- Social Media "Influencer" Campaigns are the "Celebrity Endorsement" of the Day, and Smart Companies are Using this Marketing Channel with Great Success. DW Watches was a Tiny Accessory Company that Took a Big Bet on Influencers and Does $200 mln in Sales 6 Years in.
- Freshly Launched RGNP is Tapping Into this Same Market with its First Major Influencer Jen Selter, and even a Small Piece of this Following could Spell Big Revenue Potential for the Company and Investors. New Social Media Influencers Coming Online could Add Fuel to the Fire.
With the addition of social media star Jen Selter as Creative Director of their new ION Collection, Reign Sapphire (OTCMKTS: RGNP) could be set up for a big 2018 based on even a cursory understanding of the financial implications and the potential of influencer campaigns.
Influencer marketing is the "celebrity endorsement" of the new millennium, and brands are increasingly realizing that social media influence campaigns can return investment quickly, especially with a younger, tech-savvy audience. In fact, according to a survey by Collective Bias of 14,000 consumers, 60% said they have taken blog or social media posts into consideration when shopping. And 70% of 18 to 34 year-olds - the so-called millennial crowd - had the highest preference for "peer" endorsement.
Here's a staggering figure: Twitter (NASDAQ: TWTR) partnered with research group Annalect to research influencers on the platform. They found that when consumers are exposed to tweets from brands and influencers, companies see an astounding 5.2x increase in purchase intent. That's compared to a 2.7x increase in purchasing intent when consumers are exposed to tweets from brands alone. Social media influencers have a huge impact on decision-making.
The Daniel Wellington Case: $0 to $220 Million In Six Years
Just how influential can social media be? Jewelry and accessories are a market ripe for social media influence, and the path has been proved for Reign by another finely tuned upstart called Daniel Wellington. Daniel Wellington makes watches inspired by the upper echelons of the watch world, but at an accessible price-point, from $100 to $300 dollars each. CEO Filip Tysander launched the company with $15,000 of his own money in 2009 and refused to pay for traditional advertising, instead working with bloggers and other "influencers" to grow the company. At the time, it was an untested and risky approach.
It paid off. Daniel Wellington evolved from a $15,000 startup to $70 million in sales in 2014, and a shocking $220 million the following year as young consumers got ahold of the brand. Now, the watches are carried in major department stores like Bloomingdale's and Nordstrom.
Daniel Wellington's success can be attributed to great social media marketing through influencers, and a savvy approach to targeting millennials specifically.
Running The Numbers For Reign - Bottomline Could Quickly Grow
Reign is in a similar position to DW watches five years ago, having just launched their three distinct jewelry collections last year, and the company is taking a similar tack, targeting the social media-engrossed millennial consumer group. The company's first major influencer collaboration with Selter could pay off in a big way.
How big? Jen Selter has over 33 million followers among the major social media platforms, and she was selected as one of Forbes Top Ten Fitness Influencers in the world.
By way of estimates, if just 0.25%, or one-quarter of 1%, of these 33 million followers make the jump from recommendation to a purchase, at a $99 price point, this would translate to $8.168 mln in sales. Double that to a tiny 0.5% of followers, and the possible sales could reach as high as $16.335 mln, potentially.
With a 70% gross margin and a 5-15% commission to Selter, or whatever influencer is involved in the future, this could mean some impressive figures on the income statement. The company is already operating at a $1.4 mln revenue run rate based on the first 6 months of this year, and this is only one year into their product launch!
Social media quickly turn RGNP into a mainstream accessory player among millennials in the same way that Daniel Wellington has become a household name, and RGNP's $10 mln market capitalization won't look little for long. With 20% profit margins on $8 to $10 mln in sales, the company could theoretically be putting out $0.03 to $0.05 per share in earnings, and easily justify a move of multiple magnitudes higher in short order.
Holiday Shopping Kicking Off, Little Companies Seeing Big Moves
With the holiday shopping season just ramping up, now might be the time to be looking at retail oriented companies. Shares of Amazon.com, Inc.(NASDAQ: AMZN) have taken off on great earnings and holiday shopping anticipation, rising 15% at the end of October. More notable recently, shipping companies are back in the spotlight, like Rand Logistics, Inc.(NASDAQ: RLOG) and Diana Containerships Inc. (NASDAQ: DCIX). Despite being dashed on the rocks in the last year, DCIX has surged 1000% from $2 to $20 in the last week alone, and RLOG gained 200% in the Tuesday trading session. Both went from zero to hero, and with more social media influencers planned, it's a good time to be thinking about 21st century retailers like RGNP.
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