The Ordinary’s Strategy for Success, 4 Reasons it Has Taken Off
Since The Ordinary launched in 2016 it has become a popular brand among skincare enthusiasts. At one point The Ordinary sold a bottle of its Niacinamide 10% + Zinc 1% serum every three seconds. Is it all hype or a clever business strategy? Success is never an accident and The Ordinary proves that. Deciem, The Ordinary’s parent company generated an estimated $460 million in sales in 2021. In 2021 L’Oreal was so impressed with the brand it purchased a majority stake in Deciem.
So what makes The Ordinary anything but ordinary? It starts with authenticity. With The Ordinary what you see is what you get. The brand gives consumers the skincare ingredients they are looking for with a level of transparency that hasn’t always existed in the skincare industry. The brand is also inexpensive, you can pick up an effective serum and have enough money left over to buy several more products without breaking your budget. With consumers hurting financially the brand exists at the right time, leaving more established and expensive skincare brands wondering if they have the right strategy. If you are interested in understanding why everyone is talking about The Ordinary consider these four keys to its success.
1. It gets authenticity right
Many brands talk about authenticity, but few deliver on it the way The Ordinary has. Key to the success of The Ordinary is its no nonsense product names. Take its top selling Niacinamide 10% + Zinc 1%. Yes, the company actually gave a skincare product a name that sounds like something out of a chemistry book. There is also Hyaluronic Acid 2% + B5 and Lactic Acid 10% + HA to name a few of The Ordinary’s products. It’s almost as if they consulted vitamin maker Jamieson on how to name their products.
In the vitamin industry it’s normal to spell out exactly what brands are selling but in the skincare industry it was almost revolutionary. For many years the skincare industry was brand first. Consumers wanting to be like the celebrities they look up to lusted after a $500 La Mer serum. Buying a bottle of La Mer is like buying a magic potion, you aren’t exactly sure how it makes you look better but you believe it will. Even La Mer shares this view describing its $520 bottle of The Concentrate as: “a restorative treatment serum infused with a concentrated form of cell-supporting Miracle Broth™ to help visibly calm redness and sensitive skin.” You don’t even know what’s in it but doesn’t Miracle Broth sound good? Or maybe the product description sounded better when you knew less about skincare formulations.
If a purchase from La Mer is not in your budget then maybe on a Saturday afternoon you used to grab a bottle of Clinique’s Dramatically Different Moisturizing Lotion. You were less concerned about ingredients and trusted more in the brand. Even comparing the name of Clinique’s moisturizing lotion to one of The Ordinary’s products reveals the difference. As a consumer you are expected to believe that Clinique’s moisturizing lotion is dramatically different because Clinique says so.
The Ordinary has taken away a lot of the opacity the skincare industry has used for years to market products. When you buy a product from the Ordinary you know what you are getting. If you are looking for a Vitamin C product to remove dark spots then you can get that in the concentration you are looking for. There are no marketing gimmicks just ingredients. The brand even tells you its products are well, “ordinary.” “When you are transparent with your customer, they are more likely to put their trust in you,” says Nicola Kilner, co-founder and CEO of Deciem. “We are honest with our research and well-studied ingredients, and didn’t rush into marketing campaigns to convince people to love us. We did the right thing and waited for our audience to follow.”
2. Its products are the definition of value for money
Brandon Truaxe, co-founder of Deciem who tragically passed away in 2019, realized several years ago there was a large difference between the cost of ingredients in skincare products and the price of the final product. He saw an opportunity to remove the middleman by creating skincare products himself using the purest form of ingredients and then selling The Ordinary’s products without the large markups many skincare brands charge. Most of The Ordinary’s products cost less than $10.00, cheaper than many drugstore brands.
This idea of radically changing the pricing model in an industry is not new. Warby Parker did something similar with great success. Before Warby Parker entered the market, fashionable prescription eyeglasses were expensive. Warby Parker saw a gap in the market and launched a line of stylish prescription eyeglasses starting at $95. In a move that is similar to the path The Ordinary took Warby Parker cut costs by designing its glasses itself, avoiding licensing fees, cutting out the middleman and removing any unnecessary mark ups by selling directly to consumers.
The ability of an “ordinary” brand like The Ordinary to shake up the skincare industry shows just how much the retail industry has changed. You don’t have to be a nearly 100 year old brand like Revlon to launch a top selling product anymore. You can be a relative newbie and find success. But a few rules still apply. Without having a product that offers such a high degree of value for money it’s unlikely The Ordinary would taken off.
How many times have you bought a product on Amazon because it has thousands of five star reviews and was priced right? In many cases you were likely unaware of or did not even care about the brand selling the product you purchased. The lesson is when a product delivers good value consumers care less about the bells and whistles. If you think about the inside of the largest retailer in the world you will know that, Walmart, offers function over form.
When there is less information available a brand name is more important. If you are making a decision about where to buy pizza on a Friday night you may choose Domino’s because you have eaten there before and it is well known. But now with delivery apps you might try out a pizza place because it has a 4.8 star rating on Doordash. This means that new businesses have a better chance of taking off if they have a great product and can generate positive reviews. This trend also means there is more competition for established brands.
“Luxury brands are still there and have a legacy, but they’re slightly threatened by the fact that the consumer is more sophisticated and really wants to understand the reason why they need to pay a premium,” says Charles Rosier, co-founder and CEO of Augustinus Bader Skincare, which sells a product called The Cream for $125. “You can see hyaluronic acid serums sold by brands for $200 or $300 – and you have The Ordinary selling the same serum, the same ingredient in the nice bottle for $10,” said Rosier. “I understand that a savvy consumer may buy the one from The Ordinary.” “Skincare is much less a story about celebrity or trying to sell something for 10 times the price,” says Rosier. “You can no longer build a long term, sustainable business and require a premium from the consumer if there is not a clear reason.”
Value for money is not a new concept but what some may not appreciate is that consumers are really struggling financially. It is not unusual to find a single mother that never fully recovered from the last recession, then lost her job in the pandemic or if she still has her job her wages are not keeping up with the cost of living. Consumers like that women which are growing in numbers want value for money not because it’s a nice to have or a trending topic but because they truly have less money to spend and find it difficult to make ends meet. Brands that recognize this and target these consumers are performing better.
It’s not enough for The Ordinary’s copycats to just list star ingredients on their products and in their marketing messages. They also have to demonstrate their products offer enough value for them to be worthy of a consumer’s dollar. Many of the retailers that are performing well in today’s retail sector are price conscious retailers, from Walmart to Dollar General.
With consumers still battling high inflation products that offer good value for money will only grow in importance. It’s hard to believe that The Ordinary would be as successful if the average cost of its products is $65.00. “Our founder, Brandon Truaxe, made it easier for customers to know when they were overpaying for ingredients. Consumers use the information to make their own decisions, and we simply present clear facts,” says Kilner.
While everyone is talking about ingredients the bigger trend is value. “The technologies [we use] are effective and well-studied,” says The Ordinary, “but a formulation containing them simply doesn't cost that much to make. As they are not new concepts, no resources are wasted on marketing to convince consumers of efficacy of a new form of innovation.” The Ordinary has challenged the notion that good skincare has to be expensive and consumers are responding with their wallets.
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3. It has focused on gender inclusivity from the beginning
More than a third of Generation Z consumers know someone who prefers neutral pronouns. The use of monochromatic packaging makes The Ordinary’s products easy to appeal to anyone regardless of their gender. “Gender inclusivity is part of a larger movement in the beauty industry towards better serving those consumers who belong to historically underrepresented and marginalized groups,” says Sam Escobar, stie director at Allure. “Those consumers were always there, and they loved beauty so much that they supported an industry which, for the most part, rarely acknowledged them.”
The Ordinary is “the ultimate genderless skin care,” says Larissa Jensen, former senior beauty analyst at NPD Group. The Ordinary says its gender neutral look is on purpose. “Since its conception, [the Ordinary] was never intended to target a specific gender identity in any capacity,” says Kilner. “The packaging of the line, much like the formulations, was always about being straight to the point and educational.”
With the men’s grooming and skincare market reaching $9.3 billion in sales in 2020 in the United States and growing it only makes sense to offer a skincare product that can reach a unisex audience, after all both audiences are looking for the same ingredients.
4. Influencers are fans of the brand, generating free viral marketing content
If The Ordinary launched ten years ago it might not have been as successful. But it has benefited from the growth of skinfluencers on platforms like YouTube and TikTok. If you don’t have a chemistry degree and find The Ordinary’s product names and descriptions a little too much there is a near infinite number of videos on social media explaining exactly how The Ordinary’s products work and which ones you should use.
Imagine seeing a product name with the word Niacinamide and not having someone to explain to you what that word means. Suddenly Clinique’s use of the words “dramatically different” aren’t so bad. In the skincare industry as with other industries power continues to shift away from brands and to the influencers consumers trust the most.