Goop founder Gwyneth Paltrow closes out NRF 2020 talking about the difficulties of scaling a digital business

Paltrow spoke about how she built her sometimes controversial blog into one of the biggest online luxury brands.

Gwyneth Paltrow had the audience laughing and listening intently as she closed out the National Retail Foundation’s 2020 conference. 

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Paltrow, diving deep into the controversies around her brand Goop, shared how she was able to transform it from a blog to a huge digital business.

In a candid onstage discussion with the Ellevest co-founder and CEO Sallie Krawcheck, Paltrow was open about her pitfalls and struggles turning Goop into a legitimate e-commerce site that could generate revenue.

“I wish I had been bolder about asking questions. For example when you migrate from one email service provider to another and you don’t know to ask questions around warming an IP or questions around ‘Are we sending the right portion to the most engaged people first,'” she said of her early mistakes, adding that there were times when she questioned whether it was worth it.

“I was up at 2 am reading about risk pooling and inventory management and I thought, ‘Can’t I just go make out with Ethan Hawke again. What am I doing?’ But owning those mistakes and learning from them and having humility about them has been the most invigorating experience of my life.” 

The Oscar-winning actress created the Goop newsletter in 2008 from the comfort of her kitchen table, and after about six years that small effort blossomed into a business that now has 300 employees and was reportedly worth $250 million in 2018

The company has brought in $80 million in total outside funding, according to Forbes, and throughout the NRF 2020 discussion she described Goop as a “contextual commerce” site where people can buy everything from candles to furniture and healthcare supplements.

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Paltrow’s latest moves with Goop are emblematic of the kind of multi-channel efforts many businesses are now turning to, realizing that are dozens of different ways to reach your audience.

Goop’s skincare sales have boomed as it has transitioned from an e-commerce site to a brick-and-mortar outlet with stores in Los Angeles, New York and San Francisco. 

In addition to the blog, there is a Goop podcast and an events business. Last week, Paltrow announced a six-episode Goop Netflix series, a key partnership with makeup company Sephora and even a cruise ship.

She addressed the controversies Goop has faced, particularly the accusations that the blog at times contained false or unproven medical advice and that the e-commerce store peddles some medically dubious goods.

The company recently settled a lawsuit and paid a fine over one product that was accompanied by unsubstantiated claims over its medical benefits.

Paltrow said that since the controversies over the products emerged, Goop has hired regulatory teams and scientists to vet all of the claims they make. 

“We were a young business and we didn’t really understand claims or regulatory things. We made those mistakes and in our case, it was amplified a lot because you’re gonna get more clicks if my name is attached to it than someone else,” she said, adding that she had to quickly learn about technology and regulations as the e-commerce site scaled up. 

But Goop’s e-commerce store has buttoned up, she said, and now has its own branded skincare, fashion and furniture while hosting other brands and designers. 

Paltrow said more companies were now moving toward a contextual commerce model in the digital age because consumers wanted to feel like they were part of a larger movement and not just one-time buyers. 

“We are using digital content to drive digital commerce and innovation. Customers are looking for the complete closed loop. They want resonance with a brand, not just from a product. They are looking to feel resonance about who they are or looking to feel inspired by a brand. It’s easier to do that in a multi-channel way,” she told the audience of retailers. 

“I had this instinctual and passionate desire to create something that would connect people to things that would be meaningful or resonant them in some way. We’re first and foremost in content and use that content to educate. We talk about things we love, we make things we love, and you can buy them on Goop or some things in other places.”

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