation on what's in them. But we haven't even done the first part, so I think it's going to be a long, long journey and we don't have time. There's so much data out there showing that even new generation up and coming and it's an expectation. It's not even like a preference. The millennials, it was like, oh, this is a better way to shop. I want to prefer this. And now Gen Z and Alpha are like, no, that's the only thing. I mean, we're shifting that way so quickly that we're going to have to respond. And regulation won't keep up.

No, and it won't keep up anywhere. I mean, you mentioned the eu, obviously. Yes, we might be slightly further ahead in regulation, but you can't keep up anywhere in the world because by the time something's caught the sort of zeitgeist of the shoppers, you know, you're several years behind still with regulation. So it's a minefield. So this idea of clean beauty that's changed quite significantly in the last five years as well. Based on what you're seeing, is it still as popular as it was?

I do not hear the word clean very often as much. I think that gets back to this was the whole argument when clean came out, which what is your definition of clean? And I think it is because it's, it is so different. And so instead of calling it one broad thing, we've just bifurcated it off into what it actually is, which is it human health related, is it animal welfare related, is it environmental related, what faction of clean are we talking about? And then that's the clean that the brand leans into.

Yeah. Wow. It's very complex, certainly. And I've certainly seen a massive shift too. And another thing that obviously has really taken off, and we alluded to this already earlier, is AI. So with the rise of AI, with the rise of people searching for more personalized products, with the rise of the skin intellectual, do you think that eventually we might get to the stage that retailers will start to expect brands to provide even more sort of specific, nuanced data about their products? Perhaps, yes.

It's interesting today, the landscape that we're seeing today, and this is what makes me feel like this is where we're headed in the future, is there's two elements of data and attributes that a retailer uses to help that preference in search and discovery. And so the one angle, and I think this is where AI is perfectly suited, is more on the sophisticated attributes about a product. And so it's not just a red lipstick, it's your nighttime evening, date night lipstick or whatever. But those, all those words I just used are attributes that somebody might type in Google or be searching for to discover a product. And then there's the, below the surface, what we talk about, the supply chain esque claims, which is, is this vegan? Is this not? And that, that isn't something that can be derived through AI. You can't look at a product image and say like, oh, it's vegan, like you have no idea. You have to know what it's made of. And so I do think that is where if we believe that that's what's growing and there's going to be more distinction of these, like how was the product made and brought to market type claims. That's going to require a ton more data from brands and more participation and providing it. But on the other side, you know, like the midnight date night lipstick, like that doesn't require a ton of information from a brand because you can perceive that from images and you can, there's a, there's actually a ton of businesses out there starting to form on creating metadata, using AI on products to help retailers surface products to consumers in a more personalized way.

So this is moving at a rapid pace by the sounds of things. And obviously, I mean, we talked about, you know, these retailers effectively filling the void from regulators. But something else you alluded to was obviously there are all these certifying bodies and organizations out there. Some of them are expensive, prohibitively expensive sometimes for small brands. Do you think that the standards set by retailers might also sort of take over from where the certification bodies originally were?

That's a really fascinating question. So the only reason I don't think that can happen fully, effectively is because a certification, when you work with a certifying body and you get that certification, you can use that as a brand anywhere you sell. And so you can, it's, it's a licensed thing. And I, if I sell on Amazon or Target or Walmart, whatever, I can use it in marketing, market it. But if I do the hard work to get Target Zero and I get that label, I can only use it at Target. And so even though I did all that hard work and I'm selling on Amazon, I can't really talk about how I'm Target Zero on Amazon. But maybe you could. I don't think it'd be relevant or Walmart, like they're not going to let you do that. So I think that's why the certification bodies will still be important. But it is interesting because if I'm a brand and I'm trying to figure out what to invest in, I might start to decide to invest in all the things that are specific to retailers because it helps me sell at that retailer versus one thing that I can use across all. But I'm not sure if it'll help me sell across all. So I think that's going to be the balance. The only other thing that I can see is there are so, so many certifications starting to pop up. I know, and it's crazy. And I think it's because it again is that consumers don't want just they're looking for the nuanced thing that aligns with their values. And so that requires like, oh, well, I'm focused on this small subset of things and certifying that that exists in the product. So yeah, I think it's also confusing for the consumer, like wow, there's 72 certifications on this thing. Like which one do I trust, which.

One do I go after?

So I do think consumer trust is going to start being in the retailers because that's just more of like the, oh, this is where I shop. And they said this thing. I'm going to trust that.

I agree with you. There are so many certifying bodies and it's really confusing and none of them have any real brand awareness around, well, the newer ones anyway. And I think ultimately we'll go back to those sort of OG certifying bodies that everyone recognizes which is exactly what you said about the retailers as well. If people recognize the Target or the Sephora label, that's what they go with. So what is next for Novi? Because obviously the market has changed so much even since you launched. You're in exactly the right place at the right time by the sounds of things. Where do you guys want to go in the next few years?

We get excited about this question because we started in beauty and personal care largely because the company came out of a beauty and personal care company. So we were founded that way. But also it was the first category where consumers really cared even though it was a much smaller segment of consumers. That's where they're starting to see that shift. And beauty spilled into wellness which spilled into, you know, now is in food and now it's really anything that's in and on your body. I think there's a lot of consumer awareness and education and so for Novi that's where we've expanded and we're, we're approaching in and on your body are, you know, food supplements, baby pet food, clothing and that's where we're going. And it's really exciting to partner with retailers who are also cross category because we can take our technology which is very, you know, extensible across category and it's not beauty specific. So that's, that's our growth path which is very, very exciting.

That is incredibly exciting. Will you stay mainly North America based or do you plan to go more global?

Well, yes, we're actually through a couple of our retailer partnerships already supporting global E commerce and so that's definitely something we want to continue to grow. Not to of course we have to prioritize and make sure we're not, you know, to do too many things. But yes, that is absolutely on the radar for us.

That's incredibly exciting and I can't wait to see what you guys do next. So for anyone listening who wants to learn more about Novi or maybe wants to even come and sign up to your platform, where can they do that?

Novyconnect.com just visit the website and there's a lot of different places to sign up, to talk with somebody, to get a demo and to get more information to learn more.

Amazing. We will include that link in the show notes. Go and check out Novi. Go and check out all the amazing work that Kimberly and her team are doing. Thank you so much for joining me on the podcast today. It's been such a pleasure having you here.

Thank you so much for having me. This is really fun.

Amazing. Well, we'll wrap it up now, but yeah, I can't wait to see what Novi does next. See you soon.

Bye.

I would love to hear your thoughts on this episode. Do you feel that regulators should step in to do more for beauty? Are they doing too much? Are you concerned about retailers setting the benchmark for beauty? Leave us a comment on our social channels as both the Formula Botanica team and I love hearing from you. And if you want to hear more about some of the topics we talked about today, please do delve back into the podcast archives. I love talking about these topics and there are some great episodes out there for you to listen to, including episode 119 as I mentioned right at the start of the podcast in which I interviewed Novi's head of Chemistry and sustainability, Yashi Shrestha, about the methodology that Novi uses to bring transparency to the cosmetics industry. Or episode 81 in which I spoke to Jessie Baker, the founder of Provenance here in the uk, to learn more about the way that they're working with brands and retailers to encourage brand transparency as well in beauty. There's a wealth of information in our old episodes and I do encourage you to go back and listen to them. Thank you for joining Kimberly and I for this latest episode of Green Beauty Conversations. I really hope you enjoyed it. If you did, please do leave us a five star review so that other people can enjoy these conversations too. Make sure you subscribe to the podcast on Apple Podcasts or Spotify or whatever your favorite podcast app is and stay tuned for the next episode. Follow Formula Botanica Formula Botanica on Facebook, Instagram, YouTube, TikTok, Pinterest, LinkedIn we're everywhere and come and give me a Follow Lorraine Dallmeyer on Instagram and LinkedIn. Visit our website@formulabotanica.com and sign up for our free online formulation course today. SA.