Podcast

Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 372 52 mins

The Omnichannel Potential of DTC that Transcends Apple’s ATT



About the guests

Polly Wong

Kunle Campbell

Polly Wong, President of Belardi Wong, began her career in retail 24 years ago at Eddie Bauer. She was recruited to San Francisco to work with the DTC gifting company RedEnvelope and later moved to William Sonoma Inc., where she was responsible for new customer acquisition for all seven brands. In 2005, she joined Belardi Ostroy to evolve into a next-generation marketing agency, which became Belardi Wong in 2017. In 2017, Belardi Ostroy became Belardi Wong when Polly Wong became president.



On today’s episode, Kunle is joined by Polly Bickel Wong, President of Belardi Wong, a marketing agency working with affluent brands doing a mix of online and offline marketing.

Polly’s marketing career began with an awesome start. After graduating with an English literature degree, she worked as a PR in Publicis, then EvansGroup in Seattle. She was also recruited to Williams-Sonoma, Inc. where she worked with both digital and offline marketing. With her experience and finding fun in doing her craft, she became the president of Belardi Wong.

If you think that print and offline marketing is outdated, Belardi Wong disproves it with their amazing work with thriving brands like Allbirds, Birkenstocks, Serena & Lily, Buck Mason, Todd Snyder, and dozens of others. Consisting of 100 employees with eight VPs, each with their own pedigree, Belardi Wong is one of the industry’s leading marketing and creative agencies.

It’s an insightful episode as you’d hear Kunle and Polly talk more about the resurgence of offline marketing, its offerings to uphold the best customer experience and product promotion in a technology-dominated world, as well as strategies for maximizing both offline and digital marketing.

Here is a summary of some of the most important points made:

  • Belardi Wong consists of around 100 caliber staff members and experts in online and offline marketing.
  • “Our most sophisticated clients or our most sophisticated marketers understand that in order to drive the business, you have to have a marketing mix across all channels.”
  • “Direct mail and catalogs are having a huge resurgence.”
  • “The fastest way to profitability to actual sustainable long-term growth as a business is to build your customer database.”
  • For a not-so-well-known brand, telling your story is an important move to convince your target consumer to buy your product.

Covered Topics:

On today’s interview, Kunle and Polly discuss:

  • Polly Wong’s Journey to Marketing
  • About Belardi Wong
  • Balancing Offline and Digital Media Marketing
  • Anatomy of a Thriving Digital Native Consumer Brand
  • Product Assortment Expansion
  • Macro Trends and Risks During an Economic Downturn
  • Offline Channel Customer Experience
  • On Customer Trust and Loyalty
  • SMS, Email, and Direct Mail Mix
  • Direct Mail Versatility
  • First Principle Pillars in Creatives
  • Consolidating Zero First-Party Data in a Single Platform

Timestamps:

  • 10:33 – Polly Wong’s Journey to Marketing
    • Grew up and lived around the country.
    • She majored in English Literature for her undergrad degree.
    • She got a job in PR that started her career in marketing.
    • She is the president of Belardi Wong.
  • 13:17 – About Belardi Wong
    • Belardi Wong is rolling up into eight vice presidents.
    • They have about 100 staff.
    • There are experts in online marketing, offline marketing analytics, and creative teams. They also work with private equity firms on their due diligence for transactions.
    • They work with brands like Allbirds, Birkenstocks, Hoka, Anthropologie, Frances Valentine, Clare V, Johnny Was, Todd Snyder, etc.
    • Their marketing focus is in the US, extending to Canada.
  • 15:25 – Balancing Offline and Digital Media Marketing
    • Traditional retailers have a larger marketing toolbox, leveraging radio, print, TV, and digital channels.
    • “Digital marketing is, unfortunately, becoming extremely competitive, saturated, promotional, and expensive.”
    • “There are 6 to 7 major marketing channels today.”
  • 17:29 – Anatomy of a Thriving Digital Native Consumer Brand
    • The major growth strategies DTC brands are embracing to be successful are increasing distribution channels, expanding product assortment, and activating more marketing channels.
  • 20:04 – Product Assortment Expansion
    • In some of the more traditional retail disciplines, there is a need to understand inventory management or inventory planning.
    • Inventory planning/management is how much product to buy, when to flow it in, and how to successfully restock products.
  • 21:17 – Macro Trends and Risks During an Economic Downturn
    • One of the challenges is the slowing rate of growth, depending on the category and target consumers.
    • “Some of the financial or economic softness that we’re seeing right now, unfortunately, will impact low to mid-ticket consumers more than it will impact more affluent consumers.”
    • Apparels, accessories, and footwear are seeing more strength and growth. Home category is seeing single-digit growth over the past few years and sporting goods is going to have a hard time coping.
    • Some risks for DTC brands are the seasonality and promotional discounts and markdowns happening at big box retail like Walmart and Target.
  • 29:27 – Offline Channel Customer Experience
    • DTCs must find a way to build their distribution channels, whether in their own physical stores or in other physical retail stores.
    • “It’s important to be where the customer is at.
  • 31:16 – On Customer Trust and Loyalty
    • “What it really comes down to is authenticity and consistency.”
    • “Millennials can spot a manufactured brand from a long way off.”
  • 33:39 – SMS, Email, and Direct Mail Mix
    • “SMS is driving significant scalable revenue in addition to email but it’s not just taking $1 from email and then converting somebody through text.”
    • Digital marketing is getting more expensive, and targeting and measurement have become less effective.
  • 38:00 – Direct Mail Versatility
    • There are two types of major print – standalone direct mail and catalogs.
    • Insert media or shared mail is also resurging because it used to be a value pack.
  • 41:49 – First Principle Pillars in Creatives
    • Understanding your target consumer is the number one factor in making creatives.
    • If creative folks or the product people are not communicating with each other causing inconsistent messaging with the audience.
    • “It is important to tell your story.”
  • 45:32 – Consolidating Zero First-Party Data in a Single Platform
    • “Your own data is always your best data.”
    • Belardi Wong’s clients have their customer databases.
    • It is the most important asset to a company.

Takeaways:

  • “Digital marketing is becoming extremely competitive, saturated, promotional, and expensive.”
  • The most important thing to nail down is knowing your target consumer.
  • “Direct mail and catalogs are having a huge resurgence.”
  • In targeting customers, there is a correlation between age, affluence and disposable income.

Links & Resources:

Facebook Group • Continue the Conversation

The eCommerce GrowthAccelerator Mastermind Facebook Group has just launched.
It is a community…

✔️ for founders and experts passionately involved in eCommerce
✔️ for the truly ambitious wanting to make an impact in the markets they serve
✔️ for those willing and open to help and share with other members

Here is where to apply to join the Facebook group
>>http://bit.ly/ecommercefb<<

———–

SPONSORS:

This episode is brought to you by:

As you continue to grow your eCommerce business, access to growth capital will increasingly play a significant role in achieving and surpassing your financial and social goals.

Why should you give up equity or pay high interest rates to grow your business?

There is a new way to access growth capital that transforms eCommerce businesses.

Wayflyer has shaken the way eCommerce operators access working capital.

With a dedication to only DTC eCommerce businesses, Wayflyer will fund you on a fairer “fund as you grow” model, meaning if your sales slow down, so does the amount you transfer back..

There is just a simple fee and the funds you need to grow are deposited to your account instantly.

It’s worth checking out – Wayflyer.com

This episode is brought to you by Klaviyo – a growth marketing platform that powers over 25,000 online businesses.
Direct-to-Consumer brands like ColourPop, Huckberry, and Custom Ink rely on Klaviyo.

Klaviyo helps you own customer experience and  grow high-value customer relationships right from a shopper’s first impression through to each subsequent purchase, Klaviyo understands every single customer interaction,  and empowers brands to create more personalized marketing moments.

Find out more on klaviyo.com/2x.

This episode is brought to you by Gorgias, the leading helpdesk for Shopify, Magento and BigCommerce merchants.

Gorgias combines all your communication channels including email, SMS, social media, livechat, and phone, into one platform.

This saves your team hours per day & makes managing customer orders a breeze. It also integrates seamlessly with your existing tech stack, so you can access customer information and even edit, return, refund or create an order, right from your helpdesk.

Go to Gorgias.com and mention 2x ecommerce podcast for two months free.

This episode is brought to you by Recharge, the leading subscriptions payment solution for Shopify merchants.

Recharge helps ecommerce merchants of all sizes launch and scale subscription offerings. Recharge powers the growth of over 15,000 subscription merchants and their communities—turning one-time transactions into long-term customer relationships.

Turn transactions into relationships and experience seamless subscription commerce with Recharge.

Find out more on rechargepayments.com/2x.

Transcript

On this episode, we’re going to find out why consumer brands that are targeting affluent consumers seem to be having a better ride over this economic downturn. It’s a great episode you do not want to miss.

Welcome to access to the 2X eCommerce Podcast. The 2X eCommerce Podcast show is dedicated to digital commerce insights for retail and eCommerce teams. Each week, on this podcast, we interview either a commerce expert, a founder of a digital-native consumer brand, or a representative from a best-in-class SaaS product with a tight remit.

Our tight remit for guests is, can you give new readers a test or an idea they could go with right away with a brand, test over the next 90 days, come back, and see if it works or not? They can grow metrics such as conversions, average order value, repeat customers, audience size, or ultimately their gross merchant value or sales. If they can, we bring them on to the show.

I put this podcast for one mission, which is to help you, the readers, sell more sustainably. That is why I come here and I turn up every week to showcase the guests who come. Moving forward, I will be doing more solo shows to reflect my day-to-day in managing eCommerce brands, working with eCommerce brands, and speaking and interacting with other eCommerce operators so you’ll get insights. My purpose, my dharma as people allude to, is to help you sell sustainably.

Speaking of which, on this episode, it was like a curveball. I didn’t know what to expect. I had read her profile, Polly Wong. She’s the President of Belardi Wong. I’m looking through their website. From my conversation with her, let’s say you have a fantastic direct-to-consumer eCommerce business and you’ve raised capital in Silicon Valley.

Belardi Wong is the agencies the likes of Allbirds, Hawker, On Running, Birkenstock, Bertin, Crate & Barrel, Blue Dots, American Giant, Buck Mason, Backcountry, and the like. You do get it. They are high-touch brands that cater to affluent consumers. She offered some interesting insights. Yes, everybody’s suffering from the Meta armageddon due to the iOS 14 issues. These best-in-class brands working with affluent customers or consumers are doing stuff differently.

They’re taking channel marketing differently. They’re taking marketing differently. They’re embracing offline marketing. She gave me some ninja stuff like direct mail, what they’re doing with direct mail, and how they’re using multiple channels to mitigate the loss from Meta. We ended up in a conversation that I love, which is all-around customer data.

If you want to get a glimpse into how affluent brands are thriving now, she’s still seeing growth, and she’s not seen a decline across the brands. They manage 400 brands. If you want to look into the hood of brands that are still growing amidst what is going on in the economic climate, this is an episode you do not want to miss.

You want to finish the entire 40-minute conversation I had with Polly. If you’re reading this before or after our upcoming virtual conference called Commerce Accel, she’s going to be there. You will be able to get replays after the event. She’s going to be in one of the panels at the event. Enjoy this episode. I enjoyed it. She’s a mature marketer, we’re talking over 24 years in the industry, and it’s been largely in digital. She started at Eddie Bauer and then she moved on to several other roles in more digital native versions of offline brands. It’s a terrific episode. I thoroughly enjoyed this one. Enjoy.

Polly, welcome to the 2X eCommerce podcast. It’s an absolute pleasure having you.

Thank you for having me. It’s great to be here.

When I read your backstory and what you guys are doing in Belardi Wong, I was super impressed and blown away. You guys are working with 400 consumer brands. Whether they’re digital native or traditional consumer brands, they’re top-notch, top-of-the-cream, top-of-the-crop brands.

Thank you. I appreciate that. We’re privileged to work with many great brands.

It boils down to you, the leader, and the team you’ve put together. I want to know more about your background, Polly. Where did you grow up? Where did you study? How did you get into marketing?

I lived around the country. As a child, my parents are adventurous spirit spirits so we lived in a lot of places. I graduated from high school in Seattle. I went to the University of Washington, which is an amazing school. The Pacific Northwest is absolutely beautiful. I planned to go into the school of journalism at the University of Washington and it shut down in the fall that I was starting school there. I was an English literature major in my undergrad. I graduated from college and I thought, “What can I do? I can write anything.” You spend a couple of years writing reports.

I got a job in PR, which is how I started my career in marketing over 25 years ago. I got a job at EvansGroup in Seattle, which became, over the years, Publicis. It’s an amazing start to marketing. From there, I was lucky. Eddie Bauer is an amazing heritage brand out of the Seattle area. I went from PR to EddieBauer.com. This is probably 1999. The early years of EddieBauer.com won a lot of awards back then for being an early leader in the online space.

From there, I moved to San Francisco. I was recruited to Williams-Sonoma, Inc. and worked across all seven brands in digital and print. That’s how I also got my feet wet in offline marketing. My husband called me one day from business school and said, “I got the opportunity of a lifetime in New York City.” I thought, “Okay.” We decided to pack up and move to New York and I interviewed with all of the brands in New York, the Jay Cruz of the world.

The corporate side for me was always a little bit square peg and round hole. I was a client of Belardi Ostroy. I was a client of the company. When I was at Williams-Sonoma, Inc., the partners there, Donna and Andy said, “Why don’t you jump ship to the dark side and come join us at our agency? If you can build it, you can have it.” Here we are today. I’m lucky to be the president of Belardi Wong.

Your own data is always your best data. Click to Tweet

How long have you been the president?

Probably over 4 or 5 years. Time flies when you’re having fun.

It does, indeed. Could you describe the team structure? How many people do you have to manage? How many people are under your wing? What kind of brands? What’s your clientele like?

We have about 100 staff members here at Belardi Wong, rolling up into eight vice presidents who all have an amazing pedigree if you will. For example, the last VP we hired was the VP of Marketing at Pottery Barn for years. It’s an amazing caliber team. We have a lot of staff members. Probably half of our staff have worked on the client side, which is important to us so they understand clients.

We are experts in online and offline marketing, marketing, and analytics. We have an award-winning creative team. We do a lot of special engagements like working with private equity firms on their due diligence for transactions. We have an incredible amount of experience. It’s a privilege every day for us to work with many amazing brands.

We work with footwear brands like Allbirds, Birkenstocks, and Hoka. We work with fashion brands like Anthropologie, Frances Valentine, Claire V., and Johnny Was. Also, great men’s brands like Buck Mason and Todd Snyder. We have a huge amount of market share in home decor and furnishings. Working with amazing brands like Serena & Lily, Lulu and Georgia, and Mitchell Gould + Bob Williams, and dozens of others. We’re lucky to have an amazing vantage point in the industry here.

Are your campaigns national? Do they focus exclusively on the United States and North America or today do they extend across the pond or to Europe?

Most of the marketing focus is domestic here in the US extending into Canada. We don’t market overseas in Europe. We have a lot of brands that we work with from Europe to help drive their US business. We don’t, ourselves, cross the ocean in terms of our expertise.

Over the years, as an open to the run-up to now while we’re speaking in 2022, what’s been the media mix of offline and digital? How do you balance that since you cover both sides of the marketing spectrum?

As I’m sure you know, traditional retailers have always had a much larger marketing toolbox, leveraging radio, print, TV, and digital in every single channel. DTC brands, over the years, have primarily built their businesses on the Meta and Google platforms. What’s been interesting is to watch how DTC brands and retailers are pivoting their marketing mix based on the headwinds in front of us. Digital marketing is, unfortunately, becoming extremely competitive, saturated, promotional, and expensive. How do you pivot away from that?

Universally, our clients have had challenges with the Meta platform in 2021 after the Apple changes and platform changes rolled out. How do they expand their marketing mix? We see that there are probably 6  or 7 major marketing channels today. You still have email, SMS, social, and search. Direct mail and catalogs are also having a huge resurgence. We still have a lot of clients doing out of home, whether it’s taking over a subway shelter, billboards, or what have you. We see a pretty diverse marketing mix. Our most sophisticated clients or our most sophisticated marketers understand that in order to drive the business, you have to have a marketing mix across all channels.

Going into your most sophisticated clients, they’ll be broad stroking these two categories. There’ll be traditional consumer brands that started offline and then there’ll be digital native consumer brands. What is the current anatomy of a thriving digital native consumer brand from Belardi’s perspective?

There are four major growth strategies that we see DTC brands embracing in order to be successful and combat all of the headwinds out there. The first major growth strategy is increasing distribution channels. You see that DTC brands or digitally native brands started as eCommerce only and then they started opening their own stores. Now you might see them selling on the floor at Nordstrom or within marketplaces.

The first major strategy for growth is to continue to expand your distribution channels in every single category. More than 50% of sales are still in physical stores. Physical stores are expensive. We see much more conservative store opening plans post-pandemic. You see Allbirds on the floor at Nordstrom. How do you leverage as many distribution channels as possible?

The second major growth strategy is expanding your product assortment. I always say that there are two things I learned in my years at Williams-Sonoma. The first thing I learned is that the best way to drive response rates is to have a range of products across categories and price points. The range is important. It’s misleading.

A lot of DTC brands started with a narrow assortment, 1 shoe, and 4 colors. Having been in retail for over 25 years, that’s not a path to long-term sustainable growth to profitable growth. You have to give your existing customers more and more products to buy from you. The second major growth strategy is expanding product assortments. You’ve seen a lot of the soft goods betting brands launch into loungewear. You see a lot of apparel brands expanded to home. We’re seeing that across the board.

The third major growth strategy is activating more marketing channels. As Meta has declined in performance, we’ve got clients leaning into TikTok and connected TV. There’s been a huge resurgence in direct mail and catalog. We see quite a diverse marketing mix. The third major strategy is activating all of those channels.

Speaking to your second point around product assortment, how do they strike a balance operationally from not running out of stock or overstocking as they continue to expand product assortment?

There are things that digitally native brands have been good at and then there are some areas now that they need to learn in order to continue to be successful. Inventory management or inventory planning. Honestly, some of the more traditional retail disciplines, we do see a need to understand how much product to buy, when to flow it in, and how to successfully restock products. There are a lot of important fundamentals around inventory management and planning. DTC brands need to bring that expertise in-house in order to be able to make sure that they have the product they need. Even product development, having experienced merchants who know how to build out a strong assortment.

We can’t not speak about the economic downturn in 2022, particularly in retail. With 400 clients under your belt and you’re working with private equity on digital due diligence and brands, what macro trends are you seeing affecting digital retail?

One of the major challenges is that the rate of growth is slowing. If you were a DTC brand or a specialty brand, especially if you were in a certain category like home or sporting goods, you had an incredible two years. If you were targeting an affluent consumer, affluent consumers we’re at home and having a heyday online and spending a lot of money. You have a situation where you always have to grow. There’s never an easy answer that says, “We were not going to keep growing.”

How do you continue to comp those numbers? We are seeing that the rate of growth is slowing. It depends on the category. It depends on the target consumer. We’re going to see that some of the financial or economic softness that we’re seeing right now, unfortunately, will impact low to mid-ticket consumers more than it will impact more affluent consumers. We do tend to work with more high-ticket fashion and high-ticket home brands. The consumers, right or wrong, who buy $300 sweaters are not going to be as financially impacted.

Looking ahead in terms of the retail sales performance, It depends on which category you’re in and which target consumer you’re trying to focus on. We’re seeing more strength and more growth in apparel, accessories, and footwear. The home category is seeing about single-digit growth over the last two incredible years. If you’re in a few categories like home or sporting goods, you’re going to have a hard time comping and having significant growth on top of the last two years.

It’s due to the pandemic. Everybody’s returning back to the office and you don’t need that volleyball kit in your garden.

One of the things we saw universally was that Q2 was soft for all of our clients. It was soft regardless of the category, regardless of the channel, and regardless of the target consumer. We saw this incredible universal impact and what I refer to as the start of the spring break season. Early Q1 was strong for most of our clients.

Clear as day starting in mid-March with the start of spring break season, we’ve seen an incredible amount of competition for wallet share. We’re seeing competition for wallet share from services, experiences, restaurants, and travel. I’m sure you’ve seen a lot of that and read a lot about that. We saw that clear as day.

This summer 2022 has been okay for most of our clients. It’s easy to forget that prior to the pandemic, you experienced traditional summer sales seasonality. By the time you get to July, you’re clearing through your spring-summer product. It’s a sale liquidation period. It’s not historically an important time in the heart of summer for retail.

What it really comes down to is authenticity and consistency. Click to Tweet

The question is, with all the headwinds, what to expect now that Labor Day is behind us? For us, Labor Day is that moment in time where we expect fall fashion to pick up. The heatwave does not help. 40 million households in the US having an extreme heatwave is not going to help sell sweaters, jeans, boots, and jackets. I’m a little worried. September 2022 is not going to be quite what we hope it will be if we’re going to start with this heat wave, which will keep people from buying fall products. Overall, there’s still a chance that the back half of the year could be quite strong.

It might be an opportunity to push back these sales into Black Friday and Cyber Monday. Who knows?

One of the risks is that I’m sure you’ve also read like the rest of us and seen the huge promotional discounts and markdowns happening at big box retail like the Target and Walmarts of the world.
It’ll be interesting to see DTC brands if we start off fall a little soft because of the seasonality and because of the heat and people aren’t ready to buy fall products, will the strain on hitting sales targets combined with the competition for wallet share from all of the big discounts at the big box retailers, will that put enough pressure on specialty brands to be more promotional? They historically like to be. Will that lead to potentially a negative business impact, certainly a margin hit? It’ll be interesting to see.

It’s also down to timing from the marketing teams to make that decision when it comes to making the offers if they need to. I also wanted to make a point about COVID being the perfect storm and reopening being the perfect perfect storm for DTC brands. Speaking to your first point around people returning to retail spaces or experiences to wanting to get into experiences and the need to be within those experiences. The need to be in a Nordstrom mall and to be in a retail environment is ever important. You can’t sit on digital anymore. You have to start to look at offline channels to be part of that customer journey.

You still have over 50% of apparel sales in physical stores. You still have over 60% of furniture sales in physical stores. The reality is if you weren’t finding a way whether it’s through your own stores or through the floor at Nordstroms or Anthropologie to build your distribution channels, you’re missing out from the get-go on more than half of the market share. It’s important to be where the consumer is at. Retail sales physical store sales have rebounded more than what we’ve seen from an eCommerce perspective because eCommerce was already comping some pretty huge numbers.

Two topics I want to speak about and one is messaging communication with customers. The other, which is more important and we’re going to address now, is more of the affluent consumers. You’re seeing there’s a bit of price in elasticity from most affluent consumers. It might be too late for several brands that are reading this episode.

The question is how do you effectively gain the trust of an affluent consumer? Once you get that trust, you get their loyalty. If you want to grow break it down with how you’re best-in-class DTC or more digital native brands are cutting through that noise, I’d like to take it from a product experience standpoint down to a marketing standpoint.

What it comes down to are authenticity and consistency. I have said for a long time that Millennials can spot a manufactured brand from a long way off. Are you authentic in your brand mission? Are you authentic in the brand’s point of view? Are you consistent? if you say that you’re a sustainable brand, if you’re focused on sustainability and sourcing organic products, is that following through 100% of your assortment? If you’re saying that you’re designing and you’re focused on your end consumer, does that show up in the style and the type of product?

All the way through the consistency and customer experience. If I am a size six swimwear buyer and I get my swimsuit and I love it and then I buy another one from you and it doesn’t fit the same as the first one and then I buy another one and it doesn’t fit the same, then I’ve had a bad experience. All the way through from the authenticity and consistency and the brand positioning in the way that rolls out through marketing channels, all the way through the product experience.

Are you developing a product for me? Are you consistent in the quality, the product, the sizing, and the delivery? We’ve seen that consumers understand having to wait a week or two weeks for something than they understood two years ago. Having to wait 2 or 3 weeks for your product or going to your site and it’s out of stock or the inventory is not available yet, that’s not a great experience. You have to focus on it across the board.

Top bottom. It makes a ton of sense. From a communication standpoint, going back to the fact that brands are falling back on direct mail. There’s SMS, which is growing. SMS along social are one of the fastest growing channels, closing channels, as compared to what search used to be in the past. What is the mix with comms and where does email sit? Where does SMS sit? Where does direct mail sit? How do best-in-class are using communications?

It’s been interesting because I thought that launching SMS will be a little bit like robbing Peter to pay Paul. If you build an SMS program, will it shift a lot of that CRM revenue that you get from email marketing? We have seen that SMS is driving significant scalable revenue in addition to email but it’s not just taking $1 from email and then converting somebody through text. It’s been great to see and that’s probably one of the most exciting new channels in the last couple of years. We’ve seen it for clients, depending on their target consumer but especially for that under-40 consumers. SMs can quickly grow to be as powerful as email.

We always break everything down into customer retention and acquisition. What’s happened is that DTC brands built their business on acquiring customers through the Meta platform and Google. Now, of course, one of those platforms has been extremely challenged in 2021. One of the things that we found is that in an effort to focus on new customer acquisition and especially considering that we do tend to work with premium brands, especially in high-ticket fashion and high-ticket home, we’ve seen an incredible resurgence in prints escalate in the last couple of years. We’ve launched more than a few 100 DTC brands.

Honestly, prints have been resurging for a while. Way back when, we launched Revolve, Zappos, Shutterfly, Minted, One Kings Lane, and Allbirds. We sat down with Joey in San Francisco. Zero customers and zero funding. It wasn’t even Allbirds yet. Prints have been resurging for a while. There were some early leaders in this space. Digital marketing is more expensive than ever. The targeting and the measurement have become less effective.

You need a new customer acquisition channel. There’s an incredible amount of square inches in real estate. If you’re trying to convince a new consumer to believe in your brand and understand your brand, show them your product to understand why they should buy your product. You simply cannot replace real estate, that’s for sure.

As a few examples, we’ve got a lot of wholesale brands and fashion and footwear like Birkenstock who’ve had incredible success with their print program. A lot of great home brands, a lot of the emerging brands that don’t have the footprint online to acquire customers online like Little Designs, that’s been incredible. They’re having great success. Other clients like Backcountry.

In some cases, digitally native brands are turning to print because they’ve maxed out in every other channel. If you’ve reached the point of diminishing return and you’ve maxed out in the digital channels, like Backcountry, then you’ve got an opportunity to leverage the offline channels for new customer acquisition and also CRM, that’s one of the things that DTC brands have a huge low-hanging opportunity in building out you know. Historically, DTC brands are good at using email, SMS, search, and social to target customers but prints also are extremely effective at CRM. We’ve seen it become a critical part of the mix. We have all 400 clients in the mail. It’s continuing to be strong.

Speaking about prints, I’ve always wanted to ask direct mail experts both versatile in postcards and actual catalogs. Are postcards a stepping stone? You need to run teams almost the same way you manage your eCommerce catalog. You have a print catalog and a management team to do that. What is the thought process there?

I’ve also seen situations in which certain DTC brands, when I get their packaging, have other DTC brand’s postcards in their packaging saying, “Try this out.” Let’s say I subscribe to a wine brand, I also get a craft beer poster card with an offer in it and it’s cross-promotional and it works. What are your thoughts on execution?

There are two types of major print out there. There’s standalone direct mail and catalogs. You were referring to insert media. I could put a flyer at HelloFresh’s outbound packages. I could put a flyer in Zulily’s outbound packages. That type of insert media or shared mail has had a resurgence because it used to be a value pack.

I don’t know if, within the UK, you’d be familiar with a value pack but it was a blue envelope with a bunch of low ticket offers and it was for a low ticket market. If you were a premium brand, you did not want to be in the shared mail envelope. Now there are a lot of premium shared mail programs. There’s insert media.

You can put your flyers or a postcard in outbound packages. That type of media can be effective for cost-effective scalable reach. Standalone direct mail and some of the pieces that I held up, that is more about quality versus quantity. It’s much more expensive to do standalone direct mail. It’s about $0.80 to mail a full-size catalog in the US, including paper printing and postage.

Unless you’re a company with a $100 million marketing budget selling one mattress, we don’t recommend prospecting with postcards. If the consumer has no idea who you are, they’re not going to buy from you on a postcard. We use a range of direct mail pieces, folded pieces, and catalogs for our clients.

A catalog gives a lot more credibility. The potential of bidding on a catalog is lower than just a postcard.

With a cost per click today, depending on the category, anywhere from $2 or $3, the crazy thing is that you can mail 4, 5, or 6 catalogs to a highly targeted audience for the cost of one click. It’s been incredible. Way back when you were talking about $5 CPMs. Now those CPMs are $20, $25, or $30 during a holiday weekend.

It's important to be where the consumer is at. Click to Tweet

The cost of digital marketing has gotten 5 to 6 times more expensive. As the targeting has become less effective because of the Apple platform changes and as the measurement has become less effective, at the same time, it’s become more expensive. That’s why you’re beginning to see some pretty clear underperformance in the Meta platform.

Let’s speak to creatives and the initial perception of brands from an affluent consumer. What are the first principle pillars to understand when you’re briefing your creative, working with a creative, or trying to select a creative team to execute for you?

the number one thing is understanding who your target consumer is. We had an experience with one of our footwear clients, they were working on the creative for back-to-school. When we got the campaign creative, it was a bunch of twenty-something hipsters and we’re like, “I thought this was back to school for kids? These are twenty-something hipsters. We’re looking for 6-year-olds, 8-year-olds, and 10-year-olds.”

I would say that you have to know who your target consumer is. Are you targeting a young family? Are you targeting someone who’s retired? Are you targeting a cool urban Millennial hipster? Who are you targeting? The number one most important thing is to nail that down. What happens is that sometimes the creative folks or the product people are not communicating with each other and so that creates a situation where you’ve got the messaging inconsistent with the audience.

Any other things to be aware of? When trying to target an affluent consumer, what other areas should we be critically detailed in?

If you’re trying to sell a $300 sweater or you’re trying to sell a $5,000 sofa and the consumer doesn’t know your brand, it’s hard to use a text link and search or a small image on Instagram to convince somebody to buy a $300 sweater. The cashmere sweater category, for example, is extremely competitive. Why buy a cashmere sweater versus someone else’s cashmere sweater?

There are many new emerging home brands out there. There are a million options for buying a sofa. Why buy that sofa? What about the construction, the quality, the guarantee, and the fabric? If you’re targeting an affluent consumer and you have a high-ticket product, you’re in high-ticket fashion, high-ticket footwear, or high-ticket home, you have to make sure that you aren’t just leveraging the digital channels.

For a fashion client like Air, you’re selling $200 jeans. if you’re not a well-known brand yet and you sell an expensive product, how do you reach that target consumer? It’s important that you tell your story. You have to have enough real estate to convince somebody to buy your product. That’s why we have a lot of fashion clients in the mail because if you’re a Johnny Was or Frances Valentine or an Air, you’ve got to convince that consumer that your brand and your product are worth your price point.

The final question I want to ask is about customer data. You alluded to the fact that CRMs are important. Brands are starting to embrace CRMs. From a targeting standpoint, when you’re talking about targets in affluent consumers, you’re going to be using third-party data. How are you consolidating zero first-party data in a single platform? How are the best-in-class brands doing it for better lifecycle marketing?

Your own day data is always your best data. All of our clients have customer databases. When Mary Jane buys from you and you ship her sweater to 123 Main Street, you’re beginning to build a customer database. Customer data is the most important data, the most important asset to accompany. A lot of times, when we start working with a brand, honestly, the DTC brands, because they’ve been focused on email or SMS, they don’t understand the importance of that entire customer record.

If you want to run socio-demographic profile data on who your customers are, you need a customer database. If you’ve had 100,000 people who bought from you, you need a database with all of your transactions for all 100,000 customers so that you can leverage external data sources to build socio-demographic profiles.

I mentioned the brand earlier but I don’t want to call them out now. Years ago, we had a high-ticket fashion brand out of LA come to us and said, “We want to launch a catalog. We’re targeting a 28-year-old woman.” We’re like, “Your price points are pretty high.” Usually, there’s a correlation between age, affluence, and disposable income. We got their customer profile reports back and their average consumer was 44 years old. She was not a 28-year-old. She was much older than that. It’s important to build a customer database in order to understand who your customer is.

Sometimes you want to shake these emerging DTC brands. The fastest way to profitability to actual sustainable long-term growth as a business is to build your customer database. It costs so much money to acquire a customer. It costs more today than ever before to acquire a customer. There are a million challenges. It’s expensive, competitive, and saturated.

You’ve spent all this money, an investment, to acquire a customer. In order to be profitable, you’ve got to drive downstream revenue. You’ve got to drive lifetime value. In order to drive lifetime value, you’ve got to lean into five channels for CRM. You’ve got to lean into product category expansion. You have to continue to communicate with these consumers across all of those channels. It’s not enough to rely on 1 or 2 channels to communicate with a consumer.

Based on our best estimates, at this point, Mary Jane could be your customer and you could target her on Facebook. The reality is that you’ve got about an 18% chance of reaching her when you want to reach her. You cannot rely on only a few channels to get through to your customers. The fastest way to profitability is to lean into the health and the growth of the customer file, CRM, marketing across categories, and all that great stuff.

What CRM platforms are you most excited for eCommerce?

We have probably 85% of our clients on Shopify or Shopify Plus. Because of the reporting coming out of Shopify and because of the ease of pulling customer data out of Shopify, we don’t see a lot of clients investing in huge customer databases until they’re quite sizable and then we see them build the customer databases.

Honestly, we can get to a lot of what we need to help understand who the customer is to build the models and to pull and identify who to target in platforms like Shopify. There are always a lot of pros and cons but most of our clients are still using Shopify and I would say they’re using it successfully overall.

It’s quite easy to export all of that data into it.

It takes about fifteen minutes for someone to go in and to be able to export their customer database at the address level.

When I started this podcast, Magento was a thing for mid-market retail or eCommerce. I saw the changing of guard in 17 and 18 to Shopify with Shopify Plus.

Magento made it too hard to do too many things.

It was user-unfriendly. We could go on and on. I’ve learned something. Belardi Wong is the agency for Silicon Valley, DTC brands, and as well as bigger brands. We’ll leave that conversation for another day. Thank you so much, Polly. I thoroughly enjoyed this conversation, getting to know more about you and the agency. For people who want to find out more about you and Belardi Wong, what are the best places online?

If you go to BelardiWong.com and hit the Contact Us button, it’s pretty easy. I will respond. Also, of course, feel free to reach out to me on LinkedIn directly. I’m always happy to connect with folks. Thank you so much for having me. I enjoyed our conversation. I hope you have a great week.

A pleasure. Cheers.

Thank you.

About the host:

Learn from eCommerce Entrepreneurs & Marketing Experts


Get Free Email Updates by Signing Up Below:

Podcasts you might like