On July 15, according to WWD, the American skincare brand Rodan + Fields (hereinafter referred to as R+F) announced that in order to adapt to the development of online channels such as TikTok and Amazon, it will innovate its business model starting September 1.
This business reform mainly involves three aspects. First, R+F will change its original direct sales model to a combined online and offline sales approach. Second, the company will increase the product sales commissions for distributors to motivate their enthusiasm. Third, R+F will conduct a second round of layoffs, cutting 100 jobs. It is known that the brand already conducted a round of layoffs last September, resulting in 76 employees leaving the company.
It is understood that the R+F brand, focusing on sensitive skin products, was founded in 2000 by two Stanford University School of Medicine graduates, Kathy Fields and Katie Rodan. The brand was acquired by the Estée Lauder Group in 2003 and included in the group’s professional brand portfolio. In 2007, the two founders bought back the brand from the Estée Lauder Group.
In 2008, R+F adopted a direct sales model and gradually built a sales network composed of independent distributors. At that time, the brand’s revenue was just over $4 million. By 2013, the brand generated over $200 million in revenue and had approximately 50,000 distributors and hundreds of thousands of subscription customers.
According to financial data published on R+F’s official website, the brand’s sales reached $1.3 billion in 2019. In 2020, the combined net worth of the two founders reached $800 million, ranking them 22nd on Forbes’ list of America’s Self-Made Women that year.
However, with the continuous development of e-commerce platforms such as TikTok Shop and Amazon, the growth of the direct sales model is being hindered. R+F’s CEO Dimitri Haloulos stated, “Consumer trends are changing, and our customers are no longer satisfied with purchasing products through a single channel. Therefore, we must adapt.”
R+F stated that after this business reform, it will further enhance the synergy between traditional channels and online social media, helping the brand achieve more marketing and advertising revenue.
