Editor Note- Recently Nisarg - CEO Affable.ai sat down with Aman - CEO Ministry of Supply to discuss the impact of Covid on D2C brands, challenges that lay ahead and rethinking the entire customer acquisition process post covid.
Affable Webinar: Rethinking D2C Customer Acquisition Post Covid
Nisarg - One of the themes for today's webinar is customer acquisition. And I read that you started with Kickstarter as your initial primary acquisition channel, was it more of a validation that you were looking for? Or was it for quick customer acquisition?
Aman - Yeah, that's a really good question. At first, it started as validation for us. In the first month we set a goal, Can we sell $30,000 for the product? And if so, we think there's something that resonates with other people as well. We blew through that goal, and suddenly, it became a great way to acquire new customers. We also have people who come to us till date sharing how they heard about our first Kickstarter campaign. And there's a kind of badge of pride that those folks will have which I think is just wonderful. So I do think it can serve both purposes and that tends to be the case with any customer acquisition and also validates that your problem statement is real, and your solution is valid. I feel the two can kind of pair well together.
Nisarg - You had Six stores pre-covid, what's going through you and your team members during such times, what were the conversations you were having?
Aman - Yeah, you know, the first thing we did is we put up a sign I remember beside the windows saying we will reopen in two weeks. And now here we are almost 2 years later, right? So you can kind of smile about it now, but the time was not right. I think one of our first challenges and everyone's challenge was underestimating the power of how long this might last and the long-term impacts that it might have on not only on the product but also on the shopping behavior. So I think that was our first learning that- The stores are not going to reopen in two weeks, not in two months, and maybe not two years. And that was a tough pill to swallow.
Nisarg - In terms of customer acquisition, what are some of the channels or experiments that have worked/not worked so well, for you? Can you share an instance?
Aman - I think it is a tough one to answer that. I imagine a lot of marketers on the call would relate to this. It is really difficult to measure the impact of offline marketing initiatives. Last month, we did a full-page ad in the New York Times. It's really difficult to isolate what that impact is, because if it's not digital, it's very hard to attribute the impact. So in that way, there is some level of gut that is involved with it. But I think in terms of deciding what works or what does not work, I imagine any impression is a good impression as long as it contributes to your sales funnel. I would recommend focusing on channels that can be iterated and are measurable, so you can have that improvement opportunity to go after
Nisarg - You've opened stores, you've sold online? What are your thoughts on partnering with big-box retailers? The reason I asked is because a lot of D2C companies these days are selling through Walmart, CVS, Target, and the big box retailers. What would your thoughts be on this?
Aman - I think it's a wonderful idea for the right business. A couple of things to keep in mind is Price competition which becomes a big issue since you have multiple channels selling the same product whereas when you have your channel you have nothing to think about. We have a long partnership with Stitch Fix where they are only selling full price. So there's no price competition there. First and foremost for the partnership to work, we must own the customer relationship & pricing directly. And then the last thing I think is about making sure that your margins are in place. . If your margins won't work out or if there's no plan for that to change, then retailers like targets not going to automatically reduce their rates every time in fact, if anything, they might increase that. If you are making sure that you have the right margins, meeting all the criteria, and are comfortable with all those truths, then it can be a wonderful way to grow and scale.
Nisarg - If you want to start a new brand today, D2C consumer-focused, what would you do differently? Any key insight for the first-time D2C founders in the audience?
Aman - Yeah, you know, my instinctual answer is nothing. But we've often joked and said, if you were to start a business today, this would be a pretty good choice, right to a clothing company that is based upon a new dress code emerging at a time when it is becoming a trend. And so with that in mind, The advice I'd kind of share with the audience is we've often used this word tailwinds, right, which is to find where the market is going and to join it. And don't try to fight against it. Don't try to create new behavior. But by embracing this tailwind, your job becomes a lot easier, right? If people are buying sweatpants, they sell sweatpants. And to that end, you know, I think anybody here who's considering starting a company, we're already on that path, finding those natural behaviors that are building and playing into them rather than against them.
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