The luxury beauty retailer Violet Grey is an industry hot ticket.
Last week, it was announced that Shiseido had made an undisclosed, minority investment in the company. This is after rumors swirled last summer that Amazon was looking to partner with the company to up its luxury cachet — a deal that was never confirmed. It has received the Kardashian seal of approval, too: When Kim Kardashian debuted her first KKW Fragrance online in November, she selected Violet Grey’s Los Angeles storefront to hold a one-day pop-up shop feting the launch.
For Shiseido, the investment is a way to study up on Violet Grey’s e-commerce strategy, which uses magazine-style editorial content (from celebrity interviews to tutorials) to promote its selection of prestige beauty products, ranging from skin care to fragrance from brands like Byredo and Tom Ford. It offers a more relevant angle for today’s blog-friendly consumer than the dated, content-free website Shiseido’s namesake brand relies on.
Violet Grey also emphasizes curation, which has made it a go-to product discovery destination for beauty fiends, many of whom may be otherwise unfamiliar with Shiseido products. What’s more, its entire assortment is said to be approved and tested by Hollywood’s leading makeup and hair artists, experts and stars — a process it calls “The Violet Code.”
“Any connection to these industry heavyweights wields the site more social influence and power, which brings in dollars that Shiseido is definitely banking on,” said Ashley Paintsil, the innovation and investment correspondent at LeanLuxe.
While Violet Grey, founded by the former consultant Cassandra Grey in 2014, doesn’t share revenue figures, WWD reports the company does about $5 million in annual sales.
It’s also a step in the right direction for Shiseido’s Vision 2020 plan, kicked off in 2015, which outlines the company’s overarching goal of furthering its digital innovation and market footprint. It follows close behind the Japanese company’s other recent tech-first investments in companies like the customized makeup startup MatchCo and the AI company Giaran.
“Retailers and brands are focusing more on their direct-to-consumer e-commerce strategies, which is where the real growth comes from,” explained Jane Hali, the founder of the investment research firm Jane Hali and Associates. “Their e-commerce sites must be engaging, and Violet Grey certainly has that element.”
Kim Kardashian for Violet Grey (Photo by Ben Hassett)
“[Cassandra] Grey has become an expert on e-commerce selling to the modern luxury consumer, which Shiseido could use some help on,” said Painstil.
Shiseido’s investment in Violet Grey comes at a time when many of its peers in the legacy space, like L’Oréal and Estée Lauder, are investing in or acquiring younger brands in an effort to stave off increased competition in the market. That competition is being led by independent brands like E.l.f. Cosmetics and Winky Lux, which are courting more of today’s customers with their fast “masstige” approaches, factors that have been telegraphed online from the very beginning.
The investment is also a savvy way for Shiseido to expand its reach on the popular shopping platform. Currently, Violet Grey sells only a small assortment of products from a handful of Shiseido brands, including Laura Mercier and Serge Lutens.
“[It] offers us the opportunity to grow our existing presence on VG’s online platform and to gain from Violet Grey’s unique insights into the luxury beauty market,” a spokesman for Shiseido Americas told WWD.
That means we can probably expect to see more Shiseido-owned products on the website, perhaps from some of its other big brands like Nars and Cle de Peau.
Customer data gleaned from the brands’ sales on the platform could also contribute to future product development and positioning. This is well-timed as Shiseido is working to reassert relevancy with younger consumers, according to one source close to the brand.
“Violet Grey caters precisely to the cool, luxe consumer they’re going after,” she said.
For Violet Grey, of course, the benefit lies largely in having more money to scale its growing business, as well as the potential for “deeper industry connections and expertise,” said Painstil. “I’m sure they’d like to be able to grow as big as Shiseido, and now they can learn how to do that.”