Billboards, subway ads, selfie opps and Millennial pink everywhere — as Glossier opens its newest SoHo store and prepares to launch in Sephora, it’s like 2014 all over again, when the brand was the darling of the beauty world — a runaway success that seemed to have its finger squarely on the pulse of the much-coveted Millennial.
More recently, though, sales — and buzz — have slowed.
And while Glossier is once again unleashing its marketing machine in full force, the company is looking to revive its fortunes in a landscape that has shifted dramatically since its heyday in the late 2010s, leading some to question whether the company can meaningfully jumpstart a business that has declined at a time when overall industry sales are surging.
Industry sources report that 2022 sales for Glossier declined consistently, though the NPD Group’s data shows that the broader prestige beauty industry grew in the double digits — 18 percent in makeup and 12 percent in skin care, for the year. Some analysts peg the brand, which raised an estimated $265 million in funding with key investors including Forerunner Ventures and Sequoia Capital, as having sales of just shy of $100 million at its height. Glossier executives declined to comment on the figures.
The company’s woes have been well reported-on. The brand laid off nearly 200 retail employees during the pandemic and eliminated another two dozen roles last year. Around the same time, social media denizens reported finding Glossier’s hero products in TJ Maxx and Marshall’s.
Now, though, the company is regrouping, under recently appointed chief executive officer Kyle Leahy, with a new SoHo store set to open this week and a high-profile launch in Sephora — Glossier’s first major retail partnership ever.
The brand launches in all Sephora doors across Sephora U.S. and Canada on Feb. 23, which Carolyn Bojanowski, executive vice president of merchandising, said was a response to consumer demand.
“Glossier has always been a top-searched term on Sephora.com, and is big on Google. We know that the clients are hungry and circling, and we’ve been ready to announce and get the build-up ready. It’s exceeding all of our expectations” she said. “It’s certainly the biggest launch of this year coming out of Sephora.”
While Glossier appealed to Millennials in its original incarnation, Bojanowski said it is gaining increasing prominence with younger shoppers, too. “We see it as a new client acquisition tool, we’ve got brands that speak to lots of generations,” she said. “Glossier grew up as a Millennial brand, but now it’s attracting Gen Z.”
Glossier products will be merchandised on a stand-alone gondola and given what Bojanowski called the “red carpet treatment,” complete with window displays and Glossier T-shirts for beauty advisers. “They have their store footprint and their way, and then we have our point of view, and we were able to work together on an awesome experience,” she said. “It’s very Glossier, but it’s also very Sephora.”
The partnership should be a win-win for both sides, giving Sephora access to a younger crop of shoppers who seem to favor Ulta Beauty, while allowing Glossier to multiply its footprint in a cost-efficient way.
“You often see digitally native brands go into Ulta and Sephora,” said Oliver Chen, an analyst at Cowan. “Beauty moves so fast and rapidly, when you’re in a multibrand environment, it’s a lot different. Executing in that way will have to be like perfecting a shop-in-shop… you’ll definitely need to rely on your wholesale partner.”
Chen said that consumers’ tastes in beauty — and even more so, values — have shifted since Glossier reached its apex. Its Balm Dotcom relaunch garnered mixed reviews online, as did its refillable deodorant concept.
“Gen Z looks at what I call S.T.A.R. — sustainability, transparency, authenticity and re-commerce,” Chen said. “Glossier was a pioneer of rethinking what beauty means, but the markets move quickly, and there’s a lot of inclusive brands.”
Adapting requires a lot of capital. Though Glossier has raised more than $265 million to date, relying on its own storefronts is a costly way to scale. “The vast majority of sales right now are in-store,” Chen said of the market. “Signing leases is so capital-intensive, and may not be their core competency. [A retail partnership] is almost like outsourcing the real estate function.”
The stakes of the game have also changed. “In beauty and beyond, it was enough to have a novel concept and unexpected, nice, beautiful design that transcended the cues of the category,” said Lucie Greene, founder of Light Years consultancy. “The most interesting brands now are the ones that emphasize disrupting the category with either a completely different business model, or reinventing the product itself.”
While Glossier may have hit a rough patch, there are positive signs. Google searches for key Glossier products are seeing a rebound.
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“When we first started covering beauty, Glossier was on top of the world, and we watched it slowly start to fade,” said Yarden Horwitz, cofounder of Spate. “They’re at 20.1 percent year-on-year growth now. People outgrew Glossier, and Millennial pink became what Gen Z refers to as ‘cheugy.’ But what’s interesting is consumers are very nostalgic, and we’re starting to see growth pick up.”
Some of it is driven by trends, others by news. Gen Z has shown a heightened interest in pheromone perfumes, Horwitz said, noting that searches for Glossier You fragrance are on an upswing. Merchandise from the brand has also picked up. “Boy Brow [used to be] the big one, but that’s not where the growth is actually coming from,” she said. Searches for Balm Dot Com, a hero stock keeping unit that was recently reformulated, are also swelling.
“Distribution has created more top-of-mind awareness,” Horwitz said.
Though Glossier was among the first brands to harness the power of digital marketing, its social influence has waned. “The core key demographic were the real brand evangelists — those that were a part of the Glossier community from the beginning,” said Olivia Frary, senior director of community and partnerships at Gen Z consultancy Juv. “Glossier is an amazing example of what community means to young people, but it’s really hard to scale, and that’s one of the main problems with community as a business model.”
Data from Tribe Dynamics shows that its earned media value last year was just over $71 million, less than half of its $152 million peak in 2019.
“They’re treading water from a social perspective,” said Conor Begley, Tribe’s founder. “That being said, we find that the brands that do well with social media tend to do well with specialty retailers… retail is almost as much a marketing channel as it is a distribution channel. Getting your product in front of a lot of people creates credibility for the brand.”