How DTC beauty brands Glossier and Rare Beauty could adjust marketing strategies if acquired

The potential sales of Rare Beauty and Glossier, two popular direct-to-consumer beauty brands that have challenged bigger traditional players with untraditional marketing, may force both to abandon the tactics that have worked so well for them, experts say. Rare Beauty, which is exploring a sale (per Bloomberg), and Glossier, which is in talks with luxury conglomerate LVMH (per Puck), aren’t the only cosmetic companies reported to be acquisition targets, with others including Summer Fridays and Merit. But their potential sales would be particularly significant, not only for their respective marketing teams but also for the various beauty marketers they’ve inspired since being founded. Check out the latest Ad Age events and award programs As part of the old guard of DTC brands, 10-year-old Glossier transformed the beauty industry. It was the first makeup and skincare brand that understood the power of influencer marketing, and let its community—rather than TV ads or celebrities—lead its advertising strategy. Rare Beauty, founded by Selena Gomez in 2020, is considered by some experts to be Glossier’s first real challenger: It entered its first third-party retailer, Sephora, months before Glossier did the same, and it offered similar makeup products in more diverse shade ranges. If the companies are acquired, the marketing from Glossier and Rare Beauty could become more cautious and less disruptive, according to several experts who spoke with Ad Age. Campaigns could look more conservative due to the spool of red tape that corporate conglomerates must navigate. But in exchange, Glossier and Rare Beauty’s marketing teams could benefit from their new parent companies’ access to retailers, celebrities, a wealth of consumer data and more, experts said. View this post on Instagram A post shared by Rare Beauty by Selena Gomez (@rarebeauty) When large companies acquire DTC brands, the “disruptive efforts that put these brands on the map” tend to be replaced by “more distribution” and “retail basically becomes the new marketing tool,” said Michael Duda, managing partner at creative agency and investment firm Bullish, pointing to the emphasis put on expanding relationships with wholesalers. “You don’t need to rely on virality when you are buying top-of-funnel media, and are on the shelf of every major retailer—all made possible by acquisitions,” said Jonah Fay-Hurvitz, associate partner at Consumer Dynamics, a strategic growth consultancy that works with global beauty and luxury brands including L’Oreal, Estée Lauder, LVMH and Olaplex. Also read: Carlyle sells Beautycounter back to founder Rare Beauty does very little traditional marketing, instead relying on digital-first strategies and building its community on apps such as Geneva. The brand spent just $1 million on U.S. measured media in 2023 for general promotion, according to Vivvix, including paid social data from Pathmatics. It has gained awareness in part because of the star power of Gomez, who has used the brand as a way to advocate against the stigma surrounding mental health. If it is acquired, the buyer would likely want Gomez to maintain her prominent role, Fay-Hurvitz said. “Selena is the face of the brand, so it would be hard to imagine her not a central part of it,” he said. Glossier has invested a bit more in paid advertising—it spent $15 million on U.S. measured media in 2023, according to Vivvix, including paid social data from Pathmatics. Historically, the brand’s primary marketing focus was built around its “Into the Gloss” website where micro-celebrity “It Girls” shared their beauty routines with Emily Weiss, Glossier’s chic founder. More recently, Glossier has invested in pop-ups to promote its signature perfume, Glossier You. View this post on Instagram A post shared by Glossier (@glossier) The upside Any significant changes to Rare Beauty and Glossier’s marketing strategies might not happen for between 18 and 24 months post-acquisition, Duda said. “Big companies just take a long time to digest,” he said, adding that there are often earnouts involved with acquisitions, so the founder must continue to work with the business for anywhere from three to five years before departing. But the dominos that will eventually drive meaningful marketing and branding changes typically start falling before then. “An acquisition immediately provides access to resources that smaller brands dream about,” said Fay-Hurvitz. Those resources could include access to a wealth of consumer data that could lead to better targeting and messaging, as well as larger media budgets for brand awareness and celebrity and retail partnerships. The new investments don’t always come with a short leash. For example, Grace Clarke, founder of growth marketing consultancy Grace Clarke Consulting, pointed to when Church & Dwight acquired the Mighty Patch pimple patch maker Hero Cosmetics for $630 million in 2022. A couple of years later, Hero named social media star Alex Earle as a global endorser. “It seems like Church & Dwight has let Hero Cosmetics continue marketing in their own way while providing financial support to scale retail and fund Alix Earle’s global ambassadorship,” she said. Not all acquisitions pan out, of course. DTC clean beauty brand Beautycounter, for instance, is being sold back to its founder after parent company The Carlyle Group last week stated it “undertook every effort” to support the brand before it ultimately continued to lose ground. For Glossier, LVMH “has incredible access to celebrity talent, so you may see more celebrity campaigns and partnerships with Glossier, which is standard, especially for the fragrance category,” Fay-Hurvitz said, noting that part of LVMH’s interest in Glossier is in the Glossier You fragrance. Glossier’s first celebrity partnership didn’t come until 2022 (with Olivia Rodrigo) almost a decade after the brand launched—and two years later, the brand still isn’t known for its celebrity marketing. View this post on Instagram A post shared by Olivia Rodrigo (@oliviarodrigo) Lawyer scrutiny Scrutiny from potential buyers would likely focus on any messaging that legally could get the buyer into trouble, Fay-Hurvitz said. As an example, he pointed to Glossier’s FutureDew face serum which claims that 100% of people observed increased skin radiance after using the product. “I can’t imagine a conservative legal team from a publicly traded global company being comfortable with such an absolute claim,” he noted. Once a brand is no longer independent, there is suddenly “a lot of involvement from huge corporate legal teams, who tend to be on the conservative side, on what they feel comfortable saying and showing in marketing. For beauty brands, this is especially true around any product claims that could get them into hot water with false advertising,” Fay-Hurvitz continued. But even if Glossier and Rare Beauty lose some of their luster if acquired, that doesn’t mean the crowded beauty industry will lack disruptors. “As brands like Glossier and Rare Beauty get acquired, scale and become global beauty brands, it makes room for a new crop of young brands to come along with a fresh perspective and create something exciting and new,” Fay-Hurvitz said. “After all, eventually the disruptor gets disrupted,” he added. Check out the latest Ad Age events and award programs

How DTC beauty brands Glossier and Rare Beauty could adjust marketing strategies if acquired

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