Affiliate marketing, which started as a tiny portion of beauty and fashion brands’ marketing strategies, is now a major component of their businesses. The reason is that it provides a potentially less costly alternative with more ROI to pure influencer marketing. It’s a proven opportunity to drive sales with minimal investment. “The real value of affiliate marketing is that it’s just a way to supercharge your influencer marketing,” said Julia Casella, who oversees global communications for Hourglass Cosmetics. Affiliate marketing saw major growth during the height of the pandemic, just as e-commerce did, in general. More than 50% of affiliate marketing programs increased their revenue during the lockdown.
The global affiliate marketing industry is worth over $17 billion and is a top revenue source for 31% of publishers as of February. Some of the big affiliate commerce companies include Amazon Associates, ShareASale, LTK and ShopMy for fashion and beauty. So, what exactly is affiliate marketing, and how has it become a lucrative tool for so many fashion and beauty brands, in contrast with influencer marketing, which is difficult to track? What resources are brands dedicating to these efforts, and what percentage of their revenue does affiliate marketing provide? Here, we tapped top beauty and fashion brand marketers and founders to learn more.
What is affiliate marketing?
Affiliate marketing is a type of performance-based marketing where brands pay affiliates, meaning independent individuals or companies, a commission for promoting their products or services and driving sales or leads to their websites.
Moving toward an affiliate-based strategy
According to Casella, during Hourglass’s first month on affiliate platform ShopMy, it achieved a 178% increase in traffic to the brand via its own website and retailer partners’ websites. What she likes about ShopMy is that it also shows her who is driving sales to Hourglass’s retail partners. “This transparency allows me to see what creators are performing across our various retailers and helps me leverage those creators for partnerships with those retailers,” Julia said. “By engaging with existing brand fans and using paid partnerships, we were able to achieve the boost in traffic almost immediately.” The platform also allowed her to see which talent is working to drive meaningful sales, beyond views and engagement metrics, she noted.
“Affiliate platforms can now help track a part of the customer journey — especially when layered with a good internal e-commerce team who will help extract data, such as what percentage of customers using an influencer’s code were new to the website versus returning customers,” she said.
She added that affiliate marketing is not an exact science, but it’s another piece to the ever-evolving consumer-journey puzzle. She acknowledged that the customer journey is vast and that affiliate links can’t capture all the sales an influencer drives. “The majority of makeup products are still being bought in person,” she said. A stat from Quantilope confirms that 67% of consumers are still purchasing makeup in person.
Affiliate companies like ShopMy earn a cut of sales. ShopMy takes take 15% across the board, but the commission rates for creators on the platform range from 10-30% per sale, according to a rep from the brand. Standard affiliate commission rates vary from 5-25%, according to AffiliateWP.
When doesn’t affiliate marketing work?
Julia noted that it’s important to have a strong influencer strategy to support affiliate marketing. Jennifer Bett Communications partner Melissa Duren Conner agreed that affiliate marketing may not work if brands don’t have the proper resources to manage the program. “This work requires time and patience to track sales and commissions, build strategic partnerships, approve applications and manage day-to-day,” she said. She added that many established e-commerce brands like Amazon and also big retailers offer highly competitive commissions, which make it harder for smaller brands and startups to compete.
Maria Costa, director of brand and integrated marketing at M.M.LaFleur, said her company has spent the last few years operating a more traditional influencer strategy, including paid partnerships and gifting. As a result, it now has a deep understanding of the influencers who are not only amazing content creators but also strong revenue drivers. “Their audience really trusts them, and we want to deepen these partnerships through a direct commission strategy,” Costa said.
In the first quarter, M.M.LaFleur is working with Flagship, an online store for creators, to launch a storefront with influencer Anh Sundstrom of the Instagram account 9to5Chic, a long-time partner of the brand. “Through Flagship, Anh can curate a selection of her favorite M.M.LaFleur styles, which her community can purchase directly via her website instead of needing to navigate to our site, thus eliminating some of the potential dropoff in the marketing funnel from consideration to purchase,” Costa said. The sales completed via this storefront will receive a higher commission than is typical via LTK, she added. “Based on the performance signals we see with Anh, we’ll roll out additional partnerships with a similar structure throughout the year.”
While M.M.LaFleur is still in the process of launching with Flagship, Costa said its seen success in the past by launching monthly capsule curations of M.M.LaFleur styles with influencer partners such as Sai de Silva and Chrissy Rutherford. “On average, we see a 10% lift in product sales of styles featured through these capsules,” she said. “Our goal is to see a sales lift with the styles featured in Flagship storefronts.”
Gwen Stefani’s beauty brand, GXVE Beauty, created its own affiliate program in-house. The brand was created for the community of makeup lovers who find their self expression and creativity through makeup. That mission led to the development of The GXVE Community, which launched last fall. “The GXVE Community is a brand-owned digital platform that offers a special hub for brand ambassadors to engage with Gwen, receive product education and tutorials, and connect with each other,” said GXVE Beauty CCO Lindsey Roggentien. Anyone can apply to the GXVE Community. To apply, consumers are encouraged to visit the Ambassador Program tab on the GXVE website. From there, they’re asked to provide links to their social media accounts and a short personal statement outlining why they would like to become a “Gxver.” Despite sharing social platform links, no minimum follower count is required for the chance to be considered as an ambassador — just a passion for makeup and a positive attitude. Once approved, the GXVE Community receives their own ambassador link where they can earn commission on any products they sell.
“It’s been an awesome way to bring our community into our product development process, too,” Roggentien said. She noted that the company learns about how its community uses the products and what they’re seeking in future releases. “Through creating this platform, we are able to all learn, grow and connect through a shared love of all things beauty and makeup,” she said.
Meg Strachan, founder and CEO of jewelry brand Dorsey said that “the traditional influencer strategy was based on gifting and paid posts, neither of which allowed brands or influencers to track the volume of sales driven by a partnership.” Strachan previously worked in growth marketing for VC-backed direct-to-consumer brands, but said when she launched Dorsey in late 2019, she didn’t take the traditional approach — and that’s been integral to its success. “Internally, we don’t refer to influencers as influencers,” she said. “We call them what they are: advertisers.” Affiliate marketing relationships reframe the relationship, she said, so all parties are aligned on the same goal.
Resources brands are dedicating to affiliate marketing
Because Costa sees such an opportunity to expand M.M.LaFleur’s affiliate marketing strategy, the company is building up its performance marketing team, hiring at both the manager and associate level. The team will oversee the daily, weekly and monthly growth of this channel and all performance metrics.
The GXVE Community is unique in that it is a brand-owned and operated digital platform versus a program that links to a third-party affiliate network, Roggentien said. “GXVE Beauty has a team dedicated just to this community — from developing programming/education, to conducting live tutorials, to taking part in special engagement moments with Gwen, to offering community-exclusive promotions and selling incentives,” she said. She said GXVE Beauty is dedicated around the clock to developing, growing and supporting each community team member.
“This community of ambassadors, also known as ‘GXVERS,’ are incredibly engaged and love interacting with each other. … It’s been amazing to see the relationships built among the GXVER community, stemming from shared loves of makeup, artistry and, of course, Gwen,” Roggentien said. Ambassadors receive a 30% commission on any items they sell through a personalized link, one of the highest standardized rates in the industry, she said.
Strachan said Dorsey handles all affiliate marketing related to people, including Instagram influencers, via its in-house team. “We use external resources to support our affiliate marketing through more traditional publications,” she added.
Duren Conner said her agency is nearing the one-year mark of launching its in-house affiliate division. “Since its introduction in April 2022, the category has succeeded in being seamlessly integrated within JBC’s media relations efforts, better streamlining each respective brands’ PR and affiliate strategies and goals.” JBC attributes the success “largely to the consistent communication between our PR and affiliate teams — balancing earned media opportunities and meaningful affiliate partnerships with publishers.”
Affiliate marketing revenue
In 2022, M.M.LaFleur’s affiliate marketing generated 13% of its revenue.
When comparing one client’s affiliate revenue from Q4 2021 to Q4 2022, during the time Jennifer Bett Communications began spearheading its affiliate programs, affiliate revenue saw a 134% increase. In another instance, in the first 2 quarters leveraging affiliate work, one of the agency’s clients exceeded $150000 in total affiliate revenue, Duren Conner said.
“I think how brands work with Instagram affiliate advertisers is in its infancy,” Strachan said. “It’s clear niche audiences are going to drive meaningful growth and engagement for brands moving forward.”