Kylie Jenner Inc: Giving Lip service to Digital Engagement
Formulation
The Kardashian family is known around the world equally for its controversial ascension to celebrity as well as for its savvy ability to monetize fame. While this shrewd matriarchy brought Kim Kardashian to astronomical heights, no family member has more radically transformed or adeptly navigated the digital landscape than nineteen-year-old Kylie Jenner. As the youngest member of the clan, Kylie is a digital native who demonstrated her true genius with the launch of her company, Kylie Cosmetics.
In November 2015, Kylie released her first line of makeup products, a series of three matte lip-kits. The products sold out in under a minute, freezing the website and temporarily “breaking” Google Analytics [1]. Kylie’s follow-up release generated over 200,000 active users [2]. How did a teenager generate more interest than major releases from industry titans with billion-dollar budgets? Like her makeup tutorial, it took three crucial steps.
Step 1: Kylie used digital media to create an aspirational, yet relatable brand that engaged her followers.
Kylie quickly adopted social media platforms to generate a loyal community that now includes 79M Instagram followers and more Snapchat users than any other account [3]. She accomplished this by granting fans unfettered access to her daily routine through frequent posts. Moreover, the content is fun and engaging. Editor-in-Chief of Teen Vogue, Amy Astley, explains: “She’s doing everything that teenagers want to be doing—driving around in a fabulous car, hanging out with her friends, not appearing to be too burdened by schoolwork or homework or too many responsibilities. It’s a total, vicarious thrill.” Next, she balances aspiration with relatability. While her lifestyle exudes exclusivity, “when you break it down…it’s normal teen stuff” [4]. Last, she uses multiple content types to enhance this world – the launch of her makeup line was complete with a full music video.
Step 2: Kylie launched capsules of limited inventory to deliver fans a seemingly exclusive piece of that dream.
Kylie offered her devotees an exclusive slice of her brand by fomenting scarcity to increase demand. Kylie accomplished this by partnering with Ultrabrand to develop a website and e-commerce infrastructure to sell her lip-kit products. After teasing her fan base with upcoming release dates, she pulsed the market with limited product launches, deliberately suppressing inventory levels and guaranteeing stock-outs. She fed the flame mid-launch with Snapchats apologizing for the website shutdowns and imploring if her developers “can fix it [Google Analytics’]” [5]. The limited production garnered significant press coverage, posts from frustrated customers on social media, and incredible price increases on secondary markets (re-selling as high as $3,000 per kit or a 10,000% markup) [6]. Each aftershock contributed further to increase demand. Professor Robert Phillips of Columbia explains, “It’s this rare situation where you get a combination of scarcity and a status item.” Professor Z John. Zhang of Wharton further emphasizes: “People aren’t buying functionality, they are buying desirability” [7].
Step 3: Kylie provided tutorials to ensure a personal and convenient product usage.
Following her launches, Kylie frequently posts to Snapchat to help customers with a hassle-free makeup application process [8]. Customers can also download the Kylie app for $2.99 per month to watch Kylie explain tips in even more depth.
Ensuring long-lasting results
Moving forward, Kylie Cosmetics faces two growth challenges – avoiding a fad status and expanding beyond her devoted followers. Ironically, the answer may lie in traditional media and operating models.
Kylie’s cosmetics generated such an incredible buzz that it risks a short lifespan as a “trendy” product. To her credit, Kylie has increased both the frequency and inventory amounts for her launches to mitigate this issue. An additional solution could be to partner with more traditional media players to lend credibility. Kylie could partner with leading makeup artists and obtain placements in print magazines (e.g., Vogue, Elle, Alure, etc.) to garner additional legitimacy. In addition, she can explore partnerships with the Cosmetic Executive Women (CEW) beauty organization as well as submit her products for industry awards.
Increasing the appeal of her products to a broader audience may also pose difficulties. While her cabal of loyalists will continue to buy, she likely maximized her reach with that segment. She should consider taking note of brother-in-law Kanye West’s strategy of supplementing digital platforms with traditional retail pop-up stores that capture the attention of young urban-dwellers and create an in-person experience of their worlds.
After further consideration, though, perhaps Kylie isn’t after growth after all. Kylie may not aspire to create the next Estee Lauder, but rather amass a conglomerate of many small niche businesses. Her recent decisions to launch a sneaker deal with Puma, develop a line of hair extensions (Kylie Hair Kouture), and release apparel and accessories under the “Kendall + Kylie” brand seem to indicate her preference to increase the breadth, not depth of her business empire.
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[1] https://tophat-imc.com/marketing-analysis-kylie-jenner-lip-kit-phenomenon/
[2] http://fashionista.com/2016/03/kylie-lip-kit-traffic
[3] Snapchat & Instagram
[4] http://www.adweek.com/news/technology/how-kylie-jenner-built-sprawling-audience-and-booming-brand-age-18-170719
[5] http://fashionista.com/2016/03/kylie-lip-kit-traffic
[7] Ibid
Great post! I agree that Kylie may not be after growth at all, but if she is considering maintaining sales for Kylie Cosmetics – do you think they can maintain direct to consumer sales through her digital platform? We’ve seen recently many direct to consumer brands develop a brick and mortar strategy (Warby Parker, Bonobos). Will she have to shift and build partnerships with Sephora or other retailers to sell the lip kits? Is being an online store enough to maintain sales?
This post makes me so happy, Daniel, I would not be true to myself if I did not admit that I love the Kardashians. I too have been amazed by the independent rise of Kylie out of the fire that is the Kardashian clan. The family as a whole has so much traction and fame that to be able to differentiate oneself to such an extent, as Kylie has, and to monetise that differentiation so successfully is difficult and impressive.
Kylie is often sited as a social media savant, SocialBlade’s breakdown of her social media status proving this point further, “http://socialblade.com/instagram/user/kyliejenner”. Prior to technology, it would not have been possible for Kylie to achieve both the fame and also the wealth that she has. Social media and technology has not only provided a platform for Kylie to create and to communicate with fans around the world, but it also has removed the high fixed cost of advertising and PR that celebrities of old used to need to pay for. No longer needing to fight for earned and paid media, Kylie can blast her social channels as often as she would like to to update her fans, in fact, she is encouraged to with special filters from the snapchat head office and promotions from other social media sites. (http://www.teenvogue.com/story/kylie-jenner-birthday-snapchat-filter).
Are there drawbacks to this open access to the internet for Kylie and for her brand? The ease with which Kylie can post, and the positive reception which she receives, might lead her to make unwise decisions at points with regards to what she is saying or doing in her posts. Hubris might lead her to a fall. To try to control against this Kylie has hired account managers for each of her social media outlets, (http://starcasm.net/archives/356073) as well as to help her to stay ‘on brand’ with a consistent message. Whilst this is a good first step, I would caution Kylie to also ensure that she does not over-post and frustrate her fans with too much insight into her daily life dealings, a little mystery is always a good thing!
This was a really fun post! One thing I wonder about as I read this is how insulated Kylie’s brand is from those of her sisters? Both Kim and Kendall are currently taking a break from social media, and I’m interested to see how Kylie will react. Continue as usual? Increase her activity to satiate demand for the Jenner/Kardashian brand? Also decide to take a break? I think this could represent an interesting turning point for her as she balances not only representing herself and building her brand but also on doing the same for her entire family.
I am fascinated, just like you, with how Kardashians monetise their fame – it is a smart move indeed, and very profitable. In case of Kylie, she has an incredible potential, given her young age and her career picking up. She still can experiment with the business operational model, see how she can combine online with offline etc. The most important here, to my point, is to ensure the business kicks off right. In this particular case, choosing the right partners is crucial. Since Kylie needs to outsource her lip kits, she needs to carefully assess each link of her supply chain. Her business end is managed by the company called ColourPop and manufacturing – by Spatz Laboratories, which have recently been accused of not so up to standard working conditions. Unethical partners could bring a lot of harm not only to the business, but to the celebrity image (recently there was a similar but much bigger in scale case with Honest brand by Jessica Alba).
By reading these comments, I finally know who Avatar is – Hi Eliza!!
Anyway, this was a very fun post to read, especially as it explores the overlap of business and pop culture. As you suggested, Daniel, I doubt Kylie has any interest in being a legitimate businesswoman. What she seems to be after is exposure and instant gratification, which she gets by constantly rolling out new beauty/fashion products that her loyal legion of tween fans gleefully buy up. How a lip kit sold for $3,000 is beyond me, but I’m not even mad at Kylie. She’s using social media to her utmost advantage and is probably sitting in her FOURTH $12 million mansion right now counting her stacks of cash. #SheWins.
Oh hey there, Nelly-Ange. Caught by my love of the Kardashians! Long may they reign.
Great post, Daniel! As I’m sure you’re aware, Kylie’s holiday collection launches tomorrow — and the products contain real diamond powder!!! It’s crazy to me that Kylie Cosmetics ($29 lip kits?!? $290 holiday collection?!?) is already generating nine figure revenue. Kylie clearly knows her target audience, and her social media marketing strategy has been very consistent and effective. She’s aspirational…but also relatable to teens. Teens are highly influenced by celebrities and influencers when making a purchase, but these celebs go out of style — can’t stay young and relevant forever. Perhaps more traditional marketing approaches will help with legitimizing the brand and expanding to new audiences, but I’m skeptical of this approach. I don’t think Kylie Cosmetics is a brand that can expand to a wider audience given its positioning, but I agree that Kylie has been smart by diversifying with product lines with Pacsun, Topshop, Puma and Sinful Colors, as well as her Kylie Jenner app and the Kendall & Kylie game. She also makes bank with social media product endorsements (upwards of $200,000 for each sponsored post?!?) and hefty appearance fees. I think it’s going to be hard for Kylie Cosmetics to avoid fad status — the brand is Kylie Jenner, so what happens when we reach peak Kardashian saturation (how has that not happened yet…)?
This is such an interesting post, Daniel! I agree that Kylie’s fame was amplified by her use of digital media. We all know Eliza is in it for the long haul, but I wonder who her true fan base is and how that will change over time. Will these teenage fans be loyal to Kylie as they move into their 20s, or will Kylie need to replenish her fan base with new teenagers looking to find another “role model”? Or is she just too big to fail at this point — guaranteed a fan base that will never diminish?
Hi Daniel, thanks for this fascinating post! While I have a hard time keeping up with all the Kardashians (and their side businesses) I think there’s a lot to learn from Kylie!
I agree with your conclusion that perhaps Kylie isn’t trying to build a beauty brand but instead a collection of niche businesses — in fact, I’d go as far as to say that the brand she is building and selling is herself! Celebrities have long been in the business of creating products (think Paul Newman and Newman’s Own dating back to the early 80s) and I think you can categorize celebrity businesses in 2 buckets: (1) celebrities who are the brand themselves and they may sell various products and (2) celebrities who build strong brands and companies, independent of their identity. In the first bucket, I’d include the entire Kardashian klan and others like Gwyneth Paltrow’s GOOP. On the other hand, celebrities like Jessica Alba (Honest) and Kate Hudson (Fabletics) have built more traditional stand alone companies that are less associated with their persona. (http://www.forbes.com/sites/chancebarnett/2015/01/09/the-top-10-celebrity-companies/3/#cd063fc74405)
Given these two different approaches to monetizing celebrity, do you think there are significant operational implications depending on the model a celebrity chooses?