Rhode is not the most scientifically advanced skincare brand on the market. It is not the cheapest. It does not have the longest track record or the most extensive clinical research behind its formulations. Yet it routinely sells out within minutes of a product drop, commands a waitlist culture more commonly associated with Hermès than with moisturiser, and achieved a valuation of approximately $1 billion less than two years after launch. How does a brand that launched in 2022 with a lip treatment and a glazing fluid become one of the most powerful names in beauty?
Celebrity as a Signalling Device
Signalling theory, developed by economist Michael Spence, explains how agents communicate unobservable qualities through observable, costly actions. Applied to celebrity founders, Hailey Bieber is not merely a famous person attached to a skincare brand; she is a credible signal carrier in a specific and economically meaningful sense. Her personal brand sits at the intersection of high fashion, music industry adjacency through her husband Justin Bieber, and an aspirational but attainable aesthetic, which is the cultural positioning that Rhode's target demographic looks for. The signal she sends is not "this product is expensive" but more "this product is what people like me actually use."
Celebrity authenticity with genuine cultural credibility within a specific aesthetic niche is extremely difficult to manufacture, which is why genuine celebrity founders command a price premium that paid celebrity endorsements cannot replicate. A brand that pays a celebrity to appear in an advertisement is sending a signal that anyone with enough money can send. A brand whose founder is the celebrity, and whose entire aesthetic is built around that founder's genuine personal style, is sending a signal that is much harder to imitate.
This distinction is visible in the market. Kylie Jenner's Kylie Cosmetics achieved enormous initial scale, eventually selling a majority stake to Coty for $600 million, but growth slowed as the brand struggled to maintain cultural momentum beyond its initial celebrity association. Rhode's more precisely calibrated aesthetic credibility, targeted at a narrower and more defined consumer demographic, has proved more durable so far.
There is also a principal-agent dimension worth noting. Consumers cannot easily verify whether a celebrity actually uses or believes in their own products, representing information asymmetry. Rhode's marketing strategy attempts to reduce this gap by collapsing the distinction between founder and consumer. Bieber is consistently presented not as Rhode's spokesperson but as its primary user, reducing the perceived distance between the signal sender and the product, making the signal more credible.
Artificial Scarcity
Rhode's product drops routinely sell out within minutes. This is artificial scarcity, the deliberate calibration of supply below the level the brand could sustainably produce, in order to generate excess demand and the social proof that comes with it.
As explored in the F1 WAG article on this blog, scarcity preserves the signal. A Rhode Lip Treatment available in every pharmacy at any time would not carry the cultural mark of prestige that requires vigilance, speed, and a degree of luck to acquire. The difficulty of obtaining the product is part of what makes owning it meaningful, which is why luxury brands destroy unsold inventory rather than discount it, and why Rhode does not simply increase production to meet demand.
The waitlist functions as a commitment device with well-documented behavioural effects. Signing up for a waitlist is a form of pre-commitment that increases psychological investment before any purchase has been made. Consumers who have waited feel more positively about it when they finally receive it. This is an example of effort justification: the investment of effort increases perceived value, independently of the product's objective qualities.
Scarcity also activates one of the most powerful and well-documented findings in behavioural economics: loss aversion. Kahneman and Tversky's prospect theory demonstrated that losses sit larger than equivalent gains in psychological terms as the pain of losing £50 is approximately twice as intense as the pleasure of gaining £50. Applied to Rhode's drop model, the fear of missing out on a limited product is experienced not as a foregone gain but as a potential loss, producing a sense of urgency that straightforward desire does not. Rhode's scarcity is carefully calibrated to exploit this: products are not so rare that consumers give up, but rare enough to generate urgency, social conversation, and the self-reinforcing perception that the brand is perpetually in demand.
Social Media as Rhode's Primary Market
The attention economy is the market for human focus that underpins social media platforms. In this economy, the scarce resource is not raw materials or manufacturing capacity, it is the time and cognitive engagement of potential consumers. Rhode's marketing is almost entirely organic and social-media-native. Bieber's personal Instagram and TikTok function as the brand's primary advertising channel, reaching tens of millions of followers at near-zero marginal cost per impression compared to traditional media.
This creates a two-sided market dynamic. Rhode benefits from a distribution platform it does not own and does not pay for. Instagram and TikTok provide the infrastructure; Rhode provides content that keeps users engaged on those platforms. Both parties benefit but Rhode extracts disproportionate commercial value relative to its marketing expenditure, because the content it generates is indistinguishable from the organic personal content of its founder.
The more powerful mechanism, however, is user-generated content. The Rhode aesthetic of glazed skin, pared-back minimalism, the specific nude-pink palette of the lip treatments is extraordinarily replicable. Consumers who purchase Rhode products recreate and post the aesthetic themselves, generating marketing content with authentic social proof that no paid campaign could replicate at equivalent credibility. Every "glazed donut skin" tutorial on TikTok is unpaid advertising.
This produces a network effect: as more consumers post about Rhode, brand visibility increases, attracting more consumers, generating more posts. The brand does not just benefit from its own marketing, it benefits from the aggregate marketing of its entire consumer base, most of whom are generating content voluntarily and without compensation.
There is an important information asymmetry embedded in this dynamic. User-generated content theoretically reduces the gap between brand claims and consumer experience as real people using real products should provide more reliable information than advertising. In practice, the aesthetic selection bias of social media means that positive experiences are vastly overrepresented. People post their best results. Unflattering outcomes, disappointing textures, and products that simply did not work are systematically filtered out. The information environment that emerges systematically favours the brand through the algorithm.
The Architecture of Desire
The halo effect operates at brand level: Bieber's perceived style credibility and attractiveness transfer to the products she associates with. Consumers do not merely purchase a lip treatment, they purchase an implicit association with the aesthetic she represents. Robert Cialdini's research on influence identifies this contamination of perception as one of the most reliable and least conscious triggers of consumer behaviour.
Social proof is embedded at every level of the brand's commercial architecture. The sold-out notification, the waitlist, the millions of TikTok posts, the celebrities photographed using Rhode products all function as powerful social proof signals. People are more likely to want something when they observe that many others want it too, particularly when those others are people whose taste they aspire to share. Rhode has constructed an environment in which social proof is continuously and visibly generated, at scale, by the consumers themselves.
Anchoring shapes how consumers perceive Rhode's price point. The brand positions itself as premium relative to drugstore skincare but attainable relative to luxury skincare houses like La Mer or Augustinus Bader. By managing its comparison set carefully through appearing in the same editorial contexts as luxury brands while remaining purchasable by a much wider consumer base, Rhode makes its pricing feel like exceptional value even in absolute terms it represents a meaningful expenditure.
Finally, Rhode has achieved something that most consumer goods brands aspire to and few accomplish: it has made its products identity markers. Consumers who own Rhode incorporate it into their self-concept as the products appear in lifestyle photography, are referenced in personal branding, and signal membership of a specific aesthetic community. The endowment effect means that once a product becomes part of someone's identity, they value it more highly than its objective utility warrants, and are considerably more resistant to switching to alternatives, even cheaper or better-formulated ones.
Emily Jong