When influencer-led brands fail

It’s proven that including influencers in a brand’s marketing strategy equals sales: Statista reports the value of influencer marketing alone is worth over $16 billion, while a study done by the Harvard Business Review found that on average, a 1% increase in influencer marketing spend leads to an average 0.46% increase in engagement.

It’s no wonder brands leverage influencers to be the face of their brands, nor that influencers are coming out with their own brands to cut out the middle man completely. Influencers have stepped into the fashion, beauty, health and wellness, and even food delivery markets.

But what happens when consumer preferences change and these brands fail?

Before we get there, let’s look at some successful examples and get to the bottom of why sometimes these collaborations fall flat.

How successful are creator-led brands?

With an audience of followers already paying attention to what they say and do, creators and influencers have an incredible springboard for selling products.

Moreover, they’ve already earned potential buyers’ attention and trust, so when they have something to sell, much of the hard work is already done. It’s no wonder creator-led brands can reach hundreds of millions of dollars in sales revenue very quickly. Let’s look at a few that have done just that.

IPSY

Let’s start with the makeup subscription service Ipsy as one example of an influencer-led brand.

Michelle Phan partnered with the makeup subscription brand in 2011 along with CEO Marcelo Camberos and current executive Chairwoman Jennifer Goldfarb. When asked why Ipsy chose Phan as a partner, Goldfarb said: “Michelle was the original creator and inspired a generation.”

Because of Phan’s incredible eight million followers at the time, her involvement got IPSY’s name out there fast. And her influence worked: by 2016, IPSY had 10,000 vloggers contributing regular video content promoting the subscription service. In 2017 Phan left the partnership with Ipsy to pursue her own global beauty brand, EM Cosmetics.

Although Michelle Phan isn’t part of the company anymore, the makeup subscription service is estimated to have $500 million in revenue annually and boasts 1.5 million hits per month in website traffic. Camberos and Goldfarb still cite Phan’s involvement as a key reason why Ipsy was able to get off the ground so quickly.

Something Navy

Arielle Charnas is another example of an influencer who took her following and leveraged it to create her own fashion brand. Something Navy started off as a style blog in 2009, but by 2018 Charnas had partnered with Nordstrom. The release of her Something Navy x Treasure & Bond line generated $4.4 million in sales in less than 24 hours after going live.

Unfortunately, COVID halted some of Something Navy’s progress in 2020, but the brand is still releasing new designs on its website. Currently, Charnas has more than 1 million followers on her Instagram page and more than 300,000 followers on Something Navy’s brand account.

MrBeast Burger

Influencers have also tackled the virtual food industry. MrBeast, a well-known Youtuber and philanthropist, partnered with Virtual Dining Concepts in 2020 and created MrBeast Burger.

MrBeast Burger is a virtual restaurant brand aimed at helping restauranteurs add a new source of revenue without impacting their operations. Users order food through the MrBeast Burger app or major food delivery apps, and MrBeast Burger prepares the food in a ghost kitchen and delivers the food straight to the user.

Currently, MrBeast Burger is reported to generate $100 million in sales annually for the restaurants it partners with.

These are strong examples of creator-led brands that worked well…but what about those with a more difficult track record?

Do creator-led brands last?

If you wonder if all creator-led brands will eventually peter out, the short answer is, it depends. However, there’s been a recent trend of creator-led brands being shuttered or creators being booted out of partnerships.

Yeezy

One of the more famous examples of a troubled brand/creator partnership can be see with Kanye West, (who also has celebrity pull along with his influencer status.) In October 2022, after a string of controversial statements in public and on Twitter, West was dropped by Gap, Balenciaga, and Adidas. Adidas alone lost up to $250 million in income because of the split with West and the loss of the Yeezy business.

Morphe

In January of 2023, Morphe makeup announced it was closing all of its US stores. Most of Morphe’s revenue has been helped by major influencers like James Charles and Jeffree Star. These heavy-weight influencers helped the makeup brand generate $400 million in sales in 2019.

At the time of the announcement, Morphe’s valuation was $2 billion. But because of scandals involving said influencer partners—Charles and Star—Morphe severed ties and was left with a lot of inventory it couldn’t sell.

After the split with Charles and Star, Morphe spent heavily to launch a makeup line with Ariana Grande, but sales were disappointing. Many customers cited lackluster customer service and subpar quality of Morphe products.

What causes a creator-led brand to fail?

Most creator-led brand failures can be attributed to one of the four reasons we’ve listed below.

1. Poor Marketing

Yes, influencers have a following, and maybe it’s even an active following, but sometimes that’s not enough. A creator should know that simply posting one or two things featuring a product or two isn’t enough to capture interest.

When starting a brand, marketing is key. That’s the reason why brands want to use influencers. Because in creating their following, influencers have learned the marketing strategies necessary to gain and keep the interest of their following.

But even creators can forget that. For example, Instagram influencer Arianna Renee (@Arii) found this out the hard way when she couldn’t sell the minimum order requirement to start her clothing brand.

Even though Renee had over two million followers on Instagram, she could not meet the sales quota of a mere 36 t-shirt sales to greenlight her line. After Renee posted about her disappointment online, commenters stated how the t-shirts didn’t fit the rest of her style and how she didn’t do much to promote them.

Marketing experts like Shirley Leigh-Wood Oakes and Jack Appleby also made observations on both the t-shirts themselves and how they were marketed. Oakes noted how this ‘hero’ launch product was poorly made and “weak in execution and brand image.” And after studying Renee’s Instagram page, Appleby noted how she only posted two videos mentioning the T-shirts and how the posts themselves were wildly different from the rest of her IG page style.

Bottom Line: Not staying true to her aesthetic and not promoting her own clothing line put Renee’s clothing brand in a position to fail.

2. Lack of commitment to brand

Influencers are spokespeople and can become the face of a brand. So when an influencer doesn’t show enthusiasm for a brand they represent that can have a ripple effect.

Take the incident James Charles had with Sugar Bear Hair Vitamins back in 2019. Charles, a beauty vlogger, posted an advertisement for Sugar Bear Hair—vitamin supplements that help grow fuller, healthier hair. This started a feud between him and another beauty Youtuber, Tati Westbrook, and her own brand of beauty supplements, Halo Beauty.

This feud caused attention to move away from Sugar Bear Hair and its products and instead shifted focus to the feuding influencers. Sure, the drama put Sugar Bear Hair’s name out there…but not in a positive way.

Furthermore, during the feud, Charles admitted he didn’t think vitamins had much of an effect and only partnered with Sugar Bear Hair to get free Coachella tickets. This made his followers question the value of the hair and skin supplement market as a whole. That negatively affected Sugar Bear Hair’s, Halo’s, Charles’, and Westbrooke’s businesses.

Bottom Line: Using an influencer who has a high follower count but doesn’t care about your brand can communicate to their followers that they shouldn’t care about your brand either.

3. Oversaturated Market

Another reason a creator-led brand can fail is that the market has become oversaturated. Just because an influencer has entered a major retailer, it doesn’t mean they’ve “made it.”

In January of 2023, Sephora announced it would drop the beauty lines of both Addison Rae (Item) and Hyram Yarbro (Selfless). Both brands from these TikTok stars were expected to do well since Rae has over 88 million followers and Yarbro has over 12 million followers on TikTok.

But after getting their beauty lines into Sephora, there was a steep decline in the effort each TikTok creator put into promoting their beauty line. And considering countless celebrities like Rhianna, Lady Gaga, and even Pharell have their own lines in the beauty market. It just wasn’t enough for Rae and Yarbro to rest on their fame if they wanted to get noticed amongst all these other brands.

Bottom Line: Influencers trying to break into a saturated market can’t simply rely on their follower count and influence to generate sales. There are hundreds and thousands of other brands that are also partnered with or created by influencers, so there’s a real need to continue to market and strategize to get your brand noticed.

4. Scandals

Conversely, no matter how much a creator may do to promote their brand, if they become embroiled in controversy or scandal, that can kill the brand or partnership. For example, Jeffree Star not only promoted his brand’s beauty products, but he also made in-person appearances at stores that drew so many fans it would shut down malls.

But in 2020, due to some racist and misogynistic comments Star made online, the beauty retailer Morphe severed ties with him and his Jeffree Star brand. Since then, Star has made a public apology and is far less outspoken on social media. This approach has served him well and helped him secure new mass-retailer relationships as he relaunched Jeffree Star cosmetics (which fans can now find in Target and Ulta stores.)

Bottom Line: A scandal or controversy can completely derail a campaign and generate bad press for brands.

What we can learn from Creator brands that fail

The great thing about failure is you can learn from it, and it’s even better when you learn from the failures of others. Here are some key takeaways for any brands looking to form creator- brand partnerships.

Does the Creator fit your brand?

First and foremost, do your research. If you’re going to work with an influencer, all their ideas and body of work are readily available for you to go through online. Make sure the influencers you decide to partner with align with your brand’s image and ideals.

That means looking at things like work ethic, the things they say and support, and even how they respond to negative feedback.

In fact, many brands include morality clauses in contracts with influencers. These clauses outline the ideals and behavior expected of those acting as spokesmen and faces for a brand. These clauses also outline the terms if those expectations are violated.

Don’t put all your eggs in one basket

Spending your entire marketing budget hiring one super popular influencer may get your brand noticed. But if that influencer gets caught in a scandal or something happens to them, your brand will be broke and put in a pinch.

A better use of your money would be to invest in several different micro-influencers (influencers with less than 10K followers) with loyal followings. Your brand will still get noticed, but you won’t be crippled if any controversy arises with one of the influencers you partner with. And you may even find these micro-influencers can introduce you to other niches they appeal to.

Be clear about what responsibilities an influencer has to your brand

When entering into an agreement with an influencer, be clear about what you want them to do and/or achieve for your brand. It could be simple, like requiring a creator to post a certain number of posts a week promoting your brand’s products.

Or it could be something more complicated like requiring that an influencer pulls in a certain number of new customers or engagements. Either way, you need to set clear parameters for your partnership.

Remember, just having a lot of followers isn’t enough. You want to pair with an active creator who is just as eager to work building your brand as they have been in building their own following.

Creator-led brands: the final say

Establishing and growing brands is all about relationships. Relationships with your team, your customers, and your influencer partners. Creator-Led Brands fail because they neglect these relationships or let them stagnate.

Creating these relationships with your influencer partners is the key to ensuring your brand’s growth isn’t just a flash in the pan. That means both sides get to know each other’s expectations, goals, ideals, etc. and keep each other accountable.