The influencer marketing industry is projected to be worth up to $15 billion by 2022, and social-media stars are increasingly leveraging their presence online to create consumer products to sell directly to their followers.
Take the fashion/lifestyle blogger and Instagram influencer, Julia Engel, for instance.
Engel, who goes by Gal Meets Glam online, began playing around with the idea of creating a product back in 2013. She studied why people came to her page by looking at affiliate link data: what her followers were clicking on, shopping for, and at what price points, she said.
The No. 1 item she would sell through affiliate links year-round was dresses, she said. After meeting with manufacturers and learning about sourcing fabric and design, she decided to launch her own collection.
It took years to complete, but in early 2018, Engel teased to her Instagram followers, who now number 1.1 million, that Gal Meets Glam had something big coming. Shortly after, in a blog post, Engel unveiled the "Gal Meets Glam Collection," a dress collection that launched in April 2018 and releases limited products every few months.
"I wanted to have something bigger than myself for our readers," Engel told Business Insider.
Since launching, Engel's collection has earned $35 million in revenue, she said.
'People would be buying the product anyway'
Engel wasn't the first influencer to build a direct-to-consumer brand. Far from it, in fact.
Influencer-lead DTC brands first began popping up earnest in 2012, with companies like the fitness program, "EmFitChallenge"; the phone case company, Wildflower Cases; and the cold-press juice line, Suja, according to a recent report on the state of "influencer-to-consumer" brands by the influencer software company Mavrck.
Since then, the space has exploded.
The No. 1 company doing this type of business is Glossier, which was founded by beauty blogger Emily Weiss. Weiss turned her blog into a $1 billion cosmetics and skincare company.
In its report, Mavrck ranked the top 25 influencer-led DTC brands. In second place was YouTube creator Jeffree Star's beauty line, Jeffree Star Cosmetics, which has earned $30 million in revenue, according to the report.
Especially in the fashion and beauty verticals, DTC products have proven to be a lucrative source of income, and a way for influencers to diversify their revenue streams.
Of the top 25 brands in Mavrck's analysis, fashion made up 40% of them, with beauty in second at 36%, followed by fitness at 12%.
Adam Wescott, a partner at Select Management Group — who manages YouTube creators like Eva Gutowski (mylifeaseva), with 10 million YouTube subscribers, and Lauren Riihimaki (LaurDIY), with 9 million subscribers — said DTC products are a trending revenue source for top creators in 2019.
"If you take something that their audience already recognizes them for, and then you add an original innovative product and formula that services a need, people would be buying the product anyways," Wescott told Business Insider in a previous interview.
Turning followers into paying customers
Before launch, Engel teased her collection first to her Instagram followers, posting videos as a way to build buzz for the upcoming products.
The Gal Meets Glam Collection was set to launch independently on her personal site, Engel said. But Nordstrom, which Engel had previously worked with as a brand sponsor, reached out when it heard she was working on something.
"They had a huge buying team come in and check out the line," she said. "They loved it, and wanted to be a part of our launch. This really catapulted us to have a much bigger launch than we have initially planned for, for our own site." (This February, Engel opened up the collection to other wholesale buyers besides Nordstrom.)
To transition her readers into customers, Engel also created private content for followers who signed up ahead of time via email, giving them inside access to the design process, she said.
And the process of building buzz didn't stop when her line launched, she said. It's a constant process, a sentiment echoed by other industry insiders about DTC products from influencers, who often use a limited release strategy to sustain enthusiasm.
Here are some techniques Engel uses to build awareness and anticipation:
- Engel shares each collection's "look book" the day before it launches with her followers, as a way for them bookmark the items on Instagram, and shop later when they come out.
- On her personal Instagram, Engel gives her followers exclusive behind-the-scenes content, showing off elements like a look inside the design process.
- Engel's dresses are limited edition, and almost always sell out "immediately after a launch," she said. She builds up anticipation on social media days before a collection drops.
- Through years of working together on brand campaigns, Engel has built up strong partnerships with brands like Nordstrom. Nordstrom was the first stores to carry her products on its site, which helped Engel reach new customers, she said.
- Engel said she also purchases Facebook and Instagram ads to build awareness, but that the conversion of purchasers on organic posts is higher than paid ones.
For more on the business of influencers, according to YouTube and Instagram stars, check out these Business Insider Prime posts:
- How YouTube influencers make money in 2019: Talent manager Adam Wescott, who represents prominent YouTube stars, said developing consumer products independently has become a recent trend.
- Beauty mogul Huda Kattan, who built a $610 million fortune from online fame, shares 3 business tips for influencers starting their careers: The beauty influencer and self-made millionaire behind the cosmetics line Huda Beauty, and her sister Mona spoke with Business Insider about their advice for aspiring influencers.
- An Instagram influencer with 166,000 followers breaks down how much money she earns from a sponsored post: Katy Bellotte, a YouTube creator and Instagram influencer, broke down how much she earns per sponsored Instagram post.