“I think everybody is dealing with some level of change at post-iOS update,” said Natalie Mackey, chief executive officer and founder of Winky Lux, discussing the shift in Apple’s iOS settings last year.
Apple’s policy now prohibits certain data collection (unless users opted in to tracking) on iOS 14.5 or later devices, and as a result, businesses have been impacted.
“It’s a combination of iOS update, more competition in the market, larger companies moving into digital in general during the pandemic,” Mackey continued, in conversation with WWD’s senior editor of beauty, Allison Collins. “However, during the iOS update, we really started to see issues around May. And then we hit what I would call kind of peak inefficiency with paid social in late summer, early fall. So, that was an increase in [cost per mile], [cost per click], [customer acquisition cost].”
Mackey was quick to note, the update is a positive change for the consumer: “But, of course, beauty is a very nimble business. It’s on us now to figure out how we manage growth going forward. And that’s every CEO and CMO in the industry. It’s been a fun ride to do some new growth hacking.”
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One change, she mentioned, was activity on Facebook: “It wasn’t getting enough signals, so the recommendations changed to creating look-alike audiences that were much larger. And so, it took away some of our ability to be hyper, hyper focused.”
As an experiment, Winky Lux — which offers whimsical-looking makeup and skin care online and at retailers like Ulta Beauty and Target — cut off its paid social marketing for a month.
There were decreases in traffic as a result. “But — and I have to preface this by saying, we turned off paid social in October, so we saw that decrease — it corresponded with a very robust retention campaign, so actually, our sales grew,” Mackey said. “But a lot of that was due to a real lean into email, to text, to all the different retention platforms that we use. So, that strong marketing strategy helped counteract the decrease in traffic.”
The team targeted “really highly engaged customers,” she added, while also turning their attention to virtual try-ons and developing an online skin care quiz. When it came to products, items in complexion, mascara and brow — the brand’s number-one category — were the focus.
“We have bridged the gap of that confidence to try some of these other higher LTV,” explained Mackey of “lifetime value” goods. “So, really investing in those has dramatically increased retention rates, because people just use those products more.”
The brand also invested in TV commercials.
“When we started to see CACs go up in paid social, which has been a big marketing engine for us, we wanted to shift into some other growth hacks, and we decided to try commercials,” Mackey said. “The decision was based on the fact that we felt that our customers were watching more TV, because we were in the midst of a pandemic.”
The ad was for its top-seller, the “Winky Lux Uni-Brow Universal Eyebrow Pencil”: “We started running it, and we saw incredible lift both on dot-com and on our retail partners’ dot-com…A couple of things that we’ve seen have been linear TV performing better for us than, say, streaming which makes absolutely no sense to me, but it’s the truth.”
Winky Lux has done best on the Bravo channel and appearing on ads during murder mystery shows, revealed Mackey. “The team has worked really hard to crystallize some of those new datasets.”
Retail, where the digital experience comes to life, remains significant for Winky Lux, and the brand plans to expand. Currently offering one shop in Nashville, the company is eyeing brick-and-mortar locations in Austin, Texas, and Charleston, S.C.
“It’s profitable customer acquisition,” Mackey said of retail. “We’re really laser focused on the types of markets where our customer really is.”