The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Molly and Reese Blutstein, the Atlanta-based twins also known by their Instagram personas, “accidental influencer” and “double3xposure,” are used to working with global fashion brands, usually posting photos to promote new collections or campaigns from labels like Marc Jacobs and Prada.
Their most recent collaboration, with the French shoe brand Nomasei, however, gives the Blutstein twins a more active role: designing a product. It’s the first time either party is embarking on an influencer product collaboration, an increasingly popular way fashion brands are deepening their relationships with creators, particularly amid rising social media marketing costs.
As is the case with brand-to-brand collaborations, not all influencer-brand collaborations are successful, let alone believable to either parties’ audience. Authenticity — though the word tends to draw eye rolls — is critical to proving that a product collaboration isn’t simply a money grab. The best ones help bridge audience gaps, reinforce existing consumer bases and are, of course, financially beneficial to both parties involved.
“Something that should be established from the beginning is that both brand and influencer will have different thoughts or creative input,” said Caroline Wright Turnipseed, founder of CWT Consulting Group, who helps broker influencer-brand deals. “It’s not [about] just slapping a name on existing products.”
A Win-Win Scenario
Influencer collaborations offer brands a way to help trim marketing costs and boost margins, given that the influencer is invested in promoting the product, said Marc Beckman, founder of DMA United, another firm that helps broker talent deals. Retailers like Amazon and Nordstrom helped pioneer and perfect the model, releasing collections with macro-level influencers, and they’ve become a powerful tool for brands like Spanish fast-fashion label Mango, which reached €2.3 billion (about $2.7 billion) in sales in 2019 thanks in part to a stream of influencer collaborations, most recently with Sofía Sanchez de Betak.
Still, in this now saturated market, brands must determine what they want out of these deals in the early stages.
Collaborations are often brokered intentionally, where fashion labels evaluate whether an influencer is “a good match,” said Daniel Landver, Digital Brand Products CEO and co-founder. And though not always necessary, audience alignment between influencer and brands is also valuable in order to avoid disappointing either’s existing audience.
It’s not [about] just slapping a name on existing products.
“The value proposition has to be clearly defined,” said Landver. “Sometimes a brand will want to do something really like unique and innovative and unexpected and team up with someone where you’re like, ‘Wow, that’s so interesting.’”
Choosing which influencers to work with depends on a brand’s goals — driving sales, building brand awareness or expanding into a new market, for example.
While much of Revolve’s marketing strategy centres around influencers, the multi-brand retailer considers these collaborations to be “top of funnel,” said chief brand officer Raissa Gerona. The company is also considering investing money in Chinese influencers — a seemingly endless supply of key opinion leaders and more recently, key opinion consumers — who are able to reach local audiences and help the retailer expand its presence there, Gerona said.
Tapping into new markets is often a reason behind these collaborations: Italian shoe brand Gia Couture uses them to reach audiences in the US, UK, Scandinavia, Central Europe and Russia. The brand said that through collaborations with people like Danish influencer Pernille Teisbaek, it doubled its business in 2020.
These collaborations can come about organically. In Nomasei’s case, the brand gifted Molly Blutstein a pair of its loafers after discovering her on Instagram. She featured the shoes frequently on social media without a deal in place, which indicated to the brand that she liked the product and the two shared a similar aesthetic.
Beckman said that his firm, DMA, considers factors like design ability, “media stickiness” (how likely they are to appear in fashion press) and value alignment to evaluate whether an influencer is right for a brand.
For influencers with dreams of starting their own fashion brands, these collaborations are also a way to test the waters without the onerous task of fundraising capital, finding manufacturing partners or building out a team.
“It’s a huge investment to start a brand and upkeep it with inventory and marketing and running the website and … all those non-cool, non-sexy things that people don’t talk about, but are the costs of doing business,” said Gerona, who said she is personally re-evaluating how Revolve structures its influencer product collaboration deals. “There’s also a shift in the influencer game and mentality of wanting to own something versus licensing something. I do think having skin in the game may potentially be beneficial for both parties in the long run.”
How the Bills Get Paid
While branded content that deals with influencers are usually not tied to performance, product collaborations can be. There are three typical deal structures: flat fees, standard licensing deals (where the talent sells the rights to its name) and net revenue shares, with earnings tied to product sales.
The latter can be most rewarding and equitable, said Turnipseed, but only works if everyone involved buys into the product. A flat fee, meanwhile, may disincentivise an influencer from promoting a product repeatedly to their followers, leaving a brand to make up the marketing slack.
“[A flat fee] was too much of a risk for us,” said Braquet of the Blutstein collaboration, which was structured as a 50-50 revenue share deal. “We were afraid that if we don’t sell the pair for any reason — obviously we think that it will and we hope it will be a success — but it was quite frightening for us to commit to a flat fee.”
Licensing deals, on the other hand, can put the influencer in a more vulnerable position, given the value their own brand names carry. In June 2020, Julia Berolzheimer, the influencer better known as “Gal Meets Glam,” was forced to change her moniker — one that she had built up over nearly a decade as a blog, and then shared with a clothing brand she launched with a wholesale partner two years prior — after disputes with her business partners led her to step away from the business.
Since, Berolzheimer has focused on product collaborations, recently rolling out a collaboration with accessories brand Neely & Chloe that led to the brand receiving 100 times the amount of traffic than their previous highest traffic day ever. (The collaboration was 90 percent sold through within hours, resulting in the brand’s highest sales day to date.)
Depending on the size of the brand and the influencer, deal flexibility may be necessary, such as increasing an influencer’s affiliate commission or tacking on a design fee to sweeten the terms in a profit-sharing scenario.
Influencers should also negotiate minimum inventory requirements in profit-sharing scenarios, said Beckman. Otherwise, a brand — hedging their risk against sitting on unsold inventory — may produce fewer units than would sell, limiting the talent’s potential payout.
Amazon’s “The Drop” influencer formula, for example, is made “on-demand” and only available for purchase for around 30 hours, the company said. A representative for Amazon Fashion did not share how the Drop deals are structured, but James Nord, CEO of influencer marketing agency Fohr, said the money influencers make off of Amazon Drop collaborations are usually predicated on the number of units they sell, giving an incentive for influencers to promote the collaboration — as well as the promise of a bigger payday at the end of it.
Editor’s Note: A previous version of this article stated the Blutstein x Nomasei deal was structured as a 50-50 profit share. This is incorrect. The deal is structured as a 50-50 revenue share.