Grace & Stella: 3 ways to stand out in a crowded beauty market

In 2015, my fiancée Kailee Fatt and I started Grace & Stella, a skincare and beauty line. We launched on an e-commerce platform because we saw it as an easy and inexpensive way to get started, and a model we believed would work well for our company. Three years later, e-commerce still accounts for 70 to 80% of our sales.

I recommend starting on a platform like Amazon. It’s good for small businesses because you can start for as little as $30 and still get tremendous reach.  We felt that Amazon would cast us a wider net than a retail shop in our hometown of Vancouver would. And, it continues to allow us to cheaply explore different markets and strategies without investing significant capital. Most of our customers — a full 75 per cent — are in the U.S. and they would never have known about us if we were a bricks and mortar operation in Canada.

We’ve also found that customer acquisition and retention are much more economical with e-commerce. 

When I was considering getting involved in the beauty industry, many people cautioned that it’s highly saturated, with tons of competition. They were right. To stand out, we focused a lot on our marketing and branding. On Amazon, we’re competing against thousands of other brands, so our challenge is to show up in the search results, gain visibility and build social proof.

Our focus has been to keep pace with trends in marketing, find effective ways to target customers and find new ways to build relationships with them. When it comes to social media strategies, I suggest trying all of the platforms and then focusing on the ones that work best for you.  

If you’re a small business with a limited budget, it’s important to use those dollars wisely and not spread yourself too thin. We market Grace & Stella on all social media platforms, but we’ve had the most success with highly visual platforms, specifically Instagram and YouTube. 

Our strategy has included developing in-house content and also working with influencers — bloggers and journalists with big followings. 

Influencers work in different ways. Sometimes they ask for samples of our products in return for product mentions on their platform and in other cases, they ask to be paid to mention our products. We’ve tried both scenarios, but we prefer to just give our products away for authentic reviews. 

I would also recommend subscription boxes as a marketing tool. Subscription-box companies send members a monthly or quarterly personalized box of makeup, hair, skincare and fragrance samples for, say, $10 per box. We’ve provided samples and full-sized products to be included in subscription boxes so that our products can be exposed to the large group of monthly or quarterly subscribers.

We started shipping from Canada, but then realized most of our customers were in the U.S., so we decided to investigate what it would cost to ship from there. We found it was straightforward and considerably cheaper than shipping from Canada to the U.S. 

To ship within the U.S., we’ve partnered with a third-party logistics company which has allowed us to essentially function as a U.S. business. Chicago-based Mail Everything warehouses our products for us, which is a great benefit. After all, it’s best to store your inventory close to where your customers are.

It’s important to know, to ship within the U.S. you need a tax identification number, which costs about $100 and takes a couple of days to acquire. 

The next frontier for Grace & Stella is Europe. There are a few nuances and regulations to get through, but we like the idea that there’s a whole continent of potential customers waiting to discover our products.