By Sarah Montano, Professor of Retail Marketing
Birmingham Business School, University of Birmingham
With the news that Hailey Bieber has sold her Rhode make up brand to E.L.F. in a deal worth $1 billion we explore why celebrity beauty is not only hugely popular but also a major driver of economic growth, turning their famous founders into millionaires.
It is estimated that celebrity brands are driving sales of $1billion with the British Beauty Council calculating that in 2023 the beauty industry grew by 11% with sales of £27.2 billion. Such market value is reflected in the success of beauty entrepreneurs like Charlotte Tilbury who came top in a recent list of the UK’s richest beauty entrepreneurs, with an estimated £350 million fortune from her Charlotte Tilbury make up line.
What are the secrets of success in a very competitive industry and how do such entrepreneurs challenge the traditional beauty business models?
Celebrity Magic
Some of the most popular beauty brands today are founded by celebrities, or in the case of Huda Beauty, have become a celebrity brand. The most recognised brands such as Rare Beauty, Fenty, Kylie Cosmetics, Victoria Beckham Beauty and Rhode have all been founded by celebrities.
Celebrity endorsement in advertising is not a new strategy, in fact it is a traditional strategy that has been effective for hundreds of years. However, what is different today is that these celebrities are not merely the face of the brand but the founder and holder of an executive role. Celebrity endorsement works as a strategy as it is hoped that that the bit of stardust and glitter, of a celebrity lifestyle will be transferred on to us as regular people. For example, when you apply your Victoria Beckham eyeliner you are not an everyday person but can feel like a celebrity for a moment.
Also, we look up to celebrities and trust what they say – if Selena Gomez looks great in her “Soft Pinch Dewey Liquid Blush” then we will do, this is known as credibility. Authenticity is also important, and customers will want to believe that the celebrity does really use the product. This is where social media and online retail has helped drive the success of these brands. Prior to social media, traditionally the brand would have to sell via retailer (e.g. in a department store) and would be removed from their customers. Today Selena Gomez or Rhianna can speak directly to their customers. With social media followings reaching 419 million (Selena Gomez) or 33.9 million (Victoria Beckham), celebrities have a significant global audience reach, unlike traditional retail. Not only can they reach customers but they can be seen using their own products (and looking great on the red carpet) and so encouraging customers to buy.
Innovative and Functional Beauty
Importantly, these entrepreneurs are not successful just because of their celebrity status. Celebrity status might attract customers initially, but in a competitive market with traditional and iconic brands such as Chanel or Estee Lauder constantly innovating, the products must also deliver or customers will not buy again.
Celebrity brands are successful as the founders have identified a gap in the market and driven change. When Rhianna founded Fenty, saw a clear void in the market – that make up did not work for all skin tones and types – and created the brand to drive diversity. Huda Beauty is focused around innovation with the aim that when they create a new product they are filling an industry gap. Charolotte Tilbury is driven by her “passion for science” and seeks to innovate formulae and ingredients. Finally, Trinny London in a sector often focused on youth, aims to offer innovative products, in innovative packaging such as the “iconic stack” so that people of all ages can look their best.
A Social Conscience
Many of the celebrity beauty brands have a social conscience and are trying to drive change. Rhode beauty pledges 1% of their sales to support organisations that empower women, dismantle barriers and improve access to healthcare. Rare Beauty’s Rare Impact focuses on mental heath and self-acceptance by encouraging people to celebrate their individuality. In their 2024 report they state that they are mobilising $100 million to support organisations that increases access to youth mental health services and education globally. Rhianna created Fenty with a vision to challenge the lack of diversity in the beauty industry and create products that work across all skin tones, types and hair textures.
It should be remembered that not all celebrity brands succeed. Goop has struggled and in September 2024 laid off nearly 20% of its staff. Blake Lively launched a jam business called Preserve which lasted barely a year before closing. Similarly, Kristen Bell’s skincare line closed after two years.
From Influence to Impact
In conclusion, with Hailey Bieber selling her brand for $1 billion, Kylie Jenner selling her line for $600 million, Rhianna becoming a billionaire in 2021 and Selena Gomez becoming a billionaire in 2024, it is quite evident that the secret of success is some celebrity stardust, a clear vison and ability to spot a gap in the market and a commitment to social conscience. What drives these brands’ success isn’t just celebrity sparkle, but a clear commitment to reshaping the foundations of the beauty industry.
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The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.