Elon Musk announced that Tesla would accept Bitcoin as payment in March, but beauty brands were already ahead of him on cryptocurrency.
In January, Wake Skincare, a UK-based DTC brand developed for the “connected generation,” announced that it would be the newest brand to accept cryptocurrency as a payment method. The brand made Bitcoin and Ethereum payment options available at the Shopify checkout using Coinbase, and joined a variety of labels that benefited from the cryptocurrency boom through either payment or rewards programs like Lolli.
“The reason we wanted to do this is because other beauty brands weren’t,” said Wake co-founder Alex Mavor, who started buying Bitcoin in 2016 and sees the payment option as a long-term strategy for the company.
“We know that today we are not going to attract many customers or customers who pay with Bitcoin,” he said. Right now, Bitcoin’s soaring value makes holding onto it more attractive than spending it on cars or skin care. “A lot of people are just using it as an investment right now,” he said. “But the thing is, with all technologies, they always say that changes are very slow and then all of a sudden.”
Wake, a brand designed for Millennial and Gen-Z consumers who spend a lot of time in front of screens, is one of the few beauty brands to have accepted Bitcoin payments to date. Lush Cosmetics began Accepting Bitcoin Payments in 2017, while R + Co. added it in 2018. Beauty tech startups like Opu Labs and Perfect 365 have too Added cryptocurrency options.
Much more common, however, is the use of cryptocurrency for a reward program. Lolli is a Rakuten-like platform that offers bits of Bitcoin as an online shopping reward rather than cash. With over 1,000 retailers, the beauty partners who use the program include Sephora, Ulta, Glossier, Too Faced, Elf, Fenty Beauty, Space NK, Amorepacific, L’Occitane and EM Cosmetics.
“Many of the incentives are not consumer-focused,” said Alex Adelman, founder of Lolli. “We saw it as a way to distribute Bitcoin to more people, much easier, by not having to get them to be an investor to get into Bitcoin. You could just be a buyer, which is something for everyone [is]. “The most avid shoppers who use lollipops have made up to two bitcoins from their purchases, which is worth more than $ 117,000 at the time of reporting.
According to Adelman, 30% of Lolli’s 250,000 users are female, and Sephora and Ulta are two of the “largest and most successful retailers in 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 his former company Cosmic was acquired by Popsugar and then by Rakuten. After the acquisition of Rakuten, “we got the cashback rewards area,” he said. “We called many of our old contacts [when launching Lolli]. ”
The platform has a mix of established and startup brands.“These startup brands definitely come to us and agree with us. You are speaking to an audience that is keen to learn about crypto and this is good branding for these companies, ”Adelman said.
Cryptocurrency has made headlines in the past few months with the announcement by Tesla as well as reports of interest in Bitcoin other companies like Morgan Stanley. It also hit the news thanks to the GameStop movement that popped up on the Reddit group’s Wall Street bets. Members caused the meme-inspired Dogecoin to surge in value after Robinhood prevented them from buying GameStop and other stocks they tried to raise. Dogecoin then skyrocketed in value when Elon Musk tweeted a mention of the cryptocurrency.
Mavor said he has no plans to add Dogecoin or any other currency as a wake payment method anytime soon.
“Elon Musk can’t go wrong in my eyes,” Mavor said, but he did notice Dogecoin price inflation. “That doesn’t sound like the most stable foundation to me,” he said. “[Though] If Elon Musk has a strong opinion on this, then he’s probably right. ”
While beauty brands are taking 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 believe that something has value, the more value that thing has. “He noted the” general belief of Bitcoiners that Bitcoin has already crossed this network effects threshold to have sustainable value. ”
However, this value is currently fluctuating strongly.
“As an early adopter, there are always such risks,” said Mavor. “There is no getting around the fact that there is a risk at the moment.” While he doesn’t expect the use of Bitcoin for consumer goods spending to become mainstream in the next year or two, “it’s important that these things are in place so you don’t catch up afterward.”