The Supply Side: SmileDirectClub lands in 3,800 Walmart stores

Direct-to-consumer brand SmileDirectClub is spreading its wings with a recent deal that puts oral care products in 3,800 U.S. Walmart stores. The Nashville, Tenn.-based company approached Walmart about a year ago seeking to be a disruptive brand in a competitive category, according to Amy Keith, vice president of retail for SmileDirectClub.

“We are incredibly pleased to be partnering with Walmart as we share similar missions to provide more affordable and accessible healthcare. We feel this is a beneficial partnership that allows disruption in a category important to so many,” Keith said in an interview with the Northwest Arkansas Business Journal.

She said the timing of the product launch that put teeth whitening kits, electric toothbrushes, water flossers, toothpaste and a patented smile spa oral cleaning product aligned with Walmart’s efforts to expand oral care products and overall health and wellness.

Keith said the step into big-box retail came as more of its customers wanted quick access to the products. Given Walmart’s footprint, she said this gives the company’s 750,000 customers a way to get oral care products aside from ordering online.

“SmileDirectClub’s debut of oral care products in mass retail extends our mission to be the consumer’s first resource for safe, affordable and convenient oral care solutions,” Josh Chapman, the chief global brand officer at SmileDirectClub, said in a recent release. “Partnering with Walmart to introduce our products reinforces our shared commitment to providing premium quality products at a price worth smiling about.”

Keith said the Walmart partnership allowed the direct-to-consumer brand build a bigger billboard that creates more awareness around the brand. With 140 million shoppers in Walmart stores each week, Keith said the company is thrilled to be front and center with easy to-see-displays in 2,600 stores and on traditional aisle shelves in the remaining stores.

“Being in Walmart stores helps us bring our expanding oral care brand to life,” Keith said.

Walmart said it is always expanding assortments to meet customer needs, and the SmileDirectClub launch is a good example of that mission.

“We don’t believe you should have to sacrifice your budget for your smile, so we are excited that SmileDirectClub is launching new smile-enhancing products exclusively available at Walmart,” said Shawn Townzen, vice president of Walmart personal care.

Keith said the company is happy with the pricing it negotiated with Walmart and believes consumers will find it competitive against similar oral care products from consumer packaged goods giants Unilever and Procter & Gamble.

BACKSTORY
SmileDirectClub was founded by longtime friends Alex Fenkell and Jordan Katzman. Their idea was to provide consumers with more discrete and affordable ways to perfect their smiles. The startup teamed up with Camelot Venture Group in 2014 with a mission to make orthodontics more accessible.

SmileDirectClub came up with a clear aligner product that fits tight and gradually shifts teeth into the desired position. The tooth straightening process takes an average of six months.

Seeking to take costs out of the system, the company vertically integrated the manufacturing and then partnered with licensed dentists and orthodontists that review photos, medical history and a 3D image of a smile before building a customer smile.

There are now more than 360 dentists and orthodontists in the SmileDirectClub network. While the entire process takes place at home, the doctors are accessible by phone, email or chat to answer questions that may arise. In just five years, SmileDirectClub said it represented 95% of the doctor-directed at-home clear aligner industry, helping more than 750,000 customers perfect their smiles.

Walmart does not sell the alignment retainers, but SmileDirectClub does have retail clinic partnerships with CVS and Walgreens. Keith said as Walmart continues to test the clinic concept it will look for opportunities to broaden the relationship.

The company said 80% of Americans could benefit from orthodontic care, yet only 1% receive it each year. Cost is the biggest factor keeping consumers from seeking treatment, the company said. Keith said SmileDirectClub clear aligners cost about 60% less than other options. Much of the cost reduction comes from no need for office visits.

Keith said the company has grown to more than 6,000 employees and 366 locations. She said the company will open a second manufacturing center near Austin, Texas, this year that will make the retainers.

BRICK-AND-MORTAR TREND
Despite SmileDirectClub’s start as a direct-to-consumer brand largely reached online, there was a need for brick-and-mortar exposure. This is a growing trend among more digitally native brands.

“The pace at which digital native retailers are adding physical stores to their portfolio is one of the biggest surprises to me in 2019,” said Scott Benedict, executive director of the retail center at Texas A&M University.

He said store expansions by online optical brand Warby Parker and athletic wear e-retailer Lululemon are examples of the trend. Benedict said retail stores allow brands to augment the way they serve customers as well as provide reduced marketing expenses while giving more exposure in population centers.