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CASE 12

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CASE 12.1 KYLIE JENNER, THE CREATIVE ENTREPRENEUR WHO BUILT A GLOBAL EMPIRE IN RECORD TIME

Constantine Andriopoulos

As you read this case, there are boardrooms of beauty executives across the globe developing new products and decoding sales figures in order to recreate a fraction of the magic that Kylie Jenner has built with Kylie Cosmetics. Kylie Jenner grew up under a microscope as the youngest daughter of Kris and Caitlyn Jenner (formerly Olympic gold medal decathlete Bruce Jenner), sister of supermodel Kendall Jenner and half-sister of Kim, Kourtney, Khloe and Rob Kardashian. Kylie Jenner recognized early in her life that the most successful businesses set out to solve a problem. By her own account, Jenner’s insecurity has long been her lips. In an effort to make them appear plumper, she began overdrawing them and filling them in with lipsticks. Armed with confidence in her abilities to leverage a huge platform from both the TV show and her increasing fan base, and with a mission to disrupt the cosmetics industry dominated by some of the most famous brands in the world, Jenner launched her own cosmetics line in November 2015 – Kylie Cosmetics. By recognizing an unmet need and focusing on customers who were like her (teenagers), she launched a $29 ‘lip kit’ consisting of a matching set of lipstick and lip liner. This was not an overnight success. Jenner started quite early to establish her personal brand, and then she got into partnerships and endorsements and launched other products that carried her personal signature. She created an app and worked on a fashion line with her sister, Kendall Jenner. Once these efforts showed some promising results, she launched her own line in a limited run at a premium price. She was both excited and scared. ‘Did I order too much product? Will my product sell?’, she asked herself. She had every right to worry about launching her new venture since she spent every last dime without even knowing whether it would be a success. Luckily, she decided to take the risk. The initial stock launch sold in less than a minute, crashed the website and resulted in some impressive profits for Jenner. Despite these early successes and growing online sales, Jenner was curious to identify other ways to connect with customers. She very quickly recognized the power of interacting directly with her customers and seized the opportunity to test the product in pop-up stores, where tens of thousands of people visited in pursuit of the perfect lips (Winter, 2017). Jenner now runs one of the hottest, full-service, direct-to consumer (D2C) beauty companies ever. Her business has sold more than $630 million worth of makeup, including an estimated $330 million in 2017 (Forbes, 2018). Forbes values her company, which has since added other cosmetics like eye shadow and concealer, at nearly $800 million. Jenner owns 100% of it and her empire employs seven full-time and five part-time employees (Forbes, 2018). She does not own a factory, like many billion-dollar companies. Instead, she has partnered with an experienced manufacturer. Most of her other business functions, such as packaging, sales and fulfilment are outsourced to different companies. Consequently, overhead costs are low. Jenner is primarily responsible for product development and leveraging her social media following. How does she create new products? In her interview at Fast Company magazine, she noted that ‘I’m always thinking about what I want, and what I think people want’ (Dodson, 2017). Her strategy is not to pay for advertisements and commercials and to use only social media in terms of marketing her products. She connects numerous times per day with her over 100 million followers (mainly young women and girls) on Instagram, Snapchat and Twitter and shows which Kylie Cosmetics products she is using, talks about forthcoming products, and announces new launches. Jenner and her lifestyle are active, dynamic, creative, and entrepreneurial. Jenner makes it very easy for consumers to relate to her and in return, her consumers aspire to become like her.

Today, her empire extends to eyeshadows, face palettes and application tools. In several interviews, Jenner states that making money is not the primary motivator behind her brand or her success. It is her passion about make-up, her focus on solving problems and using innovative marketing techniques to make this happen. Kylie Cosmetics is an industry leader and Jenner is spending whole days in meetings finalizing, dreaming and designing collections. What started as a small business has quickly turned large scale. Jenner is unstoppable. In her interview at the Australian Vogue, she said ‘No, there are definitely some things and some goals I have left to achieve, and I never get too comfortable. I never think: “Oh, I made it.” There’s definitely a lot of stuff that I have yet to do’ (Rippon, 2018).