Beauty brand TrèStique is expanding beyond its e-commerce roots with new funding and brick-and-mortar distribution.
Tuesday, the almost two-year-old makeup start-up — comprised entirely of dual-sided magnetic pencils with built-in tools — will enter into its first major retail partnership with Sephora. The complete color range hits Sephora.com Tuesday, and on March 10, select products will be available in all Sephora doors in the U.S. and Canada.
In tandem with the Sephora rollout, a $28 Beauty on the Fly set of three mini sticks — a bronzer, blush and highlighter — will launch online and in-store at Sephora in March. The retailer will also launch TrèStique’s 10th product — a $34 Magic Mattifying Balm & Blotting Sheet Duo — which on one end has a mattifying balm that instantly gives skin a matte finish, and on the other, a blotting sheet cartridge that dispenses custom-size sheets. Next month, two new shades will be added to the existing six-color Lip Crayon range, which each have a natural matte finish on one side and a BB lip balm on the other.
Following Glossier’s latest round of funding last month and the opening of its first permanent brick-and-mortar space in downtown Manhattan, TrèStique is the latest beauty brand born online to experience a growth spurt. While still small, estimated in the $3 million to $5 million sales range, the brand is growing.
Cofounder Jack Bensason said due to an uptick in sales on its own e-commerce site at trestique.com, Sephora’s business and a continued QVC presence (the brand did two shows on the shopping network over the summer), the brand is projected to double sales in 2017. To fund this expansion, Bensason and cofounder Jennifer Kapahi have just closed a friends and family round of $1.5 million, the first capital the two have raised since the brand launched in May 2015.
The company is in a sweet spot right now, as beauty is considered the most desirable category for building a company online, according to financial experts and venture capitalists. Factors from high margins to low return rates and mounting consumer interest anything in beauty and wellness related has primed brands like Glossier, Pinrose and TrèStique for success.
Glossier has yet to start wholesaling, but Pinrose and TrèStique are among a handful of direct-to-consumer brands to adhere to a new distribution formula. That model starts online with the creation of a digital flagship to get product in early adopters’ hands and create brand loyalists. Shortly thereafter the formula calls for rolling out to a major retailer offline or direct-selling platform like QVC or HSN. This establishes validation and creates brand awareness on a mass scale that’s unlikely to occur online without paying for customer acquisition (and as a result, having to raise more capital). It also allows customers to have a tactile experience.
“It [retail] allows us to engage with our ideal customer where she shops. It’s the point of trial; she can really test them. It’s the only place you can really try,” Bensason said.
However, retail distribution will quickly skew sales heavily to the wholesale side, but only temporarily, as founders find that once they gain traction with a retailer, that they can begin to direct customers (and sales) back to their own web sites.
For instance, Bensason said Sephora’s businesses will be significant for TrèStique — and combined with QVC, is estimated to drive about 80 percent of the brand’s sales this year. While trestique.com will only be responsible for about 20 percent of the company’s overall sales in 2017, Bensason and Kapahi are confident that being aligned with leading retailers will allow for their direct sales to grow. The goal is for trestique.com to eventually become half of the business.
“It [QVC and Sephora] was about creating brand awareness…[because] what we realized was that as a direct-to-consumer brand only, it limited us in the sense of the amount of brand awareness we could create in the first year,” Kapahi noted. “We knew we could get there [eventually] from strictly staying e-commerce, but we wanted to grow faster. We knew [that] by picking one strategic TV partner and one retail partner we would have this holistic omnichannel strategy.”
After all, the whole reason that direct-to-consumer brands online came to be was to avoid wholesale and cut out the middle man. But after pioneers — Warby Parker, Bonobos and Bauble Bar included — saw that it was impossible to build a brand that lived solely online, an e-commerce evolution took place. Today, the norm is aiming for a 50-50 direct, wholesale breakdown — give or take a few percentage points, and varying depending if the brand has its own freestanding doors, wholesale distribution or both.
Another beauty e-commerce brand that’s adopted the retail model is Pinrose.
The three-year-old brand introduced its Millennial-targeted, $55 eau de parfums at pinrose.com, and today is sold in 50 Nordstrom and Sephora doors across the country. The brand has raised just $5 million to date — a fraction of what many of the e-commerce players that came before it have raised — which is likely due to its presence in department and specialty stores from the early stages.
Pinrose cofounder Erika Shumate maintained that 75 percent of revenue last year came from Sephora and Nordstrom, and the rest from the brand’s digital flagship.
She said the plan for the next two to three years is to have 60 percent of sales coming from wholesale and 40 percent from pinrose.com, ultimately getting as close to an even split as possible.
“We knew this would happen, and we focused all of our team’s efforts and marketing dollars on those partnerships,” Shumate said, noting that pinrose.com will always offer exclusive products so it doesn’t compete with retailers. “Going forward for the next couple of years, it [sales] will likely continue to be more wholesale-heavy just because sephora.com is one of the biggest beauty stores in the world.”
Sure, the goal for any founder is to do as much business as possible for their e-commerce site — but if in the meantime, the majority of sales take place in Sephora, that stamp of approval is well worth it in the long run if it helps build a sustainable e-commerce operation.