Latest / Brand Storytelling with Fexingo: Narrative, Mission, and Stories That Sell / How The Ordinary Won Skincare by Destroying the Price Myth
Transcript
- Lucas: So there's this moment in early 2017 where a new skincare serum hits the market — ten percent niacinamide, which at the time was a pretty high concentration — and it's priced at five dollars and ninety cents. Luna: Five ninety? That's less than a fancy coffee. Most brands would sell that for what, fifty, sixty bucks? Lucas: Easily. And that's exactly the point. The brand was The Ordinary, and its whole premise was: we're going to tell you exactly what our ingredients cost, exactly what our packaging costs, and exactly what markup we take. No mystery. No luxury tax. Luna: It's almost like a reverse luxury play. Most brands hide the cost structure. The Ordinary puts it on the label. Lucas: Right. And the effect was immediate. Within months, The Ordinary was selling out globally. By 2018, the parent company Deciem was generating over three hundred million dollars in revenue. And the founder, Brandon Truaxe, became this cult figure — partly because the pricing felt like an act of rebellion against the entire beauty industry. Luna: But let's be real: five ninety for a serum only works if the product actually delivers. Was it good? Lucas: That's the crucial part. The niacinamide serum had clinical-level data behind it. The brand published the studies. So the price wasn't a sign of cheapness — it was a sign of efficiency. They cut out retail markups, cut out fancy packaging, cut out advertising spend. And they passed the savings to the customer. Luna: So the narrative wasn't 'we're cheap,' it was 'everyone else is overcharging you.' That's a powerful story. Lucas: Exactly. And it's a story that required a specific operational backbone. Deciem owned its own labs and manufacturing. They kept the product line simple — no fifty-item catalog. Just core ingredients at effective concentrations. That let them keep margins healthy even at those prices. Luna: How healthy are we talking? I've heard their gross margins were around seventy-five to eighty percent. Which is still good, but less than the typical eighty-five to ninety percent for prestige skincare. Lucas: That's right. They gave up ten to fifteen points of margin to own the value narrative. And it worked. By mid-2017, they had waiting lists. Estée Lauder took notice, invested in Deciem in 2017, and by 2021, they'd acquired the whole company for two point two billion dollars. Luna: Which is fascinating because Estée Lauder's whole business is built on premium pricing and luxury positioning. You'd think The Ordinary would be a threat. Lucas: It was. But Estée Lauder understood that The Ordinary wasn't competing for the same customer. The Ordinary pulled in younger, price-sensitive shoppers who might later trade up to a Clinique or a La Mer. It became an acquisition funnel. Luna: So the story has a happy ending for Estée Lauder. But what about Brandon Truaxe? He was famously erratic, and he got ousted from Deciem in 2018. Did the brand survive his departure? Lucas: It did, but not without turbulence. After Truaxe was removed, the brand went quiet for a while. People worried the pricing philosophy would change. But the new leadership — including Nicola Kilner, who had been there from the start — doubled down on transparency. They even published a 'cost breakdown' page on the website that showed exactly what each component costs. Luna: That's bold. Most companies keep that stuff under lock and key. Lucas: It is. And it reinforces the central narrative: we have nothing to hide. That's become the brand's moat. Any competitor could copy the formula — and many have — but no one can copy the trust that comes from that level of openness. Luna: Speaking of competitors, did any try to match the pricing? I mean, if The Ordinary can sell a serum for six dollars, why can't everyone? Lucas: Some tried. But they couldn't replicate the supply-chain efficiency. Deciem's labs were set up for high-volume, low-cost production. Most indie brands use contract manufacturers who take a cut. And bigger brands can't lower prices without cannibalizing their premium lines. So The Ordinary carved out a niche that's surprisingly hard to attack. Luna: It's interesting — the pricing became part of the brand's intellectual property. Not the formula, but the cost structure. Lucas: Exactly. And that's a lesson that goes beyond skincare. Any category where there's a big gap between production cost and retail price is vulnerable to a similar narrative. Think about mattresses, eyeglasses, prescription drugs. The Ordinary proved that if you can operate lean and tell a compelling price story, you can disrupt an entire industry. Luna: You know, it's funny — a lot of these marketing conversations we have on the show, they end up changing how I think about spending my own money. If this episode made you think differently about a brand you love, honestly, if it was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Lucas: And we appreciate that. It's what keeps this show ad-free and independent. Luna: Totally. But back to The Ordinary — one thing that always struck me is how they handled their product names. They call the serum 'Niacinamide 10% + Zinc 1%,' not something like 'Radiance Renewal Serum.' It's clinical, almost boring. Lucas: That's deliberate. The naming reinforces the transparency narrative. It says 'we are a chemistry lab, not a perfume counter.' And it actually backfired in a funny way — customers started demanding more ingredients, more transparency. The brand had to publish a 'regimen guide' just to help people figure out what to layer. Luna: So the story created its own customer education burden. But it also created loyalty. People felt like insiders. Lucas: Absolutely. And that's the ultimate brand win — when customers feel smart for buying from you. The Ordinary made the act of buying skincare feel like a rational, informed choice. Not an emotional impulse. Luna: It's almost the opposite of what most marketing tries to do. Most marketing sells a feeling. The Ordinary sold a fact. Lucas: And the fact became the feeling. 'I'm not being fooled' — that's the emotional payoff. And it's incredibly powerful. In fact, a 2019 survey found that The Ordinary had the highest customer satisfaction score in the mass skincare category, even beating much more expensive brands. Luna: So what's the cautionary tale here? Because every great brand story has a shadow side. Lucas: The shadow is that transparency is a promise you have to keep forever. If Deciem ever quietly raises prices without a clear explanation, or if they reformulate with cheaper ingredients, the trust collapses instantly. You can't go back to opacity once you've opened the books. Luna: And we've already seen some friction. After the Estée Lauder acquisition, some long-time customers worried the brand would drift toward premiumization. So far, the pricing has held, but the pressure is always there. Lucas: Right. The brand is now part of a company that makes its money on high-margin luxury. The tension is real. But for now, The Ordinary remains a textbook case of using price as a narrative weapon. And it's a reminder that the most powerful story you can tell might be a simple one: 'Here's what it costs. Here's why. Decide for yourself.' Luna: It's a story that doesn't need a celebrity spokesperson or a viral ad. Just a label with a number on it. Lucas: Exactly. And that's the kind of brand storytelling that actually changes how people buy.