All store owners secretly anticipate being mobbed on opening day. They have to think like that or they wouldn’t be crazy enough to go into retail.
Simone Xavier and Rene Xavier Filho actually had good reason to believe their store, Sigma Beauty, really would be an instant hit when it opened a few months ago at Mall of America. They come from the alternate universe of e-commerce, where one endorsement from a popular beauty vlogger will prompt 600 eye shadow palettes to sell in hours. That’s what happened when they launched sigmabeauty.com.
The couple moved here from Brazil in 1999 so Xavier could earn her PhD in veterinary medicine at the University of Minnesota. She became an assistant clinical professor at the U of M, running a molecular biology research lab. Filho was a civil engineer turned entrepreneur. Neither had any experience in the cosmetics industry when Filho designed his first set of makeup brushes four years ago after friends in Brazil asked him to send American makeup brushes and he realized a lot of brands don’t export.
Xavier, methodical researcher that she is, went online to learn about brushes: shapes, prices, preferences. That brought her to YouTube, which has become a gathering spot for beauty junkies such as TiffanyD, a “self-taught makeup artist” from Atlanta whose instructional makeup videos have been viewed nearly 118 million times.
Xavier sent TiffanyD some of her husband’s brushes, hoping for feedback. Instead, they got a YouTube video in which TiffanyD gushed about the new brushes. They sold out by 6 pm. “That’s when I knew we had a business,” Filho says.
Sigma Beauty is now a full-time job for the couple. Sales hit $13.5 million last year. The company employs 60 people at its New Brighton headquarters and keeps a manufacturing plant in China busy full time.
Sigma doesn’t advertise the old-fashioned way. The company has 10,000 affiliates like TiffanyD who get a 10 percent commission on products sold through links they post to Sigma Beauty’s website. If you’re thinking that might make consumers question the authenticity of these effusive blog posts and videos, you’re not the target demo. Sigma also has a robust social media following: more than 174,000 Facebook likes and about 111,000 followers on Instagram, where they post instructional videos.
Apparently, though, those virtual fans don’t spend a lot of time at the mall. Xavier and Filho were somewhat taken aback to find that most MOA shoppers had never heard of Sigma Beauty. I had to ask: Why bother with a storefront when you’ve already achieved the kind of success most local retailers dream of?
“It puts a face on the company,” Xavier says. “A store makes you legitimate.”
It also puts pressure on Sigma to sell its own products. “In here, there’s no one endorsing. It’s a tougher sell,” Filho says. So the couple is watching and learning. Glass covers have been removed from display cases so shoppers can touch the brushes. Sigma has added makeup, because if you’re going to encourage customers to try the brushes, they need colors to apply. Small add-on products in the $10 range are being positioned around the cash register with the goal of boosting the average store sale to $50. Online, $85 per order is typical.
Some of Sigma’s YouTube cheerleaders have visited the store— BeautyBaby44 drew 500 people. The company is pushing in-store parties, with discounts. And Sigma plans to introduce price breaks for makeup artists. But you won’t see those makeup pros staffing the beauty stations that line both walls of the store. The stations are self-serve, each equipped with a set of brushes, a mirror, and an iPad.
Says Filho, “The customers are our experts.”