Between the brand’s 2013 inception and late 2015, Drunk Elephant, the “clean-clinical” indie skincare brand, distributed at numerous beauty e-tailers, from Goop to Dermstore, alongside its DTC site. Starting in 2016, however, the brand started to focus its e-tailer partnerships. By the beginning of 2018, the brand’s products were only sold via their DTC site and on Sephora, which the brand cited as Drunk Elephant’s “exclusive retail partner in the US.”
This special relationship seemed to contribute to exceptionally strong performance on Sephora; Drunk Elephant was the most discoverable skincare brand on the retailer in 3Q18 and 4Q18, consistently placing products on the first 2 rows of products across top-trafficked category pages. Drunk Elephant products also habitually appeared on Bestseller and Editor’s Picks carousels on Sephora’s homepage, indicating that the brand’s sales on the platform were promising.
However, as Amazon cements itself as a top destination for online beauty shoppers, prestige brands are grappling with the best way to control unauthorized distribution of their products through Amazon’s marketplace. In 3Q18, Drunk Elephant partnered with Quiverr, a “Performance-Based Amazon Brand Management and Marketing Agency,” to take control of unauthorized sale of its products on the Amazon Marketplace. Drunk Elephant didn’t go the route of many other prestige companies and distribute via Amazon’s Luxury Beauty portal, instead opting to stick to a third-party strategy. While brands that distribute via Luxury Beauty receive significantly more help from Amazon in cleaning up unofficial listings, Quiverr has actually been successful in cleaning up product; just 4 unofficial brand listings were found as of March 2019. In contrast, “Sephora Darling” Anastasia Beverly Hills opted to distribute on the Amazon Marketplace without the help of an agency partner. The brand owned just 30 of their 374 product listings, indicating limited success in the cleanup of unauthorized sellers.
Amazon reported a 57% increase in year over year luxury beauty sales as of Q1 2018, indicating that more consumers are turning to Amazon for their beauty purchases. Amazon’s sticky relationship with consumers, entrenched by Prime, may better position the e-commerce giant to capture replenishment shoppers, particularly those repurchasing relatively new independent brands. This reality makes it important for brands to control their inventory on the platform – whether it be through third-party partnerships or first-party distribution.