Reality TV to Ghalichi Glam – Lilly Ghalichi’s lifestyle conglomerate
Read on to discover how tight integration between social media and advertising helps Ghalichi Glam grow its lifestyle and fast-fashion businesses.
Lilly Ghalichi, a lawyer-turned-entrepreneur, was introduced to television viewers on Bravo’s Shahs of Sunset. The show featured a group of friends in the Iranian expatriate community in Los Angeles and Ghalichi, known as “Persian Barbie,” was unmistakable in her signature look: skintight dresses and teetering heels, combined with voluminous hair and a Glam Squad to boot.
Ghalichi left the show to focus on her growing line of businesses, which now include e-commerce site WantMyLook, Lilly Lashes false eyelashes, and an online makeup school called Ghalichi Glam. Accessible designer collaborations are mainstays in the fashion industry, yet Ghalichi Glam achieves differentiation by directly leveraging Lilly Ghalichi’s cult of personality and social media presence to influence consumer purchasing habits.
Business Model:
The central theme for Ghalichi Glam businesses is to empower digitally savvy consumers with affordable opportunities to attain the lifestyle they see celebrities flaunt in the media. Implicitly, Ghalichi Glam gives customers more opportunities to garner social media “likes” themselves by putting their own twist on emulating tastemakers.
Breakdown of the businesses:
WantMyLook offers fast fashion tuned to of-the-moment celebrity trends. Price points are comparable to H&M at $40-50 USD for shoes and $30-70 USD for dresses.
On the cosmetics side of the business, Lilly Lashes promise consumers that they can attain glamorous looks worthy of Kim Kardashian, without having to hire a makeup artist. The lashes are named after cities around the world, including “Saint Tropez” and “Istanbul,” to evoke a jet-set lifestyle. Lashes are priced at $8.99/pair.
To close the circle, fans can then elect to join Ghalichi Glam’s online beauty school, paying $19/month for access to video tutorials like “Extreme Glamour Transformation Full Face Makeup Class” or “Perfect Effortless Waves” taught by celebrity makeup artists.
Operating Model:
The tenets of the Ghalichi Glam operating model are tight integration with social media for advertising purposes and speed. In a recent New York Times article titled, “On Fake Instagram, a Chance to Be Real,” Valeriya Safronova writes, “For a certain generation, Instagram has become a calling card, a life résumé of sorts: ‘This is me. This is my life. Jealous?’” For many heavy users of social media, scrolling through a celebrity feed can cause feelings of envy without recourse. WantMyLook responds directly to these feelings by embedding thoughtful integration with the Instagram platform on their website, including a “Shop the Look on Instagram” link, and posting side-by-side comparisons of their products with those worn by the likes of Kylie Jenner. By coupling social media with celebrity fast-fashion, Ghalichi Glam has carved a niche in the market that is unmatched by competitors like Zara and H&M.
Ghalichi Glam also successfully integrates celebrity (both traditional and social media) endorsements in an authentic way by using brand ambassadors. Indeed, what unifies all of the Ghalichi Glam businesses is the public and consistent endorsement of Ghalichi herself, who posts images to her 1.8m Instagram followers of herself using her products, celebrity friends using her products, or customers using her products to create professional-grade looks. This creates free marketing and an expansion of influence, since social media personalities who have been featured on Ghalichi’s Instagram will respond in kind to their own spheres of influence by tagging Ghalichi’s products in their posts.
Additionally, the WantMyLook website emphasizes speed of shipment and delivery to encourage customers to purchase items immediately; when browsing for items, a ticker on the website floats down to inform you how many hours you have left to catch the next shipment time. Speed is also of the essence in order to capture sales of fast-fashion items before the next trend is established. Finally, the company’s headquarters in Los Angeles give Ghalichi Glam access to the tastemakers and supporting makeup artists and designers that fuel society’s obsession with celebrity culture.
Conclusion:
The business and operating model of Ghalichi Glam businesses are synergistic because they successfully offer customers a value proposition of appearing on-trend at a more affordable price point. The adoption of products stem from Ghalichi’s successful use of social media to cultivate and maintain a fan base. Despite no publicly available financial statements, I am optimistic about growth for the company, especially because of Ghalichi’s forward looking statements about growth. For example, Bain Capital’s 2014 Worldwide Luxury Goods Report predicts that the luxury cosmetics segment that Lilly Lashes plays in can grow at 2% CAGR between 2013 and 2014. Despite the relatively flat growth outlook in the industry, Ghalichi stated in an interview with ArabianBusiness.com that “in 2016 I will open a store or at minimum a distribution centre in Dubai so that my lashes will be easily accessible to everyone,” indicating that global expansion is in the works beyond their current distribution system.
Loved reading your post, Ilene! I follow Ghalichi on Instagram and always love seeing her fashion/beauty shots. My main issue with the business/operating model for Ghalichi Glam is its potential to be replicated by other glamorous Insta-famous celebrities. A way to combat against these efforts could be to partner with other Insta-famous celebrities to offer the Ghalichi Glam platform for their benefit; they could sell products and advertise their ‘looks’ without having to build the platform themselves. Social media promotional ads and plugs on YouTube beauty channels for the eyelashes and beauty tutorial services could also be very successful.
Hi Ashley – I love your suggestion of offering a platform as a service and it would definitely be a huge point of differentiation for the business. I think the biggest beneficiary of this could be actually be influential bloggers who want to try their first foray into branded items (and perhaps are less funded) compared to celebrities.
Great article! I admit this world is a little outside of my expertise but I was impressed with the integration into Instagram and social media. This “Shop the Looks” on Instagram component could be very valuable for other industries besides fashion. For example, my wife follows interior designers on instagram and would love to be able to “shop the designs” that are posted, or to be able to offer the same functionality on her own designer instagram page. I follow ESPN on instagram and often see posts on the shoes that athletes are wearing – I’m sure Sterling would appreciate a “shop my kicks” link!
Hi Tom, thank you for reading! You are spot on with your comments; not being able to directly link to a product on Instagram is one of my biggest pet peeves as well. You’ll typically see bloggers on Instagram redirect you to their website, from which they’ll post a complementary blog which contains full links, but that requires an extra step which is cumbersome for someone who just wants to see the product directly!
Exciting article! Thank you for sharing how start-up company like Lilly Lashes creates competitive advantage through embedding thoughtful integration with the Instagram platform and celebrities on their website in the fast-fashion industry! Would be exciting to see how the company further expand globally going forward leveraging the competitive advantages they’ve build.
Thank you TOM100 for your thoughts! I think the lashes business could actually be huge in Asia as well, especially countries like China and Korea, to complement the expansion to the Middle East as Ghalichi mentions in the Arabia Business article.
Super interesting article! Like Tom, I’m a bit out of my element with this topic, but its really interesting to see how Ghalichi uses social media to incorporate users into her brand. I wonder if she can take this even further by bringing in a “Threadless” model to crowdsource new fashion ideas. I also see that she’s planning on opening a store in Dubai, why not LA first??
Hi Robert, thanks for sharing your thoughts! I think your suggestion is fascinating about crowdsourcing as a way to spur product development – I will try to reach out to her and see if she has thoughts on that. Re: the Dubai vs. LA question, I believe they already have a distribution center which already serves the LA market so that’s probably why they’re looking to expand internationally.
Great article Ilene! I didn’t know about this company before. It is very interesting to see how Ghalichi Glam is leveraging on Instagram as an extension of its online channel, especially in light of our in-class discussion on Facebook. Besides the popularity of Lilly Ghalichi, networking effect is probably playing a big role in customer acquisition here.
Thanks Daly! I’m glad you brought that up, the network effect is definitely central here since the strategy is so heavily reliant on social media.
Hey Ilene, nice post! A couple things stood about the operating model stood out to me:
1) Consumer Behavior: Women must like to shop more by inspiration and less by necessity. For guys, I feel this paradigm is the opposite. We go in to shop with a particular need (my jeans tore therefore I need new ones, etc.). Ghalichi’s implementation aligns very nicely with this assumption of how women shop. There’s also a fantastic baked-in upsell component where even if the top was what caught the user’s eye, she is tempted to purchase the bottoms and shoes as well to complete the look. I’d be curious to compare average transaction size on a site like wantmylook vs. more traditional merchandizing models.
2) Centralized vs. Crowdsourced Curation: Undoubtedly, the looks put together by professional socialites such as Ghalichi and the Kardashians are great, but I wonder how a centralized approach to curation compares against a crowdsourced model (a-la Pinterest where everyone can be creative and put forth their outfits). Which ecosystem would you rather be a part of and why?
3) Revenue Model: Is wantmylook simply an affiliate driving traffic to retailers of the various clothes, or do they stock/sell the clothes on their own? Was unclear to me from looking through their website. Most affiliate models like Pinterest simply link users out to the end-destination sites to complete checkout and take a cut of the transaction.
4) Does the look make the person, or does the person make the look? I’ve always wondered this about fashion. My instinct says the person makes the look. In my opinion, a gorgeous woman can quite frankly wear anything and still look great! If you traverse all the way up to the root of the innovation chain where some designer is designing clothes for the Kim Kardashians of the world, how does this designer actually measure intrinsic success of her work if pretty much everything her client wears turns to gold in the media? Downstream, are there cases of buyer’s remorse where women are disappointed the dress they buy just doesn’t look good on them?
Hi Rohan – thanks so much for all your thoughts.
1) Re: the upsell and your previous point about shopping habits of men vs. women, as a result of not shopping out of necessity, women probably think more about apparel with respect to items they already own, so just want to underscore the importance of the “complete outfit” as you mentioned.
2) I think it depends on target audience – some people just look for tastemakers and emulate them (which has been WantMyLook’s model thus far) but perhaps going forward they’ll look to crowdsourcing as a way to diversify. I’ll reach out to them and ask.
3) They stock/sell the clothes on their own.
4) This is really interesting to think about. I agree with you that I think the person makes the look, which ties back to your point (1). The reason that people use attractive models in ads is because we feel urgency/inspiration around attaining the same result. I would be interested in seeing % of returns and also how many repeat customers they have as a % of total customers, which would give some insight into the buyer’s remorse question.