Goop, Glossier and Food52 all built product companies on the back of a preexisting editorial platform with a loyal audience, transforming readers into shoppers who hungered for more participation in the brand. While Glossier’s predecessor blog, Into the Gloss (ITG), gave readers the 411 on beauty and wellness products, later serving as a platform to market the Glossier cosmetics brand, the two were never merged. In contrast, Food52 and Goop integrated ecommerce on their editorial sites as soon as merchandising began, beginning with third-party brands and later launching private labels.

The opportunities and risks of top-down versus bottom-up community-building

Founder Gwyneth Paltrow and her team launched Goop-branded and private-label products in 2016, selling cosmetics, apparel, accessories and home goods. While Goop has created a bona fide community of devotees, it differs from both Glossier and Food52 in that its community is top-down; everything it publishes and produces comes from Paltrow, rather than her followers [Read the Goop Knowledge Base for more on the company’s history]. Though Goop can use data from third-party sales, Goop.com traffic and newsletter click rate to steer G. Label, the private label is essentially limitless. As the ultimate physical manifestation of Paltrow’s style and beauty tastes, readers and shoppers embrace Goop in order to mirror their lives as closely to Paltrow’s as possible, whatever that entails. This has allowed Goop to scale to an estimated $100 million in 2018 revenue. But its continued growth is dependent on growing the body of consumers who can pay Goop’s aspirational price points, as well as Paltrow, whose departure from the helm would spell danger for the business.

Whereas Goop’s readers are followers, Food52 and Glossier’s readers are active participants. Food52 launched as a bottom-up community. The company strategically built its brand on crowdsourced material, beginning with a weekly recipe competition. Taking advantage of its growing readership—Food52 reported more than 13 million monthly readers in early 2019—it launched a hotline for cooking-related questions in 2010, a wedding registry in 2015, and other ways to participate in the brand. In 2014, the company introduced a third-party cookware marketplace called Provisions, followed by a private label, Five Two, in 2018, which further monetizes and is fueled by insights from its community. Most recently, it expanded entry points to the Food52 ecosystem via video streaming.

Glossier sits between Goop and Food52 in terms of community dynamic [Read the Glossier Knowledge Base for more on the company’s history]. Glossier and its predecessor blog, Into the Gloss, supervise all published content, but use these media properties as platforms to spark dialogue with and between its readers and shoppers. Hundreds of thousands of customer reviews and polls, images of shoppers from Instagram and community tips live on its product pages, allowing customers serve as featured authorities on Glossier’s brand (this dialogue extends to social media, where Glossier has 1.9 million Instagram followers). Albeit alongside other brands, Into the Gloss (ITG) also provides a convenient and seamless way for Glossier to feature its own products—Glossier officially launched with a note on ITG, and R&D sometimes begins on the blog. ITG and Glossier link to one another, allowing consumers to toggle back and forth. Glossier.com receives an estimated 2 to 3 million unique visitors per month, while as of early 2018, ITG received 2 million monthly uniques—a far cry from Food52’s 13 million, but higher than Goop’s 2.4. Its growing community of readers-turned-shoppers has helped Glossier generate more than $100 million in 2018 revenue.

Though Goop’s product sales account for almost three-quarters of its revenue, the company’s editorial work is a vital owned marketing mechanism—one that will serve as a constructive brand-building device, even as criticism mounts.

A Goop representative has claimed that “At the core, [Goop is] a media company and editorial site… Our roots are in editorial, and the ecommerce aspect is just an outgrowth of that, but they are connected.” However, 70% of Goop’s total revenue now comes from products, with G. Label and other Goop-branded products its fastest-growing revenue stream (50% YOY growth). Goop heavily integrates ecommerce into its editorial content, and likely, its website, social media and digital newsletter help identify trends and interests that steer additional product curation.

But overwhelmingly, these editorial operations serve to market Goop’s products. Among the nine email marketing campaigns sent by Goop in January 2019, 89% featured Goop-branded and/or G.Label products, according to the forthcoming Q1 2019 Loose Threads Megaphone Report. Aside from reducing marketing costs, Goop’s vertical integration over product, marketing and media is somewhat of a necessity for the company, whose product recommendations are often polarizing. In 2018, the short-lived partnership between Condé Nast and Goop on its eponymous quarterly magazine collapsed after a disagreement on Condé’s fact-checking standards and refusal to publish any sort of catalog. But the fallout signals that 1) Goop did not need Condé to grow its brand presence and 2) Goop would prefer to exert total control over its messaging, as it already is. It also ensures that Goop wants to continue selling products alongside its editorial work, suggesting that its integration of content with commerce is working.

Goop is further developing its brand with a growing network of summits in New York, LA and London, as well as its brick-and-mortar stores—often the best form of “marketing” a digitally-native brand has—and its forthcoming Netflix docuseries starring Paltrow and Goop’s chief content officer, Elise Loehnen. Aside from Netflix, these owned marketing channels will help buffer the brand from criticism and allow Goop to speak directly with its audience—a way for Goop to tightly hold the reins on how it is perceived. While Goop relinquishes distribution ownership with its docuseries, Netflix will give the brand a lump of money and either renew the series if it does well, or cancel it if it performs poorly—a boon to the brand, which will be able to proselytize the Goop gospel on a new channel with 60 million U.S. and nearly 10 million UK subscribers (a growing focus for the brand as it brings it summit and stores to London).

Glossier’s next chapter aims to combine ecommerce with a social network, but it will have to decide what role its merchandise will play on the platform.  

Glossier is now preparing for what it is referring to as “Phase II,” allegedly to be unveiled in 2019. Though vague, Phase II will bring the brand beyond a physical products company to an ecommerce platform merged with a social network. The company hired a former Facebook and Instagram executive in late 2018 to lead this evolution—its proportion of tech employees will also rise from about one-third to half of the company’s staff. Ultimately, the founder hopes for half of the company to be centered on physical products, with the other half focused on growing its bottom-up community—helping consumers to “[be] your own best expert and have your own opinion and narrative and [share] that with the world.”

From the outset, Glossier embraced a mission to “democratize beauty,” letting customers speak for the brand. Phase II seems like a way to ground the business more deeply in consumers’ voices. To the press, CEO Emily Weiss has also remarked that, in her eyes, the most accurate definition of Glossier is a content company, rather than a products company or tech company (though she likely pitches Glossier as a tech company to investors, which surely helped reel in $100 million in investment in March 2019, valuing the brand at $1.2 billion—over 10 times 2018 revenue). However, in March 2019, Glossier renewed its focus on editorial when it announced it would hire Leah Chernikoff, the digital director of Elle since 2013, to serve as its first head of content for both Glossier.com and ITG.

Centralizing Glossier’s community and transactions on its own platform will also become increasingly important as social media platforms inevitably find new ways to monetize their vendors. In March 2019, for example, Instagram introduced a in-app checkout, which allows for seamless transactions on the platform. Interestingly, Glossier was not named as a launch partner for the new Instagram feature, a sign that the company might be choosing to abstain from willful disintermediation even if it increases short-term sales. The beauty company’s newest brand extension, Glossier Play, is also housed on Glossier.com with the original Glossier brand, suggesting that the company wants to drive more traffic to Glossier.com rather than relying on external sites, which also makes sense if Glossier plans to build a social network of its own in Phase II.

When Phase II does emerge, it will arguably be poised to flourish as a social-ecommerce platform given that Glossier has already mastered ecommerce (this sets it apart from a social network like Facebook, which confronted pushback to previous commerce initiatives like Facebook Stores and Facebook Gifts, shutting them down in 2013 and 2014, respectively). But Glossier will also have to decide what role its two product brands will play on this forthcoming social platform and how much control it will wield over the content. Glossier and ITG’s simultaneous development will also be something to watch—particularly considering Glossier’s growth to a 200-person team, versus ITG’s full-time staff of only four full-time employees (soon to be five with Chernikoff’s joint responsibilities at Glossier and ITG).

Food52 has a valuable online community that can help inform product development, but the company lacks the manufacturing expertise to meet customer expectations in reality.

Today, almost three-quarters of Food52’s total revenue stems from merchandise sales, the rest coming from advertising and other commercial opportunities. Provisions, its online marketplace, launched five years after Food52 went live, giving the brand time to build up a roster of readers-turned-shoppers. This process was essentially repeated with Five Two, whose products were developed with the help of Food52 readers, and whose buildout was likely informed by data the company has on its third-party vendors.

Five Two debuted with 20 products, the first of which, a wooden chopping board, was reportedly developed out of 10,000 responses to an online survey. But involving readers in product development came with its consequences. With 3.5 out of 5 stars in customer reviews at the time of writing—many at either end of the spectrum—some shoppers bemoan that they contributed to the R&D phase of the inaugural cutting board, only to be disappointed by the quality.

With the “maker” of the line on the site listed as Food52, it’s not clear who is manufacturing Five Two’s products. But ensuring optimal quality will be central to the success of the private label’s future. If it is able to do so, Food52 will be able to use high-margin ecommerce sales to fund its site, relying less on ad revenues while growing its community and further spinning its flywheel. (The company can easily maintain a third-party marketplace, but would have more to gain from an owned brand, just like Goop’s larger marketplace and G. Label) Leveraging ecommerce to fortify its media operation will also help to safeguard Food52 from rising competition in the cooking space from brands such as BuzzFeed’s Tasty (more in Part III) and the video network Tastemade, both of which produce social-media friendly, food-related content and sell products.

Striking a virtuous cycle between product, media and community will also help Food52 attract investment. While the company struggled to raise venture capital in its first year—likely because investors were reluctant to back a media brand—a solid Five Two brand could be a big selling point, proving that an online community can be leveraged for product sales. As of now, Food52 has received a mere $13.3 million in funding, a drop in the bucket compared to other consumer product companies that have raised hundreds of millions of dollars. In 2018, Food52’s revenue was a low $30 million compared to like-minded companies in the media and ecommerce sphere—the Wirecutter, for instance, accounted for nearly $50 million of the New York Times’ 2018 annual sales, which is driven purely by affiliate sales (that is, without manufacturing or selling a single product). But if Food52 is serious about manufacturing private-label goods, it should bring in additional expertise to effectively capitalize off of the online, bottom-up community it has grown.

[wcm_restrict plans=”team-annual, plus-monthly-trial, plus-monthly, premier, plus-annual”]

The Community-Building Framework

  • Is your brand a top-down or a bottom-up community? How does this classification affect how you sell products to the community?
  • As a company with an editorial and a commercial arm, what is the optimal integration of these two pillars for customer experience? What purpose do they serve separately and what purpose do they serve together?
    • Should these two operations co-exist on the same site or exist separately?
    • Should they be branded the same or differently?
    • Should merchandise be shoppable directly from your editorial content or should it be separated?
    • How can you A/B test to determine what works best for your company and brand?  
  • While Food52, Glossier and Goop all began with content first and launched product second, could you achieve a virtuous cycle doing the reverse?
    • How could you turn your customers into more than shoppers?
    • What do you already accomplish with your marketing that could be transformed into relevant editorial content for your customers?
  • As you develop a merchandising branch of the company, what role will your editorial arm serve?
    • How will this role change over time?
    • If you removed editorial operations at any given time, how would it affect your business?
  • How do you allocate funding to your editorial and commercial operations?
    • How does this play into their respective performance?
    • If you see a future in deepening the integration between these two pillars, how can you allocate resources accordingly and strike a virtuous cycle?
  • How can you use your readership and/or viewership to identify trends within the consumer space and provide that merchandise to them?
    • At what point in your life cycle can you or should you start monetizing this community?
    • What will you have to do to locate the talent necessary to create a third-party marketplace and/or manufacture products of your own?
  • How much investment capital do you need to grow your ideal joint content and commerce operation? How will you classify your company to investors to meet your financial goals?
  • What is your long-term vision for a joint content-commerce operation? What will happen when one pillar of your business inevitably surpasses the other in terms of revenue?
  • How can you translate this content-commerce integration into the offline world?  

[/wcm_restrict]