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Call it an Avon lady for the digital landscape.
This story first appeared in the February 1, 2013 issue of WWD. Subscribe Today.
Beginning today, beauty entrepreneur Patricia Pao will implement an online platform designed to turn her skin care company, Restorsea, into a $10 million brand by the year’s end. The digital initiative, called the Lifetime Value of Customer Program, offers targeted individuals with a “significant online presence” — such as bloggers — financial compensation for endorsing Pao’s products on their blogs, Facebook, Twitter, Instagram and Pinterest pages. According to Pao, product sales through the program will account for 90 percent of the expected $10 million in retail sales by December 2013, a major jump from its $125,000 in revenue from September through December 2012.
“We are living in a time now where we need to find ways to commercialize the Web,” said Pao, a Harvard Business School graduate who during her career has worked on products for brands like Avon, Elizabeth Arden, Guerlain and Peter Thomas Roth. “It’s time to figure out how to use the Web similar to how Avon representatives went door to door 150 years ago.”
Through the patented digital platform, online “influencers,” as Pao refers to them, earn a certain percentage from products purchased via click-though links posted on their Web pages and social channels. In addition to earning money from the initial sale, as per the program, when an affiliate’s follower makes a purchase on restorsea.com, the follower is forever associated with the affiliate, who will garner commission from all of the follower’s future purchases. Commissions are paid quarterly.
“People have built huge followings online and it’s about leveraging that reach into sales,” said Pao, who also offers another buzz-generating program called Share The Love, in which online Restorsea shoppers can send complimentary deluxe skin-care samples to three friends, which Pao believes will further drive brand awareness and sales. “We are all about win-win,” she said. “We want to make this work for everybody. If a brand genuinely wants to do that, people actually believe you and will get it.”
Pao said it was the $20 million price tag needed to secure the rights to her exclusive ingredient — an enzyme called Aquabeautine XL, released during the salmon hatching process — that got her thinking of unique ways to bump sales figures aggressively and quickly. “I was looking at the numbers and realized I needed to figure out how to pay my ingredient supplier,” said Pao. In October, the line entered Bergdorf Goodman, where industry sources say the brand’s current two stockkeeping units generate between $5,000 and $7,500 in retail sales a week. “Desperation is a highly motivating factor to thinking innovatively,” said Pao.
Because her brand still doesn’t have the “critical mass or door count” of bigger brands, Pao said she believes by owning the “online direct-sale channel,” she can put Restorsea on the map, much like Leslie Blodgett did through QVC with a once-little-known mineral makeup brand called Bare Escentuals.
The Restorsea lineup — which currently includes Rejuvenating Day Cream and Revitalizing Eye Cream — will expand this spring, and will range from $65 for a cleanser to $195 for a serum. The Restoring Night Cream and Renormalizing Serum will launch in March, the brand’s Rejuvenating Day Lotion SPF 30 will be introduced in April and in June, the Reviving Cleanser will roll out. All products are hypoallergenic and contain a proprietary skin-exfoliating and strengthening complex, which features Aquabeautine XL and complementary ingredients like brown algae and Japanese Songyi mushroom extract.