Influencers are changing the face of commerce for good

These babies are millionaires.
These babies are millionaires.
Image: Reuters/Carlo Allegri
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Michael Jordan’s Nike sponsorship deal may not immediately come to mind as one of the most dramatic moments of his career. But the story behind it is nothing short of a buzzer beater.

For one, Jordan’s vision—and the iconic Air Jordan sneaker—came perilously close to never seeing the light of day.

Back in 1984, 21-year-old Jordan was a top college star, an Olympic gold medalist, and the third overall draft pick in the NBA. But even with those achievements under his belt, a sneaker deal with a major athletics company seemed elusive.

Jordan longed to sign with Adidas, but the company wasn’t interested. Converse was keen to ink him, but would only commit to scrawling Jordan’s name on a pair of cookie-cutter kicks. At the eleventh hour, Nike came along with an offer to develop a sneaker to the athlete’s exacting design specs.

Compare that to the freedom available to today’s influencers and icons. At just 21, Kylie Jenner has been named the world’s youngest self-made billionaire thanks to her cosmetics line. On her own terms, Gwyneth Paltrow has grown Goop from a blog to a $250-million empire. Marshawn Lynch, Katy Perry, and Lady Gaga have launched apparel, shoe, and beauty lines—notably retaining complete creative and financial control because there are no licensing contracts, sponsorship deals, or corporate conditions to satisfy.

Behind all of this are market forces as easy to overlook as they are utterly transformative: the rise of direct-to-consumer sales, and a little thing we’ve come to know as influencer status.

The term “influencer” may not evoke thoughts of profound social or economic disruption. And yes, there are plenty of social media influencers out there selling products to their followers for an affiliate fee.

Influencer culture has also given rise to an alternate world of inauthenticity that has changed how we measure—and covet—success as societies. But when it comes to how we consume products and experiences, the authenticity of the person selling us stuff has been the most powerful driving force of change.

The influencer model has changed the way our society doles out fame and fortune, and presents a new opportunity for entrepreneurial success. And the benefits of this emerging business model extend far beyond the Jordans and Jenners of the world.

Democratizing fame (and fortune)

In Jordan’s day, fame was largely controlled by a handful of entities—agents, entertainment studios, managers, and advertisers—who made decisions based on narrow cultural and aesthetic criteria for what was considered “marketable.”

Case in point: Despite his obvious talent, Adidas reportedly rejected Jordan in part because he fell short of the brand’s height requirements. They preferred to work with basketball players that were over seven feet tall (Jordan is six-foot-six).

Today, influence is no longer controlled by corporate gatekeepers, or manufactured in a Hollywood bubble according to focus groups and preconceived stereotypes about what’s going to sell.

Instead, power has been handed back to consumers who are redefining fame, democratizing access to its associated fortune, and even adding much-needed diversity to fields that have traditionally been woefully homogeneous.

Michelle Phan, for example, translated her free YouTube makeup tutorials into a multimillion-dollar cosmetics line and became one of the first prominent Asian-Americans in the beauty field. And Jeffree Star brought his unapologetic (and at times problematic) voice and queer persona into the beauty field via his YouTube-channel-turned-makeup-line. Meanwhile, fashion blogger Gabi Gregg wore a swimsuit in a post that went viral, and used it as an opportunity to launch several successful plus-size clothing lines.

Valorizing “real”

The influencer model has narrowed the gap between creator and consumer, giving buyers the power to support people they actually believe in, and elevate regular folks from unknowns to icons. Take the case of Kayla Itsines. The personal trainer from Adelaide, Australia gained a global following after posting photos of her clients’ transformations on Instagram. Her passion for fitness, not to mention the jaw-dropping results of her high-intensity workouts, struck a chord with viewers. Riding the wave of support, Itsines was able to sidestep deals with traditional publishers and retailers. Instead, she published an e-book on her own, launched an app, and created an online store. Today, her business is worth $486-million, and—in a telling inversion of traditional licensing deals—Apple paid her to star in its Apple Watch ads.

What’s behind Itsines’s success? On a purely logistical level, direct online sales enabled her to build a thriving business model without relying on third parties. Today’s influencer-entrepreneurs have tools at their disposal to handle marketing, sales, and fulfillment practically on their own—something inconceivable when Jordan was getting his start.

But on a deeper level, the key to her success has been the ability to authentically connect with fans. Authenticity may be another digital buzzword, and an increasingly slippery concept in an era when even “candid” selfies are carefully posed for and heavily edited. But Itsines doesn’t give her followers a bland and scripted corporate persona. They see someone whose passion for fitness is evident; someone whose enthusiasm and even challenges come through relatively unfiltered via social media.

In the end, consumers are able to vote with their dollars for a product, and a person, they actually believe in.

Raising the bar for consumers

The influencer model has had another unexpected benefit: It’s helped purge the market of VIP-backed junk and surfaced products that people, well, actually want. When fans have a direct pipeline to provide feedback, even celebrity status doesn’t guarantee a successful influencer brand if a product doesn’t live up to expectations.

Consider former Gossip Girl star Blake Lively’s short-lived lifestyle brand Preserve.

Doesn’t ring a bell? Exactly.

But Gwyneth Paltrow’s successful lifestyle offering, Goop, is a household name, whether you’re a fan or a critic. Paltrow’s commitment to the advice, products, and wellness tips dispensed via Goop is immediately evident—so much so that she’s become synonymous with the brand. Ride-or-die Goop fans are a testament to its value.

For another example, this time from the sports world, think about NFL running back Lynch’s apparel line Beast Mode. As his NFL career came to a close, Lynch has dedicated himself to building Beast Mode into a provider of quality athletic apparel at a non-baller price point. He’s able to offer this to consumers because he is skipping the middleman, and relying on his influencer capital instead.

This all adds up to a much higher bar for traditional or even fellow influencer brands to clear. Slapping a celebrity endorsement on a product is no longer enough; successful influencer brands have positioned value and quality front and center. For all their hype, influencers only succeed by providing substance. There’s too much competition, and consumers are far too savvy to fall for a substitute.

Ultimately, it’s easy to hate on influencers. But on a deeper level, influencer brands and direct sales have wrought significant changes in how fame and entrepreneurial success is earned. Big brands, and the marketing and PR armies that support them, have lost their firm hold on who’s cool, what’s hot, and what consumers really want.

For now, power is shifting back to the people—with a chance to buy Kylie Jenner’s lip gloss, Colin Kaepernick’s jersey, and whatever you want, really.