‘Niche down’ and be patient: DTC founders share tips to drive sustainable growth

Inside Retail attended the latest DTC Experts summit in New York City.

DTC Experts regularly hosts panel discussions and Q&A sessions with leading direct-to-consumer brands. Its latest summit was held at Shopify’s office in New York City, on May 30, and featured speakers, including Deepa Gandhi, the co-founder and chief operating officer of Dagne Dover, Courtney Toll, the co-founder and chief executive officer of Nori, Matt Mullenax, the co-founder and chief executive officer of Huron, and Tony Yu, the co-founder of Vessi. 

They discussed topics such as methods for scaling online and offline acquisition in 2024, understanding consumer niches, and having a clear brand message. Here are some highlights.

Responsible growth through product and community

On a panel with Nik Sharma, CEO of Sharma Brands, Deepa Gandhi discussed the origin story of Dagne Dover, a handbag and lifestyle brand that she launched with Melissa Mash and Jesse Dover in the early 2010s.

The co-founders realized there was a white space in the market for multi-functional, stylish bags that suited their hectic lifestyle. Coming from a place of personal experience as consumers of their own products, the co-founders wanted to build a brand that catered to the female consumer amidst a male-dominated industry. 

During her discussion with Sharma, Gandhi emphasized the importance of responsible, patient growth over expanding too quickly. While building up funding for the company and expanding with retail partners, Gandhi and her associates knew they wanted to find investors who wanted to be in for the brand’s long-term as it grew into a brand that multiple generations of consumers would enjoy. 

The brand founder explained, “The other benefit [to a slower growth approach] was we wanted to create a real customer base, a loyal customer base that will come back and love us and just build our community.”

Gandhi recalled that the brand avoided paying influencers in the early days of its journey. Instead, the company focused on creating authentic relationships with content creators who had been gifted products, genuinely enjoyed the brand and were happy to spread the brand’s story. She also highlighted the importance of connecting with consumers on a one-on-one basis, through in-person events and great customer service. 

“It’s really hard [to drive growth and awareness] when you don’t have $20 million in marketing to drive $50 million in revenue, which was happening [at the time of launch in 2013]. That means we have to rely on word-of-mouth, which was really cooking for us from the beginning,” Gandhi stated. 

Building a brand that consumers will love for generations to come can’t be done through “quick and dirty methods”, the executive explained. The best way to build a successful brand is through a slow and steady process that focuses on creating the best product possible to satisfy a cohesive and responsive consumer community.

Scaling online and offline customer acquisition in 2024

Courtney Toll, co-founder and CEO of Nori, a clothing care tool company, Matt Mullenax, co-founder and CEO of Huron, a men’s grooming brand, Drew Sanocki, co-founder and co-CEO of PostPilot, a direct mail marketing platform, and Karim El Rabiey, co-founder and CEO of Pearmill, a performance marketing agency, discussed strategies for scaling a direct-to-consumer business online and offline. 

One of Sanocki’s key recommendations was to reach for “low-hanging fruit” via routes like re-acquiring existing customers who hadn’t purchased in a few years through short messaging services and direct mail.

Meanwhile, Toll and Mullenax both highlighted the importance of targeting barriers to purchase by offering free shipping and easy-to-navigate returns. They also advised new founders to focus on product sampling and demonstration opportunities, such as visual ads showcasing how to use a product.

Mullenax said there are no “hacks” to scaling customer acquisition and that the best way to move forward is to step back and evaluate where your company is at.

“I hate the word hack, the concept. For us [Heron], one of the things that’s been most successful for the past three to six months, is taking a step back to assess this three-way intersection of where’s our gross margin the strongest, what people want, which people coming back to buy and where’s retention the strongest?”

Building top of funnel

Closing out the day’s panels was Tony Yu, the co-founder of Vessi, a Vancouver-based waterproof sneaker brand that has sold over one million shoes since launching in 2017. The secret to building a successful direct-to-consumer brand, according to Yu, is having a product that passes the “20 feet away” test. 

The brand founder explained that to stand out in retail, especially in a hyper-competitive segment such as footwear, consumers need to be able to immediately recognize a product from 20 feet away.

Yu also advised attendees to figure out how to “niche down” and find specific but strong consumer groups. For instance, Vessi offers 100 per cent waterproof knit shoes, which appeal to parents, doctors, and others who may be in high-mess situations. 

Within these niches, it’s critical to understand who the “taste-makers” are, Yu said, and target them via discount codes or gifting opportunities. For instance, in a hospital setting, Yu realized that surgeons were the primary trendsetters and focused on that group, which eventually led to other hospital workers learning about and investing in the brand. 

This avoids the scenario of “too many” people discovering and consuming the product to the point of oversaturation where consumers are overly aware of the product and become bored with it and the brand. 

Ultimately, Yu said that brand founders must have a clear message about what their brand is and what their key offerings are.

While sustainability is an important conversation to be had within the retail industry, Yu explained, it can’t serve as a brand’s primary point of differentiation and brands need to keep their messaging clear, concise, and “cool” to appeal to the modern consumer. 

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