One of my favorite places in the world is the French Champagne region. Steeped in history and a love of drinking good wine, what’s not to like? When I was a student, we couldn’t afford to drink fine champagne (it was warm pints of British beer instead). So the region developed this mystical aura for me. Many years later, I finally visited the house of Moet & Chandon in Epernay, about 100 miles northeast of Paris. For 200 years, Moet & Chandon has been synonymous with luxury and fine living. (It was the champagne favored by Napoleon and the first champagne used to celebrate a victory.)
Why are we willing to spend more for a bottle of champagne? Partly because it tastes better than many sparkling wines — and at those prices, it should. But the real reason is branding. We drink it because it makes us feel luxurious.
In a previous life, I spent a decade at Morgan Stanley covering luxury and retail brands, and later, ecommerce. It was there that I developed a deep appreciation for the power of brand. And that’s one of the reasons I’m so excited about Goop — the luxury brand for educated, curious women.
Goop started out in fall 2008 as a newsletter, launched by Gwyneth Paltrow out of her kitchen in my hometown of London. Every week Gwyneth would share healthy recipes, advice, and product recommendations with a select group of friends. It rapidly evolved into a thriving retail website and lifestyle destination.
But Goop is about more than selling vitamin-fortified fluids, jade eggs, and cosmic energy crystals. It’s about a community of millions of women who religiously read Goop’s newsletter and attend Goop beauty events.
Goopies (yes, they are proud to call themselves that) are smart, college-educated women in their 20s, 30s, and 40s who want the best for themselves and their families. Goopies are the influencers, industry leaders, and passionate followers who first buy the high-quality Goop moisturizer and then come back for the dress, the perfume, and a subscription of daily Goop vitamins. They want it all — and with an average household income exceeding $100,000, they can afford to have it.
They are conscientious and curious consumers, focused on health and wellness, and seeking recommendations and personalization. In both respects they trust Gwyneth’s taste and judgement. As do I.
After my years covering eCommerce and luxury brands, I always look for the X factor in a company that enables it to rise above the competition. What makes Goop special and gives it the X factor, in my eyes, is:
1) Gwyneth Paltrow
Her authenticity, grit, determination, and vision are what have allowed Goop to become a luxury name brand far faster than any other in recent memory. Gwyneth has an unfair advantage in building a DNVB given her strong fan base, high profile and Goop’s almost 10 year history building a media presence.
2) Loyal customers
Goopies are such fans of Goop that they name themselves after the brand. When the press are negative, it just reinforces the unique nature of the brand and brings the community closer together. As Goop rolls out more private label items it only increases the fascination (and obsession) for Goopies.
3) Extensibility of the brand
Goop has demonstrated an ability to bring customers in for one product, say Goop fragrance, and then sell them products from other categories, such as apparel, wellness and beauty. Their ability to cross sell across products shows that a true brand is being built.
4) The magic of word of mouth
It is increasingly difficult to find an eCommerce business without a dependence on the Facebook algorithm so when we find one that has customers telling each other about it and discussing organically through social media, we see brand building in its cheapest and most effective form.
5) Captive audience through media
The first thing that drew me to Goop was the fact that it started life as a content site, much like how online retailers Glossier and FitFabFun emerged from fashion and beauty blogs. These three sites have been able to both build communities of loyal followers and learn from them, then take that knowledge to become more responsive to their customers’ needs and desires.
That combination of content, community, and commerce is virtually unbeatable — and, to my mind, represents the future of online shopping.
It’s all of these factors that go into Goop’s own special sauce and they are playing in the big leagues. Luxury is a $300bn market ($90bn in the U.S) where the conglomerates are slow to make moves online. I expect digitally native luxury brands like Goop to create significant value as they are able to sell direct and know everything about their consumers.
Lightspeed Venture Partners is excited to be working with Goop, and I will be sitting in the boardroom as we aim to help Goop deliver content and commerce globally and ultimately create a new luxury brand.
I sat down with Gwyneth to hear why she started Goop, what motivates and influences her and what keeps her up at night. You can hear it on our Lightspeed podcast or read it here.
☞ To hear more of my thoughts in the future, follow me on Twitter
Authors
