Coty Kardashians

Why the Coty, Kylie & KKW tie-ins won’t work

Why the Coty, Kylie Cosmetics and KKW Beauty tie-ins already feel dated in today's influencer marketing setting

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Who doesn’t enjoy a cappuccino? But whilst we’re amused by the frivolity of the froth, what we’re really after is the substance offered by the coffee. This seems to be Seed Beauty’s argument in two lawsuits filed against Coty.

Last year Coty paid $600m for a 51% stake in Kylie - the eponymous cosmetic brand founded by Kylie Jenner.

Last month Coty agreed to buy a fifth of all shares in Kim Kardashian-West’s cosmetic company - KKW.

The two half-sisters realised some years ago that there’s one thing better than working on brand collaborations to sell other people’s stuff. That is to sell your own stuff. The Kardashians now sell their own brands of cosmetics, fragrances, shapewear and a line of clothing.

Coty is banking that bringing the social media stars into the fold will help modernise both its portfolio and distribution of make-up brands. Kim and Kylie are Instagram royalty. Combined they boast 360m followers. This figure excludes the 24m people who have signed up to the photo-sharing app to see Kylie Cosmetics content or the 5m people who follow the KKW brands. Coty is hoping to develop an Instagram-led, direct-to-consumer sales strategy through the deals.

But, whilst there is no doubt that Kim and Kylie can shift product, their careers as reality-TV stars turned social media moguls will not have equipped them to be cosmetic pioneers.

Enter two other siblings: Laura and John Nelson the sister-brother co-founders of Seed Beauty. 

According to the Financial Times Seed Beauty asserts in court papers that it was the “sole developer, manufacturer, and supplier” for both KKW and Kylie Cosmetics and that its competitive position would be gravely harmed” were Coty to gain access to its trade secrets.  

The relationship between Seed Beauty and the Kardashian sisters had worked well helping to build cosmetic empires valued at over $1billion for KKW and $1.2 billion for Kylie. 

“Coty made a $600m investment in [Kylie Cosmetics], but it really was a subterfuge to learn Seed’s confidential business methodologies,” Seed alleges in the lawsuit. 

Seed Beauty argues that it provided the product research and development and manufacturing. The Kardashians brought their online-fame as sales power. Strip away Seed’s input and you’re left with sales, marketing and distribution. 

By betting $800m on Kim and Kylie Coty is attempting to play ‘catchup’ with cosmetic rivals L’Oreal, Estée Lauder and Glossier in how they position, and market their products with the aid of social media influencers.

But the Coty move seems old fashioned by today's influencer marketing standards. The Kardashian fame is closer to celebrity endorsement than it is to influencer marketing. Their communication's strategy is broadcast; one-way communication.

True the half-sisters have amassed an Instagram following greater than the population of the US (not adjusting for the double-counting of people who follow both accounts or for demographics unlikely to purchase cosmetics). However today influencers are marked out by the communities they nurture. Today it is as important to listen to your followers' feedback as it is to talk at them.

Emily Weiss grasped that principle early on.  Weiss was a fashion blogger. She started her blog Into the Gloss in 2010 whilst working as a fashion assistant at Vogue. Her blog chronicled the beauty regimes of fashion’s elite. She consistently created compelling content. She nurtured her online following into a community. 

Weiss launched her own products based on listening to that community and testing product and packaging with her community at each step. Her community became her research and development department as well as her customer base. Now Emily Weiss is CEO of Glossier her cosmetic company valued at $1.2 billion.

Coty, Kylie & KKW combined clout

The Coty, Kylie  and KKW tie-up gives clout today in the eCommerce D2C marketplace. It doesn't prepare the Japanese-owned conglomerate for tomorrow. A better bet might have been to have bought into the engine room that is Seed Beauty. Alternatively it might have sought to tap into influencers who understand the value of two-way communications and of nurturing communities beyond follower numbers. They might have looked beyond the celebrity online stars and embraced brand advocates, too.

Influencer marketing nuances

L’Oreal is taking a more nuanced approach to influencer marketing. “We not only rely on top influencers, the ones with the millions and millions of followers but also with more regular consumers who have a following on Instagram on YouTube or anywhere else that might not be as big”. L’Oréal’s chief digital officer explained to The Drum earlier this year continuing: 

“Those people are considered very authentic and we see that media engagement rates for smaller influencers are much higher than those for big influencers, though they are still needed for reach.

Influencer marketing selling power

Cosmetics is a top three vertical for influencer marketing content on Instagram. Last year Estée Lauder made headlines when its president and CEO, Fabrizio Freda, said: "75% of our investment now is in digital social media influencers and they're revealing to be highly productive.

"Frankly [our advertising has been] very productive because we have learned... how to focus our investment where there is growth," Freda continued, adding this had resulted in a "much better rate of return" for the business. 

Today, though, influencer marketing is founded on community, storytelling and authenticity beyond celebrity endorsement.

About the Author Scott Guthrie

Scott Guthrie is an influencer marketing strategist, event speaker, university guest lecturer, media commentator on influencer marketing and active blogger. He works with brands, agencies and platforms to achieve meaningful results from influencer marketing. That tells you something about him but it's not giving you a lot of detail, is it? So, read more here.

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