Are Influencers Turning Into Retailers, and Vice Versa?
Max Rhodes, CEO of Faire, shares his thoughts on the future of retail in an interview with Sequoia General Partner Ravi Gupta here. In the interview, Max predicts increasingly blurred lines between retailers and influencers:
Another line that’s going to be blurred is the line between social media influencers and retailers. More and more, you’re seeing that social media influencers really are retailers. They’re tastemakers, they have an audience, and they’re figuring out how to monetize that audience. In the same way, retailers have an audience, have a brick-and-mortar presence, have an online presence, and have foot-traffic, and they’re monetizing that audience by being tastemakers.
Let’s unpack this. Let’s start with social media influencers (and how they don’t want to take on inventory risk), go to retailers (and why it’s hard for them to make viral content), and finally talk about the merging of these groups.
Creators
So are creators (and by the way, I’ll be using creators and social media influencers interchangeably here) becoming more like retailers? If what it means to be a retailer is to earn money by selling products, then absolutely. I think there’s a ton of exciting things happening around creator monetization—single-player platform-building tools let you sell content (Substack, Winno), community membership management let you sell access to communities (Hyper), and NFT creation tools let you sell…well NFTs (Buildship). All of these tools enable new digital products that empower creators to make money.
Physical products on the other hand (and thus relating to what most of us think of when we hear “retailer”), still seem to be largely unavailable to most creators. Though companies like Represent (acquired by Cameo) are looking to democratize the opportunity, it isn’t ubiquitous yet. Even when creators roll out their own physical product line, the result looks more like an independent business with a marketing arm rather than one that seamlessly integrates with the creator’s digital offerings. Take a look at this store created by the popular YouTube channel Good Mythical Morning. Although it has everything a good Shopify store needs, it doesn’t have much to do with the incredible YouTube channel it’s tied to, nor are there many digital experiences that point back to the store.
This isn’t to say that creators can’t help sell physical products they don’t own. The truth is that creators have always had ample opportunities to sell physical goods that weren’t theirs (affiliate marketing). Affiliate marketing looks like it’s going to be even further democratized going forward. Take a look at Bounty, where influencers don’t even need to formally enter a relationship with brands to start creating content and getting paid. Furthermore, standardized interfaces such as LinkTree or Beacons continue to train the internet’s public squares, like Instagram, on how to consume affiliate placements. All of this is to say that affiliate marketing has been, and will continue to be, available for creators to shill physical products.
So yes, creators are becoming more like retailers in that they’re rolling out their own products, curations, and storefronts—but they’re refusing to take on any inventory risk, whether it’s by manufacturing their own physical products or purchasing them from suppliers, which all retailers do.
Great. Now let’s look at how retailers are becoming more like creators.
Retailers
If creators come from a place of attention abundance and try to retroactively find products that their audience wants, retailers and brands do the opposite—they start with a set of products and try to find people who want them. By the way, I’m going to be a little reductive here and use “retailer” and “brand” interchangeably, but really I’m just thinking of any storefront that sells physical inventory (though I’m not thinking of Amazon or Walmart either). Whether they house a single brand or a curated set of brands doesn’t really matter to me—I think they both fall into the same trap that I’m about to explain.
So ok, brands and creators have a different approach to how they build audiences. Which one is better? Definitely how creators do it. I can say that for certain because unfortunately, brands unintentionally (or intentionally) make their interactions feel like ads. It’s only recently that brands started being deliberate about putting up faces that their audience can see and humanize to avoid sounding like an ad.
So, the best brands today are having individual creators run their social media accounts. For example, take a look at this TikTok by vegan chicken nugget company Simulate. It’s genuinely funny and doesn’t shove the Simulate product in the face of the viewer:
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One thing to note—even though having individual creators represent a brand’s social media account works better than not doing it at all, it’s still not as effective as if the creator was just doing stuff on their own. That’s because the content has to be at least tangentially related to the mission of getting more dollars out of consumers’ pockets. There’s a certain weariness that viewers have that make it harder to go viral.
To tie this up, yes retailers and brands are becoming more like creators in that they’re creating content around individuals rather than products. At the same time though, brands by nature will always have a harder time creating truly controversial and explosive content.
The great creator-retailer merge
I highly doubt retailers and creators will ever merge to form a uniform, hybrid category, but I do think they have a lot to learn from each other. I suspect we’ll see a lot of innovation around helping creators take on inventory risk cheaply and with minimal operational overhead. I also imagine we’ll see innovation around getting retailers to be radically transparent in their marketing (DAOs are the future LFG?).
For example, imagine a world where you can walk into your favorite YouTuber’s brick-and-mortar store and check out their branded merchandise and products they endorse (and when you buy something you get a thank you video from the creator). Or imagine a world in which you get to become friends with the guy working on your favorite energy drink brand (and when you pick it up from the grocery store, he sends you an update on his life).
I don’t know. All I know is that there’s a lot to be built.