How Crown Affair's CEO took the brand into Sephora and beyond to capture more of the hair-care market

0:04Hello, and welcome to the Modern Retail Podcast. I'm your co-host, executive editor, Anna Hensel, and I'm here with my other co-host, senior reporter, Melissa Daniels. Melissa, how's it going? It's going well, Anna. I'm excited to hear about who you've spoken to this week for the Modern Retail Podcast. Yeah, I had a really fascinating conversation for this week's podcast. There's a lot to dive into here, but I'll just back up a little bit. So as a reporter, I cover startups a lot. I'm really interested in just like the startup journey. And if you look on social media, people like to share the highlight reels.

0:48They talk about it as uniformly positive. One analogy I remember seeing years ago on Twitter is someone who said, I forget who exactly, but they said, if you look at D2C Twitter, a lot of it is people on mile one of a marathon talking about how great it feels, which I feel is very apt. But so this week on the podcast, I had Elaine Choi, who is the CEO of Crown Affair, a haircare brand. And the first question I asked her to kick off the conversation was there was a recent headline describing her brand as being the it girl haircare brand. And so I said, how do you feel about that? And she said, it's exciting, but it's also terrifying because now it feels like there's so many more expectations you have to live up to if the press calls you like this it brand.

1:41So I just thought that was fascinating. I don't know what your conversations are like with startup CEOs, Melissa. You know, I always like it when they're that candid about the reality of being faced with expectations and outside influence, right? Because when you're founding something and you're in your own garage or office or co-working space, everything sounds really great, but it's also really terrifying. And you're not really sure if it's going to work. I think a lot of times we hear that metaphor of building the plane as you're flying it. Yes. Building the ship as you're sailing it. Yeah.

2:17And that's a scary thing to do. And I think the highlight reel of social media can gloss over that. I love that we're getting more real about what it takes to be an entrepreneur and found a business in this day and age. I think we're starting to see more founders go public with their challenges. I think LinkedIn is a spot where people are being a lot more vulnerable. What else is Crown Affair up to these days? I wish I was more on the up and up with what it means to be like the hair care product. But as a toddler mom, I am lucky if I wash my hair twice a week. Yeah. So to back up a little bit, Crown Affair is a hair care brand that they might describe it differently, but I feel like they're a brand that's really focused on kind of creating the essentials for your hair care ritual.

3:06And it's funny, you know, speaking to the CEO, this wasn't really their plan at the beginning, but they launched during COVID and that forced them to change things. Sure. So I spoke with the CEO, Elaine Choi, who has been there from day zero. Crown Affair was founded by an entrepreneur named Diana Cohen. And the way Elaine described the relationship is like, Diana is the creative person. Elaine is kind of the numbers person. So they've been building this brand together, but Elaine was recently promoted to CEO. And so when Crown Affair initially launched, Their whole idea was they really wanted to build community IRL, but then COVID happened.

3:52And so the brand first came on my radar because I saw Diana posting videos on like TikTok and Instagram sharing hair care tips. And to me, that's how the brand really took off. You know, celebrities have posted about them now and the brand is at a really interesting inflection point. They did about 20 million in sales last year. They're targeting about 30 million this year. And so how they're getting there, the brand launched first as a D2C only startup. Then they launched into Sephora. They're growing their presence in Sephora. But just a lot of the conversation focused on kind of what that inflection point is like right now.

4:33You know, speaking with Elaine, one of her priorities right now is, OK, as the business is really shifting, how do we keep the employees who have been there for a long time happy? How do we make sure they have the tools they need to succeed as like everyone's role is changing? So that was another really fascinating part of the conversation to me. Yeah, that is really interesting because you have people who are sort of along for the ride and wanting to make sure that the business is growing in a responsible and meaningful way. And if you're making decisions at the top that aren't allowing those people to do their jobs appropriately, I think that can be challenging for brands.

5:12You know, you want to make sure that everyone who's in charge of the different aspects of the business are in a position where they have the resources to scale to the heights you're trying to take it. Right. But overall, I think the conversation was really interesting. I would say, you know, we dug into some tactics that are working well for them, what they found with influencer marketing, but also just, again, emotionally what it's like to be a startup CEO. I think that if you are a startup CEO or even if you work in a business where your role has changed over the years, I think this will be a really fascinating conversation for you to listen to.

5:50Well, let's get into it. I'm excited to hear. Yeah. And here's the conversation with Elaine.

6:02Elaine, welcome to the podcast. How are you doing? I'm good. Thanks for having me. So I have one question first to kick off this conversation. As I was doing some research prep for this episode, I saw a business of fashion headline from last month that read how crown affair became the queen of it girl hair care. So first of all, congratulations on being the CEO of a it girl hair care brand. But it just got me thinking like as a CEO, when you read a headline like that about your brand, how do you feel about that? My first response is actually sheer terror. It's really funny because I feel like Diana was really excited.

6:41She sent it to me. I'm obviously incredibly proud of the team and what we've built together and my partnership with Diana. But I don't know, I'm an Enneagram three type achiever, if you're familiar with that quiz. So for me, I see that headline and I'm like, all right, pressure's on, like, can't build silently anymore, have to keep going, like hit the goals. There's like, so many people watching. So I think a mix of like feeling proud and also just being like, okay, here we go. Yeah, I was wondering that. I feel like that's a very common response I get when a CEO sees this big piece of press about the brand they're running.

7:20It creates a sense of excitement, but also terror. But we're going to focus on the excitement today. So first of all, for those who aren't familiar, tell us more about what Crown Affair is, what makes it different from other hair care brands? when I first met Diana that's kind of why instantly it's funny we had a 30-minute conversation I was living in LA and that's what convinced me to move to New York and start the brand with her and really it was rooted in the way that not only the way that she thinks about hair but also the way that she thinks about her time and how do you really make every moment a ritual of self-care I think historically it's been in the hair care industry it's always about what do you fix about your hair?

8:03If you have curly hair, you want straight hair. If you have straight hair, you want curly hair. And really, Crown Affair is about loving who you are, learning about what your hair is, learning how to care for it, because an act of care is an act of love. And really, that's kind of what we're all about. And how are we guiding people, creating products, as well as services to be able to help people really embrace what their hair is and who they are? yeah absolutely so how long have you been with crown affair for when did the brand start and when did you join so diana had been working on the brand for about two years prior to launching and then about six months before launch i think she had some prototypes of a product and she knew she wanted to go for it she also knew that she needed money to do what she wanted to do so around that time, she was fundraising and it was mostly to hire someone.

9:00She's incredibly left brain, creative, visionary founder, and she needed an operator to come in and work with her and launch the brand. So we got connected through a mutual friend. We chatted. I think she had been speaking with a few other people, but it was just like instant kismet connection. Yeah, that's great. So yeah, so I joined about four months prior to launch, left my hometown, LA, moved to New York, never thought I would do that. And then we launched the brand in January 2020. So one thing I would really like to talk about during this conversation is just what it's like working and running a fast growing startup that kind of, it just expands beyond its roots.

9:45I cover startups a lot at Modern Retail. One thing I'm really interested in is how you make the transition from being a D2C-only startup to going into retail to trying to reach more customers who aren't your original fans. To back up a little bit, when you first joined Crown Affair, when you moved from LA to New York, what kind of things were you working on in the early days? a lot of it was just I love planning I love planning and strategy so it was just like and and Diana knows I love post-it notes so it was just like knowing that we wanted to launch in January 2020 let's think of anything and everything that we need to do for it to be a successful launch and it's just looking across everything marketing ops and it is a little bit of visioning too, right?

10:38Where it's like, what do we want to accomplish within the next year? And instantly, I mean, this is where Diana has such clear vision. She was like, I want to be in Goop. I want to be in Violet Gray. And then I want to be in Sephora because we all know what Sephora means for a beauty brand. And I just love coloring in the lines. So for Diana to set that framework for me, I was like, okay, cool. What do we need to do to be able to hit those milestones? You will learn that I love analogies. I was a cross country runner. So for me, it's very much like running a race where it's like, you know where the finish line is, but then how are you setting those milestone markers to keep you going?

11:14I remember I would like practice a race and there was always like a tree at the one mile mark. And I was like, okay, cool. So I just have to get to that tree in this amount of time and then I'm on track. And so that was kind of like the really the beginning stages. And it's just like checking things off one by one and making sure that we're we're getting close to where we want to go. Right. So you mentioned something about how when you were getting ready to launch, you were kind of trying to think through what the most impactful things would be. I'm curious in retrospect, now that you're a few years removed, what were some of the tactics or things or investments that you feel like really made an impact and helped Crown Affair have a more successful launch?

12:01we I mean it's interesting because we had to throw our plans out the window I mean Diana's rooted in community partnerships engaging with people we had a full plan in January 2020 that was going to be engaging with people in real life to get the word out there and then of course it was the pandemic so it's interesting because our philosophy has stayed the same we were like we feel really passionately about this brand and we want to be able to share it with people and we want for them to feel connected to it. And I think before the pandemic, yes, we wanted to do all these real life events. We want to do partnerships.

12:42We wanted to activate a very, very engaged influencer community that Diana had already built. And really the tactics just kind of shifted more digitally. And I think the biggest new tactic that we didn't expect, and Diana says this a lot, she never really spoke in front of camera. And so we were kind of thinking through, okay, how do we get our story out there in a way that feels authentic and will allow us to connect and find the people who this story would resonate with? And now it seems obvious. Diana. I mean, Diana is the brand. She cares so passionately about it. So that was kind of like the biggest shift in terms of tactics.

13:22And we saw that it worked as well. Yeah. For people who aren't familiar, if you look at TikTok or Instagram, Diana has done a lot of videos. She's kind of been like, I know people have mixed feelings on the term influencer, but like she really, from my vantage point, it seems like a lot of the videos she has filmed herself, kind of talking about hair care tips, have like really been impactful for the brand and helping you like reach new customers. Are there particular videos or pieces of content of hers that have done really well or kind of what have been your learnings as to why that has resonated?

14:04We also don't like the word influencer. I mean, especially for Diana, because I think she's such a storyteller and she has something to say. And social media just happens to be one channel through which she can share that story. So I think what kind of got her viral on TikTok was a very quick tutorial on the twist and clip air dry method. And it was just kind of a unique way to be able to do your hair without heat that people loved the results of. It was really effective for her. And then I think the other ones are just how she lives her life. I think that's where the philosophy of Crown Affair, of taking your time, rituals of self-care, that's really the foundation of the brand.

14:48And those are the stories that she's telling. And those seem to really resonate and engage our audience as well. Right. I was particularly interested. I think a big milestone for any startup is when you launch into mass retail for the first time. So remind me, when did Crown Affair launch in Sephora? We launched in February 2022. Okay. And so what have you learned in two plus years of being in Sephora? Oh, man, so much. I mean, we love the brand. And we were like, we're going to bring this calm, zen, beautiful brand that's all about taking your time and ritual into Sephora. And we launched in Sephora.

15:31And we forget that we know the brand really well, but no one knows what Crown Affair is. so instantly we went in store and one sephora is a very loud environment so to have something quiet and minimal is not going to stand out and then the second thing we learned was when people don't know what your brand is they're literally asking what is crown affair is it even a hair care brand and i remember i had this moment because someone was shopping our shelf and we had our oil which is called the oil on the shelf and someone asked if it was face oil and i was like okay we have a lot of work to do to really educate the customer on not only what the brand is, but to assert ourselves as like, we are a hair care brand.

16:10And so over the past couple years, it was really about, okay, cool. How are we showing hair to show that we're a hair care brand? And then secondarily, be able to bring people in and retain them through what our philosophy is on hair care in general, but really leading with product, really leading with results, I think was the biggest learning in terms of Sephora. That's one of the most common refrains I hear from startups when they launch into not just Sephora, but any mass retail for the first time is like a realization that sometimes it comes just down to packaging, but that like, you know, customers are not familiar with what your brand is, what you stand for, what you sell, and you have to make that hyper clear.

16:57So yeah, you mentioned some shoppers like didn't even realize you were in the hair category. So how did you make some of those things clear to the Sephora customer? What changes did you make? We barely had any photos of hair on our visual merchandising. Yeah. So I think that was like the biggest change. We for a while, I mean, I think sometimes before afters are so manufactured, it's like so clear that the hair was done. So we were, we took a little bit of time to figure out like, how do we, how do we really do before afters in our way? Cause our whole thing is that like, you should be able to embrace your hair.

17:34So why would we like do heat tools on our models to be able to show the results, enhanced results. So had to get a little bit creative there. And then I think the biggest thing was really focusing in on a few core skews that we felt like were representative of our brand. Um, in particular, I think the dry shampoo instantly resonated with a lot of customers. I think probably because of its clean formulation, its unique application, a lot of people equate it to kind of like, it feels like makeup. And that's been a really interesting insight too, because people love doing skincare and they feel so good doing makeup, but they don't feel good doing hair care.

18:14And so how do we kind of bring that in and be able to highlight that? And then I think the other product that we really wanted to focus in on was the leave-in conditioner. We're all about caring for your hair and just like your skin, you need hydration. And a lot of people have shied away from leave-in conditioner because they're like, it's too heavy. I have really fine hair. And our unique formula, it's so lightweight. We call it weightless hydration. And it can be used for everyone. It's such a foundational step for hair care. So you recently became the CEO of Crown Affair. Obviously, you've been with the brand for a long time.

18:53But what was your conversation with Diana? Like, why did you two decide that now was the right time for you to step into the CEO role? Kind of remember this conversation because I was using an analogy with her. I was using several analogies with her. Yeah. And it's kind of like we started a bakery together in 2020. And she was like, we're going to make the best matcha pastries. And I was totally down. And for the first couple years, she knew exactly which matcha pastries she wanted to make. And I was her right hand. I was like, great, I'm going to get the flour, I'm going to source the best matcha, I'm going to construct what this with this bakery looks like.

19:34And it's and we'd collaborate together on what we wanted it to look like. And then a few years in, we make all of our products. And then I start to see, wow, oh, people really like this one donut or people like these three pastries. And I can figure out who it is that likes these. I can figure out how I can scale to efficiency these products and then really work on distributing it in a way that can make the business really profitable. And I think at that point, it's less about this like creation from the ground up. And it's really about how do we find more people to share our pastries with. And that's kind of my skill set.

20:17So it was really a gradual transition over the past five and a half years that we've been together. In many ways, it didn't even feel like a stark conversation. It felt like many, many conversations that we've been having. And it just made sense given where we are as a brand and wanting to continue to scale with Sephora and increase distribution and really march towards profitability that it just made the most sense at this time. Yeah. So what are your priorities now then? I mean, listening to the analogy you just shared, it sounds like, you know, figuring out how you can introduce yourself to new types of customers, maybe reach new demographics, but what are your priorities right now as CEO?

21:01Yeah, I think it is distribution. And on the distribution side, I think it's really focusing in and doubling down on Sephora. We have some pretty massive expansion this year. And so that's my main priority. The second is last year was a lot of testing in terms of marketing. So we saw what worked, what didn't. And I think the second priority is really all about efficiency towards profitability and just leaning into what's working on the marketing side. And then my third priority is team. I think there are so many people on our team that have been with us really from close to the beginning and just making sure that they're happy.

21:39We're going through some pretty big shifts, especially as we scale and just ensuring that we're staying close to them on making sure that they feel like they have the resources they need to be supported and grow and to be able to hit their metrics. You mentioned that you tested a lot with marketing last year. What were some of the things you tested? This probably seems so obvious. We did try to do some macro influencer strategies. It was a lot of money and it just wasn't the biggest return. And I think that was kind of the biggest one, but it was like, we were looking at different things with influencer.

22:16We were A-B testing a lot in terms of digital advertising to see what messaging creative was resonating. I think that's kind of what allowed me to realize that we really needed to hire an amazing creative director. It was like this rich, strong imagery that felt so core to the brand that was resonating on our digital channels. So how do we kind of beef that up even more? Yeah. With macro influencers, I mean, it sounds like it kind of ties into imagery is very important, but what did you learn there? Will you continue to invest in macro influencers or like how will you change that? It seems so obvious looking back, but it was so counter to how Diana and I thought about launching the brand, where we're really just rooted in that one-on-one connection and having strong engagement with our community.

23:10And so it does make sense that our micro-influencer community does so much better because they love the product genuinely. They want to share it with people. They want to share how it might work for their people. And I think the challenge with macro is that it can feel a bit impersonal and is pretty counter to kind of what our initial philosophy was and continues to be. this got me thinking because you had mentioned at the beginning of the conversation that you really wanted to build a brand rooted in community and i think community is such an important but also broad word you know i see a lot of brands who they think the answer to building community is simply hosting events and so like to you i'd be curious to get your perspective on like what it takes to build authentic community?

24:05What do you feel like consumers are looking for in regards to community from brands? I think it's a place where you can see yourself in the others around you. And then I think the second is, yeah, like you've found a space to be able to engage with people like you. And so for us, I think, yes, like bringing people in by hosting an event is one way to bring the community together. But I think in other ways, like community is also like one on one interaction. I think like I think this is why Diana keeps posting, too. If she is saying something on TikTok and it resonates with one person out there in the country, that's that's community.

24:50That person has found meaningful connection. And I think that's kind of how we we see community. It's really not about like mass and bringing people together and trying to go for reach. It's really about like, how are we really connecting with people authentically, individually within smaller groups? Yes, we do the big groups hosting as well, but that's kind of how we see community. Right. Another thing I'm curious about is, are there any marketing tactics or investments that maybe you prioritized in the early days and you found strong returns on that like aren't working as well today. I don't know if that's an issue you encounter, but that's something I wonder a lot with brands.

25:35You know, it's fun to talk about what's working, but is there anything that's not working now that used to? I think I'm having a hard time answering this question because we like, Like, I'm very conservative. I don't tend. And also I came, I was pre-med. I'm a science background. I'm very hypothesis driven. So I'm like very like precise in terms of like, this is the experiment. Here's what I'm controlling. I think like macro was kind of like the experiment that failed. And so there's nothing really that we like did that we had to really sunset. We've had to pull back and like reshift our strategies.

26:11I mean, everyone went through iOS 14. So that was like a time where we had to shift our strategy there. But I would say for the most part, things have pretty much stayed the same channel wise. And then we've just had to kind of like shift within each channel on our strategy. Yeah, that makes sense. You mentioned team is another priority, obviously. Are there particular roles you're looking to hire for this year? I'm kind of wondering, again, as Crown Affairs at this very interesting inflection point, do you kind of see gaps within your organization that you're looking to fill? I would say our biggest gap was creative.

26:53We were kind of punching above our weight with that. And so that was a big hire for us when we hired our creative director. In terms of next big hire, I feel like we're really hesitant, but we know that we'll have to eventually hire someone very dedicated on performance marketing. Now that we have... What makes you hesitant about that? I think it's hard to balance kind of this authentic, engaged community with the scale that comes with performance marketing because... Right. It kind of becomes automatic. And I think the whole reason why our community is so special is that we can listen and respond and adapt and shift.

27:40And sometimes like performance marketing just feels like this like flywheel that can get really out of control. So we're trying to we eventually will need to hire someone, but we're hoping it's someone who can kind of balance engaging with like our community, understanding what's working. scale that up as much as we can, revisit, see if anything needs to be shifted, and then continue to go accordingly versus like, I mean, we saw this in the D2C days, right? In like 2009 to 2012, it was just like, oh, wow, digital advertising is working. Let's go and pour all of our dollars there. Like that is just not the way that we want to grow.