# 26 Dropping what doesn’t work.

In February we made the decision to sporadically close our online store and move to a ‘drop’ model for distribution. Here’s how the last 6 months have played out.

Drops are nothing new — a proven strategy in the fashion industry and for celebrity makeup brands, we felt that Fluff’s audience would respond well to a controlled environment of supply and demand. Absence makes the heart grow fonder.

We predicted that the down time would mean lower operating expenses, and we hoped that we‘d have more creative space to focus on the content we did roll out for Fluff — something that admittedly had been lacking inspiration and engagement.

The problem was:

While we’d built a brand, a product, and a following that we’re really proud of, Fluff was burning me (and the rest of the team) out. COVID, supply chain delays, changes to the industry, influencer marketing, Facebook’s algorithm and ecommerce more broadly have made our business (and many others) extremely unpredictable over the last few years.

The experiment is:

We believed that by moving away from an always-on model, we’d be able to focus our efforts, increase demand (through scarcity) and lower our ongoing costs. Our goal was to make Fluff more predictable and more profitable. And ultimately, more enjoyable.

The results so far:

It’s been six months and we’ve learnt that people like drops. It certainly drives organic demand. Our first — the store closure in February saw us make a month’s worth of revenue in 5 days. We were closed for March and April, before reopening in May for our Makeup Drop in which we were open for 6 days and recorded our highest earning period to date. In July, our Skincare Drop was open for 12 days, earning less than our previous drop but still more than a standard’s month revenue.

These drops have allowed us to pay off some historical debt, while getting a clearer view of our cash flow and budgeting. Due to increased consumer demand, it’s also meant that we have not needed to discount stock — in fact, we raised some of our prices with no criticism. At a time where it feels like brands are on sale more than they’re not, it’s been nice to have our product and positioning validated in this way.

The comparison:

Most interesting has been looking at our year on year profitability. Our drop model has seen us open for a collective 23 days across 3 drops, as opposed to 186 days of always on trading. In summary, we’ve been able to get comparable revenue for less input.

Our goal now:

We’re working towards a consistent revenue figure for each future drop, (occurring every 2–3 months), maximising the potential of strategic influential partnerships (I know, I know) and our paid advertising model, to maintain healthy cash flow and ensure we are never out of stock (imagine that).

The tradeoffs.

We’ve lost our ability for short term loan facilities. Capital from PayPal or other providers is not possible when your store is closed intermittently (with no revenue). On the plus side it’s made us much more considered in our decision making — we’re only spending what we have. I think this lesson might be our greatest.

The unknown.

We don’t know how long people will like drops or if they’ll tire of this strategy. Will they actually wait to refill, or will they be tempted by another brand with product that’s available to buy right now? Would a subscription service for refills solve this problem?

We also don’t know if and what other brands can leverage in our down time.

Key takeaways.

Our sessions and impressions across website traffic and ads have been about the same for each drop, while our sales were a lot better for makeup. We know that skincare is a hard sell due to market saturation (the amount of ‘sustainable’ skincare brands launching every year is completely unsustainable). And it’s become extremely clear that our makeup Cloud Compacts stand alone in terms of design, usability, and philosophy.

These figures also allude to the amount of people who returned to buy makeup at our skincare drop — which is promising for growing our customer base.

We have been trialling influencer spends with varying results, without having to rely on this method of advertising for the majority of our sales, or compromising our brand values and audience perception. It makes me happy that we’re not doing this in the same way as everyone else. While I can appreciate the work of this category, I don’t necessarily agree with the impact, and my journey here is very much about finding a middle ground.

We continue to see greater organic traction than paid. We are still learning a lot about our advertising model and refining in real time — including a future focus on Google Advertising over Facebook and Instagram (sorry, Zuck but you suck).

We have introduced small run, collaborative merchandise products at a higher price point of $100–$200 to increase our basket size, maintain customer engagement, and acquire new audiences while working with brands and owners we enjoy talking to — that’s nice.

I’m still thinking about how to get the most out of our abandoned carts during the short drop periods, in a genuine way. We really want to focus on providing valuable content for our audience — whether that’s showing more how-tos or shade related content, or video check-ins each morning saying we are online and answering any questions.

Our audience is still predominately Victorian based, which is wonderful news in terms of loyalty (thanks to everyone Northside who owns Fluff), while also representing an opportunity for us to spend considerable time branching into other states for future drops in 2023. (Hi, NSW.)

The future.

We have two upcoming drops to see us through the year. If we are able to coordinate with our manufacturers (the joy), we will also be releasing two additional SKUS in Dec across makeup, and a limited edition product collaboration in a new category which we’re super excited about.

Most importantly, we have a pop-up in Fitzroy in November and Dec. Being able to reconnect with our community after a 3 year physical absence since vacating our Gertrude St location feels wild. While the break has been great we know it’s time to get back IRL, and we’re keen to learn about our customers and the general retail experience again.

Content

In the time between drops we’ve not been on Instagram a lot.

We’ve used this time to refocus our strategy for our Issues page, as well as what we will say when do post on Instagram, and occasionally, playing around on TikTok. I hate this platform more than I love it, but it’s felt great to see a content piece go viral that you’re genuinely proud of, without relying on the common fear-mongering tactics of the beauty industry, or traditional influencer activity.

In Summary

2022 got off to a shaky start in which I questioned whether brands like Fluff could survive. As a last attempt at connecting to our audience and getting on top of our cashflow, we pivoted and persisted. Slowly but smoothly, we’ve managed to maintain a business that by next year, should be able to stand on its own, alongside a brand with integrity.

Meanwhile.

In my last update, I wanted to create a framework for my writing, in which I focus on three things I’m interested in, and three things we’re doing at Fluff that I think you’ll find interesting:

Interested

• Indy Blue — She’s the co-founder of Lonely Ghost clothing: we’re aligned on a bunch of stuff, including content: “because at the end of the day, what’s the point of selling stuff I don’t like? This brand is an expression of me. Of my most real self. This is my lane.” Her campaigns make me feel something, and that doesn’t happen often.
• BeReal — Hey, I’m yet another cheugy millennial enjoying this nice break from Instagram.
• Writing for other brands — has given me so much energy and inspiration — I have missed working with talented people, sharing ideas and challenging my own.

Interesting

• Revisiting refill packaging — We will be moving away from our plastic 100ML refill pouches towards a larger, better solution in 2023 which I’m really excited about. Pouches suck, honestly. More on this later.
• Merchandise — We will be repurposing our leftover winter hoodies for June 2023. We had the opportunity to further discount these in our most recent drop, and we thought: no. With the small amount of stock left it’s a chance to work with a new artist and provides us with a genuine play in up-cycling, if you will.
• Reducing our skincare line — In 2023, we will be focusing on our makeup products and reducing our skincare line to: Oil Cleanser, Face Oil #3, Face Mask, Exfoliator, Refills. I’ll go into detail about why in another post, but if you’re into any of our other products then our next drops in November and December will be your last chance to buy them.

And that’s all I’ve got. Thanks for reading, as always.

Here to chat.