Why Focus is Wunderbrow’s Key Growth Strategy with Diego Mandelbaum (episode 524)
Diego Mandelbaum is the CEO at KF Beauty, a privately owned beauty company based in the UK, who own one of the most recognizable make-up brands launched in the last few years Wunderbrow.com. Founded in 2015 they now sell globally via their Shopify story and Amazon and some small select wholesale partners. And all in all they do 15,000 orders a month.
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Dive in:
[08:06] Seeking impact as CEO of KF Beauty.
[14:19] Managing product discontinuation and new product launches.
[17:53] Be pragmatic: Simplicity and focus yield growth.
[18:53] NYU professor discusses business growth trade-offs.
[23:22] Established product faces challenges with new launches.
[25:18] Listen to Diego’s Top Tips!
Focus on What Works and Double Down
Diego emphasizes the importance of identifying the strategies, products, or campaigns that deliver results and then allocating resources to amplify their success. For example, when certain Wunderbrow products performed really well, his team chose to drop underperforming items and reinvest in the top SKUs. The 80/20 rule was a cornerstone of this approach, with 20% of products generating 80% of revenue. The key things here are to continuously review offerings, remove inefficiencies, and scale proven winners.
Growth Requires Pragmatism and Measured Decision-Making
Rapid growth comes with significant risks. Diego reflects on Wunderbrow’s hypergrowth phase in 2017, which led to inflated operational costs and a lack of focus. He advises other brands to approach growth pragmatically by considering sustainability and long-term impacts. Measured expansion—such as careful geographic rollouts or strategic partnerships—is more effective than overextending. Brands should also align growth strategies with available cash flow to avoid liquidity crises.
Reinvestment is Critical to Scaling
Diego stresses the necessity of reinvesting profits back into the business to sustain growth. Reinvestment ensures long-term success. Strike a balance between meeting investor expectations for profitability and allocating enough funds to fuel growth. Transparent communication with stakeholders about the importance of reinvestment can help manage this balance.
Resist the Race to the Bottom in Pricing
Price competition is a constant challenge in eCommerce. Diego notes that his team resisted the urge to reduce prices on Wunderbrow’s hero products to maintain healthy margins. Instead, they focused on building strong brand loyalty and delivering value through quality and innovation. Avoid excessive discounting, which can erode brand value. Rather, invest in differentiation and customer experience to compete on more than just price.
Simplification Drives Operational Efficiency
One of the first steps Diego took as CEO was to streamline operations. He did this by focusing on the eyebrow beauty category and cutting an overgrown product catalog. This simplification helped the team hone their expertise, reduce costs, and create a sharper brand identity. Narrowing focus to a core product offering can create competitive advantages and allow for deeper market penetration.
eCommerce Book Top Tip
- The Algebra of Wealth: A Simple Formula for Financial Security by Scott Galloway
eCommerce Traffic Top Tip
- Email marketing
Tool Top Tip
Carbon Top Tip
- Optimise logistics and minimise unnecessary shipping. Additionally, Diego highlights reducing packaging waste by using smaller, more sustainable designs.
Interview links
- Check out Wunderbrow
- Use the code Masterplan to get a surprise with your purchase!
- Diego on LinkedIn
Related Episodes
- 7 Top Tips for eCommerce Growth in 2024 (episode 474)
- Transforming Menswear eCommerce: From Discounts to Premium Quality with Moss’s Matt Henton (episode 502)
- Increasing Philip Kingsley’s Profits with Strategic Promotions with Lauren Duncan (episode 510)
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