This year is decidedly a growth year for Winky Lux.
In March, Winky Lux will expand to Ulta Beauty, plus it plans to open five of its own storefronts throughout 2022 in the southern United States. Winky Lux currently has a storefront in Nashville and will re-open a New York City location in a new space. Winky Lux already sells through Target, Urban Outfitters, Anthropologie and its own DTC website. Digitally, Winky Lux will ramp up its focus on Instagram Live, which it first began using in 2021. At present, the brand hosts one IG Live event every week, but it will increase that to 3-5 weekly events in February, said Natalie Mackey, CEO of Winky Lux. Winky Lux had previously experimented with livestreaming via HSN, but Mackey said the channel is not the best fit for lower-priced brands due to the percentage of each sale that HSN earns as commission. The majority of Winky Lux products sell for below $30. Mackey said the brand expects 40% sales growth in 2022. The brand reached $20 million in annual sales as of 2020.
“We see big sales bumps happen across all channels [after an IG Live], and high engagement,” she said. “We’re co-opting the QVC model of, ‘Let’s tell you about this over and over again.’ QVC [is all about] a product’s features and benefits, and all the exciting things about the product. It’s bringing that person-to-person sales experience to the digital world.”
Mackey said the size of the sales bump is dependent on the featured product. Lower-barrier-to-purchase, items like mascara see greater sales, compared to products like foundation. Typically, Winky Lux will offer viewers a 20% coupon code to entice them to shop during and after the programming. Its livestreams are 15-20 minutes long and held at times when Instagram sees a surge in users, such as at lunchtime or in the evening. Mackey, alongside Winky Lux social media director Jenna Jordan, are the ongoing hosts. Only one product is featured in a segment.
Mackey declined to provide specifics around the Ulta Beauty launch, but said the brand will make a big push to support the partnership for the first three months after launch, including with livestreams.
“[People] expect a bit of a different experience [with livestream shopping]; they don’t want it to always feel like they’re being sold something,” said Madison Schill, head of communications at third-party livestream shopping platform Livescale. “They want it to be an experience, where they can grow together [with the brand] as a [form of] community building.”
Mackey said the brand’s advertising strategy is shifting in 2022. Specifically, “a substantial part” of the budget has been reallocated to top-funnel brand awareness strategies, rather than middle- and bottom-funnel strategies. OTT commercials and OOH ads are two new areas of focus. She said this is mainly due to the recent Apple iOS updates, which allow users to request apps not to track them, impacting a brand’s ability to attribute sales.
“This is where Instagram Live comes in as one of the many different channels that we’re [now] leaning into,” she said.
Mackey noted that the brand’s DTC storefronts have the potential to be revenue drivers due to the high lifetime value of those who shop in the brand’s stores. She said its in-store shoppers are 3x more likely than its other shoppers to become loyal customers. Winky Lux breaks down its customers into three buckets: Winky Lovers, Casual Customers and Dabblers. Winky Lovers are the most frequent shoppers, while Casual Customers shop from the brand a few times a year and Dabblers are passive purchasers.
“Retail is interesting again. [DTC] retail has always been inherently difficult … to make [costs] break even, when you have a [lower] price point … The macro correction in [real estate] prices has made us feel like there’s a lot of opportunity in the future.”