Emerging brands are not just new and scrappy, but are becoming increasingly sophisticated in getting the word out, tapping into the full marketing funnel and navigating the creator economy.
With the number of social media users projected to top 330 million by 2029, according to Statista, creators make a buck or two on links that pay commissions while brands rake in revenue with a cost-effective, pay-per-sale fee. Done right, it can cost much less than traditional marketing.
For brands like Aligne that don’t have a six-figure marketing budget and are looking to test ground in a new market, affiliate marketing has proven to be the right bet.
“The U.S. is huge, and you can approach it through these big, flashy campaigns or you can go more micro to start and work with great content creators who have created huge businesses for themselves,” said Ginny Seymour, CEO of the British clothing label.
Arielle Charnas, influencer and founder of Something Navy, a now-defunct clothing brand turned Substack newsletter, visited the New York pop-up store and posted on social, spiking sales 3,000 percent from the year prior in a matter of an hour, according to Seymour. By partnering with creators who have shown an affinity for the brand, Seymour leverages their point-of-view, community and inclination to share styles they selected and enjoy wearing.
With the right partnership, synergy between brand and creator could generate far more benefits beyond sales. It could increase reach — in this case, Charnas’ 1.3 million Instagram followers — and engagement, raise brand profile and provide immediate, crucial data on customers. Wholesale accounts are often slow or just not equipped to provide that kind of data.
Aligne, which entered the U.S. market in August 2023, reached over $1.4 million in sales through affiliate links during its first year, out of $6.5 million in sales for the brand overall.
Seymour allocates more than half her marketing budget to affiliate marketing, and projects that budget will only increase. The U.S. business will account for 70 percent of sales by the end of December.
Babba Rivera wearing the Daphne jacket by Aligne.
Courtesy of Aligne
The creator economy is projected to reach $480 billion by 2027, per Goldman Sachs Research, which includes a range of revenue streams such as affiliate commissions, brand partnerships and sponsored content. Commissions in particular are a measurable form of spending that can be foundational to a business’ growth, particularly for a still-emerging brand.
For contemporary shoe brand Larroudé, affiliate links have been instrumental since the start. Founded in 2020 by former fashion editor Marina Larroudé and husband and financier Ricardo Larroudé, the New York-based company not only works with affiliate platforms, but has created a program of their own where customers recommend shoes to other friends and earn credit in the process.
“We do believe in the power of sharing. We do believe in a world that a woman sells more once someone is wearing it and when someone is talking about it,” said Marina Larroudé.
In 2023, the company generated $30 million in sales and allocates budget across commissions, seeding, paid search, social media advertising and off-the-wall campaigns.
While Larroudé said the brand would never outright pay anyone for a blog post or form a paid partnership, she does believe in the value of gifting product and paying commission to affiliate partners.
“The budget is infinite as long as it has a return on investment. Our affiliate commission for influencers is 20 percent, which is higher than any other one in the market, and if they sell 1,000 shoes, then they’re going to be paid,” Larroudé said. “So everyone is incentivized and motivated to do more, but it depends on them. If they don’t post and then don’t tag, I won’t be gifting again because we’re not a charity business.”
Affiliate marketing spend in the U.S. is projected to increase to $12 billion this year, according to Statista. And platforms like ShopMy have elevated social commerce to the stratosphere. Cofounders Tiffany Lopinsky, Harry Rein and Chris Tinsley offer user-friendly, real-time analytics to track performance of creators from clicks and conversion, while connecting luxury brands like Saint Laurent and Prada to 150,000 creators across 130 countries. In addition to its automated gifting program, which streamlines logistics, the platform offers creator discovery capabilities and a tool that serves as the middleman for guaranteed coverage.
“It’s [affiliate performance] becoming almost like the validation layer for brands to do a bigger partnership [with a creator] because otherwise they’re flying blind,” said Lopinsky. While gifting to celebrities and influencers are often managed by PR teams, Lopinsky reasons that the process should be informed by affiliate strategy, requiring cross-departmental communication and collaboration to determine which talents are best to partner with to enforce brand image and generate sales.
The practicality of having a one-stop shop for clear reporting, communicating and seeding along with AI-generated recommendations on who to align with is an attractive feature for brands that may not be able to staff a full team dedicated to influencer marketing.
ShopMy dashboard.
courtesy of shopmy
“Brands have been separated; brand [marketing] is way up here in the marketing funnel, performance is way down there, and they’re not working together at all, and they really have no knowledge about who’s doing what,” said the cofounder.
And that can lead to missed opportunities. For 2024, ShopMy generated $262 million in sales for brands, and drives approximately $70 million a month in sales to brands and affiliate partners. And now, with the Duchess of Sussex Meghan Markle as one of its 150,000 partners — a partnership Lopinsky would not discuss when asked — it’s likely that number will rise.
Brands weren’t always on board with affiliate programming. Luxury players were late adopters to this channel, considering it second tier, joining once the numbers were on paper and there was less stigma associated with pay-to-play.
For New York-based creator Lilly Sisto — who counts over 100,000 followers on Instagram, 70,000 on TikTok and 16,000 on Substack — linking back to products was her modus operandi since the early days.
“I just kind of did it because I loved it,” said Sisto. “And then I really started getting traction, and realized I can actually make money and do this as a side hustle.”
It didn’t take long for Sisto to commit to creating content full time, crediting TikTok for the start of her brand deals. Sisto has partnered with Giorgio Armani, Tory Burch and Polo Ralph Lauren.
Now, she gets about 20 percent of her revenue from commissions, but continues to share her favorite products via links. And that’s a plus for brands as affiliate-driven customers not only have a 21 percent higher lifetime value than those acquired through other channels, according to Awin, but they associate brands and products to a particular context and attributes creators put on display.
But, as with everything, brands must contend with oversight as the influencer marketing sphere is increasingly being regulated. A class action lawsuit against Revolve Group brought to light how the creator market is no longer the Wild West and distinctions between sponsored and organic content must be clear. The company declined to comment on the lawsuit or its influencer program.
One thing’s for sure, affiliate marketing will continue to grow as brands look for quantifiable returns on investments, especially in this uncertain market. Lopinsky said that, once brands see the full marketing funnel, then they can realize their full potential.
