“Complete Products and Brands”: How Beauty Commodification is Shaped by Celebrities and Venture Capital

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This story is part of “Now what?” Digiday Media’s Fall 2021 Sneak Peek, a look at how media, marketing and retail has changed over the past 18 months, and what it means for their future. Check out the rest of the stories here.

Jennifer Lopez, Prince, Game of Thrones, Pharrell, Hello Kitty, Lady Gaga, Harry Potter, Halsey, Baby Yoda, Friends, The Muppets, Selena Gomez, Ariana Grande – it doesn’t matter who or what someone is a fan of, they can probably find a beauty brand or a collaboration for it today.

Over the past year, makeup and skincare collaborations and brands have launched virtually every week for anyone (or anything) with an audience. The power of social media and dedicated fans has been paired with easier than ever ways to align distributors, giving an ever-growing roster of creators, agencies, and even film and TV studios the opportunity. to transform beauty products into a new celebrity merchandise sub-category.

“The way we approach it is more like a collector’s item. And we want it to be an experience for the fan, ”said Jeff Sellinger, co-founder and CEO of collaborative makeup startup HipDot. Enthusiastic fan groups have led him to launch makeup collaborations over the past year with singer Kesha, the movie Clueless, and the band My Chemical Romance, to name a few. “A lot of people order multiples because they don’t want to open it; they want to have one that they keep intact.

For traditional beauty giants, this means not only competition from startups with disruptive branding, but a growing number of brands focused on influencers, celebrities, and collaborations with a built-in fanbase at launch. As these labels fill the shelves of Sephora and other retailers, established beauty brands have adapted with increasingly creative collaborations to stay relevant. For trendy new brands with collaboration-dependent business models or famous founders, the key has been to position themselves as more than just a merch – instead of the next viral giveaway, these startups are hoping to create the next Fenty Beauty. .

“Merch as we knew it, I would say seven years ago, were logos on t-shirts,” said Ronak Trivedi, co-founder and CEO of Pietra, a platform that helps celebrities and influencers grow. their own product lines. . With the rise of social media, “traditional merch” has evolved into “complete products and brands,” he said.

A former Uber alumnus, Trivedi co-founded Pietra in 2019 to offer a centralized online platform where users can connect with service providers including vendors, warehouses, ecommerce enablers and designers to launch their brand. Prices vary by department: For sourcing and product development, Pietra charges a 10% charge for each sample, while product assembly and storage costs $ 99 for up to 500 units. The company also operates its own ecommerce marketplace where creators can sell their brands, collecting a fee of 5% plus $ 1 on each purchase. Backed by VC heavyweights including Founders Fund, Andreessen Horowitz, TQ Ventures and Abstract Ventures, as well as celebrities such as Will Smith, the company is valued at $ 75 million.

The platform is bracing for a major influx of celebrity brands and influencers as it announced on August 23 a deal with United Talent Agency for a $ 500 million fund to build more brands with the talent of the agency. The platform and agency will focus exclusively on the talents represented by UTA, funding all aspects of the brand launch process. The creators chosen for funding won’t necessarily be the ones with the most followers, but rather those chosen for “authenticity,” demographics and location, Trivedi said. As to where the funds will be allocated, “we don’t have a set constraint” on the categories, he said.

Beauty is currently Pietra’s second most popular category after fashion and accounts for between 25 and 30% of brands created through the platform, according to Trivedi.

The value of an auto follower base or fan group has also boosted collaborative-driven models of fast-growing beauty startups such as Morphe, ColourPop, HipDot, and Revolution over the past half-decade. In addition to looking at influencer collaborations, these brands have also discovered the value of collaborating with all entertainment franchises generating demand for derivative products, whether they are musical artists, films, d ‘television shows or fictional characters.

For HipDot, five years, collaborations “play a bigger role in our business” than commodities, Sellinger said.

“We’re doing this for the fans,” said Jeff Sellinger, co-founder and CEO of HipDot, the brand’s regular beauty collaborations. It increases its number of collabs each year: in 2019, it launched 3, which doubled to 6 in 2020 and is already at 5 this year with more planned. HipDot engages fans in product artwork and social media content to promote the products.

This business model has proven to be lucrative for brands. The British e-merchant Beauty Bay, for example, sees its sales increase on its site when it launches fruitful collaborations. Her May 2021 collaboration with beauty influencer Ayo Coralie not only sold out in 47 minutes, but also resulted in an overall 43% increase in sales for her private label By Beauty Bay. This also led to increases on other brands – SUVA thus recorded an 84% growth.

The collaborations “continue to be a big sales driver for us” and “create an almost viral excitement at launch which in turn extends the reach of Beauty Bay,” Company Co-CEO Dave Gabbie said via e- mail.

For traditional conglomerate beauty brands, this means that the celebrity spokesperson model is no longer enough. Startup-inspired collaborations have particularly grown over the past two years among established brands. NYX Professional Makeup, for example, launched several collaborations during this period with TV shows, musicians, and other entertainment brands.

“Partnering with a TV show, we’re able to leverage the storyline to develop products that match the themes and characters of a series, and there’s also a dedicated audience that goes with it,” a declared NYX Professional Makeup global. president Yann Joffredo by e-mail.

“We are deepening superfan communities” to market collaborations, said Joffredo, who said these fans “definitely see collaborations as merch.” Like HipDot, the brand also sees double purchases of products, which then become collectibles: a January 2020 collaboration with the Netflix show “Chilling Adventures of Sabrina” sold out within hours, and was then sold. on eBay at four times the price. original price. On August 28, the brand released its latest collaboration with the Netflix show “Sex Education”.

While fans and subscribers can generate hype and buying frenzy, the goal of collaborative startups and influencer or celebrity brands is to be taken seriously for high-performance products.

“Traditionally, you may have seen more traditional products or licensed products where quality hasn’t always been the most important thing,” Sellinger said. The importance of getting positive online reviews from beauty influencers and online enthusiasts has changed that. HipDot, for example, focuses on the marketing language that the products are clean and vegan, without talc, parabens or mineral oils.

This is especially important for celebrities or beauty influencers who are launching their own brand or collaboration with a focus on products intended for actual use. Rather than giving the impression that they are simply profiting from a licensing agreement, “the creator has to design it; they have to use it, ”Trivedi said.

Over the next few years, more independent brands are on the horizon.

“Now that these barriers are broken down, I think we’re about to see a massive shift in consumer retail culture to become designer-led brands, when designers start to realize that they hire their audience to these bigger brands, ”Trivedi said. .


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