The world of clean beauty and cruelty-free products maker Arbonne International LLC is an Instagrammable model for all things health and wellness.
That’s evident from the light and bright social media posts of smiling independent consultants showing customers how to use, say, their TrueSmooth hair products, or offering guidance on the pressing question of how often one should exfoliate.
Behind all the social selling is a 42-year-old direct selling machine generating hundreds of millions of dollars annually through its army of 500,000 independent consultants serving 1.3 million customers monthly.
How to push Arbonne to the next level is what newly appointed CEO Tyler Whitehead is tasked with as he focuses on upping the multilevel market company’s digital game and international reach, while also expanding the company’s user base, most notably nabbing Gen Zers and younger.
“Our objective is to really take Arbonne to the next frontier and I think for what we’re working on strategically is really just fitting very nicely with what we see in the environment today,” Whitehead told the Business Journal.
“It’s leveraging virtual and digital frontiers, as well as the opportunity for us to expand geographically and demographically.”
Plans over the next five years for those new physical frontiers will include Mexico and the rest of Latin America, Southeast Asia, Europe, the Middle East and Africa.
Whitehead is the most recent addition to Arbonne’s C-suite having joined in April as part of a major reset under parent Groupe Rocher of France, which acquired the business in 2018 on undisclosed terms. In 2019, Samir Khandhar joined as vice president of customer experience before being promoted to chief digital experience officer in March of this year. In January, Amy Humfleet joined as chief marketing officer.
The trio now lead a major push to modernize the business and brand.
The Arbonne business model is an old one going up against young-gun, digital direct-to-consumer beauty and wellness brands that have exploded in recent years with the backing of venture capital. Think Kopari, Glossier and HUM Nutrition among many others that have built brands off the backs of digital social media networks.
Arbonne uses its network of consultants to build communities of fans by selling products at in-person parties, meetings and, now, social commerce via digital selling tools and social media platforms.
The one-to-one communication doesn’t change, but how that communication occurs has changed and will continue to evolve.
“We used to say it’s a work-from-home business. Really, today, it’s a work-from-phone business and we’re just seeing that accelerate,” Whitehead said.
There’s been a push of late to age down the categories and demographic to focus on millennials, Gen Z and Gen Alpha still in junior high or high school.
Arbonne essentially works with two different groups. There are the independent consultants, who are mostly women between the ages of 30 to 35. And then there’s the product user base, those who are buying from those consultants, that range from the teens to those in their 50s, 60s and 70s.
Moving forward, the products and categories Arbonne plays in will remain in place as Arbonne seeks to nab younger consumers. What’s different now is that it’s more about offering product information in a different way to accommodate how consumers want their information delivered, Whitehead said.
“The product information, the product benefits, the types of personal experiences that our consultants share continue to evolve,” he said. “I would say there’s really two primary things that are happening. One is what may have been more in-depth information through a link and research, those are less front and center. Now, it’s the six seconds that they have for somebody who maybe notices a product or benefit that they might be interested in.”
Arbonne already has the product with a brand built on clean, sustainable ingredients since its start in Switzerland in 1975.
It’s now part of a larger company with a similar focus under Groupe Rocher, which began in 1959 with Botanical Beauty and an eye on plant-based beauty. The group now consists of a portfolio of 10 brands, including Yves Rocher, Petit Bateau, Dr. Pierre Ricaud, Flormar and Daniel Jouvance.
The French company remains family owned with Bris Rocher, Rocher’s grandson, serving as the group’s CEO. Rocher noted at the time of Arbonne’s sale for an undisclosed price from Natural Products Group to Groupe Rocher in 2018: “This acquisition will be a real asset that will enable us to strengthen our positioning in the direct selling channel, which has seen an upturn over the past few years.”
Arbonne at the time of the deal was a $550 million business and it’s reported to have grown in the three years since, alongside the rest of the direct selling industry.
The Washington, D.C.-based Direct Selling Association, which recently appointed Whitehead to its board, said the industry generated U.S. retail sales of $40.1 billion in 2020, up 13.9% from the prior year with 7.7 million sellers. Wellness remains the long-standing top product category for the business model.
Health and nutrition is about half of Arbonne’s overall revenue with the remainder comprised of beauty and personal care.
Growth for the broader industry is expected this year, albeit at a slower than originally projected rate. New York research firm IBISWorld adjusted its projection for the industry’s U.S. growth to a 1.2% increase from 3.1% citing the competition coming from e-commerce and the lingering impact of COVID-19 restrictions on group gatherings in some places.
To capitalize on the expected growth, Arbonne kicked off what it’s calling a digital transformation this year. It is the culmination of about 18 months of work and included a website revamp with a personal shopper and recommended cart tools.
That’s translated into improved SEO results, higher order conversions and faster webpage load times.
“We went from a purely functional website that felt like it was rooted in the ’80s to, now, a much more engaging dynamic platform that reflects our premium brand,” said Digital Experience Chief Khandhar.
The product pricing already speaks to that. Among Arbonne’s best sellers is a protein shake powder retailing for $79, a five-piece brightening set at $297, mascara for $30, makeup primer retailing for $44 and a $75 firming body cream.
This year also saw the introduction of the Arbonne ContentKit app for consultants to customize their posts and share on social media. The app has seen about 30,000 downloads in the U.S., Arbonne’s largest market, since January, according to Khandhar.
The acceleration of freelance work and the gig economy—also largely being driven by tech and digital—has helped Arbonne onboard consultants by pitching flexible work schedules to prospective sellers.
“From a gig economy perspective, it is a macro trend where people have one, two, three opportunities going on at the same time, so it’s even more critical that we offer flexibility,” Whitehead said of how to grow the consultant base. “I think we’ll continue to see that accelerate as people’s desire for flexibility in where they work continues …. That has been an accelerant for our business and will continue into the future.”
Now, the focus for next year turns to continuing to drive social commerce, product recommendations and ratings, continued improvement of the mobile app and selling tools that could potentially bundle product with the app or other digital experiences.
Next year could also see the rollout of a subscription-based program.
Ultimately, Khandhar pointed out that while a digital sweep is taking place, there’s also been a shift in the mindset of Arbonne’s employee base.
“Digital transformation starts and ends with our people,” he said, adding the philosophy of testing and iterating is rooted in “being comfortable with less than perfect. You either succeed or you learn; it’s one or the other.”
The Human Element
With so many plans set in motion, it will become increasingly important Arbonne’s brand remains clearly defined at a time when point of view and personality build brand equity.
“It’s about really finding what we stand for and then allowing our consultants to relate to that and then relate that to others,” Whitehead said of Arbonne’s point of differentiation. “Our attraction continues to be around the integrity of our products as the original clean beauty company. Arbonne was founded 42 years ago with a very strict ingredient philosophy and that continues to be our touchstone.”
It’s a philosophy that has it standing out within Orange County’s robust beauty landscape, which is a diverse one made up of heritage makeup brands such as Too Faced Cosmetics in Irvine and Newport Beach-based Urban Decay, which will relocate to parent L’Oreal USA’s West Coast headquarters in El Segundo next year. Independents like Manna Kadar Beauty Inc. in Irvine and Coloured Raine Cosmetics LLC in San Clemente are also growing fast. Then there’s the beauty companies with a direct selling model, with SeneGence International Inc. of Foothill Ranch sitting at the top with an estimated $1 billion in sales as OC’s second-largest woman-owned business.
Whitehead declined to provide a sales projection for the year, but is rosy in his outlook.
“We’re coming off three very, very strong years in a row of growth through 2020 and we’re projecting to keep pace as we move forward. We feel like the digital acceleration will continue. Our products continue to accelerate,” Whitehead said.
Even factoring in the impact of e-commerce behemoths such as Amazon, Whitehead posits Arbonne and others like it offer the human factor that doesn’t necessarily come through in a digital-only transactions.
“I think in the future as opportunities for product are a click away on Amazon and other technology platforms, our ability to incorporate the personal touch and the personal recommendation and the experience value of being a part of the Arbonne community will continue to drive that competitive advantage,” the CEO said.
And for the consultant end of the spectrum that management must also serve, Whitehead said there’s satisfaction for him in seeing how independent consultants grow their businesses through Arbonne.
He comes at it from a multi-lens perspective.
Whitehead practiced law early in his career, serving as the outside counsel for nutrition and personal care company Nu Skin Enterprises Inc. before moving in-house and working there for nearly two decades first as general counsel and then later into sales and other aspects of the business.
“The attraction to join a company was really the relationship with the consultants. It was the opportunity to provide a support system and a business for those that may not have the ability to start a business without capital or without some type of business experience. That’s what I loved about the industry and, really, what I love about Arbonne is because I see enormous talent that can be unlocked with some simple support,” Whitehead said of what drew him into the industry.
“The incredible thing about a business like Arbonne is that it has that curated collection of humans that come together and enjoy the products and share in a way that is two or three steps more deep than a transaction.”
Meet the three recent hires helping drive big change at Arbonne
Samir Khandhar joins as vice president of customer experience; promoted to chief digital experience officer in March 2021.
Areas of responsibility:
e-commerce, loyalty, user experience, customer retention management, insights
most recently served as associate partner, CX and digital transformation at Monitor Deloitte
Amy Humfleet named CMO.
Responsibilities: global management of Arbonne brand
Resumé: Vice president of Santa Monica-based Beautycounter; previously worked at Aveda, Diamond Products, Dial and Kao Brands.
Resumé: president of the West Region for Nu Skin Enterprises Inc.; ran global business in 36 countries; also held titles of vice president of sales and operations for the Americas and vice president and general counsel
Areas of focus: digital, international expansion, growing customer base