We Do Everything For You": Innovative Direct-to-Consumer Brands

Speaker 1: Welcome to The Marketing Stir Podcast by Stirista. Probably the most entertaining marketing podcast you're going to put in your ears. I'm Jared Walls, associate producer and Stirista's creative copy manager. The goal of this podcast is to chat with industry leaders, to get their take on the current challenges in the market, but also have a little fun along the way. We're taking a break this month, but thought we'd reshare some takeaways from season one. In this episode, we hear from Miriam Kendall, SVP of marketing at MakeSpace, Andrew Koenig, President at City Furniture, Sue Beckett, Vice President of digital marketing and e- commerce at Lovesac and Arnold Glick, Integrated Marketing Manager at The Farmer's Dog. Each guest discusses how their direct to consumer model became essential for their customers during the pandemic. Give it a listen.

Speaker 2: Well, Rahul Gandhi and a couple of other co- founders actually after Hurricane Sandy had this experience of they had to renovate their places and so they have to store their stuff, and they realized how awful they experience it, especially downtown Manhattan where you don't even own a car. So you've got to go rent a car, you got to take your stuff, you've got to wrap it up and pack it. And then you go out to some storage unit in some shady neighborhood somewhere. And they only have a facility that's twice as big as you want. So you just have to pay for whatever is available at the time. And there's no service whatsoever, it is all on you. And especially for people living in dense cities, it's just this awful, unpleasant experience, and it can be super expensive to do. But with MakeSpace, we come to you, we do everything for you, and you only pay for the storage that you use. No matter how much you have, no matter how big or how small. So it's exactly what you said, it was founded out of a horrible experience from our founders.

Speaker 3: And how has it been through 2020? I have my guess on it and take on it just again because I see so many people from New York City moving out of Manhattan, being in Manhattan, being the epicenter with COVID. And people just kind of like, well, I can't enjoy all the restaurants and I pay so much money to live here. Has MakeSpace business increased during this time?

Speaker 2: Yeah. I actually feel a little bit guilty. We're doing amazingly well. When COVID first happened, we were all, as the whole world was, kind of nervous about what was it going to do to our business, and how would people react. But we were actually very quickly designated an essential service. And so, we were able to continue to operate. We tried to operate with hands- off, no contact, delivery and pick up. So like you said, a lot of people were moving back in with their parents. There were people moving out of cities and people who had extensive leases who didn't want to pay for them anymore, especially when they felt like cities were dangerous. Just a huge amount of movement. And I think for the storage industry, in particular, people weren't sure what they were going to do. They didn't want to make new long- term commitments, so they weren't signing new leases. So they just really wanted a place to put their stuff while they try to figure everything out. And so what people would have maybe normally, been a short- term store with us, they just left it because it's so easy and convenient to have it there while they're trying to make decisions for their lives, and what's the next chapter for them.

Speaker 4: The pandemic, obviously mid- March, early April. Big scare and everything being shut down, stores being shut down. At that time, there was still about 95% of our sales were coming through stores. But then we have a really strong technology platform. And so, a lot of that business shifted online. Once we realized, and I think once consumers realized the stay- at- home economy, the shift to people staying home. Their importance to their home, it was higher than ever. It's now their restaurant, it's now their staycation, it's now they're homeschooling. You know, I think as those trends in consumer behavior started happening in April, May, June. We started to see our sales come back and with the strong technological background, online presence, web chat, sales phone calls. I mean, we were doing virtual appointments, all of our sales associates, 900 of them have sales iPads. We were walking around the store, showing the customers the product. They were literally asking us to stand in front of it to visualize the height, the width, whatever. When it was appropriate we offered in- store safe online one store private appointments. So technology was really absolutely core to helping us adapt to this consumer behavior. And then the customer was just buying in 20 different ways that we didn't expect. And furniture is pretty essential when you're being asked to stay at home. So demand really picked up through the roof and I'm happy to say, we're actually on track. You know, fast forward, we're in November, we're on track to beat our original goals that we set in January pre- pandemic that we even knew was coming. But overall, the home is more important than ever, huge shift in share of wallet to the home, anything to do with home. If you try to get a pool now, try to get your roof done, it's a one to two- year waiting list, I've heard all across the country. So our businesses are in great need, in great demand. I watched a lot of little old ladies walk into our store even during the pandemic, saying I need a fricking mattress. This is essential to me. I need a mattress today. And so I think a lot of furniture retailers out there, we had to close down from state mandates and such, but furniture is pretty essential when you're asked to stay at home all the time.

Speaker 2: We're really fortunate that because of the nature of our products, they fit in very well into the lives of a lot of different types of groups of people. And so, when you think about the fact that you can add as many seats and sides as you want. You could start off as a young person, newly out of your parents' house and have a love seat. And then as you get to a bigger apartment or you move into a home, you can add more seats, you can change the covers. And so, then as you get into a life stage of being potentially young parents, as you mentioned, the covers are washable and changeable. And so, your child spill something on one cushion, you can take that cover off and wash one cover. And then as you progress, you either, once you get older, maybe you're a young professional, or have it all. You can continue to expand, or even, say a Gen X or a baby boomer, and you have to start to have children that are leaving the home, and you have big set up, you could actually give pieces to your children, to start their own couch. And so, we're really fortunate to be able to satisfy the needs of so many different people. I would say our core target are young professionals, young parents and that have it all group, because our products are a premium price product. Because of the durability, and because of the fact that you can have it for so long, and just by nature of the way that they're built.

Speaker 5: Yeah, absolutely. So we get a lot of the unboxing experience. You get your box of food and people are showing, look what I just got for my dog or opening it up. Our packs have the dog's name on them so that's a big... People love that, that personalized aspect. This is [Fido's 00:08:23] pack of food. They love sharing that. We also saw with our subway ads when they're up, we have ads that were saying along with dogs and a great picture of a dog and a bowl of food, and people were just posting that. So it's free press right there. And a lot of people love posting on that. That's a great thing. That was also a difference. We were having a lot of people posting about their personal loans at Goldman Sachs. So it's nice to have this more organic kind of social content, which creates a movement. And I think word of mouth is so important here. Where do you get that information when it comes to your dog's health? Do you trust your friends and family? And if people are posting about it, we encourage that. We'll repost some of our favorite posts on Instagram. We are very involved, and we are watching, and tracking a lot of what people are putting out there.

Speaker 6: That's awesome. I do remember the subway ads here in New York, those were cool. I think was an initial reason that I was like, I see those all over, let's reach out to the Farmer's Dog and then Arnold there. So with that, talk to me about the... You were saying the personalization of the dog, where you could understand their diet, and you customize a plan, and we're getting a little nitty- gritty into the product here, but talk to me about how you guys are able to customize that for crosstalk

Speaker 5: When you go to the site to sign up, you're taking third questionnaire where you're putting in your dog's information, such as their age, their breed, their activity level, their weight, what their desired weight if they're overweight, underweight, and we have an algorithm there to calculate the calories, how many calories they should have. And you can also put in if they have any allergies to certain foods, we'll obviously flag that certain recipes have those, you won't want to feed those. So then it's really helpful. We're seeing a lot of customers writing in and telling us that this has been really helpful for their dog that was overweight. So there is 56% of dogs are overweight in the U. S. inaudible. Feeding guides on the Kibbles are pretty wide. So they tell you, okay your dog is between a 20 pound weight, and you should give it a cup or a cup and a half of food. That's actually a pretty big range. And a 20 pound difference in a dog is massive. And so, we are helping people understand more of how much they really should be... Taking the guesswork out. The packs that you get sent, say half a pack a day or a full pack a day, it makes it really clear and it keeps their calorie intake exactly what it should be factors in their activity level. So those on the back of the bags of Kibble, they're not saying if it's a very active dog, it obviously needs more calories vs an older dog. So it's just a little more accurate there and it goes a long way in keeping a dog healthy, make sure that they're at the right weight, it prevents arthritis and a host of other issues. So it's more than just the fresh food. Obviously, it's a big part of it, but it's also a big thing is portion inaudible.

Speaker 7: I'm guessing almost all the businesses direct to consumer?

Speaker 5: Yes. We have no retail, it's all online.

Speaker 7: Gotcha. And then how do you see the retail space changing, do you see a greater number of people going directly to brands, or do you see a place for the PetSmart's of the world?

Speaker 5: Yeah. That's a good question. I think we've been fortunate. There's not a lot other things that happening this year, but with the pandemic, people are not having retail, not going to retail. So we've been fortunate to see people wanting this DTC product for their dog food. And we're hopeful that we'll see the convenience aspect of it, lugging around a big bag of dog food is not fun. So we're hoping to see the convenience aspect as DTC work. I think retail will always be important. There are certain things that you'll want to touch and feel and see before it just get sent to you. There's also a big aspect of especially, even before that, last summer we did a booth at Smorgasburg here in Prospect Park in Brooklyn. And it is dog- friendly and we had thousands of people come and we had a booth and we had samples. We had a lot of people coming up to us, oh I've seen your ads, I've seen subway, we always want to try it, but my dog is so picky. They don't eat anything, I don't want to order a box and then spend all this money on the box and the dog doesn't like it.

Speaker 7: Twofold.

Speaker 5: Okay, that makes sense. And we were like, well, we have sample right here. Just try it. And you put it down and the dog devours it. And they immediately want to sign up.

Speaker 1: Thanks for listening to The Marketing Stir Podcast by Stirista. We'll be back with full episodes in September. But until then, please tune in for a month of special topic focused free caps from our season one guests. As always, please like, rate and subscribe. If you're interested in being a guest on the podcast, email us info @ themarketingstore. com. See you next week.