Upon release in June 2022, Rhode’s peptide glazing fluid, a $29 gel serum that hydrates and plumps the face to leave a dewy finish, attracted a 100,000-strong waiting list.
In previous restocks, the Los Angeles-based beauty company started by model Hailey Bieber sold 36 units of the glazing fluid every second. Today, it has over one million people on its waitlist for all of its products. In order to grow outside of the US, Rhode is currently leveraging the buzz surrounding its brand.
According to CEO Melanie Bender, who joined the company in October 2022, despite being less than a year old, Rhode has already experienced early success as a result of Justin Bieber’s strong influence, especially among Gen Z, the brand’s biggest customer base. “We sold for 11 days before reaching the eight-figure sales benchmark. I’ve never seen anything like it. In spite of the fact that Rhode doesn’t presently engage in any active marketing outside of the US, she anticipates a similar response when Rhode launches direct-to-consumer in Canada this month and the UK in the summer.
The proliferation of companies started by celebrities has divided views within the beauty sector. The nearly $500 billion global beauty market is already crowded with products from stars like Ciara, Pharrell, and Jared Leto, as well as makeup artists like Isamaya Ffrench and Fara Homidi, influencers like Tina Craig and Chriselle Lim, and an even younger generation of creators like Emma Chamberlain and Addison Rae.
Bender, a seasoned professional in the beauty industry who has held executive positions at clean skincare companies such as Versed, where she served as founding president, Merit as an advisor, and Mana Products, where she served as an independent consultant for strategy and development, claims that Rhode sticks out because it has a strong voice.
In a post on Instagram that was seen by more than 500,000 people, it was one of the first brands to express opposition to the overturning of Roe v. Wade. Additionally, the Rhode Futures Foundation, the company’s charitable arm, works to break down barriers that women face and support their long-term goals. It’s challenging and calls for many firsts in terms of how we put aside money, how we collaborate with organizations in various communities, and how we establish objectives for our own practice. However, according to us, they are just as significant as other KPIs, such as revenue and growth,” adds Bender.
Rhode’s next phase will focus on establishing an enduring presence for itself, independent of Bieber’s appeal, as attention spans in the beauty industry continue to be short due to an apparently never-ending stream of new or recently viral products.
A high-profile founder
Bieber took on investment firm One Luxury Group as a strategic partner and used her own money to finance the majority of Rhode. Bender claims that Bieber is still “incredibly involved” in all facets of the company on a daily basis. She claims that as the company’s founder and creative director, she is crucial to the brand’s general creative direction and product development. We talk to her more than once a day to base our formulas and priorities on the market needs that she recognizes.
Bieber, who has more than 49 million Instagram followers, 10 million TikTok followers, and an A-list social network that includes fellow beauty entrepreneur Kylie Jenner, can generate excitement for Rhode in a manner that would be expensive for other brands. She is also a trendsetter, having popularized the no-makeup makeup look that has become essential to the buzzed-about “clean girl aesthetic” as well as “glazed donut” skin and nails (named by Google as 2022’s top beauty trend). According to Bender, “Glazing is something we’ve really been able to lean into as a brand.”
Still, being in the public eye has its risks. Within a week of launch, Rhode faced allegations of trademark infringement from the LA fashion label with the same name (which is understood to be ongoing). Bieber’s alleged fractious relationship with singer and actress Selena Gomez has also attracted publicity. “Celebrity brands are inherently tied to celebrities and everything they do,” warns David Schneidman, director at Alvarez & Marsal Consumer Retail Group, which specialises in business transformation. “If a celebrity has a consumer-facing brand, they must be really cognisant about the effect of the business based on their daily life, because that will have an impact on sales, whether good or bad.”
According to Brandwatch, a social analytics company owned by Cision, Rhode experienced the biggest increase in online mentions right after its debut. Due to supporters’ celebrations of her accomplishments and expressions of support, Bieber’s appearance on the Forbes 30 Under 30 list caused a further increase in online mentions from November to December 2022. The brand’s products were featured in a TikTok video that online personality Jeffree Star uploaded earlier in March, criticizing the packaging. This was when its second-largest spike occurred. According to Brandwatch statistics, opinions of Rhode are not consistent across platforms.
If dealing with a famous founder has been difficult, Hailey has a lot of authenticity in her beauty, says Bender. She is the go-to beauty expert for women between the ages of 15 and 35, and she holds dual roles as a businesswoman, influencer, and product aficionado. People’s ability to recognize the authenticity of her sharing the goods and formulas she searches for and develops with the world has been key to the brand’s success.
New areas of investment
While instantaneous recognition, knowledge, and ambassadorship are advantages for celebrity brands, the main problem, according to experts, is that many of them lack a distinct point of differentiation. According to Schneidman of Alvarez & Marsal, “Because they were created as an incubation through the celebrity, they don’t necessarily have a specific value proposition, and that can sometimes be difficult.”
Investment bank Raymond James’ managing director of equity analysis, Olivia Tong, who specializes in cosmetics and personal care, concurs. There are many companies out there, so you must be able to provide something unique that goes above and beyond simply turning your fans into customers. She notices that some companies have trouble maintaining buzz after their launches. “Can they progress past that initial stratum of support? Whether a company was founded by a celebrity or not, getting repeat business is always important.
In order to establish trust, Rhode has partnered with scientific authorities and relied on peptides as a key component. The company also promotes the idea that less is more, in line with Justin Bieber’s “one of everything really good” skincare tenet. Despite the high demand from customers for a variety of categories, Rhode only offers three products and has no plans to increase its SKU count, according to Bender. “It has provided us with a crucial conceptual framework as we consider new goods. It entails putting a very high standard on everything we release.
Although Bender refused to provide more information, this year should see increased innovation in the skincare industry. Before December, the company will also release its first color makeup. According to her, “I believe [the new products] naturally complement Hailey’s aesthetic and what people look to her for.”
Rhode is investing in physical activations as it expands into new areas to reach a new audience. Following a physical launch in the US in June and an event to celebrate Bieber’s birthday and the launch of Rhode’s limited-edition vanilla birthday cake-flavoured lip treatment in November, Bieber will host a dinner for skincare enthusiasts, press, and influencers in Canada. This will be the brand’s third event to date. Additionally, Rhode runs an influencer program and collaborates on content production and seeding with makeup artists like Nam Vo. Bringing in individuals who share our goal or message is important, according to Bender, so that we can share an authentic moment.
According to Bender, the objective is to create a “generational brand” akin to Estée Lauder, Bobbi Brown, and Fenty. “One of the ways to do that is to maintain a laser-like concentration on who you are and what you stand for. It also entails being receptive to how the neighborhood and society are changing, she continues. She cites partnerships with other companies as one possibility. In addition to providing access to Hailey and her beauty routine, “We’re really thinking about how we educate and connect with people.”
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