It’s not just big brands and retailers that are seeing direct-to-consumer (DTC) as their path to riches, celebrities and influencers are also fast jumping on the bandwagon.
From Kim Kardashian’s shapewear line SKIMS to George Clooney’s Casamigos Tequila to Emma Chamberlain’s Chamberlain Coffee, Hollywood A-listers and influencers alike are increasingly choosing to launch their own DTC businesses over licensing deals.
There are several key lessons to be learned from celebrities’ DTC playbook, said Maggie Sellers, a TikTok guru, who has become popular for her fun, approachable, and “sexy,” if you will, take on DTC trends that are shaking up the retail space.
In a recent interview, we discussed all things DTC and the lessons brands and retailers can learn from celebrity/influencer-owned DTC brands.
Where celebrity brands began
Today, more celebrities and influencers are capitalizing on their social media following to launch their brands. And why not? Many of them have succeeded in turning their DTC brands into billion-dollar enterprises.
Take Kardashian, for example. She was officially recognized for her billion-dollar status by Forbes in April 2021, thanks to her two lucrative DTC business ventures, KKW Beauty (which has since been renamed SKKN) and SKIMS. Then there’s hip-hop billionaire Jay-Z, who co-founded Marcy Venture Partners, which invests in Black-owned DTC businesses such as Savage X Fenty by Rihanna.
“The blueprint to becoming a billionaire was set by the Jay-Z’s, the Kanye’s, the Rihanna’s,” said Sellers.
"Once the blueprint was laid, every talent manager and agent out there recognized this path to fortune, which has ultimately led to an over-saturation of the celebrity brand space."
With over-saturation comes the need for an overhaul
This over-saturation has pushed celebrities and now influencers to think beyond just slapping their names on various products.
A recent case study on brand alignment and authenticity or lack thereof is Sephora’s recent decision to pull the plug on beauty brands Item Beauty and Selfless by Hyram, two brands founded by TikTok stars Addison Rae and Hyram Yarbro.
The two brands overestimated the power of securing shelf space and were lackadaisical in their brand-building efforts – meaning they left most of the work to Sephora and stopped prioritizing their community.
In contrast, brands such as Fenty Beauty by Rihanna and Rare Beauty by Selena Gomez have continued to find success. Why? Their brand-building approach goes far beyond pretty packaging and finding shelf space in high-foot-traffic retail stores.
“Two years ago, Fenty Beauty was such an innovative concept, even with the over-saturation in the beauty space, because it was the first brand to really nail color profiles and palette options for consumers of all races,” Sellers pointed out.
Meanwhile, Rare Beauty has tapped into the authenticity of founder Selena Gomez to form a connection with its customers. Gomez has been very open about her self-esteem struggles, publicly sharing her battle with low confidence ensuing from unrealistic beauty standards since she was 10 years old.
“Rare Beauty is breaking down unrealistic standards of perfection. This is makeup made to feel good in, without hiding what makes you unique—because Rare Beauty is not about being someone else, but being who you are,” says the company website. Not only does Rare Beauty talk the talk, they walk the walk with 1% of all sales donated to the Rare Impact Fund, which gives people access to the resources they need to support their mental health.
While Fenty Beauty and Rare Beauty are examples of established celebrity brands, there are still others that are making inroads in just about every segment, driven by their authenticity and founders’ level of involvement.
Rhode Beauty by Hailey Bieber is one such brand to look out for, Sellers said.
The benefits (and challenges) that come with a blue ocean strategy
There is no denying that the beauty industry, as big as it is, is fast getting saturated with new brands. However, there are plenty of other categories that are still ripe for disruption. Katy Perry, for example, launched De Soi, a non-alcoholic beverage.
Her concept and decision to launch a non-alcoholic brand is genius stuff, Sellers said, pointing to the vast growth potential in the category.
The non-alcoholic (non-alc) beverage market amounts to $496.50 billion in revenue for 2023, with the largest segment being soft drinks, with a market volume of $328.10 billion. In comparison, revenue in the alcoholic beverage market amounts to $1.69 billion.
That said, celebrities like Katy Perry are taking more of a gamble as they are investing their time, energy and resources in the long game. After all, educating and acquiring new customers requires significantly more time and work than targeting a customer already well-versed and aligned with said industry or category.
“When you first touch a potential consumer in a new category, you’re not trying to necessarily sell them your product as much as you’re trying to sell them on the idea of the category in general,” Sellers said.
"It's about leading with education."
This is where partnering with a known celebrity or influencer can be a viable approach for brands and retailers.
“What better way to enter the category than with a celebrity that already has an audience that trusts you to educate them? This allows you to cut down the time and the cost that it would normally take to acquire them. And because they trust you already, the discussion is much easier to have.”
Case in point: When Perry first posted about De Soi on Instagram, many of her followers dropped questions in the comments asking about the product, showing curiosity to learn about the product category.
“If you can take a celebrity with over 400 million followers on social media, who trust her, believe in her, and knows that she’s prioritizing health and wellness and that she’s a mom and she’s trying to balance everything – if she’s educating you on non-alc, you already consciously or at least subconsciously trust them even if you don’t know what it is because it’s coming from someone you already have a relationship with.”
TL;DR
Simply slapping a well-known name on top of a product and calling it a day no longer cuts it. It takes authentic and passionate storytelling for celebrity brands, or any brand for that matter, to truly succeed.
Feature photo credit: Maggie Sellers
