The Business of Beauty: Advice from entrepreneurs leveraging the power of the female economy
The power of the female economy, or the ‘power of the purse,’ is undeniable – in fact, according to a 2009 Harvard study, women spend $20 trillion annually and will be spending $28 trillion by 2014. This level of purchasing influence, combined with broad access to online communities, creates wide opportunity for businesses to harness the buying power of the female consumer. However, entering these markets can be extremely difficult for entrepreneurs, given the large, multinational enterprises already active in these spaces. Success in attracting the female market is less about what you are selling and more about how your product meets the needs and wants of the consumer. How can you start tapping into this market in an authentic way? Much of the entrepreneurial innovation and ability to break through to these markets has been driven through technology and the ability to engage consumers in new ways.
During the 2011 Dell Women’s Entrepreneur Network event in Rio de Janeiro, a panel of successful entrepreneurs spoke about how they’re reaching female consumers. Below are highlights from the day’s conversation with Carley Roney, co-founder of the world’s largest wedding website and gift registry, Brazilian skincare entrepreneur Ilana Braun, CEO Divya Gugnani of Send the Trend; an online shopping website with over 30,000 subscribers, and one of the top US healthcare experts, Myrtle Potter.
Carley Roney: Taking the wedding industry by storm [Video]
Discovering the white space
Carley Roney, Co-founder at XO Group Inc. (formerly The Knot Inc.), has built an extraordinary franchise around weddings and other important life stages over the last 15 years. From the onset there was a huge incumbent in the space, Conde Nast Media Group, but Carley felt things could be done differently and seized the opportunity. She reminds entrepreneurs that there are always blind spots to the ‘eight hundred pound gorillas’ and when she was starting her company, technology was truly one of them. The competition didn’t recognize the value of the internet at the time (1996), so it was up to her company to move incredibly quickly and launch an online wedding platform before someone else did.
As the first one in the market to make the move, they had an advantage, not a guarantee for success. Carley’s needed a solid brand and distinctive voice, so having a totally different attitude towards weddings was critical. The company embraced everyone from women that wanted to print their own invitations and have 30 people to those planning million dollar weddings.
Scaling the business [Video]
Over the years, XO Group has been iconic in constantly making bold decisions to change and transform the business, launching numerous new websites and products and entering new global markets. Maintaining diligence on constantly looking forward can be difficult, but Carley continues to be successful by focusing on her customer base rather than on the business. Even after going public in 1999, XO Group decided that being a customer-focused company was more important than being an investor-focused company.
Doing what’s right for customers (in XO Group’s case, it’s not only brides and expecting mothers but the company’s network of thousands and thousands of local and national advertisers) enables the company to laser-focus its needs and keep out the noise, allowing XO Group to concentrate on embracing new technologies and making the investments that are important. By listening to customers and building trust within your market, you’ll identify the areas where you can take risks and where you can innovate.
Divya Gugnani: Bringing luxury shopping to the masses [Video]
Disrupting the idea of luxury customer service
Divya Gugnani, a serial entrepreneur and former venture capitalist, is the co-founder and CEO of Send the Trend, a business that serves the fashion industry in a truly innovative and disruptive way. Based on her personal experiences, Divya recognized that while shopping is a very pleasurable experience for women with high amounts of dispensable income, this isn’t the case for women who are on a budget. She saw that these women weren’t provided the same service to find customized, personalized merchandise – and decided that this was what she wanted to create with Send the Trend.
Divya sought to engage budget-conscious, yet fashion forward women and change their shopping experience, so she teamed with co-founders fashion designer Christian Siriano and Mariah Chase to make the business a reality. As a female VC Divya saw hundreds of women entrepreneurs pitch her on business ideas but then never see the ideas through, so she advises women to commit to their vision and then execute a plan.
Worst case scenario you fail and you learn from it! Send the Trend had its failures along the way as they weren’t prepared for the volume demands they began receiving shortly after launch. The business was featured on the Today Show resulting in nationwide exposure and, in turn, an influx of new customers. Send the Trend’s servers were crashing and the founders had a moment of realization that they were now a ‘real company’ but didn’t have the available capital to keep the business up and running. By acting quickly, they were able to raise the necessary funding to move forward but the founders learned the importance of planning for growth and investing in scalable technology.
Changing the way women shop
The fashion industry is incredibly competitive and, like Carley, Divya is challenged by ‘800 pound gorillas’, but in her case, these are all the retailers and accessory brands. Creating a brand that combines on-trend high quality fashion accessories with great customer service was no easy feat. Technology has revolutionized the shopping experience and Send the Trend is actually changing the way women shop, making discovery and decision making easier. Since there’s no store, sales employees, lights or electricity to pay for, the company is able to offer the consumer great quality product at a lower price, something many women are beginning to become accustomed to.
Finding a niche
Building your business through word of mouth is the most cost effective way to increase both your scale and profits. By engaging every customer in a way that makes them feel special, you’ll see long term very positive effects on your business.
In starting a business, the most important thing is to be flexible and to listen. As you keep iterating on your business model, you have to keep changing – it’s never a straight line. When Send the Trend launched, the company thought customers would be 18-35 years old but soon found that their average customers were actually 30-50 years old. In the beginning stages it’s about figuring who your customer is and testing a million things to figure out what they respond to. Once you get to be a bigger organization, you become more rooted in who you and at that stage it’s all about servicing the customer base you’ve identified.
Myrtle Potter: Guiding Americans through the healthcare system
Navigating wellness and health
Myrtle Potter is a best-selling author and one of America’s foremost and accomplished healthcare leaders and experts. After three decades at companies including Merck, Bristol-Myers Squibb and Genentech, she decided to leave her corporate role and combine her vast experience as a healthcare expert, patient and caregiver to champion the needs of individuals struggling to navigate the U.S. healthcare system.
The healthcare industry is a truly female-focused industry but Myrtle recognized that that it hasn’t necessarily treated women effectively as consumers of healthcare and effectively marketed to their wants and needs. In founding Myrtle Potter Media, Inc. research indicated that ninety percent of women at any point in time know someone who is struggling with the healthcare system as it’s becoming increasingly impersonal and with many more people going into the system there’s fewer resources and fewer trusted places to go. She saw that many companies weren’t solving for the fact that the business of health is personal and sought out to develop a trusted, high-touch brand – serving as America’s preeminent consumer healthcare guide.
The future of healthcare
Websites and community tools are revolutionizing the ways in which women talk about healthcare and technology has the opportunity to transform the multi-billion dollar global industry in a disruptive way. When it comes to healthcare, data shows that women, second to their physician, will go to their friends and families for advice before they will seek out other experts. Despite this, no one is tapping into this power that women have to recommend a doctor, hospital, product, etc. While we’re seeing small cottage industries of businesses doing this, no one is really pulling it together. It’s a huge missed opportunity and one that Myrtle is working to capitalize on with her business.
lana Braun: Taking on the Brazilian skincare market
Creating a unique value proposition
The cosmetics and beauty industry in Brazil is the third largest in the world, only after Japan and the U.S., and Ilana Braun saw an opportunity to create world-class skin and hair care products designed specifically for the Brazilian complexion. While the big multinational brands were focused on make-up and fragrances, Ilana sought to develop skin care products with high efficacy and new ingredients.
Dermage is a cosmeceutical company that’s not only focused on beauty but also on health-conscience women, working very closely with both dermatologists and consumers. By looking at the unique attributes of the Brazilian consumer that aren’t being served elsewhere, Ilana was able to create a truly unique value proposition for her customers, offering a differentiated product within a very competitive industry.
Scaling the business [Video]
In order to create an extraordinary and successful brand, it all goes back to authenticity and establishing the trust of your customers. Growing your business doesn’t necessarily mean expanding into new markets. Dermage has become a very iconic brand within Brazil and Ilana recognizes that there’s still a lot of opportunity for growth in Brazil. She’s focused on entering new sales channels and starting to distribute in drugstores (currently Dermage has 35 retail stores across the country).
Ilana’s deep understanding of the needs of her customers helps her successfully scale. Since Brazil and Latin America have very different weather conditions than other regions of the world and Brazilian and Latin American women tend to have oily skin, Dermage concentrates efforts on developing skin care products designed for this skin type and with sunscreen because there is so much sun exposure.
Additionally, Ilana saw an opportunity for growth by targeting a different audience within the same market. The average age of Dermage’s customers is around 35-40 years old but Ilana wanted to be able to reach younger Brazilian consumers as well. In order to effectively reach this age market, Dermage utilized crowd sourcing and asked targeted bloggers and influencers to help in the creation of a teenage line. Feedback was gathered on everything from deciding on the products to choosing the name of the line. The resulting launch was overwhelmingly successful as it allowed consumers to really take ownership in the brand – a tactic that can be used effectively in businesses across many industries.
And when asked to provide one final piece of advice for entrepreneurs just starting out, listen to what the experts had to say here… [Video]
Members of the “The Business of Beauty” panel providing the above advice and perspective included:
- Moira Forbes, President and Publisher, ForbesWoman (Moderator)
- Ilana Braun, Co-founder, Dermage
- Divya Gugnani, Co-founder and CEO, Send the Trend
- Carley Roney, Co-founder and Chief Content Officer, XO Group, Inc.
- Myrtle Potter, President and CEO, Myrtle Potter Media, Inc.