Inventory rates are rising on those social channels, Klodnicki said, but the data coming in helps crystalize their target audiences, improving the average order rate, average order value and the cost to convert. Those benefits compensate for the higher upfront cost to reach individual accounts.
Skullcandy can also afford to sharpen its focus on social media because its retail partners account for most sales and do the legwork in other digital channels.
If Skullcandy invested heavily in search, it would be competing with (and losing to) its retail carriers like Best Buy or Target, Klodnicki, said, driving up costs for all involved. Skullcandy’s own site also never offers the lowest prices for its products, which would put it in more direct competition with its retailers.
“We’re very mindful not to compete down-funnel with our retailers,” she said. “That’s part of why we’ve invested more in the social platforms, and can let our retail partners spend their dollars in search and elsewhere more effectively.”