Elon Musk announced that Tesla will accept bitcoin as a payment method in March, but beauty brands have already been ahead of him in their adoption of cryptocurrency.
In January, Wake Skincare, a UK-based DTC brand created for the ‘connected generation’, announced that it would be the latest brand to accept cryptocurrency as a payment method. By making bitcoin and ethereum payment options available using Coinbase in its Shopify checkout, the brand has joined a wide range of labels capitalizing on the cryptocurrency boom through payment or reward programs such as Lolli. .
“The reason we wanted to do it is that other beauty brands weren’t doing it,” said Wake co-founder Alex Mavor, who started buying bitcoin in 2016 and is considering the offer from there. ‘payment option as a long term strategy for the business. .
“We know we’re not going to have a lot of customers, or maybe no customers, today by paying with bitcoin,” he said. For now, the recent surge in the value of bitcoin makes holding more attractive than spending it on cars or skin care. “A lot of people right now are just using it as an investment,” he said. “But the point is – with all technology – they always say change happens very slowly, then all at once.”
Wake, a brand designed for Millennials and Gen Z consumers who spend a lot of time in front of screens, is one of the few beauty brands to accept bitcoin payment to date. Lush Cosmetics has started accept bitcoin payments in 2017, while R + Co added it in 2018. Beauty tech startups such as Opu Labs and Perfect 365 also added cryptocurrency options.
However, the use of cryptocurrency for a rewards program is much more common. Lolli is a Rakuten-esque platform that gives portions of bitcoin as rewards for online shopping rather than cash. With over 1,000 merchants, beauty partners using the program include Sephora, Ulta, Glossier, Too Faced, Elf, Fenty Beauty, Space NK, Amorepacific, L’Occitane and EM Cosmetics, among others.
“A lot of the incentives are not aligned for the consumer” to currently spend bitcoin, said Alex Adelman, founder of Lolli. “We saw it as a way to distribute bitcoin to more people, much more easily by not requiring them to be an investor to get into bitcoin. They could just be buyers, which everyone [is]. “The most passionate shoppers using Lolli have earned up to two bitcoins from their purchases, representing over $ 117,000 at the time of reporting.
According to Adelman, 30% of Lolli’s 250,000 users are women, and Sephora and Ulta are two of its “biggest and most successful merchants on the program.” EM Cosmetics founder and beauty influencer Michelle Phan is also investing in the platform and has become a bitcoin evangelist on her social platforms in recent years.
Adelman founded Lolli in 2018 after the acquisition of his previous company Cosmic by Popsugar and then Rakuten. After the acquisition of Rakuten, “we understood the cashback reward space,” he said. “We recalled many of our old contacts [when launching Lolli]. ”
The platform offers a mix of established brands and startups.“These startup brands are definitely coming to us and aligning with us. They are aimed at an audience that wants to learn more about crypto, and that’s a good brand alignment for these companies, ”Adelman said.
The cryptocurrency has grabbed the headlines in recent months with Tesla’s announcement as well as reports of interest in bitcoin by other companies like Morgan Stanley. It has also made its way into the news thanks to the GameStop movement which emerged on Reddit Group’s Wallstreetbets. The members caused the memes-inspired Dogecoin to rise in value after being blocked by Robinhood from buying GameStop and other stocks they attempted to raise. Dogecoin then skyrocketed when Elon Musk tweeted a mention of the cryptocurrency.
Mavor said he has no plans to add Dogecoin or other currencies as a Wake payment method in the near future.
“Elon Musk can’t hurt my eyes,” Mavor said, but noted Dogecoin’s price inflation. “It doesn’t seem to me to be the most stable of foundations,” he said. “[Though] if Elon Musk has a strong opinion on this, then he’s probably right.
While beauty brands have different approaches to cryptocurrency, they share optimism about its future potential. According to Adelman, “Money is a collective belief system that an asset has value. The more people there are who believe that something is valuable, the more valuable it is. He noted that “the general belief among bitcoiners is that bitcoin has already passed this network effect threshold to have lasting value.”
However, this value fluctuates wildly at the moment.
“As an early adopter, there’s always that kind of element of risk,” Mavor said. “There is no way around that there is a risk at the moment.” While he doesn’t expect the use of bitcoin for spending on consumer goods to become mainstream over the next one to two years, “it’s important that these things are in place, so that you don’t do not catch up afterwards “.
