glossier-business-model

The Glossier Business Model In A Nutshell

  • Glossier is a direct-to-consumer beauty and cosmetics company founded by Emily Weiss in 2014. Weiss got the idea for Glossier after observing that major beauty brands held absolute power over what beauty products women could wear.
  • Glossier is an eCommerce business selling beauty and cosmetic items for a profit. Revenue is supplemented by three flagship stores and various pop-up stores. 
  • Glossier utilizes the direct-to-consumer business model, which means revenue is bolstered by higher margins, repeat purchases, and greater access to valuable customer feedback.

Origin story

Glossier is a direct-to-consumer beauty and cosmetics company founded by Emily Weiss in 2014. 

For Weiss, the Glossier journey began in 2010 when she launched a blog called Into The Gloss while working as an editorial assistant for Vogue. Weiss created the blog to challenge the traditional top-down approach in the beauty industry, where brands would develop cosmetic products and then tell consumers what was desirable or trendy.

To challenge this status quo, Weiss built an online community around trust and authenticity, giving women the opportunity to discuss what products they were buying and how their choice of cosmetics was influenced by their personal style and daily routines. Weiss also leveraged social media as a communication tool at a time when major brands were using television and showcased ways women could look glamorous without spending a fortune.

Three years after launch, Into The Glass had amassed 120,000 followers on social media and more than 2 million monthly unique visitors. Buoyed by her success, Weiss managed to secure an initial round of funding from Kirsten Green, a venture capitalist who helped Weiss focus her business plan on a line of basic but affordable cosmetics. Weiss then partnered with a chemist to develop the first Glossier product – a moisturizer for acne-prone skin – and hired a small team to launch the website.

Glossier.com came online in October 2014 with a four-piece collection of skim balms and lotions. Much of the work required to build a loyal and engaged audience had already been done, so Weiss focused on extending the product range to include items such as skin serums, masks, shower gels, body lotions, and lip balms.

Glossier raised $80 million in Series E funding in March 2019, valuing the company at $1.2 billion and giving it unicorn status. Today, the company boasts over 3 million customers and 200 employees with millions more followers on social media.

Glossier revenue generation

Glossier is predominantly an eCommerce business, though the company also operates three flagship bricks-and-mortar stores in Los Angeles, New York, and Seattle. Glossier also operates pop-up stores in various locations. One such store in London received 100,000 visitors in under three months, resulting in the store becoming a more permanent fixture.

Glossier makes money by selling cosmetic and beauty items for a profit. Since Glossier products are promoted as an affordable alternative, the company prefers to sell combo packs and upsells during checkout as opposed to offering regular promotions.

In recent years, the company has also started selling products under the GlossiWEAR brand, which includes hoodies, sweatshirts, and water bottles.

The direct-to-consumer model

direct-to-consumer
Direct-to-consumer (D2C) is a business model where companies sell their products directly to the consumer without the assistance of a third-party wholesaler or retailer. In this way, the company can cut through intermediaries and increase its margins. However, to be successful the direct-to-consumers company needs to build its own distribution, which in the short term can be more expensive. Yet in the long-term creates a competitive advantage.

The direct-to-consumer online retail model is rare for a beauty and cosmetics company as many consumers prefer to try beauty products before they purchase.

Nevertheless, Glossier enjoys the following benefits from utilizing the approach:

  • Higher margins – since the company can sell beauty products without intermediaries or other third parties, margins are higher. In fact, the company makes a point not to sell its products through established retail chains such as Sephora and Ultra Beauty. Gross margins are estimated to be around 80%, which is above the industry average.
  • Direct access – with millions of social media and blog followers, Glossier can leverage direct customer feedback to identify emerging trends or guide future marketing campaigns. The company is also known as a “people-powered beauty ecosystem” because it releases new products while simultaneously analyzing user feedback.
  • Repeat purchases – in a 2018 interview, Weiss stated that 50% of Glossier customers were repeat buyers. Customer retention is a significant driver of profitability and is a dynamic Weiss built during her many years of blogging.

Main Free Guides:

Scroll to Top
FourWeekMBA