When Erico Frezza started experiencing severe adult acne, he took matters into his own hands. Meticulously researching for the next three years, Enrico launched Peace Out Skincare and its first product, the Acne Healing Dot. In this episode of Shopify Masters, we chat with Erico on the skincare product development process, the benefits of using SMS marketing, and how they created a viral sales-generating TikTok video.
For the full transcript of this episode, click here.
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- Store: Peace Out Skincare
Filling the gap with a product developed out of personal need
Felix: You created this business, or rather the first product in the business, because of an issue that you suffered with. Can you tell us more about that?
Enrico: That’s correct. Peace Out, before it started, was my own struggle with acne that I had throughout my teenage years, and I couldn’t find anything to fix it. I ended up taking Accutane, which cleared my major acne. But years after I stopped the Accutane, I kept getting those occasional breakouts. I got tired of trying everything under the sun to take care of them, and I got tired of letting my breakouts make me feel insecure like when I was back in my teenage years. It robbed me of my self-esteem and happiness. It really took a toll on my emotional wellbeing. I started researching different types of treatments that were not focused on acne to treat my breakouts because I’d tried everything to treat acne and nothing worked for me. I stumbled upon this dressing that is called hydrocolloid dressing, which has been used for wound care for over 25 years. It absorbs fluids and reduces inflammation. I said “Well, okay. I can try it. I mean, I tried everything, so why not?” So I did a 20% salicylic acid peel on my face, and then I put on the big patch and went to sleep. When I woke up, the pimples were flat, so a layer of my skin had peeled off. It was definitely a learning experience. But I found the dressing, the hydrocolloid addressing, was able to absorb the pimple overnight. I was like “Okay, this is something. Can we make this better?” And making them better was to be able to infuse it with acne-fighting ingredients. Which took a long time to find the manufacturer, and the lab, and a lot of testing in the kitchen at my house to be able to find the right percentages and stuff. But we’re able to achieve it and file a patent. We’re the first-ever company to infuse active ingredients with these hydrocolloid dressing to make the acne healing dot.
Felix: What made you believe that there could be more done with the existing products in the marketplace?
Enrico: The acne category hasn’t really changed since 1980, and it’s been very doctor-driven. Most of the products out there were just repeats of the same things, just in different packaging formats. I didn’t feel there was very much innovation in that category, and it was just extremely clinical. So what we wanted to do is bring a first to market to a product that is effective at treating breakouts overnight. And secondly, bringing it with a brand that was not doctor-driven, but instead was fun and not scary. We wanted to bring a fun and engaging lifestyle brand aspect to the market.
Felix: What were the first steps you took to create the product?
Enrico: The first step was to test it on myself, I was definitely my test subject. Then I started looking for manufacturers that would be able to infuse these ingredients with the hydrocolloid dressing, which is easier said than done. It was extremely challenging. It took six months, and I almost gave up. I reached out to 75 manufacturers in the US and overseas. Nobody could do it, or if they could try to do it, it would take two to three years of R and D, which was not an option. Eventually, through research, I found a patent that was able to mix alginates, which improves the adhesion of the dressing. So I said, “Well, if they were able to mix that, then maybe they can mix the active ingredients that I would like to put into the patch.” I reached out to them, and after seven R and D batches and test and trial, we were able to achieve the final results, which is the Acne Dot, which is currently in our marketplace.
Felix: You mentioned it took six months and seventy-five manufacturers to finally produce your envisioned product. What kept you going during this time?
Enrico: What kept me going is that I knew it was possible somehow. It might’ve been challenging, but I knew that I could find the one manufacturer to make this work and believe in my idea, rather than just saying “It’s impossible,” or say it would take multiple years to try and develop it. I really had the goal to help people that struggle with acne. Because I know how it personally feels to have acne and breakouts, and I just knew that there was something better that had to be put into the marketplace. That kept me going.
Felix: Now when you finally land on a manufacturer that could help produce the product, how did you find them?
Enrico: Through the patent that I was mentioning, where they would mix the alginates with the dressing. I looked up one of the inventors in the patent and then Googled them. So I kind of stalked the patent and then the person. He’s the owner of the manufacturer in California that was only 30 minutes away from my house. So I set up a meeting, and that was it.
Felix: What was that meeting like? How do you even begin a conversation with someone that has a patent you may need for a product that you’re creating?
Enrico: It was not the same patent. Their patent was to mix alginates with the dressing in order to improve the adhesion for wound care. So it was a totally unrelated patent itself. Their ability to be able to mix those alginates with the hydrocolloid dressing gave me an idea for how to mix my active ingredients into the dressing.
Felix: Once you found a manufacturer, how long did it take before the product was ready to be sold?
Enrico: About a year. Since it’s an OTC (over-the-counter) product, we needed to make sure that the salicylic acid, which is what we infuse the hydrocolloid dressing with to treat acne, was stable across X number of months under different temperature conditions and humidity. That took a few adjustments on the R and D part to be able to achieve.
Felix: As you were developing this, were you able to do any testing with the market?
Enrico: We mostly did friends and family testing. We didn’t have the capital to be able to start doing clinical testing. So it was a close group of friends and family to test it out and provide feedback. Personally, I wanted to make sure that I achieved the best possible product. When we first started, we noticed that the patch would turn brownish because of the salicylic acid, or the adhesion wouldn’t be so great, or the absorption would not be so great. So we have to find the right levels. Once I had, the final product, then we started testing it out with friends and family to get feedback. And they were awesome. It’s not just me. It works for other people as well, so that’s great.
Felix: Once you got that manufacturer, how much did you order at that first production run? How did you get your first customers?
Enrico: It was 20,000. Before we went into production, we already partnered with Sephora to launch exclusively with them in Sephora US, both online and in-stores. So once we had an idea of, the size of the potential business, then we started the production for it.
Working with big retailers as a brand new startup
Felix: Sephora, how did that relationship come up?
Enrico: We had the opportunity to pitch to Sephora through a family friend. And when we pitched, it definitely took a while. It was not easy to get into Sephora. They only pick exclusively about four or five brands per category a year, especially if you’re launching in-store as well. So it was definitely a challenge to be able to get to Sephora and then start pitching it. When we originally pitched the first time to Sephora, they were like “This is great. We love your product. We have tested it. We love your brand. But we need a full band, not just one product.” At the time, it was just the first product, which was called Peace Out Acne. And we kind of revamped our branding and came back with a full pipeline, the Peace Out Skincare brand with multiple products underneath it.
Felix: What do you think Sephora found attractive about you? At this point, you didn’t have any sales or anything yet. You’re a brand new company. What made them put their trust into you?
Enrico: That’s a good point. It was definitely the brand and the founder story behind the brand, which is always a strong connection, and the technology in the product itself. So it’s been a combination of things. In their mind back then Acne was such a clinical category that was really not changed for a long time. And having an acne product that was fun, and engaging, non-clinical, not doctor-driven, I think it really appealed to them for a younger demographic, that they were not yet targeting, at least in the acne category.
Felix: When you did launch, were you responsible for any of the marketing, or did Sephora take most of the brunt of the marketing?
Enrico: We were responsible for marketing. They, of course, supported us and they keep supporting us. They’re an amazing partner. But it was definitely a split into the marketing. We have to do our part with the resources that we had, and they helped us. So it was kind of a win-win on both sides. It was not just one-sided.
Felix: When you did this launch with Sephora, did you also already have a website that you were selling from?
Enrico: Yes. We had the website through Shopify, PeaceOutSkincare.com. What we wanted to do at the beginning was to focus on driving sales through Sephora to really build a partnership since they trusted us, for a brand that had zero sales before even launching. So they took a bet on us, and I wanted to make sure that our partnership with Sephora was solid. So in the beginning, our website was purely for educational purposes. We were not selling. It was to educate the consumer on the brand story, and the products, and the vision of the brand that where we wanted to go. Then eventually, around 2018, we started selling through our website as well.
Felix: Once you started selling through your website, did you have a different marketing strategy to get customers to your website rather than just going through the retail channels with Sephora?
Enrico: We started exploring more into SEO, that we hadn’t tapped into before. We also started digital advertising, to start driving some sales through our own site versus Sephora. Also press, which in the beginning was directed to Sephora. We started splitting a little bit to our site, as well. That was back in 2018. We were very much newbies at direct-to-consumer and ecommerce, and we were still very much focused on Sephora and the global expansion within Sephora, which took a lot of resources out of our small team. In 2018 there were four of us. Now we’re 20.
Felix: When you decided to launch more products, how did you decide what to launch next?
Enrico: All the products in our line are connected to something that I personally struggled with. The first product we launched was Peace Out Acne. Then we launched Peace Out Pores, which are overnight pore strips that you put on your nose or on your cheeks, and it absorbs all the oil that is trapped within your pores and seals the pore with ingredients that are inside the patch. Then we launched Peace Out Dark Spots, which is a dissolving micro-needling dot to treat hyperpigmentation. And that was my own personal struggle with melasma. Next was Peace Out Wrinkles, as I’m now in my late twenties and I’m starting to see some fine lines. That’s when we launched Peace Out Wrinkles, which are dissolving micro-needling patches to treat fine lines and wrinkles. Now we’re at seven products, they’re all connected to a personal struggle. I guess from a consumer perspective, I watch the marketplace, and I try to think of it as “What am I missing in my current routine that I would like to add?” Or “What am I not liking about a certain product I’m using that I would like to improve?” So it’s not always reinventing the wheel, sometimes it’s also improving it. A lot of our projects are really reinventing the wheel, they’re truly first to market products. But as we’re expanding, it’s also how can you improve a certain product?
Felix: How do you decide whether to invent something new or improve an existing product?
Enrico: When there is something that is truly lacking in that category, then it needs a first to market product. Dark spots, that category hasn’t really changed in 20 years. There’s been the same active ingredients and the same delivery system to treat hyperpigmentation, the same as wrinkles. A lot of the time topical products can only go so far in what they can treat, especially when you deal with hyperpigmentation and wrinkles that are deep underneath the skin. And that’s why we picked these over micro-needling patches to treat it. Now that our pipeline is expanding and we’re looking at more all-over solutions, improving what’s currently there and making it better versus reinventing or starting something from scratch.
Felix: What’s your process for improving an existing product?
Enrico: Testing a lot of different ones, and making a list of the pros and cons with all the ones that I test. And based on my own personal preference which, I guess, now it starts to seem then it’s aligned with what the customer likes, I make a list of what I would like to improve from that. So we take that as a benchmark, I guess, the most favorite. And we’re like “Okay. So these are the pros, these are the cons. How can we achieve these results and how can we make it better?” And then that starts a process of making it better with the list of the different things to tackle to achieve it.
Felix: After multiple products do you find the development process easier, or are there still challenges?
Enrico: It is becoming a little easier in terms of the procedure in place and knowing the process in order to stay within the tight timelines. We don’t have a year or two to develop products. Right now, I’m working on the next six or seven at the same time. The timelines can be a little tight. Having done this before, I know what the process is, so it makes it a little bit easier in terms of navigating the different steps. When it comes down to the product development for improving a product or testing it, something first to market is always going to present some challenges. Especially when you’re the first to market and nobody has done it before. It makes it difficult to first test the efficacy of it, and secondly, to make sure there are no issues with the product, that it delivers what’s promised.
Felix: What part of the product development process do you think has the most impact on a product’s success?
Enrico: The combination of both the right formula with the right delivery system. For the launch of Peace Out Dullness, we had to go through so many different adjustments on the formula because it was awesome on paper, and the delivery system was awesome. But the delivery system of these gauze pads was making the formula very sticky. We had to make multiple adjustments to erase the tackiness of the product. It’s always towards the final stages when you really have to perfect it that it becomes the most critical part. Because you are always on that tight timeline when you have to finalize in order to start production, it’s normally three to four months before you launch the product, so you have little wiggle room to perfect everything before you go into production.
Exploring the benefits of TikTok influencer marketing and SMS marketing
Felix: Throughout the process, how do you market, and then launch, to your customers?
Enrico: As soon as we have a final formula and a prototype of the product, we start an internal consumer study. Through a pool of the Peace Out squad family, we send out products to run a consumer study internally. We send out a three-page questionnaire in order to start to understand the feedback and make sure that this is good from a consumer perspective. Based on that response, we make the final adjustments before we go into production. While we start production, we normally start the clinical trial as well.
Felix: What marketing channel do you focus on these days to acquire new customers?
Enrico: We’re always testing new platforms. I would say that social media, between Instagram, Facebook, and TikTok have been huge drivers from the social media standpoint. Press, SMS, marketing, Google SEO, e-mails. I would need Junior, our CMO to give you a full, more detailed response on this. There are so many different sources of marketing that drive traffic to our own website. As we’re growing, we’re always expanding, and testing new ways of driving and connecting more to our consumers.
Felix: Tell us more about how you use TikTok to acquire customers?
Enrico: TikTok has been a really fascinating platform. At the beginning of the year, we started discussing getting involved with TikTok. Before we jumped in, we wanted to put a strategy together. The strategy was put in place about February of this year, so right when the pandemic started. We started gifting influencers on TikTok and reaching out to them to get our products into their hands. One great video that came from that was we gifted Peace Out Pores to a TikTok influencer who then did a duet video with the biggest skincare TikTok influencer, who has 5.4 million followers. We had more than 12 million views, and it was liked more than 2.4 million times and shared over 60,000 times. That resulted in the sale of 15,000 units of the product in one single day, and we sold six months of inventory in three weeks. We normally have six months’ worth of inventory at any given time, and it was totally sold out. We’re still sold out on our website. Hopefully, we’ll be back in stock next week. What was fascinating was that with TikTok, there are different opinions on actually driving sales versus just driving views. This experience kind of proved that it can actually drive sales, and a lot of it, more than any other platform that we’ve ever seen. And what was interesting about TikTok versus let’s say Instagram is that when something is posted on a feed, after a month or so it’s dead. Nobody scrolls down that much to see it, and it’s rare that it’s re-picked up in your browse feed. With TikTok, as things trend, they can be trending for six months to a year, just like YouTube in a way. We felt that was also a great investment, where you can keep trending for such a long period of time for something that you invested once into.
Felix: It’s basically like an influencer marketing strategy for TikTok. How do you identify, or how did you identify the influencers to work with?
Enrico: We tried to find people that connect with the brand. They either struggle, for example, with acne, or pores, or any of the other products that we have in our line. People that we feel have the right type of engagement, meaning that they feel authentic when they post their videos and the way they interact with their followers.
Felix: Now what’s the process to reach out to an influencer on TikTok?
Enrico: So we have a social media manager and a TikTok manager, where they scout on the platform TikTok influencers, and they reach out through messages directly on the platform. And we’ll send them free products to test and try, and we ask in exchange for a video to share their experience with the product and their honest feedback.
Felix: On Instagram and maybe YouTube, there’s the sponsored content. Is that as prevalent on TikTok, where people are paid to review and to be an influencer for your product?
Enrico: It’s not as much. Now there are more brands starting to do paid advertising through TikTok influencers. For us, most of the content that is on TikTok was just through organic seeding, product seeding, and not paid. After we saw the big video with Hyram, we decided to test and try for the launch of our latest product, Acne Serum, a couple of sponsored posts. Now it’s mostly still organic for us, but we’ll be looking into doing a couple of more sponsored posts.
Felix: What’s the ideal content that a TikTok influencer would create that leads to things like 15,000 units sold in one single day?
Enrico: That’s the million-dollar question. What worked for us was showing both the instant gratification of the pore strips peeling off the nose and showing all the junk that it sucked out. So it’s that visual, gross effect. And in the video, she showed her before the nose close-up, and then the after, in the video going close to her nose, showing the aftereffect of how clean it was afterward. In that 30 seconds, or 45 seconds video, showing both the product, the instant gratification of showing the junk [inaudible] on the strip or the dot, and showing the after results, it’s what really makes something go viral.
Felix: Now what about on Instagram. What’s your Instagram strategy?
Enrico: On Instagram, we try to do similar things. We also do organic seeding, and we tested paid sponsorships. With Instagram, it’s a little bit of a different platform in terms of the type of content. It’s not so video-driven outside of the stories. So it’s more focused on education and product imagery, et cetera.
Felix: You also work with influencers on Instagram. Is it the same type of content you want? What did you mean by education?
Enrico: Education meaning like explaining how the product works, the ingredient’s story, the differentiation with, for example, for our acne dots versus other pimple patches out there.
Felix: One thing I noticed on your site is the pop-up asking for phone numbers rather than emails. Why did you decide to go with this approach, SMS marketing?
Enrico: What we’re noticing is that the younger demographic, especially Generation Z, SMS marketing has a much higher opening rate. We decided to test it, and we launched it on July 7 with the launch of our latest product, Peace Out Acne Serum. We already have 4,000 subscribers, with an impressive ROI of 555, which is pretty insane. And so we’re just at the beginning with SMS marketing, and we’re still testing to see what works, what doesn’t and keep improving it from there.
Felix: You mentioned that one of the benefits of SMS is that it has much higher open rates. Are there any other advantages that you’re finding?
Enrico: Well, the ROI, it’s 555%. It’s pretty high. The average ROI is about 250%, so it’s almost double than our average ROI on that. And also, the order value seems to be a little bit higher from the consumer coming from SMS marketing versus e-mail marketing, as an example.
Felix: So that the limitations on SMS I think are clear, or there’s just less real estate for you to get your message across on SMS compared to e-mail. How do you kind of adapt to that kind of limitation?
Enrico: In SMS marketing, it’s mostly copy-focused, so we keep it short and sweet. And in email, we have an opportunity to be a little bit more creative and show more imagery. It’s a lot tighter copy.
Felix: Do you also send any media, like images or even videos, through SMS with your marketing?
Enrico: Yes, you can. But we have not done that yet. Since we just launched it less than a month ago, so we’re still testing it out.
Felix: What is the call to action with SMS marketing?
Enrico: Yeah. The call to action would be to an individual product most of the time to keep it focused on driving the sales to one product versus trying to sell some multiple. In a different aspect, for example in emails, you can be driving to multiple products, so not just one.
Felix: And how often are you planning on sending out messages now through SMS?
Enrico: About once or twice a week.
Felix: Is that the recommendation that you usually hear? A phone number requires more trust, right, when you give someone your phone number versus e-mail?
Enrico: Yeah. Because it doesn’t feel spammy. An everyday thing would be too much, and I think it will result in unsubscribers versus new subscribers.
Felix: Is the website design, in-house? Or did you hire outside to build the website for you?
Enrico: Originally, we’d done it in-house using one of the templates from Shopify and then slightly customizing it. And it was the best way to be able to put a site out there and in the most affordable way and the quickest way. As we started selling, we started improving it and customizing the template even more. And then in July of this year, we launched our website, and we created an entirely new design, still built on Shopify, but it was fully customized versus relying on a template. We had an opportunity to have a little bit more customization and more features that we wanted to represent the brand. It’s been a great year, in general, from our own site, and now that we finally were able to launch a website that really represents what the brand is and stands, it’s awesome
Felix: As the website has evolved, were there certain changes that you made that led to increased conversions?
Enrico: Yeah. We tried to make it more user friendly, and also a deeper focus on the mobile. Since over 60%, maybe even 70%, come from mobile. On our own websites, we wanted to make it the easiest way to navigate and reach the checkout in the least time possible without having to go through multiple pages or multiple steps.
Felix: Are there any applications that you use on the website that helped with running the business, or even like things like increasing conversions?
Enrico: Well, we added ApplePay. We have multiple checkout options, like PayPal, Amazon Pay, credit cards. With shipping rates, there were a couple of apps that we implemented to be able to make the checkout process as seamless as possible.
Felix: What’s the next milestone that you guys want to work towards?
Enrico: Keep focusing on expanding within Sephora globally. So we launched, as I mentioned July 17th, 2017, with Sephora US online and in-stores. We launched with Sephora Europe in 17 countries and 1,300 stores. We launched with Sephora Canada in May of this year, and we launched with Sephora Australia and New Zealand in July of this year. So it’s to keep focusing on expanding our business and making it stronger within Sephora exclusively and keep driving our site. This year has been pretty insane how much we’ve seen it growing compared to last year, so to keep the trend up would be great. We’ll keep focusing on finding new ways to increase our site sales and our business size.