When Glossier launched in 2014, it was totally new, each in its messaging — be you, simply dewier — and its direct-to-consumer gross sales technique, which on the time was an unconventional technique to promote magnificence.

Founder and chief government Emily Weiss’ strategy labored, and all of a sudden, Glossier grew to become the gold normal for startups, who forewent once-coveted shelf house at malls and Sephora in favour of promoting to their prospects immediately.

Numerous magnificence labels mimicked Glossier’s heavy use of social media to attach with their “communities,” in addition to its Millennial-friendly pink branding.

The thrill led to funding: Up to now, Glossier has raised $266 million in funding, together with an $80 million Collection E in July 2021 to construct out its retail community, valuing the corporate at $1.8 billion.

However even because it reaffirmed its unicorn valuation final 12 months, the corporate’s troubles have been mounting. Glossier Play, a extra pigmented and glittery make-up sub-brand launched in early 2019 to a lot fanfare, however didn’t catch on and was quietly discontinued in the beginning of 2021. In August 2020, Outta the Gloss, a collective of nameless, former retail staff, emerged to problem the model’s welcoming picture. The group printed an open letter on Medium and created an Instagram account to air grievances starting from racism to poisonous office tradition.

In 2021, Glossier’s US gross sales decreased by 26 p.c, 12 months over 12 months, based on Bloomberg Second Measure. Kym Davis, head of product growth, and Ashley Mayer, vice chairman of communications, each departed final 12 months. In November, the model introduced a slew of senior hires: a brand new chief monetary officer and senior vice chairman of retail, and its first chief business officer.

And on Jan. 26, Glossier laid off a couple of third of its workforce, or greater than 80 staff, which the corporate referred to as a “tough however crucial resolution,” including that “these modifications depart us well-positioned as we proceed to develop the model lengthy into the longer term.”

“We prioritised sure strategic tasks that distracted us from the laser-focus we wanted to have on our core enterprise: scaling our magnificence model,” Weiss wrote in an inner e-mail obtained by BoF. “We additionally acquired forward of ourselves on hiring. These missteps are on me.”

Now, Glossier is challenged with rewriting the wonder playbook it helped outline, respiratory new life into branding that had grown stagnant, and drawing new, youthful members into its buyer group.

So how did Glossier get right here?

Stagnant Messaging, Branding and Innovation

Weiss based Glossier as an extension of her web site, Into the Gloss, a well-liked beauty-focused publication. She launched the model in October 2014 with a set of 4 merchandise — a “Balm Dotcom” salve, a moisturiser, a face mist and a pores and skin tint, which on the time got here in simply three shades (right now, there are 12). Every buy got here with cute stickers that includes the model’s emblem and merchandise, which prospects caught on their telephones and computer systems.

Glossier's original product lineup.

Glossier was one of many first founder-driven magnificence strains that confirmed you didn’t must be a world large like L’Oréal or Estée Lauder to start out a model. Weiss’ Into the Gloss fanbase served as the muse for the model’s “group,” — particularly, the individuals who wouldn’t solely purchase Glossier merchandise, however discuss up the model on social media and line up across the block, rain or shine, outdoors a rising variety of shops and pop-ups.

However for all of the Glossier mania, the corporate’s messaging, the best way it sells merchandise and its branding remained a continuing. Whereas consistency is usually a advantage on the planet of client merchandise, sure elements of Glossier’s branding, together with its Millennial pink-heavy coloration palette, seemed more and more dated.

The core message of embracing who you might be and selling dewy pores and skin grew to become as commonplace as ‘clear magnificence.’ Glossier’s prime demographic, Millennials aged out of the model, choosing extra mature, elevated skincare and make-up labels, equivalent to Nars and Charlotte Tilbury.

“When everybody says you’re a ‘once-in-a-generation model’ you may trick your self into believing yours could be a model that withstands the check of time,” mentioned a magnificence investor who requested anonymity. “So why change? Why evolve?”

Successful over the following era of younger shoppers has confirmed tough. The marketplace for teenagers and twenty-somethings is extra crowded than it was eight years in the past. Different gamers like The Strange, Youth to the Folks and Kinship have gained reputation, whereas drugstore skincare mainstays like Cerave have seen a resurgence. New merchandise didn’t resonate with Gen Z; teenagers don’t want retinol — the ingredient on the centre of Common Professional-Retinol, considered one of Glossier’s largest launches final 12 months.

“Glossier stayed on this center floor,” mentioned Manola Soler, director at Alvarez & Marsal Shopper and Retail Group, a world consultancy. “It’s the identical aesthetic but it surely’s not resonating the identical method with new generations.”

Glossier did strive one thing bolder, product smart, with Glossier Play, a line designed for the bold-browed, contour-loving followers of make-up manufacturers like Huda Kattan and Anastasia Beverly Hills. However the timing was off. Play’s debut got here throughout a interval when make-up use was in decline. Two years later, the pandemic’s skincare obsession has given technique to a make-up renaissance, together with the expressive seems to be and hues Play was meant for. However the line was discontinued in January 2021.

“When everybody says you’re a ‘once-in-a-generation model’ you may trick your self into believing yours could be a model that withstands the check of time. So why change? Why evolve?”

Magnificence’s Retail Evolution

Glossier’s issues sign greater challenges for the DTC mannequin itself.

As soon as, the final word signal of a ‘cool’ magnificence model was that it was out there solely via its personal web site, or maybe the occasional pop-up store. However most shoppers nonetheless favor to buy magnificence merchandise in individual, whether or not it’s a specialty retailer like Sephora or the closest Goal.

Promoting direct-to-consumer — which accounts for 80 p.c of Glossier’s gross sales — can be costly. The model as soon as had an edge over potential rivals in that its prospects have been extra more likely to return, lowering the necessity to bombard them with adverts on social media, or depend on promotions. However that benefit has eroded.

Michael Maloof, director of analytics at Earnest Analysis, mentioned Glossier’s as soon as “high of sophistication” retention price – customers who returned to make a second buy the next month – for brand spanking new on-line prospects plummeted from 15 p.c in November 2019 to five p.c in November 2021.

Total, vacation gross sales on-line dropped 22 p.c from 2020, based on an Earnest Analysis evaluation of bank card knowledge between Nov. 1 and Dec. 29.

Glossier, which has an annual sale on the kickoff of the vacation season, added a second sale final June to bolster income. Of the brand new prospects acquired in June, simply 4 p.c bought once more in July, and by September, one p.c of that group shopped on the model’s website.

“Within the three months after [the sale], these new prospects mainly all left,” Maloof mentioned.

Extra conventional gamers have additionally stepped up their magnificence recreation. Ulta Magnificence has introduced on Gen-Z favorite manufacturers like Morphe and Kylie Cosmetics. Goal, Kohl’s and Walmart invested closely of their magnificence departments, together with shop-in-shops with Ulta (Goal) and Sephora (Kohl’s). Walmart introduced in about 100 new magnificence manufacturers final 12 months.

Glossier isn’t offered at any of those locations. The model opened three shops in Seattle, Los Angeles and London late final 12 months, after New York and Los Angeles flagships and a London pop-up closed in March 2020.

“They must be the place they’re going to be found,” mentioned Marie Driscoll, managing director of luxurious and style at Coresight Analysis.

However even when Glossier continues to open extra places, which is the plan, a Glossier retailer, regardless of how Instagrammable it might be, can’t compete with the choice out there at Ulta, or more and more even Walmart.

“Scaling is the secret, but it surely appears Glossier could have maxed out on DTC,” added Soler.

Customers try out products at a Glossier pop-up.

A Altering Startup and Enterprise House

Glossier’s traders have restricted choices until the model can flip itself round.

With a valuation of almost $2 billion, Glossier is simply too costly to be a lovely acquisition goal, and the model has raised an excessive amount of cash to promote for considerably lower than that. Going public would even be tough. Among the many direct-to-consumer manufacturers which have held preliminary public choices within the final two years, together with Warby Parker and Allbirds, most are buying and selling effectively beneath their debut value.

In the meantime, conglomerates are searching for out smaller manufacturers which have quicker paths to profitability and wider distribution networks. Youth to the Folks, a Gen-Z skincare favorite that’s raised far much less capital than Glossier, was acquired by L’Oréal in December for over $300 million. It’s mentioned to be a break-even enterprise.

Glossier may elevate more cash and hope the market rebounds, or purchase smaller corporations to fill in gaps in its lineup. The best path to progress could also be to embrace a method Glossier was constructed to keep away from: launch in a significant retailer. Some consultants predict this can occur by the tip of 2022.

“The final two years ought to have been a time when Glossier did amazingly. Everybody was shifting on-line, and on-line is almost all of their enterprise,” Soler mentioned. “They have been there, they began there and they need to have had that down.”