When Rachel Roff, founder and CEO of Urban Skin Rx, walked into the brand’s Charlotte, North Carolina, office on Jan. 7, she knew something was different.
Urban Skin Rx’s direct-to-consumer sales were spiking. A planned Instagram post by mega-influencer Diana Danelys De Los Santos (@amaralanegraaln; 2.1 million Instagram followers) was published, but the team had worked with De Los Santos before and knew the spike was beyond what was previously delivered. Over the next five hours, the team uncovered that TikTok had been the source of the sales increase after a single user, Ashley Boggs (@niceoneashley), posted a before-and-after testimonial about the brand’s hero product, the Even Tone Cleansing Bar. Sales had also increased at retail partners including Ulta, Target and CVS. (Urban Skin Rx is in over 4,000 doors.) Since January, monthly sales have increased by 150%, and cleansing bar sales have increased by 220% across all channels.
As of Monday, the original TikTok video has been viewed 5.9 million times, a hashtag set up by Urban Skin Rx of #clearskinchallenge has received 4.4 million views, and the branded hashtag #urbanskinrx has received 8.7 million views. Because of this viral occurrence, a positive pandemonium has taken over at Urban Skin Rx that impacts supply chain, operations and marketing. All the while, TikTok has stress-tested whether the brand can succeed while somewhat losing control of its messaging.
“We were in the middle of finalizing our budget for the company, and now we have to [understand] the duration of this impact,” said Roff. “You cannot know how long this momentum will last, and trying to ramp up inventory and figure out how many people we need [to hire] without overspending has been difficult.” According to Roff, Urban Skin Rx has a 3% DTC conversion rate, and 50% of customers repurchase from the brand.
The first difficulty is in ensuring the company has enough inventory for both its DTC and wholesale channels, as overall sales are evenly split between them. The brand declined to specify overall sales. (Various media reports indicate its annual sales are between $2 million and $10 million.) Roff said the company expects to grow by 70% in 2020 in light of the TikTok bump, an increase of 36% from its initial expectations.
She said that 10-year-old Urban Skin Rx is still too small to warrant stocking months of inventory. Urban Skin Rx sells both 2-ounce and 3.7-ounce cleansing bars on its website, but only 2-ounce bars in retailers. As the 2-ounce sizes began to dwindle at retailers, that brand put a limited number of 3.7-ounce bars in 2-ounce unit cartons, with stickers indicating that, for a limited time, customers were receiving a larger size. They were sold to retailers at the same price as the 2-ounce bars.
At the same time that the company was tweaking its supply chain, it had to handle its newfound TikTok presence. Typically, Urban Skin Rx uses social media manager platform Sprout to respond to customer direct messages and comments on Instagram, but on TikTok, it is a fully manual task, said Roff. The brand hired two additional customer service reps, with one dedicated to TikTok. The brand’s senior manager of social media and influencers is now focused on TikTok 50% of the time. Since TikTok limits comments to 125 characters, the company is troubleshooting how to respond to shoppers appropriately. Beyond its cleansing bars, Urban Skin Rx sells body care, supplements and tools. And the team wants to educate TikTok users on these products. Since its viral fame, some videos showed customers using the wrong product for a skin concern and negative reviews have surfaced, said Roff.
Urban Skin Rx is not the first brand to receive unintended fame on TikTok. The nature of the app’s design maximizes exposure, which can sometimes backfire as was the case with Rae Wellness. It is a testament to how quickly a TikTok presence can snowball and why overnight success has larger ramifications. For its part, Urban Skin Rx is doing as much as it can to embrace the platform; TikTok is now part of its formal marketing plans moving forward, said Amanda Knappman, UrbanSkin Rx director of marketing.
Urban Skin Rx reached out to TikTok in mid-February to formally explore a sponsored hashtag challenge but did not hear back until March, said Roff. While the brand waited, it began the #clearskinchallenge hashtag and has tried to migrate users to its branded hashtag. Using the influencer marketing platform Fohr, the brand solicited interest from users to receive products and participate in the challenge. So far, 50 people have joined, and there is a 600-person waitlist. The company has started to gift free products to TikTok users, as well. Urban Skin Rx is also working with Boggs through a paid partnership and has increased its paid influencer budget by 40%.
“TikTok people become stars overnight, so they don’t have crafted and curated content,” said Knappman. “It’s a whole different world to understand and approach.”
Since its initial outreach to TikTok, and through its research, the brand learned that a “Signature Ad Product” (the official name for hashtag challenges) could cost $150,000. When the TikTok team finally responded via email, it offered no guidance on minimum spend. Instead, TikTok provided benchmarks around typical KPIs (CPC, CPM, CPV, etc.) to optimize a campaign.
“The algorithm on TikTok is so unique and specific that it is hard to figure out. We wanted to ensure our content mimicked the organic content that performs so well,” said Knappman.
Urban Skin Rx is currently in discussions with TikTok about different buying options and benchmarks for a sponsored campaign, and Roff said the company expects to launch one later in March. The brand has created an original song and is looking to test two different creative concepts: The first concept is a dance challenge featuring a dance it hopes users will replicate, while the second is a before-and-after testimonial similar to the original viral video. Both Roff and Knappman said that Urban Skin Rx employees are mostly millennials, so it has been slightly strange for them to try and understand a uniquely Gen-Z platform.
To summarize her own experience over the last two months, Roff simply said: “TikTok has taken over our lives.”
“We know movement, dance and music is a huge theme, but what’s interesting is that positivity, and being open and transparent are also themes on TikTok,” said Knappman. “In a selfie culture, they are sharing very vulnerable photos and videos of themselves.”