How Kylie Jenner Built One of the Fastest-Growing Beauty Brands Ever It took less than two years for Kylie Cosmetics to reach an estimated $630 million in sales.
By Tiffani Bova
Opinions expressed by Entrepreneur contributors are their own.
Excerpted from Growth IQ: Get Smarter About The Choices That Will Make Or Break Your Business by Tiffani Bova with permission of Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © Tiffani Bova, 2018.
The traditional makeup market was down 1.3 percent in 2016. But independent brands were up 42.7 percent. The growth of these smaller independent brands is a direct reflection of a change in market context, consumer tastes and buyer demographics. Case in point ...
One of the most successful recent examples of a company executing a highly targeted and effective product expansion growth strategy is Kylie Jenner, best known as being the youngest of the Kardashian-Jenner empire.
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Regardless of what you may think of reality TV or the Kardashian family, this is an impressive story that takes advantage of many of the benefits that technology and changing consumer behavior provide companies today, which is at the heart of growth IQ.
Taking full advantage of her exposure on the Keeping Up With the Kardashians television show, Kylie became an influential voice on makeup and fashion. In 2012, when she was only 15 years old, she collaborated with the clothing brand PacSun, along with her sister Kendall, and created a line of clothing, Kendall and Kylie, targeted at teenage girls, which was their natural fan and target customer base. In 2014 and 2015, Time magazine listed the Jenner sisters as one of their "Most Influential Teens in 2014." If that wasn't enough, in 2015 Kylie launched her own cosmetics line, Kylie Cosmetics. What made her believe she could successfully enter a cosmetics industry occupied by some of the most famous brands in the world?
First, she had a passion for makeup and fashion. Second, she had the ability to leverage a huge platform from both the show and her growing fan base, which allowed her to form (required) manufacturing and distribution partnerships. Third, she saw an unmet need in the market. Fourth, she wanted to focus on customers who were just like her -- teenagers.
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Let's focus on the second one for a moment, because it is an important piece of this lesson. In December 2017, at 20 years of age, she reached 100 million followers on Instagram alone. She also has more than 24 million Twitter followers and 20 million Facebook followers, bringing her social media reach to more than 150 million people. In short, she had one of the largest social media followings on the planet (maybe only rivaled by her big sister Kim)!
As part of a product expansion strategy, its initial collection of discrete cosmetic products was expanded over subsequent months (yes ... months) in two different directions. One direction was related cosmetic categories: Kyshadows (eye-shadow palettes), Kyliners (eyeliner), Snapchat tutorials (which average 10 million views), a mobile app and other fashion products. The other direction was the bundling of products thematically (Kylie's Vacation Edition, Kylie's Valentine Collection).
Now firmly established in her target market, Jenner leveraged a personal milestone to stretch the edges of that market with these new products -- to continue to be relevant to her aging, yet still teenage, customer base -- with the #KylieTurns20 product campaign.
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The success of this strategy depended heavily on both combination and sequence. Yes, there is no question that part of her success is based on making the most of her massive platform, but that will only get you so far. Similar to what we saw with Jessica Alba and The Honest Company, being a celebrity might get your foot in the door, but without great products, a loyal customer base and a strong customer experience, it won't matter.
Many other (much older and more established) celebrities have attempted to extend their brand by venturing into the business world, only to fail. Jenner -- along with her business manager and mother, Kris Jenner, and her extended business team, including Laura Nelson and Josh Nelson of Seed Beauty -- had to first capture a sizable share of her target market by playing off the context of Kylie's teen stardom and massively loyal fan base.
The sequence of this massive growth was critical. Kylie started by establishing her personal brand first, before she endorsed or released any products on her own. Next, she created her own niche within the family empire, different from her other siblings, and stayed focused there, with various endorsements and partnerships. Then, once those efforts had shown promising results, she launched her own line of "Lip Kits" -- in a limited run, at a premium price -- which sold out in minutes.
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Some might argue that this is the classic "scarcity" marketing tactic, and they may be right. Was it intentional or not? Who knows, but she has become a master at knowing her customer base (or, rather, fan base), catering to their needs and continuously pursuing product expansion to extend her product line as her customer base ages into adulthood.
The combination of her marketing and social media moves was a critical component of its success. As social media replaces traditional media, it's possible you won't see an ad in Teen Vogue anytime soon from Kylie Cosmetics. Kylie is leveraging all aspects of social media marketing (video, Instagram, Twitter, Facebook) to stretch the boundaries of customer engagement.
Fabrizio Freda of Estée Lauder observed: "Younger generations are defining the culture with images of self-expression. They take more pictures in a day on average than their parents took in a year. Sixty-five percent of teens rely on social media to discover and select beauty products. ... Volatility and the pace of change are not diminishing. What we're living through is not a moment in time, it's the new reality. ... The art of leading through change is understanding what has not changed and how to leverage our historical strengths."
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In less than two years, and with no paid advertising campaigns, Kylie Cosmetics is now a full-service, direct-to-consumer (D2C) beauty brand and social media powerhouse, with an estimated $630 million in revenue.
Let's put this all in perspective. How does Kylie Cosmetics revenue performance measure up against other beauty titans? Well, it took fashion genius Tom Ford 10 years to reach half a billion dollars in sales after he launched his beauty line in 2006. It took L'Oréal's Lancôme cosmetics line 80 years to hit $1 billion. It took MAC 13 years to achieve $250 million and another 10 years to reach $500 million, even with Estée Lauder owning a majority and then all of it during that time frame.
As for Kylie Jenner, the current rate of growth of her company suggests that she will rocket past the $1 billion mark by 2022 while still picking up speed. And there appears to be no end in sight.
