Like Etsy, but for influencers.
A new crop of influencer-curated e-commerce shops — for beauty, fashion and accessories — are popping up as e-tailers navigate the changing retail climate.
The concepts include:
- Memebox’s curated influencer shops, where influencers host shops on the business’ web site with their favorite products plus content created around those products and earn commission from sales
- Beautonomy, a recently launched makeup palette-creation service that allows customers to create online shops to sell their wares for a commission via Beautonomy’s platform
- Iconery, which sells celebrity and influencer-created jewelry though shop-in-shops on its web site
- Foray Collective, a site expected to launch in early October that links influencers to fashion, accessory and beauty products and sets up their content-supported e-commerce storefronts
The concept is not exclusive to fashion and beauty — Amazon started beta testing an influencer program in 2017 that allows approved influencers to curate shops.
According to Kirsten Green, general partner at venture capital firm Forerunner Ventures, which backs Instagrammable brands like Glossier, Outdoor Voices and Away, influencers are now playing a role traditionally held by retailers.
“The role of a retailer in many ways has been to create context around a product,” Green said. “An influencer has the opportunity to be a mini store of their own because they can do those things with product via their recommendation and via how they showcase it.
“It’s part of a broader trend, which is remapping the broader retail ecosystem and redefining the roles of all the different players and what their business models need to look like,” she added.
Beautonomy, which just launched in September in the U.K., is one of the brands offering up individual storefronts as part of its model. Customers can go on the company’s web site to make their own highly customized eye shadow or complexion palettes, and once the products are finished, users can opt to set up a storefront to sell their creations for a commission. The opportunity is open to both influencers and consumers without vast social followings.
Beautonomy’s program launched several months after K-beauty business Memebox unveiled a program called Insider Access, which allows vetted influencers to create micro-shops and earn 5 to 8 percent in commission. Those shops contain content that the influencers create around Memebox in-house brands I Dew Care, Pony Effect and Nooni. For Memebox, Insider Access marked its return to commerce after taking a year off from any online sales to focus exclusively on content publishing and gathering insights. “Commerce could be introduced as one of the features, versus commerce being the main driver,” said chief executive officer Dino Ha when the program launched.
“People no longer shop by brand, they shop because they have a personal connection with someone, so these new retail models are picking up on that idea,” said Ivka Adam, founder and ceo of Iconery, which works with celebrities and influencers like Rashida Jones, VivaLuxury’s Annabelle Fleur and artist and musician Brianna Lance to design fine jewelry collections that are sold on Iconery’s web site. Commission runs between 15 percent and 25 percent, and collaborators pay a design fee up front so they are “buying into creating their own collection,” Adam said.
Iconery uses an algorithm to determine the price point most likely to work for each design partner. “When we bring in a new influencer, I say, ‘I know you have aspirations to do high-end fine jewelry, but you won’t sell anything, where if you sell at a $45 price point, you can sell tens of thousands of dollars worth of jewelry,'” Adam said.
Influencers generally post on Instagram when their collections are released, which drives traffic to their shop on Iconery’s web site. Using Google Analytics, Iconery can then change the link in their own Instagram bio to that influencer’s shop.
Part of the reason that model is picking up online is because Facebook ads “don’t perform anymore” and Instagram ads aren’t specific enough — but influencers can still drive traffic to web sites — Adam said.
Iconery, which launched four years ago, is already experiencing a shift in its business model as influencers work to set up their own e-commerce sites, Adam noted. “We’re doing more private label and more development for the influencers to do their own retailing,” she said, noting she has started referring to the business as a “supply chain as a service,” which provides a point of sale for influencers who don’t want to build their own e-commerce businesses.
The concept isn’t exactly new, noted Adam, who worked at eBay for several years through 2013. “We always wanted our sellers to do more of their own marketing and promotion, but they weren’t influencers so they didn’t know how to market themselves,” she said. “It didn’t work at eBay, but now that there are influencers, it does work.”
Collections at Iconery tend to reach peak sales within the first three months, unless the collection is refreshed. “A restock is a great way to get people coming back,” Adam said, noting it’s a model the Kardashian-Jenner family executes well.
“If you watch the cadence at which they launch collections, it’s enough to keep piquing their followers attention, and they’ll do small collections to keep people coming back,” Adam said. “They broke this notion that you have to launch with a full collection and you can’t say anything about it until the launch date. They’ll build anticipation ahead of time…so the moment it drops, it sells out.”
In line with that model, Iconery sometimes designs an entire collection ahead of time, and rolls it out over time, Adam said, starting with the most authentic and salable pieces (based on data).
“It’s interesting to me that these influencer shops-within-a-shop are popping up, because the next evolution is them creating their own e-commerce shops — it’s so easy to run a Shopify shop,” Adam said.
Foray Collective, which will launch in early October with a selection of beauty, apparel and accessory brands, is also taking a multipronged approach to influencer shops. Influencers who are invited and sign up for the platform can add items from 40 brands to their shopping carts, and when they check out, instead of paying, requests for those items are sent to the brands that make them. If approved, items are sent gratis to the influencer, who in exchange, has two weeks to upload content around the product to their Foray storefront. Foray takes around 40 percent from the brands, and splits it with the influencers, who earn between 15 and 20 percent.
“Essentially, what we’re launching is a three-sided marketplace,” said Foray cofounder and ceo Tiana Haraguchi. “We’re helping to automate the way brands and influencers collaborate.”
“With the shift in the influencer space, it’s hard,” Haraguchi said. “A lot of these influencers are struggling to get paid collaborations with the brands they authentically align with…the really cool fashion and apparel and beauty brands that they love aren’t typically paying those full posting rates anymore because it’s really hard to gauge ROI,” or return on investment.
With Foray, brands and influencers will have access to data. Brands will be able to tell which influencers sold which products, and hopefully hone their collaboration strategies accordingly, and influencers will be able to tell which products they’re better at selling, according to Haraguchi.
Right now, Foray is focused on women’s apparel and accessories, but down the line, is likely to expand into other categories, Haraguchi said.
“The market share we’re going after is Revolve, it’s Nordstrom, it’s Shopbop,” Haraguchi said. “We have a very niche focus right now on women’s fashion and apparel…but once the technology is launched and figured out, there are different segments and verticals we can launch into.”
For Foray, the marketplace is a new approach to business. The three-year old company started as an experiential marketing agency specializing in influencer trips for things like Coachella. It grew from the network of one of Haraguchi’s cofounders, Kaitlynn Carter Jenner, (the daughter-in-law of Caitlyn Jenner, (Carter Jenner is married to Brody Jenner, from the reality television show, “The Hills”) who has about 675,000 followers on Instagram.
That first phase allowed the business to build out its brand and influencer networks, before developing the automated collaboration portal, which has hosted more than 2,000 influencer-brand collaborations since it launched in beta three months ago, Haraguchi said. The marketing side will remain operational, she noted, and pull together events like Foray’s second annual holiday gala. For that, influencers in the network will request dresses and accessories through the platform, and Tresemmé will handle hair styling, Haraguchi said.
Foray will launch with shops from about 150 influencers, including Carter Jenner, Jenah Yamamoto (973,000 Instagram followers) and Jourdan Sloane (293,000 Instagram followers). About 40 brands will launch on the site, including B-low the Belt, Solid and Striped Swimwear, Matisse and Kopari beauty.
Foray and Iconery have both raised money from Crosscut Ventures, a venture capital firm with a history of investing in next-generation commerce models.
“The rise of Instagram and the influencer is that next wave,” said Brian Garrett, cofounder and managing director at Crosscut. “Consumers are becoming a bit blind to brand, and more focused on the style, the look, the feeling that comes from the way influencers present the product — it’s more about the emotion.”
Plus, with the rise of mobile, consumers can be inspired and shop anywhere, and business models like Iconery’s or Foray’s are meant to reduce transaction friction, he noted.
“It’s still early days for the microinfluencer, or the second-tier influencers,” Garrett said. “They seem to have higher engagement from their fan base, and you need to aggregate a decent amount of them to drive any real volume, but the current models of affiliate commerce are difficult to scale.”
The model also provides companies an opportunity to sell with influencers that match up to their brand stories. “A brand is already willing to sell at wholesale to [a department store] where product goes on the rack with no differentiation or story, so why wouldn’t they think about Foray, where economics are the same, but you get compelling content?” Garrett noted.