United Sodas of America unveiled its line of 12 flavors of low-calorie soda last May, which came after two years of development. At the most recent Modern Retail+ Talk, co-founder and CEO Marisa Zupan said the compant surpassed forecast sales by 5x over the past month. “Learning about people’s behavior at their delivery preference was valuable during this period,” she said.
While the first generation of DTC brands waited years to launch retail stores to build up their online business, newer DTC brands have been much more eager to launch stores within their first couple of years in business. Many of them are now cutting back on the number of stores they had planned to open in the next year or two. But they are also rethinking what it will take to get their customers to come to their stores, and where their customer will be.
Direct-to-consumer startup founders have found themselves in a number of unprecedented situations over the past three months -- from having to keep their company afloat while stores were closed to having employees confront them about racism within the company. Many of these same startups have also found themselves in hot water for how they responded to these situations. The issue at hand is simple: customers feel like these companies aren't practicing what they preach.
Over the past two weeks, there's been a flood of direct-to-consumer startups issuing statements about steps they will take to better support the black community, and build more diverse companies. But venture capitalists have remained largely quiet. "People are scared -- even though they want to do the right thing, they're worried that people are going to inevitably drag them down with, 'well look at your website,'" said one consumer investor.
At this week's Modern Retail+ Talk Saucey founder and CEO Chris Vaughn spoke about how the company, which launched in 2014, has grown and evolved its philosophy on working with brands. In the early days, the platform tried to find any big name in alcohol that would work with it. Today, the service is available in 40 different markets around the United States and finds itself sometimes turning down campaigns.
Running a radical, mission-driven brand can be tricky. East Fork Pottery's Connie Matisse explained at this week's Modern Retail+ Talk the need to integrate values throughout business decision, and why "not everyone needs to be your customers." Consistently defining your company and what you stand for is integral in finding and retaining customers, she said.
DTC startups have responded to events of the past week in a couple of ways. The first is by affirming their support for Black Lives Matter on social media, and pledging to fight against systemic injustice. Some brands followed that with pledges to donate to organizations like the NAACP Legal Defense and Educational Fund and the National Movement for Black Lives Matter. Now, the focus needs to shift to building diverse companies.
Running different channels requires skills and discipline. Brand consistency is key, especially when many channels are involved internationally and across different touch points. Ask “what are the reasons to come to the site and why is the experience special?” said Ugly Drinks CEO Hugh Thomas.
Over the past two months, digitally native startups have been some of the biggest beneficiaries of store closures. Part of this growth was due to the fact that shoppers had fewer options. Now, shoppers have more options as stores open back up in more states. The coming months will prove just how much of the growth direct-to-consumer brands experienced was a flash in the pan.
Brooklinen's marketing team explains why customer feedback is valuable during a crisis. Checking with the audience helped them modifying tone and content, target offline customers and make them comfortable with e-commerce, and leverage existing social media resources to further build customer loyalty.
Over the past year, Facebook hasn't been shy about its e-commerce ambitions. So, it didn't come entirely as a surprise on Tuesday when Facebook announced that it would be launching customizable online storefronts called Facebook Shops, as part of its quest to get customers to think of Facebook and Instagram as their go-to places to discover new products. Shopify is largely considered to be the go-to e-commerce provider from direct-to-consumer brands, and as such, stands to benefits the most right now from Facebook's aggressive e-commerce push.
Now that companies have roughly two months of working remotely under their belts, all CEOs are grappling with if, and when, they should call employees back to the office. Many CEOs are trying to figure out exactly what that will look like. For some, it may mean getting a smaller space. For others, scrapping offices altogether.
Over the last three month, consumer behaviors have shifted -- and the strategies behind retail expansion have changed dramatically. At this week’s Modern Retail +Talk, Iris Nova’s founder and CEO Zak Normandin explained why the pandemic is a test for DTC brands that are hoping to maintain a brick and mortar presence.
2020 was the year East Fork ceramics planned to become profitable. Now, that's likely no longer on the table, but the company is using a new model to better handle its balance sheet: pre-sales. Now, new product lines will all be for sale before they're manufactured, as a way to get capital in as early as possible.
Just because CAC is down, it doesn't mean aggressive marketing is right for everyone, said Mike Duda at this week's Modern Retail+ Talks. He explained what the new landscape means for DTC brands' future and how to think about longterm growth.
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