Fashion retail is a risky business. Like many sectors, it has been disrupted by the rise of the internet, as consumers increasingly shop on their phones rather than on the high street.
So with fewer people browsing in shops, there’s a question of how best to advertise a new dress or a trendy handbag.
Traditional marketing methods, like billboard posters or TV commercials, have fallen in popularity: they need to be very broad in order to reach as many potential consumers as possible, and end up being less effective.
Targeted online ads, meanwhile, can be efficient, as technology can match ads with consumers based on their interests and web history, but consumers have started to see this as “creepy”, and the data required to target shoppers has become harder to obtain thanks to privacy laws like the EU’s General Data Protection Regulation.
But another advertising format has steadily grown in popularity with brands in recent years: influencer marketing. This is where content creators like bloggers, Instagrammers, and YouTube stars leverage their dedicated fan following to strike deals with brands to promote their goods.
The influencer’s relationship with their fan base means that if they recommend a product to their thousands (if not millions) of followers, those fans are likely to act on it.
And influencer marketing can be very effective. According to Amber Venz Box, president and co-founder of RewardStyle (a marketing platform that allows influencers to monetise their content), brands that use her service to connect with influencers have achieved a return on investment of seven times what they spend.
So how did influencers become so, well, influential? I sat down with the red-headed blogger-turned-business mogul to find out.
Some like it haute
Dallas-based Venz Box started RewardStyle back in 2011 with her partner Baxter Box when she was just 23. A blogger herself, she saw the opportunity and value that influencer marketing could create.
Over that time, she has seen the market evolve as content creators moved from writing blogs on their desktop computers, to running social media empires from their mobile phones.
“We’ve had a front row seat to the shift from bricks to clicks and desktop to mobile in the fashion retail world,” Venz Box says.
The service is a business-to-business platform which brands and influencers must apply to join. Once part of the service, influencers use it to manage their business and monetise their content, while brands set out their targets, and then RewardStyle works with influencers to achieve them.
“When brands come to us to say they want to sell one million lip glosses, we can say ‘here’s the budget that requires, here’s the list of influencers and the mix of content and platforms that will drive that’,” she explains.
“While we don’t guarantee it, we can say what we believe is the right mix and price that will help them reach their goals, based on historical performance data of our influencers. Then we execute that for the brand, and report back to them on how successful it’s been.”
Dress for success
Today, RewardStyle’s network covers 30,000 influencers across more than 100 countries. It is partnered with 4,500 retailers and one million brands, and helps to drive $1bn in annual sales.
Linked to RewardStyle is the consumer app LIKEtoKNOW.it, which enables shoppers to take a screenshot of an influencer’s content on social media, then tells them where they can buy the items featured. Last year, it drove $300m of sales to Venz Box’s retail partners.
Impressive numbers, certainly, but it wasn’t easy work growing to that size.
“In 2011, it was impossible to get the attention of any retailer,” she admits.
“I stalked and tracked these guys down to get them to understand the value we were creating. It was a struggle. For the first year, we had only two or three brands worldwide that would work with us.”
But now, RewardStyle is partnered with all sorts of brands, from Gucci to Netaporter.
“In the first quarter of this year, we had over a thousand brands apply to use RewardStyle to market their goods and services – a massive transformation, and that’s because our influencers are driving sales.”
Of course, it cannot go unmentioned that influencer marketing has come under intense scrutiny this past year.
Regulators like the Advertising Standards Authority have been battling to make sure that influencers understand marketing rules and clearly communicate when their content is actually an advertisement – twice this year, Made In Chelsea star Louise Thompson has had Instagram posts banned for not disclosing that they were sponsored content.
Meanwhile, brands like Unilever have raised concerns about influencers boosting their following numbers with fake accounts, which allows them to demand a higher price to promote a product.
Venz Box acknowledges these issues, and says that part of the problem is that, as the market has grown, other platforms have sprung up that only track an influencer’s social data, such as their follower count, which can be faked.
“The problem there is that you can have bot followers. Influencers are being paid for something that is false and there’s no way a brand or platform can know what’s real and what’s not,” she explains.
In those situations, brands are paying upfront based on an influencer’s potential reach and not on actual results. In contrast, RewardStyle examines sales data to find out which pieces of influencer content actually drove sales, reports that info to brands, and then collects payment.
“Our influencers are only compensated when they drive sales, which is not something you can buy or fake,” Venz Box says.
“Our brand partners are protected, because they are only paying when content performs.”
Venz Box is understandably passionate about the influencer sector. She’s witnessed its transition from a cottage industry of part-time web bloggers, to a thriving multi-billion dollar market that forms the cornerstone of advertising strategy for many brands. She claims that, in 2017, 86 per cent of marketers had an influencer budget.
“The influencer industry didn’t exist seven years ago. We mobilised a generation of creative entrepreneurs and found a sustainable way for them to be compensated. We’ve educated all of these brands worldwide. Demand for these influencers has grown tremendously.”
For any brand considering influencer marketing, it would seem that RewardStyle is the height of fashion.