Katie Welch is the chief marketing officer of Rare Beauty, the beauty products company founded by superstar musician and actress Selena Gomez. Rare Beauty sells its products online and in Sephora retail stores, and importantly, Katie does almost no traditional marketing: Rare Beauty is a true internet brand that depends on social media strategy, influencer marketing, and community to drive sales.
This kind of marketing is essentially new: yes, there have been celebrity endorsements for a long time, but famous people making their own products and companies and using their online reach to launch and grow those businesses is a combination of art and commerce that is 10 to 15 years old at most. Rihanna’s Fenty Beauty is only five years old, but it’s redefined the industry and helped make her a billionaire. Some of the first big successes came from the Kardashian-Jenners including Kylie Cosmetics, founded in 2015, as well as Kim Kardashian’s Skims, founded in 2019.
I’ve been really curious about how these businesses work, how they reach their audiences and customers, how CMOs like Katie measure success, whether being the marketing executive for a super online celebrity-driven business feels different than being a traditional marketing person, and whether the ever-present risk of weird things happening online make her plan differently.
This one’s a lot of fun. Katie’s really direct and honest, and her enthusiasm for what she’s doing comes through. Also, we talk about Robert Smith and The Cure.
Okay, Katie Welch, CMO of Rare Beauty. Here we go.
Katie Welch you are the chief marketing officer of Rare Beauty. Welcome to Decoder.
Thank you so much. I’m happy to be here.
It’s really exciting to talk to you. To start, can you tell our audience what Rare Beauty is?
Rare Beauty is a beauty brand created and founded by Selena Gomez. It’s a brand that she had the idea to start and then pulled together a team of other industry pros. We launched in September of 2020, but not only did we launch the brand, we also launched Rare Impact, which is a division of the company that works to make a difference in the world, specifically around de-stigmatizing mental health.
As part of that, we have also created the Rare Impact Fund, where a percentage of sales will go to the fund as well as traditional fundraising. The brand is sold exclusively at Sephora around the world—we actually just launched in Brazil—as well as on our website.
I’m assuming people have guessed this, but launching a brand in September 2020 puts you in the middle of the pandemic. I want to talk about sales, direct-to-consumer, and how retail works in this environment because I think there is a lot to unpack there. But to start, how big is Rare Beauty? And how many people do you have in Rare Impact?
I’m a marketer, so I can choose words to make it seem like we have teams of people. We have a team of three people who work on Rare Impact specifically. The company’s total is almost 80 people.
Were you at 80 people when you launched or has that number been growing? What is that little formation story?
It has been growing. I don’t know exactly how many we had when we launched, but when I started in 2019, I was one of a handful of people starting the company. That was when I met Selena, and I worked closely with her to develop the mission, vision, values — to really understand why she wanted to start this company and this brand at the time.
Then we had to figure out how to launch it, of course not knowing what the future held for us, which was a lot of pivots. I know everyone says that, but my goodness did we experience real pivots.
One thing I think about all the time, especially with beauty brands that are connected to celebrities, is that the business of being a celebrity is harder than ever. If you were a celebrity in the ‘80s and you made a hit TV show or had a hit single, you might collect high-paying residuals off that content for the rest of your life. The TV networks would syndicate it or the radio would play your song, and you would collect a lot of income from whatever you were in.
That business has really changed; that has gone away. You see a lot of celebrities moving to spaces thinking, “We have to sell things to people.” Those businesses have to scale and potentially one day get sold for billions of dollars on their own. Is that part of the motivation here for Selena, or is it something else?
No. She was upset by the way the media and other industries were commenting on how she looked, and she had posted about the beauty myth on Instagram in an incredibly heartfelt way. She thought, “This is making me feel terrible. What can I do to stop that? What is this standard of perfection that I’m supposed to be living up to?” She has makeup artists. She has hairstylists. She is beautiful with and without makeup, and she felt beautiful on the inside. If other people were making her feel bad about herself and her self-worth, then what can she do about it? She said, “Is there a way that I could make a difference from the inside out?”
She has been very open and honest about her personal mental health journey. She wants to make a difference in that world by destigmatizing, and creating a warm and welcoming environment around celebrating yourself and your own standards of beauty. She wants to make a difference within the industry from the inside out, as well as a difference within mental health. That was why she wanted to do this.
She knows she is not a product developer or a beauty marketer, so she found a team of people to help her bring this vision to life. She is incredibly involved in the product development side, as well as the marketing side alongside me, and the creative concepts that come to life with the images that we put out and the words that we use. That was the impetus, the reason for doing it.
When I met her, the first thing she did was hug me. She has this superpower of connecting with people, and I thought, “Gosh, here is this mega celebrity who is just so kind, heartfelt, cool, and normal.” I felt like I had known her forever. When I asked her why she wanted to do this, she said, “I want to create a space where people feel welcome in the beauty industry.”
That struck me as something so different. I have worked in beauty for a long time, and I love the emotions that beauty brands try to evoke. I mean, listen, I am a beauty junkie at heart. Self-expression, empowerment, yes, yes, yes, check. I love all of the emotions that brands will stand for, but she mentioned feeling welcome. That is actually different. Not a lot of brands say, “Come sit with us.” Getting to know her and that she actually is that welcoming person—to me, it felt like something really different.
This is a business podcast. If the answer was, “We just wanted to make a lot of money,” well, a lot of people come on the show and say, “Of course we want to make a lot of money.”
You know what? If she had said, “I want to make a lot of money,” I would have been able to see right through it. I can’t do my job that way, if that is the case. I wouldn’t have wanted to join.
That, to me, is a question about culture. The culture over time is becoming worth less and less, which I think is a problem. You see this reflected in how we actually generate revenue to make more culture. The connection between commerce and culture is really fascinating to me. So, I wanted to ask that to begin with.
She maybe didn’t need to start a beauty brand, but she has a platform and a voice that can make a difference, and it’s one that does.
Where were you at in 2019? How did you meet Selena, and what was her pitch to you?
I was working for The Honest Company as the general manager of Honest Beauty when I met an individual on her team, who happens to now be our current CEO. He said, “I have something you might be interested in. I would like you to meet a group of people.” Then the rest was history.
From my point of view, it honestly seemed like such a once-in-a-lifetime opportunity. I am a creative person and I love storytelling. You don’t often get a chance to work with someone like Selena who has such a vision and is able to say, “Okay, let’s start this from scratch.” That seemed like a no-brainer.
I have found that being on the founding team is fun. I have not left this founding team. I only have the one data point, but it has been fun.
So you have a CEO and the CMO. What is the operating structure of 80 people? Are we all just waiting for emails from Selena and then executing? How does that work?
No, no. This is hands-down the most collaborative structure I have ever worked in, and I have worked at a handful of founder-driven, founder-led businesses. We have a CEO, a chief product development officer, a chief digital officer, a chief marketing officer (myself), a chief sales officer who is our primary contact with our retailer, a chief financial officer, head of operations, and head of HR. All of those departments work incredibly closely together.
This is the Decoder question. How do you make decisions?
Oftentimes, it’s gut.
That is the best answer we have ever gotten.
That oftentimes it’s gut? It is. It’s gut.
I am so close to the industry. I’ve been selling lipsticks for a long time. I am obviously not an 18-year-old — though sometimes I think I am — but I try to stay very close to our target audience. I try to really understand the brand. I try to really understand all of the factors that go into a decision and weigh everything. Usually my gut goes one way or the other. However, at this company, honestly more than any other company, it is a real partnership. I have come to rely on my colleagues so much and we work so well together. It may be a marketing decision, but I can turn to — well, maybe not the chief financial officer, but don’t tell him that — our head of product or our head of digital, to really weigh all the options and talk it through.
I think it’s because we were all part of this founding team. We all work so closely with Selena on her vision and understand her ethos and how we want to bring things to life. Things aren’t in a silo. Honestly, it was a learning lesson when I first started. I was so used to hitting the ground running like, “We have to do this. Let’s do this. Go.” I had to take a step back and say, “Let’s weigh everything. Let’s talk to Selena. Let’s talk to my partners.” I think it is all for the better.
Let’s unpack that tiny little example. Almost all your marketing is digital. What is a marketing decision that you might make and why would a head of digital have input on that?
What are our brand values? What is our brand mission, the vision? What language is going to go on the website? This is something that I could have worked directly with Selena on, but we wanted to make sure that the entire leadership team — and the entire company at that time, since it was so small — was on the same page. Our chief digital officer may be running our website and our direct to consumer business, or our chief product development officer may be developing these incredibly cool products, but I want to make sure that everyone is on the same page with those really fundamental, brand-building decisions.
So it is an 80-person company. How much of that is your team?
23 or so.
Wow. How have you structured your marketing department?
In the beauty industry, there is so much that needs to get done. There is not just content, but campaigns, launches, visual merchandising, so we have a sizable creative team. We also have a brand and product marketing team, a consumer marketing group that oversees digital, social, and community. We have PR and influencer marketing, which is a huge part of beauty. Also the copy. Then finally, social impact, which is the division of the company that works to make a difference in the world, the three individuals who are on Rare Impact.
That’s amazing. Tell me about this split between PR and influencer marketing, and social marketing. There is a world in which they are all the same thing, but you have split them up.
In beauty, there is a huge segment of creators who are passionate about beauty products. They may be reviewing products, but they are also creating looks and are the ones driving the conversation around beauty today. Our traditional PR teams will do traditional media relations, maybe some thought leadership pieces, product reviews, traditional media, but in beauty, so much of the conversation is driven through content creators. This team works to build those relationships. The whole company really values beauty creators and their opinions, so we all talk, text, and DM with creators, myself included — which our CEO and Selena love. We are all just big content creator fans. So much of that is in the PR world.
Within social, they are managing our community on Instagram, TikTok, Twitter, Facebook, and so on. In addition to that community management social team, we have gotten to know that community in a way that I think is quite different. Once quarantine hit, we started doing Zoom calls with our community to try to get to know them, and now it has evolved to in-person events.
It gets back to that warm, welcoming environment and brand that Selena wanted to create. We will host a dinner to get to know the brand or one another, or we will go on a hike or something with our own community to get to know them. They are non-traditional marketing techniques, but it all stems back to the brand and what we are trying to build, and how we bring that to life.
It strikes me while listening to all of that, you call it nontraditional, but that is becoming more and more traditional. I don’t know that anyone could have launched a brand like this and gotten to market in the way celebrities can now without the benefit of social marketing. Do you see that shift? Is this now the main way that businesses like this are able to actually exist?
Oh, 100 percent.
How so?
Now, it’s really a two-way conversation between brands and audience.
Twenty or so years ago, you would push out a marketing message with a traditional media plan; you would have a one-dimensional target you were trying to reach, and that was it. It was flat. Now, it’s really a two-way conversation. For many people that sounds obvious, but I don’t know that a lot of brands are really doing it.
I think beauty does it well because it is a high-touch product that has evolved that way. We do some digital advertising with Facebook and Instagram ads, but I don’t see that as the most powerful part of the marketing mix. It really is about PR and influencer marketing in my opinion, as well as social and community marketing.
We also try to take it to another level in a more personal way. Let’s say we post on Instagram about UGC, user-generated content. If someone is wearing a lipstick and you post a photo, that is not groundbreaking. We try to take it a step further and say, “This is Katie in our community, who is wearing Kind Words lipstick in the shade Humble.” Then we will ask the community member something about themself. We get to know them, so that our community can get to know one another. We like to celebrate why people are unique and rare, so why not try and do that in all aspects of our social?
I want to come back to that Facebook marketing piece in a moment, because a lot of direct-to-consumer brands have struggled as Facebook and Apple have gone to war, but let’s just hold off on that for one second.
I want to ask one more thing about influencer marketing. In my corner of the journalism universe, tech journalists like me are very precious. We have our ethics statements, and I will yell about the background policy. Then there are influencers. We are not quite the same, but we all get along. I know some beauty editors and I have read a bunch of meta beauty pieces about how the beauty journalism industry has kind of just become an influencer marketing industry. There are some blurry lines there. Do you see that shift? Is that something you think you can take advantage of? Would it be better if there remained a split between the influencers and the industry at large? How do you feel about that?
One is not better than the other. There are just tons of people who love beauty products, and that is why I love doing this job. If I was a 14-year-old, I would love to be able to say, “Oh my gosh, someone is going to teach me how to use this eyeshadow palette,” whether I turned to YouTube, TikTok, or an issue of Vogue magazine. I just think there is more content to consume for those who love beauty. Some people are still going to read Vogue, which is awesome, I still do. Some people are going to stick to TikTok, which is what I also do.
In my opinion, there are just more people talking about makeup, which is cool. It’s great that there are so many different points of view. Perhaps when I was growing up, there was only one. Now the points of view come from so many different people, so many different backgrounds, and so many different ways of self-expression. I think it’s great, and I embrace it all.
It is up to the individual reader, viewer, consumer, listener, whomever to take it all in and determine who they want to follow and believe in. I don’t think one is better than the other. I think it is all exciting. Is that a little Pollyanna of me? I know it is, I’m from the Midwest.
So am I. It’s good we vibe on that level. The future of marketing looks like a lot of partnerships and maybe not a lot of distance. I think it is really interesting to hear from people who are on the forefront of collapsing that distance.
I think for the future of marketing, it makes it difficult. It used to be easy to figure out how the news was delivered or how you could launch a new product. It was simpler. Now there are just so many audiences to whom you can reach. The list never ends, and that is tough.
I think the tough part is telling the team, “Okay, shut it down.” You could do this all day long because there are so many points of entry to find beauty news and however you want to market that, whether it’s paid, earned, owned, whatever.
When you say things like, “We have to make decisions. This is working, and this is not.” I am guessing the metric you are actually using there is sales. I mean, you are the CMO, so your job is to use these levers to increase sales. You are not just trying to grow a TikTok audience for the sake of it.
It is just the new marketing funnel. Does our TikTok drive sales directly? Maybe during a launch time, but sometimes it is someone else on TikTok who could be driving sales. It’s still tough to gauge.
Our TikTok is cool because it’s part of our relationship-building with our community, whether our internal content creators are telling stories around product point of difference, showing how to use a product, announcing a product that just launched or even just sharing inside jokes.
They started putting googly eyes on our products and creating characters. When we launched in Europe and took these characters around the world, people loved it. They were stories. They were able to follow along with a TikTok trend in a way that was relevant to Rare Beauty. Now, does that sell a lip gloss? Maybe not. Does it make people think that this brand is warm and welcoming? Yeah, totally. Not everything has to be for sales.
Is that the main metric or is there a secondary metric? Are you thinking about things like, “Okay, we have googly eyes on lipsticks in Paris”?
Oh, god. How could that be the headline?
The best status update in any stand-up you could have is like, “What happened today? Well, we have googly eyes on lipstick in Paris.” Do you measure that?
The googly eyes? No. I am personally on TikTok, so I think I am more chill in that regard, though my team might disagree with me. I’m like, “Yeah, it’s going to be fine.” I just want to maintain that presence, so we can build a community where we are able to engage in the conversation around beauty with creators, followers and fans. That has worked.
Is it non-traditional? Totally. Would another beauty brand do that? I don’t know, they may not be as comfortable doing it. You know what? It works, so why not try it? If it makes people smile.
Do you think that provides a level of stability? I know a handful of CMOs around the industry and one of them — not the one who has been on Decoder, just to let her off the hook — told me, “This is a total mercenary job. When you come in you have six months to settle down and a year to do stuff. Then the easiest thing the CEO can do to please the board is flip the CMO, so that someone else can try some other new stuff.” It felt like the most cynical read of that job I could ever hear.
Your read is very different. Is it because you are among the founding team? Is it because social marketing has that community aspect that makes things more resilient? Why do you think your approach is so different?
That is a really good question. I understand that. I have seen, read, and heard that same sentiment. I love what I do. I love storytelling. I love community engagement. I love that the marketing mix has shifted so that we can do this nontraditional social approach and market to a bunch of different people. I love pushing the boundaries. I thrive in this environment because I am more creative than a data-led person. Maybe it’s my personality. Maybe it’s my background. I like to do stuff like that, so I am up for the challenge.
May this not come back to haunt me one day. That makes me sweat a little bit. Yes, CMO is a tough role. I don’t have my MBA, and I didn’t grow up as an assistant brand manager that worked her way up. I grew up in public relations; I worked at Weber Shandwick for many, many years. I have a different approach, and I think of things in a different way that works in 2022-23. What is going to happen in 2025 though? I don’t know.
Which social platform will I be asking you about in 2025?
BeReal.
Is that it? Is that your call? I will come back to you in 2025 and we will check on it.
No, no, no, no. Not in 2025. That I don’t know. The question is if we will still be talking about BeReal in six months.
I have no idea.
Are you on BeReal?
I get the notifications and I’m like, “You know what? I don’t need anyone to know more about my life at this point in time.” Because I always get them in the middle of the most boring shit.
Always.
“No one needs to know that this is happening right now.” I’m staring at the window like, “What is going to happen in five minutes? This is not the time.” What are yours?
My BeReals are incredibly boring. “Here I am in front of the computer screen. Here I am on the Peloton bike. Here I am.” I love my life, but it’s not that exciting. It’s not like, “I’m on a hike today!” It’s more like, “I’m working.”
It’s not like Selena Gomez is your boss or anything like that.
We’re still just working, selling lipsticks. “Here I am, selling lipsticks.” It’s a lot of that.
What I think is interesting about BeReal is the capture. There is something about the urgency of having to do it right then and there. If you’re late, that is not a good thing. I also think it’s cool that you don’t have the opportunity to filter anything. It has to be what you are doing at that very moment. You have to “be real.”
I think the memes around it are hysterical, too. I have watched my team all drop everything for a BeReal. A friend of mine, Brendan, posted this time last year about the app Poparazzi, which was super popular. Then of course Clubhouse. Will it wane? I don’t know.
My friend Casey Newton calls them pop-up social networks. They come, they go, and they don’t develop a durable graph. Who knows?
I agree. It’s been interesting for me to watch my Gen Z team be so engaged. They weren’t that way with the other ones.
A couple weeks ago we had Hank Green on the show and he was talking about the revenue models for YouTube, TikTok, Instagram, what have you. His point was that YouTube has this big rev share, so it enables all kinds of creators to find an audience. Instagram, without any rev share, basically only has a brand sponsorship model. An influencer marketing model, which means Instagram creators all just gravitated towards beauty, because that was where the money was. Other kinds of things don’t really flourish on Instagram.
I’m sure Instagram has been a huge part of your mix for years, but it’s blowing itself up right now. They’re like, “We are going to be TikTok now. Sorry, not sorry.” Adam Mosseri is going to apologize to you, and then tell you that you still have to clean your room. Is that affecting you? I would guess that your Gen Z staff and your Gen Z customers are not on Facebook products the way that teenagers used to be. They are not on Instagram the way they used to be. Are you thinking, “I have to get ahead of that,” or are you following behind those trends?
This is a great question. I would say that they are still on Instagram and they are on TikTok. They are on all these platforms. Perhaps they are spending a little less time on one or the other, but I am not going to recommend stopping engaging or creating content. It is about the type of content that we create. What’s interesting is to see what works and what doesn’t.
How do you speak the different languages of the platforms? It is going to fail if you create one piece of content and just slap it up on TikTok and Instagram, and think that they are all going to be the same. That is not really going to work.
For the mental health content that we make, we created the Rare Beauty Mental Health Council. They are advisors within mental health, nonprofit, academia, the medical field, all who help guide our strategy or help co-create content. We are a beauty brand, we sell lipsticks. We are not the brand to dole out mental health advice, but we are the conduit to trusted resources. We create educational content that could help destigmatize, that can help link people to The National Alliance on Mental Illness or to Dr. Marc Brackett at Yale, et cetera.
Instagram is where some of that content has been highly engaged, saved, utilized, and shared. I love that. I mean, we still have around 3.3 million followers on Instagram that are still engaged. We DM with our community there and we’re able to see what they’re posting. I still love it all. Will it change? Of course. Are we going to know? No. Is that nerve-wracking to me? Yes, but I try to stay on top of it.
That’s why I’m paying attention to BeReal and everything else. You don’t have to do every platform, but you certainly need to explore and understand them and figure things out. I think that is one of the reasons I got on TikTok in 2019. My own attention was going to that platform so much that I thought, “Oh god, we have to figure this out and see what works.”
I feel like I have done you a disservice. Katie has a great TikTok, and you all should go check it out. Here is my question though, and this may be the only question I wanted to ask. What is it about TikTok that makes people talk to you from their car? You have TikToks where you’re like, “Here is a tip about being a CMO,” and you are in your car. Why? I don’t even have a TikTok and I’m like, “Oh, I should go sit down in my car to talk to the audience.” There is something about TikTok that just makes people feel like the right place to shoot a video is in the front seat of the car, sitting still.
Well, first of all, it’s always pulled over, because god knows I only started driving when I moved out to LA.
Brand safety guideline checklist, number one: I’m pulled over.
First and foremost, pull over and put the car in park. It’s usually because my schedule is like, “God, I have to get to a meeting. I have to get this done. I have to get this up.” I pull over and do it really quickly and I post it. For others, I don’t know, but there is quite a trend. I think because I saw others doing it, I was like, “Okay, this is fine. I don’t have to be in front of a ring light in my kitchen.” That’s why I do that. I am usually pulling into the office and have to get it done before I go into a flurry of meetings.
I feel like there is a PhD thesis in car TikToks. There is something about the platform that has made people decide that they’re going to be in their cars when they make TikToks.
It would be interesting to see how that works with engagement. I heard Mademoiselleosaki team say that if you change your angle or your clip every two seconds or so, it keeps your engagement up. Obviously, that is part of the algorithm to keep people watching. Honest truth though, it is because of my schedule.
We have started making TikToks for Decoder, so maybe I have to get in the car. Maybe that is the move.
So you have said, “At the end of the day, I’m selling lipstick,” like five times.
Oh, no. Does that sound terrible?
No, I mean, that is what you do, right? All of you need to get paid at the end of the day, so you have to sell lipsticks. That is where the money comes from, I’m assuming. Unless there is some secret Selena slush fund that I don’t know about?
No, not that I know of.
That would be breaking news. If you want to say there is a Selena slush fund then this episode goes to the moon. At the end of the day, all of this stuff has to convert to sales, because that is probably still the main metric you are thinking about. Where are you seeing more action? Is it in Sephoras? Is it in retail? Is it on the website? Do you push one or the other? Do you prefer one or the other?
No offense to my chief digital officer who runs our e-commerce business, but I love Sephora. We have launched around the world. In fact, we just brought Selena to Sephora in France and Italy. In the UK there is no Sephora at this time, but we distribute through Space NK, which is an incredible retailer. So we brought Selena to London.
She was able to meet the teams locally and see the gondola in store, which is the merchandising unit. Both Space NK and Sephora are such incredible beauty powerhouses. To be there and partner with them is a marketing channel in itself. It is incredible to have your brand message in the windows of Sephora, on the gondola, working with the beauty advisors to train them to talk about your product.
Sephora is a different kind of competitive environment for marketing messages though. Like, Glossier is now in Sephora. They have their own products.
Not yet.
Katie is like, “Not yet.” Are you trying to keep them out? Are you doing any under the table shenanigans?
No, I’m just saying, “Not yet.” They haven’t launched yet. I am really curious to see how they launch it. That will be interesting.
So at some point they presumably will; they have announced it. I am just saying that it is a different environment for you to participate in. Do you have to tailor your marketing message? “You are going to walk into a store with lots of products, but we want you to pick ours.” Versus scrolling TikTok, where you might see a trend, come to our website, hit the button, Apple Pay will look at your face and you’re done.
Creators are the people starting the conversations around beauty.
Sure. Do you have to change your message? You modify it for the platform, but the answer is yes and no. The wild thing about beauty is that beauty creators are the people who are starting the conversations around beauty, and they are also talking to the advisors in Sephora.
There was a trend on TikTok where people mix our blush and highlighter together. It took off. People were going into the store to recreate that trend. So, I pay attention to what is happening on TikTok to see if that is something we want our people in Sephora to be educated on. We could pitch to the Sephora team to do an email blast or do a social post that recreates the trend we are seeing. It really is a two-way conversation. You are aligned around a product launch, so your message is still somewhat similar in each environment.
Can you see if various trends on social platforms or your marketing are driving sales in one channel versus another? “This trend went viral on Instagram Reels and suddenly sales on the website are up. This piece of content went viral on YouTube and that drove sales in stores.” Are you at that level of sophistication in tracking?
Well, is it from a tracking mechanism or is it just seeing results? About a year ago, two or three creators talked about Always An Optimist 4-in-1 Mist at the same time and it jumped. It was on one of the lower skews, and not really a top seller. The next thing you know, it skyrocketed to the top.
I know for a fact it was due to the beauty creators on TikTok, because no one else was talking about it and we hadn’t done an email blast. It was organic. They just started talking about it. We do pay very close attention to our sales by skew versus what people are talking about to see if we can track any of that. Is it a situation where we say, “We have to look at inventory,” or, “Is this a trend and something we can leverage”?
You sell a physical product. I get a lot of software CEOs on the show, so it’s fun to talk to somebody who sells atoms, not bits. Do you ever say, “We have a lot of inventory and another drop is coming soon, so we have to clear out the shelves. We are going to do traditional marketing stuff like discounts or promotions.” Is that different for you in a world where you are doing primarily social marketing? Or is it still the same moves expressed through different channels?
We have not done promotions to that level yet. We are still only two years in. At other brands, have I done that? Yeah, you can.
But is it a different playbook in the social world versus the traditional retailer world?
Not really. A promotion is a promotion and a markdown is a markdown.
That kind of speaks for itself. One thing that I am really curious about is on the website side. I have heard from so many direct-to-consumer brands that they had a whole business where they were converting against targeted advertising. Apple hit the button — the app tracking transparency button — and it destroyed Facebook’s business in a very real way. Facebook was out there saying, “You are killing small businesses.” But because they are Facebook/Meta, everyone is like, “Who cares about you?” It is true though that small businesses were hurt by this. Their ability to track sales through those ads decreased and their ability to convert through those ads decreased. Have you felt that, too?
We don’t have such a reliance on our ads that we felt that.
Is that because your audience isn’t on Facebook in that way?
“The days of seeing an Instagram or Facebook ad and converting immediately to buy may be over.”
No, I wouldn’t say that. I think our marketing mix is pretty healthy and balanced. We are not solely reliant on one channel. The days of seeing an Instagram or Facebook ad and converting immediately to buy may be over.
People are seeing the ad, then seeing it in Sephora and then getting an email. Maybe they just have to see it a couple of times before they actually convert. It may be a little bit tougher now that there are so many instances of recommendation along the consumer journey, and I don’t know that you could attribute as much to Instagram or Facebook anymore.
I think it is still important to think through the message or point of view we are putting out there to help convert eventually, but because we weren’t so reliant on it from the beginning, it’s been okay. We really thought about making it a little bit more balanced. That’s why we rely so much on the earned, and on our own stuff.
So way at the top of the show you mentioned the word “funnel.” In traditional marketing the stages are awareness, loyalty, and down the line to sale. It feels like you have a different conception of what the Rare Beauty funnel looks like. What is it?
Well, I think we are starting from a different spot. We have such a highly engaged, large, social fan base ourselves, plus obviously Selena. Someone once said to me, “You guys just have Selena post and then people buy your products.” She has incredible engagement, and her fan base is so kind and wonderful.
But I think it is truly a mix. What does she want to post? What makes sense for her to say about a product? She obviously reaches a very large amount of people, but it is that plus all of our owned channels. How do we leverage that and what’s the rest of it?
Do you think that the first thing to do is just make people aware? Or can you just get that because Selena Gomez has a huge presence?
No. I mean, oof. If people were only aware that Selena Gomez had a beauty brand, that wouldn’t do anything. So many other things go into it. You have to prove product performance, you have to show that the brand has values and a different point of view, you have to talk to the highly engaged community and superfans first. If you just said, “Look, there is a product by Selena Gomez,” I do not think people would necessarily buy it right away. There are a lot of other elements that go into it.
Maybe some other brands do just that, or assume that they can just rely on that, but not for the customer in this day and age. I think people want to research products. That’s why the creator community is so important. It all starts with the product. You have to have a great product. If we didn’t have a great product, all the marketing in the world wouldn’t matter.
When you become a CMO, does someone hand you that line to say?
No, does everyone say that?
Oh, it’s amazing.
Really? I think we have all been in the position where we were like, “Holy shit, what am I going to do with this? It doesn’t work.” So it’s true. Again, you can’t just force the message on people. Someone is going to come out and say, “You know what? I actually don’t like that product.” And you say, “Ugh, how do I turn that around?”
That is a hard moment. I think we have all seen that moment when a product comes out and it doesn’t live up to the hype or meet expectations, or there is an unfair piece of coverage and things go sideways. Well, maybe not for Rare Beauty. How do you react to those moments? What is your strategy for that?
It depends on what the concern is. Are they using it the wrong way? Is there a way we could educate on something? Years ago I worked on a product where people were actually just putting too much on their face. It was not wearing well because it was just too much. So we created a ton of content about how a little bit goes a long way. We changed the messaging and worked with the creators to get the word out. Sometimes it just depends on what the issue is to turn that ship around. Hopefully you can think through all of that before it launches, but it happens.
Do you think that content is advertising? Are some things ads and other things content? Is it all advertising in your head?
Even if it’s just something on our Instagram or on our owned YouTube channel? Do I think that’s advertising?
That, or marketing. There is a very technical split between those two terms and I’ll grant it to you. It’s all messages from a brand, right?
“It’s all marketing, and I’m not going to pretend it’s not.”
For sure. It’s all marketing, and I’m not going to pretend it’s not. I think people know. People turn to the brand for some of that stuff, like how to use a product. So just make sure you have all those resources for your consumer on your YouTube or elsewhere. I think you have to do the consumer the service of having it all there. Yeah it’s marketing. It wouldn’t be smart to launch a product without anything else.
Do you have an outside agency? Do you have a regular ad agency? Is that something you consider?
When we launched, we worked with an agency because our creative team wasn’t fully staffed yet. But no, everything is in-house at this point.
Do you ever think you need an agency to do things like make TV ads or advertise in the Super Bowl or something?
No. Maybe, but not yet.
Do you even think about TV as a channel for your messages?
When we launched, we did Addressable TV, which is really interesting. We had some success with it, and it’s something we talk about a lot. Right now, we are just so digital because that is where the consumers are.
Addressable TV is where Hulu has ad slots and you can buy into the ad slots. You’re saying, “Actually, our customers aren’t even watching TV that way.”
That’s not true. I don’t know that for a fact. At this point, do we have the marketing dollars to make a true impact to do Addressable TV? We really have to do it the right way. I’m watching it closely. We did Addressable TV at launch and it performed, but it was in the mix of everything else where everyone was already talking about the launch of Rare Beauty. It’s tough to say, “Yeah, that did it.” I do want to try it again, and we’re talking about it for next year, but we will do the creative in-house probably.
You and I are talking a day after Disney said there would be an ad-supported Disney Plus, and a couple of weeks after Netflix said there would be ad-supported Netflix. Does that change your view? You might get some Addressable TV platforms with a different content mix or a younger consumer base.
Absolutely. It’s definitely something to consider.
Do you think you would run standard-looking TV spots there, or is that an opportunity to do something else completely?
I think it’s an opportunity to do something else.
What do you think that is?
I don’t know. It depends on who the audience is, on where you are running it, on the type of content they are consuming. If there is a TikTok-type content that is maybe more demonstrable of how the product works or shows something that really keeps you highly engaged and it is 15 seconds long, that could possibly work. We have seen it work on TikTok, so that could be interesting.
It could also be a more traditional type of spot, where Selena stars in it or uses her voice or one of her songs. That’s all possible. What’s going to get someone out of the kitchen and into the TV room to watch the TV? What if it was a really great before and after of a mascara that was inspired by something on TikTok? That could work.
Do you have access to Selena Gomez, the library and assets? If you want to use one of her songs, is that just a phone call? Or is that the same kind of licensing conversation it would be for any other musician?
It is still a licensing conversation because she still has the writers and everyone else that is involved. (*whispers*) I don’t know if I can talk about that.
That’s on you. That’s not on me.
Will you edit out me whispering that to you? No, it’s fine. We can talk about it. It’s all the same.
In many ways, Selena is your biggest asset in terms of marketing. She is a celebrity with a huge platform.
It was her idea. I wouldn’t be here if it weren’t for her.
Do you have conversations where you’re like, “You have hit songs, we should just use them in the ads”? Is it harder because now you have to ask Selena for a favor, go into the library, and do all this licensing work?
It just depends. I mean, the brand is based off of her song “Rare” and her album Rare. She sort of fell in love with that word, so we use the song all the time.
Selena herself has been very vocal about online harassment. The Verge is also very vocal about online harassment being bad, so I appreciate that about her. We have talked about having a marketing platform built on online communities as though it allows you to be stable. You are weathering the storm, and you are not part of the Facebook app tracking transparency disaster that is happening to other people. You are chill about conversions at scale because everything is growing. The flip side is that online platforms and communities can get out of hand. Do you have a 911 lever in your head that says, “This is out of hand, we have to run this playbook”?
We have gotten to know some of the more vocal people in our community and some of our bigger fans. We have met them in person at events or we have done a Zoom call with them, and these things that we call Rare chats. First and foremost, nothing has ever gotten out of hand. Knock on wood. Oh my gosh. I don’t even like saying it, and may it never happen. We would turn to the people who we call our friends of the brand, because we have those relationships with them, and maybe get their insight to understand what happened or see if they can help navigate whatever is happening.
It is so nuanced in whatever that situation could be; it just depends on what the situation is. For the most part, everyone is pretty kind. You are 100 percent right. I do worry about that. You can put something up on Instagram and someone can say something rude about whoever is in it. It happens in other channels, but I have not seen it. I just feel like the community is a really kind group and we sort of just don’t allow for it.
Do you feel the social pressure that I see other celebrities face all the time? You said a wrong word, so everyone is going to yell at you and you have to back it up and re-edit the album. Maybe the word was wrong and that was the right choice, but you see that the way the pressure is applied comes with a lot of the baggage of online harassment. Is that something that you think about? “We have to make sure that every piece of content passes this threshold of awareness before it can go out”?
I think you just try to do the right thing as much as you can and do the best that you can. So much of that is just paying attention. My goodness, we all make mistakes. We’re not robots. I think if something were to happen, be transparent and apologize and fix it the best you can. We do think about everything. You just try to be as respectful and kind as you can to the community, so what you say, what you post, and what you share doesn’t make someone feel bad. That is not what we want to do.
There are some brands in this world that I think will probably never think about how online communities are affecting their behavior. Lockheed Martin, I’m sure, does not care what is happening on Twitter. Beauty brands seem like they have to care a lot. They are all the way at the other end of the spectrum. It is kind of a reputational product as much as a functional product. As you have been saying this whole time, it has to be good. But then the sales are made through reputation, brand values, and all the other stuff you have been talking about. Do you feel like you have ceded control of that to the online community in any way? When I say Lockheed Martin doesn’t care, they are just going to be Lockheed. Boeing is just going to be Boeing every day of Boeing’s life, and that is the end of that. You have handed over a huge part of your brand’s success to a group of people that you only somewhat have influence over, but at the end of the day, have no control over.
I mean, that is the world we live in. That is why we think we make decisions with the community in mind, so that we are creating content that is beneficial for them, putting out words and visuals that make them feel good about themselves, and that sparks a positive conversation around self-worth.
We think about it because we have to. It is the right thing to do, and I like thinking about it. Sure, it adds another layer of complexity, but you have to. I guess certain beauty brands certainly could just put stuff out there. It just depends on your approach as a brand.
You have mentioned Gen Z a bunch of times. Do you think that you are going to stay focused on younger consumers over time? Or do you think you are going to build this cohort and grow up with them?
I don’t know yet. That is a great question.
That to me is when the brands stop caring about their online presence because they have their customers. They are just going to keep going because there is a lot of loyalty over time.
I don’t know. Beauty is tough, and people are not always super loyal. I would like to foster a relationship with all sorts, of every generation, and figure out how we do that. That makes the job so much more difficult.
What is your boomer marketing strategy?
Moms.
Yeah, but the moms are not boomers anymore.
Oh my god. You’re right. Just my mom.
I’m a parent, don’t you dare call me a boomer!
Let me be young, okay? I’m Gen X. Can I still pretend?
Oh, I think Gen X and Gen Z, we vibe in a very serious way. We’re the letters. We’re good.
You’re right. What is our boomer strategy? Maybe we don’t have one. Grandmas?
I’m just wondering. At some point you are going to say, “I do not have time to make this set of decisions anymore. These are my brands and I am going to do all the other stuff I need to do to keep my kids alive.”
What is interesting with social is that it is not so much a demographic as it is a psychographic. If someone on TikTok is interested in beauty content or content that is more about their self-worth and mental wellbeing, then that might show up in their feed. So sometimes we work with creators that are different ages, maybe boomers. I’m still laughing. That is really funny.
You are going to come back on the show in 2025, we are going to see what happened with BeReal, and I’ll ask what happened with your boomer marketing strategy. It’s going to be the best episode of Decoder ever. Creighton is putting it on the books right now.
I was just thinking about my own mom. She has always bought the brands.
Oh, she has bought your brand? So she’s in it.
Yeah. Wherever I’m working.
Is she doing the full Euphoria looks? If you must know, that would be a TikTok channel I would watch.
Should we do that?
I mean, I’m not a TikTok expert, but I feel like that one would go super viral.
Wait, will you edit that part out? You’re not going to. I know you’re not going to. I just answered from my gut, not from a talking point.
That’s why you’re here. All right. We’ll let you off the hook. What is next for Rare Beauty?
Well, we just launched a collection of lipsticks.
See, we’re here to sell lipstick.
We are here to sell lipsticks.
By the way I look great in eyeliner, so if you ever want to send me some samples.
I heard! I heard, because you’re a big Cure fan is what I was told.
Oh my god, my team completely doxxed me.
Was that true?
Super true. Oh yeah. Me and Robert Smith. That’s a real situation.
Are you joking? Is it because Robert Smith wears eyeliner and you decided to wear eyeliner once? Or are you truly a Cure fan?
I’m saying that I spent my teens and twenties like fully kitted out, all the time.
I love that. I saw The Cure at Austin City Limits a couple years ago.
They’re a really loud band for being a bunch of old guys, it’s like a rock show. Anyway, now we’re just talking about The Cure.
Hold on, hold on, hold on. Let me rewind. What is our boomer strategy? Two words. Robert Smith.
There you go. I know Selena has to be a Cure fan. I feel that in my bones. Can you make this happen?
You feel it in your bones? Sure, yeah.
I have listened to her music. There are some influences there that are very clear.
Here is the deal we’re going to make. You edit this so I don’t sound like a dumb-dumb, and I will do a Robert Smith eyeliner.
Done. That’s it. That’s Decoder. Katie, thank you so much for being on the show.
Is that the way we’re going to end this?
I think it should be. I don’t think there’s a better way to end it. Katie, that was amazing, thank you so much for coming on the show.
Source: www.theverge.com