When Covid-19 hit the U.S. in March, Ipsy, like all beauty companies, had to rethink its year ahead. But CEO Marcelo Camberos said he hoped the larger economic and consumer changes would allow Ipsy, best known for its monthly subscription Glam Bags, to become “a bigger part of members’ lives.”
“In this world where they really need us, where it’s much harder to go to physical retail and feel confident doing so, how can we provide more value?” said Camberos, on the most recent episode of the Glossy Beauty Podcast. “We thought that the key way we could do that was to give them more control.”
Ipsy aims to give its customers more control by allowing them to choose the merchandise that they get in Ipsy’s Glam Bags and to offer more personal care products in tandem with beauty. Camberos said the big question for his team when thinking of customers is always, “Was it worth it for me this month?” in regard to the monthly shipment of products.
And this line of thinking has been applied to all of Ipsy’s franchises, including its events, which the company had previously gone heavy on in 2019, and incubation, as seen in its August launch of Item Beauty with TikTok star Addison Rae Easterling.
“We probably changed more than half of our business initiatives for the year,” said Camberos of the company’s pivot. “This is a new world; we need to act quickly.”
Here are a few highlights from the conversation, which have been lightly edited for clarity.
Creating added value
“We have to ask one main question: ‘Was it worth it for me this month?’ And that’s a very tough thing to do month in and month out. And so, if the answer is, ‘No, it wasn’t worth it,’ our members will churn and they’ll go elsewhere. Or they’ll stop receiving our boxes. If the answer is ‘yes’ — which I think we’ve been fortunate that we’ve been able to provide that ‘yes’ answer for a long period of time for our members — then they will stay with us. From a members’ perspective, what they ask themselves is pretty much always the same question: ‘You know, I paid $12 or $25 for the full size, was it worth it?’ And that comes in the form of: Were the brands exciting? Were they well personalized for me? Did the bag arrive on time? And was the customer service really good and the overall experience? Did I find education about the products and inspiration that helped me get the most out of the products that I got?”
The future of Ipsy’s incubated brands
“We’re very excited about it. And well, we are emboldened by our success with Item Beauty. You look at the brand, and it’s amassed about 200,000 followers in less than two months on Instagram, and that’s good. But what’s more impressive is that the engagement rate is 7%. The average engagement rate for beauty brands, I think, is 0.25%. And so you’re talking [about a] 30-times more engaged brand and engaged audience. And that’s translating into people trying the products out and being really excited about them. So, we’re going to be doing more of these [incubated brands], where we can find a niche or a sector of the market that’s underserved, where we find a partner that really understands that market and has a lot of credibility in the market, and where we can bring to bear all of our data of 160 million product reviews and our broader Ipsy platform to help the brand succeed.”
What the new influencer looks like
“With the life cycle of these creators now, you have to learn a lot in a very short period of time. And so it’s very hard — you’ve gone from nobody knowing you except your family and friends to, all of a sudden, being a celebrity in less than a year. And I’ve got to say, I’m so proud to be partnering with Addison because she’s handling it so well. She’s just an amazing woman and a great partner, but it’s hard what she is doing and the pressure that she has on her shoulders. You wouldn’t be able to tell when you watch her, but I am sure it’s there. The shortened life lifecycle makes it very difficult, but of course, it makes it an amazing business opportunity for them, and they have to take advantage of it. For us, we were lucky to partner with her.”
The reality of digital events
“We’ve tried and we’ve done a good job with [digital events.] But it’s not the same as being in-person and the magic that can happen in that interaction. I’m a huge believer in live events and physical live events; we will bring them back. In the meantime, we’ve done some really innovative, great things. We did an event — a version of Ipsy Live that was digital — where we did a ‘make-off’ between Iggy Azalea and Nikita Dragun, Dojo Cat performed, and we’ve done a bunch of Ispy Assemblies — one with Sharon Chuter, the force behind Pull Up For Change. We’re doing a lot of things, and they are successful — but it’s not the same, and I am looking forward to the moment where we can bring it back and be doing this in-person. … But I don’t think it’s doable [to do live events now]. Who wants to go and pay $200 for a physical event where they might get Covid?”