Whimsical masstige makeup and skin care brand Winky Lux is poised to have a big year — it’s expanding with Ulta Beauty and opening a new microstore in a hot beauty shopping district in lower Manhattan.
The brand will expand its presence into 350 Ulta doors this year after being in the grab and go section, with a colorful display featuring neon lights. The move comes on the heels of major success with Target, according to chief executive officer Natalie Mackey. “Target launched, we had a really disruptive display,” Mackey said. “And [Ulta] got excited about it — ’OK, we’ve been talking about doing this, let’s do it, and let’s run a similar playbook tailored to the Ulta customer and the Ulta experience.’”
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Here, Mackey dives into the ongoing beauty retail evolution and talks candidly about what the iOS privacy update has meant for customer acquisition via social media (spoiler: nothing good).
How have you approached the Ulta Beauty launch?
Natalie Mackey: We’re launching in about a third of the chain with two-foot endcaps and also in-line and our own full display. We’ve been waiting to do that because, for us as a brand, we do much better when we have full display. We’re better off doing less stores, more wow factor. We’re not really a single sku brand, we make a lot more sense as a family.
The display focuses on our high-replenishment products. A lot of the products that are harder to sell online but are much more higher replenishment — complexion, skin care — we have to sample [our moisturizer] and get it in people’s hands in order for them to buy it.
How has your retail strategy evolved during the pandemic?
We also sell at Anthropologie and Macy’s. We love Macy’s because we love the customer, and we love Anthropologie because they treat our brand with a lot of gravitas and respect and position it in a way that is quite beautiful. During the pandemic, all of our non-Target wholesale really struggled — big-time struggled — but Target was amazing. We shifted our focus into places where people can actually get the product or were actually going.
What about your approach to marketing?
In general, we have started to look at our spend as a true omnichannel spend, instead of focusing on paid social, which post-iOS update is a trash can fire. Not that we’re abandoning it, but really pulling it down and focusing on top-of-funnel advertising. What we see is if we spend $50,000 on a commercial, we’ll see $15,000 come back right away in digital, another $30,000 is at target.com, another $15,000 is at Ulta and then a big chunk on Amazon — this is just a hypothetical.
For us, it’s better to focus on those big moments as opposed to lower funnel marketing that’s just driving e-commerce. Our customer wants to buy where she’s already buying — she really likes Amazon. Amazon is becoming a really big business for us.
How are you acquiring customers these days?
We cut off paid social for the entire month of November and didn’t see our sales decrease very much. Our traffic decreased a little bit. We had to run it in a vacuum to see what the effect would be, and what we gleaned from that exercise was customers coming in from paid social are the most expensive and are not our most loyal customers.
Retargeting is still pretty good, but the issue is, that with the privacy update, it’s extremely difficult. We do have luck if we’re running a promotion targeting people that have purchased from the brand but have opted out of email, but that’s a high intent person.
The negative is I don’t see a clear path to using paid social for outsized digital growth in the way people did it before, in the way we did it before. What I do see is a lot of cool opportunities to growth hack. TikTok is cool, out of home and commercials are really cool. There’s some fun new stuff with QR codes that’s really cool. None of it is as scalable as paid social has been in the past.
What’s your approach to stand-alone retail?
Our Nashville store is profitable, and it’s only half built out. Some of that is a macro trend of people wanting to go back out and see cool things and experience things. I’m excited about retail in high-growth cities. Retail was mispriced for a long time….With the correction, we’re in a place where we can actually make money in the store. Even if we manage a store and break even, we’re winning against paid social because the cost of acquisition is free. Our most loyal customers come to our stores. Now, we’ll be on Mott Street [in New York], and it’ll be a microstore.
It’s important for us to see how people interact with the products. In the Ludlow Street store, before it shut, we would see people come in and interact with our whipped cream blushes or primers and they would pull out a huge amount. And we were, like, oh, this is an education gap we need to bridge. When you see that you can make edits to the packaging, to the messaging, you can change the way you communicate with the customer in order to get ahead of product issues on shelf. I love the idea of the New York store being a bit of a lab.
Of all the pivots you had to make during COVID-19, what was the best one?
We found some really cool marketing channels. We invested more heavily in TikTok, we shot a commercial. Commercials have been a really big driver for us. Who’d have thought running commercials on “The Bachelorette” was the way to go? It’s like the Super Bowl — the first episode and the last episode have huge eyeballs. Bravo is a big producer for us.
Any predictions for 2022?
Makeup is going to come back big — I think it’s going to be huge.
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