You Look Good.
They say that beauty is in the eye of the beholder. In a world of infinite choice and immediate access, how does a beauty company cater to the expectations of their beholders? How does a beauty brand cut through the cacophony of direct to consumer upstarts? How do you build a profitable business competing with department store incumbents on one end and new companies bidding up customer acquisition costs on the other?
By making your customer your community, and your community your co-creator.
Glossier started with the radical idea that avid, authentic community engagement combined with deft curation and conviction, could build a big business. No single beauty company (or direct to consumer upstart, for that matter) has effectively and authentically done this as well as Glossier. Today, we are delighted to welcome the Glossier team to the Spark Capital family as investors in their $100M Series D financing.
It’s never been easier to start a direct-to-consumer company. As with many verticals, the internet has dropped the barriers to entry for new CPG upstarts. Brands no longer require massive advertising budgets, retail partnerships, and coveted shelf space to find their audience. But more choice has conversely led to less trust. Consumers look to their peers online for guidance on the best products from the best brands. This means that word of mouth is the ultimate customer acquisition channel — one that Glossier has mastered.
Glossier’s founder and CEO, Emily Weiss, cracked the code on selling directly to consumers in a way that many entrepreneurs have tried, but very few have succeeded: she started by building a community. By being patient, thoughtful, and authentic in cultivating her audience with Into the Gloss, Emily earned the brass ring of CPG: customer trust. Members of the Glossier community aren’t just fans — they’re partners on the journey of building Glossier. As an example, the company responds to more than five direct messages on Instagram every minute — an unprecedented scale of one-to-one conversation for a brand in any category.
Glossier’s success with this strategy is evident in the numbers. The company added over one million new customers in 2018 — customers that are profitable with their first purchase and keep coming back to buy more. They have seen triple digit revenue growth every year since founding while maintaining a burn that is decidedly old fashioned in this day in age. Their products are sold directly to their community, exclusively through their own channels. There are no third parties extracting revenue or pilfering their customer insights — community engagement flows through toll free and drives future product innovation and amplification. The community is a valued colleague.
The beauty industry is particularly ripe for this model innovation. While it’s a fast-growing, massive $450B category, the industry lags many other consumer verticals in online commerce penetration — 10% today vs 15–20% for other categories. Yet beauty communities and content have long been staples of the internet — from YouTube makeup tutorials to Reddit skincare forums. Into the Gloss was a pioneer in online beauty discovery and the community born from the blog is a unique competitive advantage for Glossier today.
Of course the community — and later, the company — is the result of years of hard work and uncanny foresight by Emily. To say that she is a force of nature obfuscates her true super power: she is a fantastic listener. By weaving her unique point of view with the feedback loops of her community, she has built a platform to power additional brands that respond to her customer’s needs. More importantly, she has built a world class team of product designers, supply chain experts, marketing muscle, and arguably one of the largest engineering teams in beauty to make it happen.
Glossier is truly the first customer-built beauty brand, and for this reason, we believe they’re well positioned to be the beauty platform for all beholders. We’re thrilled to be partners — and customers — on the journey.