Growing Profitability featuring Cherene Aubert of ILIA Beauty

[00:01:29] Taylor Holiday: Welcome back to another interview episode of the Ecommerce Playbook Podcast, where we look at the GQ giants, the brands that are growing profitably, and we dissect their DNA to help you understand what makes. And e commerce brand grow predictably and profitably. And today we have a very special guest and close friend, Cherene Aubert, who is the VP of digital and e commerce at ILIA Beauty, a monster beauty brand, and also a former CTC’er.

She led growth strategy here at CTC for many years. And so we have a lot of shared. Views of the world and what Cherene is awesome at is picking brands that she knows have the potential to grow, that she can apply her knowledge and wisdom to, to help continue on what is already an incredible path.

She did that at Bobbie, she did that here at CTC, and now she's doing it for ILIA Beauty. And ILIA Beauty re represents a journey from where we've been, which began in skincare with Bamboo Earth, to supplements with Dave Huffman from Ancestral. And now we go into beauty, but really with a focus on cosmetics.

And we're going to begin to understand the nuance between skin care and cosmetics and how each of these brands are comprised. And today we're also going to look at a brand with a little bit broader distribution that contributes to their 221 GQ score. Although you're going to listen to Cherene argue for why it should be even higher based on how they actually handle their acquisition spend.

And it wouldn't be an episode with Cherene and I talking if she didn't argue. She is my second biggest Twitter troll after all. So enjoy this episode, but with Cherene Aubert from ILIA Beauty.

[00:01:29] Taylor Holiday: All right. Welcome back everyone. We're here for the third interview episode, Cherene congratulations on being my third closest friend on the internet. But before, we're gonna dive in today at your real job, but before we do, we gotta talk about this. So if you can't see the video right now, I am wearing some official merchandise from official Shopee.

And Cherene. So Cherene used to work at CTC many moons ago. We were just a quick stair step in her aggressive climb up the corporate ladder. But I don't, it was like Cherene how far, it was like two years into it when we, you finally like, confessed that you were running an e-commerce side, gig store called official shop.

So will you explain to the people what the heck this is and what I'm wearing?

[00:02:12] Cherene Aubert: Oh my gosh. So Taylor is wearing a shirt. It's an exclusive collab with a a, a Twitter famous guy, and it says, I am down so badly in like, diamond studs and it's a tiger woods and a down arrow, like a stop crashing. And so basically it's, it's a, it's a meme, t-shirt site whose target demo is like 13 to.

25-year-old boys and yeah, check it out. Official shoppy.com you wanna be cool.

[00:02:46] Taylor Holiday: if you want to know Cherene, she basically is a 13 to 25-year-old boy. That's basically you, what you learn, and if you really wanna know who she is, don't let her. Super professional, highly incapable, incredibly intelligent exterior fool. You go look at official shopee if you really want to get to know today's guest.

But what I love about it is it's signaled to me like many things I know about Rine, that she is like legit, like she loves. E-commerce and loves selling shit on the internet. Pardon my language. But she does. That's who she is and she's amazing at it. And so today we get to dive in with her to talk about her work on ILIA Beauty, which we're gonna start off with an argument 'cause that's how Sherine and I communicate.

That was every one-on-one we ever had for a year was her telling me why the goals I had set were the wrong ones for her. But but I love her for it. And she's a great sparring partner, but. ILIA Beauty has a two 12 GQ score, and Cherene thinks it's bogus because we include the TikTok spend as part of their one year LTV to NCA calculation, and they don't include TikTok as exclusively trying to drive online revenue, which sets up sheen.

I think a little bit about what you can do, which is one, tell us about ILIA Beauty, what it is, and then talk about how you, you just were describing to me your first day on the job and what you did when you came into the company, and I think it's a great segue for our conversation.

[00:04:00] Cherene Aubert: Amazing. And yeah, my aggressive climb up the corporate ladder could not have happened with Taylor Holiday's, mentorship and everything I learned while under, under his wing. So thank you Taylor. I. I'm super excited to be here. IA is an amazing, innovative, clean beauty brand. They have skincare powered makeup, so essentially it's makeup.

It's, it was one of the first and one of the original innovators in the clean beauty space. So they're makeup. Is clean, but it also performs. And that was new when it first came out, and they did really well. They had product market fit. They built an amazing brand and they had very rapid growth. Last year we were acquired by the Clarence family.

It's a legacy, beauty and skincare brand in France. And yeah, I joined about four months ago and you know, on my first day in the job, the first thing I did was I was like, I'm gonna become best friends with finance. First of all, those are my people. They're nerds just like me, and I wanna look at the numbers and I wanna understand.

So we were, you know, sitting around the table looking at goals for 2024. And I kind of noticed that while our business was growing, our media investment. Wasn't growing at the same rate. And so within that first day, I was like, let me pull what are, gimme all this data, gimme all these numbers, let me put a case together and make the case for why we should continue to spend more media branded media top of funnel that doesn't have a conversion objective behind it, that's not tied to a direct response ROAS or CAC number.

[00:05:36] Taylor Holiday: So I love this because one. I'm gonna sort of play contrarian to what I think people is an un maybe a sort of oversimplified opinion that I may have expressed once or twice about top of funnel media. But the, the difference is, is that I believe that it matters and becomes important as you expand distribution.

So one of the values of that makes ILIA score great is that you do have broad distribution. This is not exclusively a D two C brand. So tell us a little bit about the distribution and how that plays into the media strategy.

[00:06:03] Cherene Aubert: Yeah, and it's like the one thing I will say about when a lot of people have the question around like, when is the right time to invest in brand media? When is the right time to invest in, like not direct response advertising. I mean, it's like immediately when you start a business, you should be investing in.

Acquiring customers in a way where you can't and you don't have to pay for them. Like if all of your ad spend goes away or your, all your ad channels come down, you should have customers that still come to you from a channel that you're not directly paying for each one of them. And that just looks different at different stages for different businesses.

And so you're always investing in that organic acquisition. It just looks different at different stages. And so ILIA, the it's a nine figure business. The majority of sales happen in retail stores. And then followed by you know, we have one big retail partner, and then we have our D two C business, and then we have a lot of other.

Smaller wholesalers and Amazon. And so what's unique about that is like, okay, we all look at the p and l and everything by like different sales channels and different P and lss, but the customer doesn't look at it like that. They look at like, online or in store. I'm gonna leave my house or I'm gonna shop online.

And so when we actually look at the mix of business from online versus in store, about 55% of ILIA's sales happen online.

[00:07:26] Taylor Holiday: That's great. So then talk to me about then how you think about the media budget. 'cause I think this is a common. Consideration for brands as they mature into broader distribution is where should those media dollars show up on what p and l should they be assessed only against the direct business or they should they be sort of amortized across them?

How do you all handle that media budget as it relates to each of the distribution channels? And where does the spend map against revenue?

[00:07:54] Cherene Aubert: Yeah, te Taylor said I was his third best friend, but what he failed to mention is that I'm his number one Twitter troll. So

[00:08:01] Taylor Holiday: Well, I think two, I, I think, I don't, I don't think, I think there's a clear number one, I think you're, you're in number two.

[00:08:07] Cherene Aubert: I am number two, but I'm always kind of like, you know, joking about cost caps and how they're for people who don't wanna scale. And, you know, that's not, that's not entirely true. We know that. But I think when you re reach a certain size and scale of the business, it makes sense to distribute media.

And in a way that's like not directly measurable to your D two C channel, especially when you have retail distribution or other channels where you don't have customer data like, you know, Amazon or some of these other sales channels that are popping up like flip or whatever. But essentially the reality is for many businesses that are omnichannel, your direct response or your digital media is driving.

Sales in store and your in-store presence is driving sales online. We know that's not one-to-one, and so what we've started to do is make the case for media that is not measurable. And so we have a bucket of media dollars. Even on meta that we wanna have different conversion object or different objectives for that are not conversion, like reach or traffic.

And then we, we also just like stuff TikTok into branded media. And I think like a lot of businesses are scared about spending on TikTok, and maybe that's appropriate based on the size and stage of the business. But for the beauty industry, if you're not on TikTok, you're nobody like the. Generation of users, you know, that used to go to YouTube for like beauty and makeup tutorials are now going to TikTok for that.

And they don't always, they don't those type of users and a lot of TikTok users just wanna doom scroll for several hours. They don't wanna leave the app to make a purchase, but it's important to show up there and be, have, share a voice there, especially for when that user then eventually goes to Sephora and is making a purchasing decision and has.

Some kind of brand recall about some influencer they, they saw, or some ad that they saw. So we know that this is like a, this is a full funnel strategy. We know that TikTok return and CAC doesn't look as good as meta does, but we also know that it has a place in and it's where the users are. So we also wanna be there.

[00:10:14] Taylor Holiday: Yeah, and

[00:10:15] Cherene Aubert: We just don't wanna be on, on the hook, on the

[00:10:17] Taylor Holiday: so, 

[00:10:18] Cherene Aubert: the e-comm, p and l.

[00:10:19] Taylor Holiday: so what I want everyone to listen is like, so I have this series right now called Bridges, which is all about bridging the gap between marketing and finance. And I want you to, to, to think about some things that Cherene did. So this is to marketers, whether you're starting a new job or you're in it right now.

Day one, she walked into the CFO's office and said, you are my person. I am here to work with you in the job. So that's like awesome move number one. Number two is she's going to understand the p and l so that she can fight for the expectation that's placed on her relative to the overall spend of the budget.

'cause I, I watch a lot of marketers be subject to, over there in the retail side, they're reaping all this margin and all the media dollars are getting dropped on their p and l and they're going, I can't win this game. It looks like my channel's down, but I'm driving demand for the whole business. She was able to educate, equip, and get to a place where, hey, this set of media, I think it's a tri, correct me if I'm wrong, but it's any campaigns that are not conversion objective and then TikTok exclusively as this is a critical brand channel that we know is gonna drive everywhere.

So this section of the media is gonna be amortized based on what we see across all the business. 50 50 split between retail and wholesale. It's not gonna show up on my p and l that I'm responsible for growing.

[00:11:26] Cherene Aubert: Exactly, and I think the other thing is like not only did I become best friends with finance to understand the whole picture of where there may have been gaps in our media. I. Strategy and make sure that we, our media is growing in relation to the expectation that the business was growing. But then I also became best friends with the brand marketing partners and I said, look, let's fight together for this extra incremental budget that's going to help tell your story that's not as measurable, that doesn't have a as clear of a path to conversion, but is an important story that's driving the business.

So now I have kind of like everyone. A line that we should spend this money. And the final step is the board. And it's really interesting because, you know, at first we're like, yeah, yeah, we should spend more, but you know, it should be extra. If we perform really well, we're gonna hold back this money and we're gonna spend it if we, if we hit our performance.

Our board, you know, saw our plans for the year and they were like, we need to spend more. We need to spend more top of funnel and it needs to be this dollar amount. And I'm like, that's exactly what I planned. So something I learned at CTC paid off because you know, the numbers were right, but I think like. If you're, if you're a digital person, if you're a digital media growth market or whatever you call it, an e-commerce person, like you should raise your hand and take responsibility over your media distribution

[00:12:54] Taylor Holiday: Love it. That's that. That's so good. So, okay, we spend a lot of time on that. 'cause I think it's such an important topic and I think it. It helps to sort of bring nuance to the position of maybe my headline banter on Twitter and your trolling of me on Twitter, which I think are both delightful. But let's talk about some of the other parts of ILIA that make it really great.

I know that, surprisingly, actually, and I think this is a distinction we had Dave on from Bamboo Earth, which is pure skincare. Think about face wash that you use the same routine every day, multiple times versus makeup, which tends to be a little bit more sporadic in its utilization. So the LTVs aren't quite as good in.

Cosmetics as they are in skincare. Some people might not know that, but the margin is really awesome, right? It's part of the benefit of the category. Great value to weight ratio. Talk a little bit about how you all think about product merchandising and pricing as it relates to those dynamics.

[00:13:42] Cherene Aubert: Yeah. And the other thing I would say on the LTV topic, like. Maybe if IA was a D two C only brand, our LTV would be better. But we've also given our, we have like channel fluidity and we've given our customers choice to replenish on Amazon or replenish in Sephora. So there's like a part of it is like that there, the LTV may be there, we're just not able to measure it as well as a D two C first business would be.

But I think as it relates to merchandising, and this is something that I'm focusing on a lot right now, is like there like. There's so much competition in this space. Um, you know, we have really incredible products, but I think in beauty in general, anyone, you know, you don't have patents on it. Anyone can replicate anything.

There's lots of copycats coming up. What you actually have to stand on is your brand differentiator, like your, what is your brand? Not only does your product need to be good, but you're really your brand needs to be like strong and differentiated. So, it's about fighting for attention constantly and then knowing who, where your position in the market is and who your customers are.

I think everyone's kind of fighting for everyone's attention. And it's a little bit of an echo chamber where everyone's looking at each other for the answers on how to do things, but you gotta get back to like, who is the customer and what do they actually care about? And how do you cut through the, the noise to tell them what, what's right and what's not.

And then as it relates to like pricing, merchandising, a lot of that there's, there's like a long innovation pipeline and. So one of the things that's great about e-comm is you can test and re-message and re-merchandise and create virtual bundles and come out with newness when you don't actually have like real newness.

So that's what we're testing a lot. That's one of the big learnings I had from Bobbie is like, your offer is everything. The way that you position your offer to a new customer is what has the biggest impact on your customer acquisition cost. So it's like, can you, with your same assortment, knowing that the innovation pipeline takes a long time to come to fruition, can you, with your existing assortment, re-merchandise and reposition what you have to make it seem attractive to new people?

[00:16:00] Taylor Holiday: So you have the benefit of having lots of different SKUs that can bundle in different ways. So what offers, how do you sequence through offer testing? Like what do you decide goes first? Is it just about which SKUs have the highest velocity and you sort of move from there? How do you decide where to start in that?

Process.

[00:16:17] Cherene Aubert: It's, it's a good question. It's interesting because I joined the company in Q4 and it was just like complete madness and for the e-commerce team. And then the marketing team is, and the brand team is like on this other side where they're like, we're planning about, we're. We're planning February.

I'm like, we're basically surviving through like November. What do you mean planning February? So at this stage, you know, I'm, I've been here for like four months at this stage. It's like a collaboration between what is the brand message. We've kind of start with like what are the trends in that moment, in that month?

What are, what is the brand trying to say in that moment? And then how do we. Fit that offer testing under that umbrella of what the brand is trying to say and be creative. So we kind of have this like brand constraint that I welcome 'cause there's so many unlimited ways to test. I mean, the first most obvious thing is like, okay, you can pair together your bestsellers.

But you know, we have February, Valentine's Day coming up and we have a, a theme that we have for Valentine's Day, and so we're releasing bundles that fit with that theme so that we can get people excited about the same products.

[00:17:26] Taylor Holiday: Yeah, that, that, that's super interesting. So talk, so you, you hit on sort of what is the next part of this. If we think about four peaks and the ability to think about the marketing calendar and moments and promotion. So talk to me, do you have tent pole sale moments? Do you have key campaign, campaign releases, product launches?

Like what's the marketing calendar like for you all?

[00:17:45] Cherene Aubert: It is amazing because we actually do have four tent pole moments, and I didn't have to do much selling on that concept or, you know, in other, in other places I did. And it's really, we have two big e-comm promo moments. We have Black Friday, cyber Monday, we have friends and family sale. Then we have these two tent pole.

Luckily for me, like one of the tent poles is actually product focus. So there is a direct sales impact. So we have a an A TR product launch coming, and then we have this bigger brand moment where we're kind of focusing on our driving our core hero product. So we're, we're like, okay, we have two peak sales moments and two peak branded product

[00:18:27] Taylor Holiday: That's awesome. And is June the, the Friends and Family Sale? I'm just looking at like the revenue peaks, like Yeah. Then that's perfectly opposed to each other, right? So you get the big moment in Q4 and then you get June as a secondary point, and then right in between you can do product launches and brand releases.

It's, it's a great, great rhythm to it. Another thing that I know at Bobbie was a big piece because part of it, because it was such a good story that it made it obvious that PR should be a piece of it. But I think in beauty and skincare, and I even see a lot on your PDPs, you have a lot of badges from PR people.

Like you have the allure product of the year. Like it feels like there's so many like obvious, credible sources of reference that matter to the customer that it, it seems like it would make sense to do a bunch of pr. And I know that's been a part of your story, like is that a big piece of it? How do you think about PR and how would you recommend people kind of get after that part?

[00:19:15] Cherene Aubert: Oh yeah, you don't sleep on PR because it has so many uses, like, you know, the trust badges on site is one outcome of pr, but right now, the way that we have PR split up is we have PR on our brand marketing team, and then we have affiliate in our e-commerce team. And those two worlds are overlapping closer and closer every year, every almost every.

PR publisher wants to participate on the affiliate side but they're not pay to play. And then there's the pay to play affiliates, and then there's like the PR affiliates. You, you, you kind of have to manage the channel similarly. And affiliate and influencer has a major overlap too. So what we are, what we are working on is like, what's our north star metric for affiliate?

How do we split responsibility between these two teams, who, who have two different objectives? And, and how do we get revenue from this PR channel through affiliate and credibility from the, from the pr, from the brand side. And then we kind of use that content in our advertising on site and we try and like pull it through email.

So it's also a content engine for us. So like serves, you know, three purposes, brand credibility content and affiliate revenue.

[00:20:30] Taylor Holiday: I love it. Love it. The last thing, so I know you're not cheap, you're a high value asset inside of an organization. If we think about Lean Opex and building a team, other than hiring x CT CERs, or trying to occasionally solicit my people, what is your process for building a team and how do you think about the size and scope of that team relative to the growth of the business?

That was my job.

[00:20:53] Cherene Aubert: Look, I've o I've only hired two XCT, Sears, and

[00:20:57] Taylor Holiday: Is it? I, I think we'd have to check that

[00:21:00] Cherene Aubert: okay. Okay. I've contracted, I've hired two and contracted one. One other tried to join, but, you know, that's neither who's, who's counting Taylor, what was the question?

[00:21:15] Taylor Holiday: How do you think about team building? Like what, who is your team and how do you think about the relationship of the cost of your people relative to the growth of the business in sort in housing outsource? Like how do you think about your, your responsibility for that part of it?

[00:21:29] Cherene Aubert: Yeah, I think building the team is the most important thing you can do. Not only from, you know, everyone has an ego. They want, their team is the reflection of themselves, and they want their team to show up really well. But I also staff my team the way that, like to match the funnel, like someone should be in paid acquisition, someone should be owning conversion optimization and, and site experience, and someone should be owning email, SMS the whole life cycle loyalty and the retention program.

So that's how I'm structuring my team. We also have customer experience and we're having customer experience. Actually play a big part in onsite experience because they're, and we're ac we're using our customer experience team as like an incubator to fill roles on the e-comm team. And we're creating like a development path for those people.

Something I actually learned from CTC having this like, you know, great career path for people to, to move up within the

[00:22:29] Taylor Holiday: That's cool.

[00:22:30] Cherene Aubert: Yeah, it is, it's, it's really, it's, I would say it's pretty innovative. But I mean, you know, there's certain, there's certain, like hard qualities you look for. Like if I'm hiring someone in paid media, I wanna specifically know that they've, and again, this comes from my experience hiring at CTC, like, I wanna know that they've managed certain media budgets or at certain levels because anyone can say they're, you know, they're a growth marketer, but it's a certain type of person who can operate at managing a higher level of spend, for example. And then as it relates to freelance versus in-house, it all kind of goes back to the p and l and it's like, what do we. What do we, what can, what gaps do we have that we can fill with contract resources?

Because we can assume that oftentimes they're cheaper than in-house team members. And at what point does that flip where it becomes cheaper to, in-house someone, or there's a value of having someone in-house that allows you to do more work? And delegate more work to other team members. And what are our OKRs and like, what's our roadmap against those OKRs and, and do we need resourcing or people to actually get through those things to hit the numbers?

We're also doing like long range planning through 2030, and sometimes you just have to make it up and you're like,

[00:23:55] Taylor Holiday: That sounds a lot of made Yeah.

[00:23:58] Cherene Aubert: It's like we, we think media's gonna grow at the same rate of, of sales. Maybe. We know that there's declining efficiencies. But then we think everything else is gonna be grow at the rate of inflation, I guess, you know, like, unless I think, unless you're taking a big growth swing, like you're opening a new channel or you're opening up new markets and you wanna put a person, like a, a, a cost to justify the additional revenue that you're bringing in.

[00:24:26] Taylor Holiday: So on this last question on this topic, you are someone who I, I have always. And maybe you want me to cut this? I don't know, but I, I've respected the way in which you've negotiated and fought for yourself in every situation. I think it's a skill that you have and you're good at. And so it means to me that you chose your title with intention at this, this place.

Like I know that's something that you would think about, it would matter to you. And I noticed it's not growth. And this is something I've been sort of like reflecting on of what the market is these days. But you chose VP of E-commerce and digital, or there was some agreement between you on this. I'm curious.

Why, why that? Why that versus growth, and how do you think about your role within the confines of those terms?

[00:25:06] Cherene Aubert: Man, you're so smart, Taylor. Like, not directly. I, I didn't directly negotiate this title at this company that happened to be the title, but you're right in that I was a VP of growth. And I wanted to be a VP of digital and e-commerce. And like that's what to me felt like more encompassing of what the actual role could be.

And so I think like, you know, even I. When I was at Bobbie as a VP of growth, I was like, well, growth is, growth is a lot of things. Growth can be acquiring a new co company and a new manufacturing when you're, you know, we were a supply led company, so we couldn't grow unless we had supply and we couldn't get supply unless we acquired a manufacturing facility.

And like, that's, that's the growth for that company. I couldn't, you know, really do that. I was growing the business from, a, like marketing, e-commerce strategy perspective. And I was supporting fundraising activities. But growth is different wherever you go and it belongs to everybody.

And I think, you know, I started as a team of one there. I was growth higher, number one, and we became a team of 12 and we expanded into really. All digital marketing and growth, marketing, creative and data and insights. That fueled the strategy for a lot of the other teams. And I think I started to realize like I, I wanna own the whole digital and e-commerce experience.

And even in, in my role right now, I, I oversee the D to CP and L, but like I'm a person that's hungry for growth, personal growth. So I'm like, how can I actually. Oversee digital and e-commerce as, as it relates to a, an omnichannel business. And that means supporting our sales team and becoming best friends with them too, and helping them grow their online channels.

And and then just goes on from, from there.

[00:27:05] Taylor Holiday: And it's so smart, like, and this is, I think what you just summarized is everything I feel about the term growth is that growth is a company effort that requires in many different cases, different problems to solve. And the Bobbie one's such a great example where you, you sort of notoriously like publicly started referring to yourself as the VP of STH because you actually couldn't even satiate the demand that existed because it was a supply problem.

Like growth was literally a supply problem. And I think it's such a good example why that term is unfair in a lot of ways. I think a company should avoid giving it to people. It gives an an ambiguous reset of responsibilities. And I also love that you took not just VP of E-Commerce, but you recognized that the digital piece was gonna have an impact on the broader scope of the business.

And so I think it's, it reflects your sort of thoughtfulness as you do every stage of this, which is something I've watched you do every way. And growth is definitely a byproduct that is in your wake. You grew the CTC team, like, I don't know, we were like five when you started, 20 when you left. You did the same at Bobbie, I have no doubt you'll do the same at ILIA.

And this is a, this is a CMO waiting to happen. So that's, that's the next time we're gonna have you on is when you're there, whether it's ILIA or somewhere else, but Reen keep killing it and we appreciate having you back.

[00:28:08] Cherene Aubert: Thank you, Taylor. Well, I have one parting word to say to those people who are titled the growth title. To give you a little bit of hope, and this is how I approached it and my time at Bobbie is like, even though growth is everybody's job, it's your job as. Whatever you are, head of growth, growth manager, VP of Growth, to educate the rest of the organization on the part they play in what it means to grow the business.

And that's how you are set up for success and to partner across the org to make sure that all of your partners are enabled, enabled to grow the business based on the information that you have.

[00:28:43] Taylor Holiday: And that's somebody taking responsibility for a title or job that's not even theirs yet. That's how you act beyond the scope of your thing to keep rising through organization. So keep an eye on her, follow her on LinkedIn. She's follow her on Twitter, although she's a little outrageous on Twitter. She's more official shoppy there.

But we'll, we'll see if we can't get her to troll a little less now that we've brought her back to the podcast as guest number three. It's a really special spot, but Cherene really appreciate you. Love seeing you succeed. Talk soon.

[00:29:10] Cherene Aubert: Thank you, Taylor. Likewise.