Ana Andjelic is a brand strategist and sociology expert.
Glossier is one of the most successful beauty companies around. At one point, there were 10,000 people on a waitlist for lipstick. But before Emily Weiss landed $52 million in Series C funding, no one predicted anything like Glossier. In fact, 11 investors turned Weiss down.
No one knew Glossier would become a success until it did.
In today’s beauty industry, success is more unpredictable than ever. This is because much of it is the result of social influence: the effect people have on one another’s decisions. Today, this effect is massive; thanks to Instagram and YouTube and Snapchat and Pinterest, we are constantly exposed to one another’s decisions when it comes to what to buy, wear and like.
But we don’t only rely on others for knowing what to buy. We also gravitate toward the same things as them because we are social animals and love sharing our experiences.
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When we are influenced by what others like, our individual choices interact in essentially unpredictable ways. And because we almost never make decisions independently of one another, reliable prediction of the next It thing — a product, a brand or a technology — becomes essentially impossible.
We adopt a business because our friends are already there.
Glossier succeeded because it recognized that women enjoy sharing their beauty preferences, and gave them the tools to create content and enabled conversations around it. Glossier’s value is not in the sheer scale of its user base, either: rather, it’s in the social activity happening on its user network.
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In the beauty market, success is then a matter of cumulative advantage. Something becomes popular mostly because a lot of people like it. And because a lot of people like what they think others like, beauty markets do not only reveal our preferences; they actively shape them.
The quest for the next Glossier will remain elusive as long we fail to look beyond algorithms and toward the social activity as the source of an online business’s value.
This social activity revolves around one or more of the four Cs: community, content, curation and collaborations. They critically impact how a company launches and markets its products, and creates, captures and delivers value for its customers.
Community
A retailer needs to encourage social connections among its customers. These social connections will become its primary source of value and the key driver of competitive advantage. Social connections work best when created around an audience’s pre-existing passion, hobby or interest. High-design ride wear brand Rapha positions itself as a “vibrant ecosystem for road riders around the world.” Its belief that cycling transforms lives translates into the series of local Rapha Cycling Clubs, where cycling enthusiasts can gather for events, rides and races, and to bond with others.
Content
Content created by a retailer generates value even before a single product purchase or use of service. California-based fashion apparel brand Dôen creates a social network around its proprietary content. The brand prides itself in selling “thoughtfully designed clothing by women, for women.” This female link is Dôen’s value proposition, and it consistently delivers it through its product design, events and Journal, where Dôen profiles the extraordinary stories of community members that others can have conversations around.
Curation
A retailer’s new customers can lower the value for its existing customers. To prevent reverse network effects and maintain a high signal-to-noise ratio, retailers need strong curation and personalization of the customer experience. In order to ensure its products and services are relevant and valuable to its customers, Adidas introduced Creators Club, a membership program that gives customers access to exclusive events, products and special offers.
Collaborations
Ask what else your customers are wearing, reading, listening, experiencing and talking about, in addition to your products or services. Relevance of a retailer for its target group is greater if it is culturally amplified. Ikea’s collaboration with streetwear brand Off-White is aimed at designing an affordable furniture collection to help millennials create their first home. More important, it reflects a broader taste and the aesthetics of their joint audience.
No one knows who the new Glossier is going to be. Instead of obsessively guessing the next success story, companies and investors can create one by making their products and services inherently social. To increase the chance of cumulative advantage once the product or service is in the market, they can put one or more of the four Cs at their core. In the complex and inherently unpredictable beauty market, designing for social influence their best bet.
