Balancing growth and retention: What One Rockwell says can be learned from Glossier layoffs

By Ravyn Cullor contact

- Last updated on GMT

Glossier announced they would be laying off a third of its employees after raising $80 million in funds in 2021. © Getty Images - akinbostanci
Glossier announced they would be laying off a third of its employees after raising $80 million in funds in 2021. © Getty Images - akinbostanci

Related tags: funding, DTC, Finance, Investment, Skin care

The DTC personal care market has evolved rapidly and the recent layoffs by Glossier can teach the industry how a brand can misstep and what to know going forward, says One Rockwell.

CosmeticsDesign was unable to get comment from Glossier for this article.

Early in 2022, well-known beauty brand Glossier announced it would be laying off around one-third of its employees, and CEO of e-commerce consulting company One Rockwell Shelly Socol told CosmeticsDesign this might be an example of a well-intentioned company pursuing growth and acquisition too aggressively.

Socol said it’s important to remember Glossier’s story of success, having been founded as a DTC brand in 2014 by current CEO Emily Weiss after transitioning from a blog. At the time, Glossier was effective in developing a brand around what its customers needed and efficiently used Instagram, Socol said.

As the DTC market grew and investors and multinationals became more interested in “the next big thing”​ brands like Glossier, Socol said the brand likely felt more pressure to create acquisition and growth.

“Investors … see companies that they think are really going to be the next thing and are starting to look at how they're speaking to their community, or how they're positioning the brand, but also the bottom line,” ​Socol said. “Sometimes brands, when they're having that type of success, get quite forceful as far as pushing for more and more growth.”

Socol said personal care brands can learn from what Glossier did before the layoff and what the company will do to recover moving forward.

Don’t forget your “tried and true” consumer

One of the main missteps Socol said Glossier likely made was losing sight of their tried and true consumers in favor of acquiring new ones. She said while the brand was focusing on acquisition, the DTC market was also becoming fierce.

While DTC success relies on personalized messages to consumers, that is becoming more difficult and expensive because of tightening policies and laws around consumer data. As that becomes more challenging, companies can focus more on communicating to and innovating for their existing die-hard fans.

Socol said she saw Glossier focus on launching a broad range of products in both the makeup and beauty spaces that did not necessarily meet the demands of their existing customers, which Weiss also said in articles about the layoffs​.

You always have to be innovative, especially in beauty,”​ Socol said. “While you want to move fast, and you want to grow, you have to be really judicious, smart and cautious as you go about it.”

For skin care and beauty brands in specific, she said it’s important to focus on long-term value.

Additionally, social media has made efficaciousness more important with product launches. Consumers on apps like TikTok will post about whether or not a product works, which can mean more on social media than carefully planned marketing materials and negative feedback can be hard to recover from, Socol said.

Age with your original customer

In launching many new products in the pursuit of customer acquisition, the brand may not have been keeping in step with their aging customer’s skin care needs, Socol said. Glossier’s main block of customers are millennials who are now eight years older than when they discovered the brand.

For a brand in that position, Socol said it may be a better approach to focus on launching products that follow the skin care needs of their consumer as they age as well as appeal to younger consumers.

One brand she said has done this well is the suncare brand Supergoop, which has changed its design and communication to appeal to younger and older consumers and has launched new products to intentionally fit into the regiment of their central UV protection.

“(Glossier) probably grew too fast, they delivered a product that wasn't resonating with their consumer who was aging a little bit and they were probably hyper-focused on acquisition and not retention,”​ Socol said. 

Socol added that what worked with a young consumer a decade ago may not be as effective with a young consumer today, as Gen Z consumers are looking for more of a two-way relationship with brands.

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