Talk about a growth spurt.
Rodan + Fields doubled its business last year, tracking $1.15 billion in annual retail sales for 2016 — that’s up from about a half-billion in 2015, according to Euromonitor data released today. The brand now sits at the top of Euromonitor’s rankings in both premium skin care and skin care overall, surpassing brands such as Clinique, Lancôme, Olay and Neutrogena. Euromonitor rankings are based on annual retail sales.
The antiaging skin-care line, started by Proactiv founders and practicing dermatologists Dr. Katie Rodan and Dr. Kathy Fields, is in hypergrowth mode, spurred by last year’s appointment of Diane Dietz, a former Procter & Gamble executive, as chief executive officer.
Dietz attributed lagging department stores sales and the rise of social media — the medium through which the majority of Rodan + Fields sales representatives (the company refers to them as independent consultants) do business — as the inflection point that has allowed the brand to flourish.
“There’s still such a need for skin care and antiaging, but the rise of digital and social media, consumers want more authentic information and communication,” said Dietz. “We thought about it like the perfect storm.”
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Over the past year, Dietz has ramped up marketing efforts, doubling down on social media and ensuring the consumer-facing web site was easy to use.
“We have a very different approach, more authentic — where people really share results from product, and it’s all socially enabled,” said Dietz, referring to the personal before-and-after photos consultants are encouraged to share with their networks.
Dietz also tapped a new chief financial officer, chief technology officer and vice president of supply chain.
The company has 200,000 consultants in its two markets — the U.S. and Canada — and is set to enter Australia later this year. Industry sources have noted that the company is also eyeing Japan.
Rodan + Fields execs declined to list specific markets it would be entering, but chief brand officer Lynn Emmolo noted that the company is evaluating several international markets. “We’re looking at a lot of criteria before we go in,” said Emmolo, ticking off social media savvy and demand for skin-care in the country.
An industry source noted that Rodan + Fields has found success with its consultant base, who are typically educated, middle- and upper-middle-class stay-at-home moms who sell the products via their social media networks. Dietz noted that the customer base reflects this demographic. “The customer prototype is educated, higher-income, smart and savvy,” said Dietz. “And the other thing is our satisfaction rate is over 80 percent.”
Successful product launches are another factor in Rodan + Fields’ success — Lash Boost, an eye-conditioning serum designed to enhance eyelash growth, is on track to do $100 million in sales after launching last year, according to the company.
Aside from Lash Boost, the brand is most well-known for its skin-care regimen system. According to Drs. Rodan and Fields, they saw a white space for product ranges that were clearly labeled and organized by skin issues. “We really focused on common skin concerns — if you look at our products, they are organized into regimens and each one is treating a different problem,” said Dr. Rodan. Consultants are also given access to an online tool to refer their clients to, in which the clients fill out a questionnaire relating to their skin so they know which regimen to buy into. “The solution tool really offers answers, so consultants don’t have to be experts in any way,” said Rodan. “One of the beauties of Rodan + Fields is that people want simple. Identify a problem and go right where they need to go.”
Rodan and Fields continue to operate separate San-Francisco-based dermatology practices, which allows them to stay tapped into the market and what consumers are looking for. “We understand what’s wrong and how it fix it.” The next big product will be a hydration serum developed with glycerin and a proprietary molecule said to boost the skin’s hydration levels for eight hours.