Now this is supposed to be a quick segment to get you up to speed on the latest ecommerce news…
But as I’m sure you know, things are blowing up a bit in DTC-land right now.
And it’s not slowing down any time soon.
I mean, just this week Pepsi launched not one, but TWO direct to consumer sites, snacks.com and pantryshop.com.
Which means Kristen will have plenty of updates to share next week, too. 👀
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On this episode, you’ll hear about:
- Peloton’s insane growth – sales are up 66%.
- Hydrant’s latest round of funding.
- Pinterest and Shopify are offering merchants a new way to sell.
- The clever way Liquid Death used bad reviews.
What to listen for:
- [1:40] Peloton’s average net monthly churn hit its lowest rate in four years. 😱
- [4:18] Peloton had to pause advertising spend because the demand was so high.
- [7:15] Why Peloton is well-positioned for the future even when physical gym locations do reopen.
- [9:38] Hydrant’s latest round of funding and what they’re planning to use it for.
- [11:57] Why you should be using a subscription model if it makes sense for your business.
- [15:39] Shoppable pins from Pinterest and Shopify.
- [19:52] The 4 new features on Pinterest.
- [23:10] New drops in SaaS.
- [26:15] Shopify’s new POS.
- [28:29] Liquid Death launched a...metal album?
Links to love👇👇
- Kristen LaFrance on Twitter
- Kristen's newsletter
- Peloton reports 66% increase in sales as coronavirus keeps consumers working out at home
- Hydrant Attracts $5.7M Series A To Quench America’s Thirst
- Pinterest teams with Shopify to offer merchants new ways to sell
- Liquid Death’s Greatest Hates
- The Ecommerce Marketing Show Home
*There’s a 100% chance this has some spelling errors. I know you won’t hold it against me.
Kristen: Episode two! Woot woot! Welcome everybody to the second episode of Ecomm Noms. I am your host. I am the mayor of DTC Twitter, Kristin LaFrance, and I am so excited about what we are going to be nomming on this week. We've got a lot of little bites. We're going to walk through so we're really going to get our snack full. So what we're nomming on this week, just to give you a quick rundown.
First we're going to talk about Peloton’s massive increase in sales and really what that means and why I think it's happening. Next we're going to look at Hydrant's new Series A round of funding that they got this week. Woo hoo. Good job Hydrant. We're going to also talk about the new integration between Shopify and Pinterest and what it means for ecommerce and what it means for your store. Then we are going to look at some news from the SaaS world.
There are a lot of tools that many ecommerce operators all use and a lot of them are dropping some pretty cool features so I thought we'd take a minute to really highlight some of those cool things that are coming out, give them a round of applause and nom our way onto the next story, which will be our last thing we cover today and this is...I'm going to leave it a bit of a surprise. It is one of the coolest, craziest, most creative marketing tactics I have seen in quite a while. So if you are ready to dig in, get your fork, get your knife, get your spoon, get your spork if you want it. We're about to chomp down.
All right, let's start with Peloton. Business Insider reported Peloton reports a 66% increase in sales as coronavirus keeps consumers working out at home. So last Wednesday the company reported third quarter results revealing that those sales were up 66% during the quarter as more people are investing in home fitness equipment. I don't think this on its baseline really surprises anybody. A lot of people are trying to furnish out home gyms, figuring out ways that workouts can still happen at home and even be enjoyable at home. Before we get too far into this, I have to say something that I did right around the time that quarantine started was went and bought a Peloton and we've had it for about two months in the house and me and my husband both love it. It's so much fun. It makes you feel really good except for the times that it makes you feel like dying, but that's good for us, right?
So let's talk about these numbers. Business Insider reported that Peloton ended the quarter with over 866,100 connected fitness subscribers. Now what that means is these are the customers that have bought either the bike or the treadmill. So we're talking about 866,000 bikes or treadmills that were sold and that is a huge number. That is a 94% increase from this time last year. That's awesome for Peloton, another stat subscribers of the app itself we're up 64% by the end of the quarter versus this time last year.
Now important to note, you can have the app without having the bike or the treadmill. So those are two incredible numbers to see both sales and subscribers both going up by such massive amount – 66 and 64%. Now if you followed me at all, you know what I talk about. If you've read this article, you're probably going to know what other metric I'm going to pull out of this, but this one was just amazing to me.
Peloton reports that its average net monthly churn hit its lowest rate in four years. That is crazy. So what we're seeing here, not only acquisitions rising, but retention is rising, churn is falling, which means cashflow is coming in. Peloton is building something that is clearly connecting with people and keeping them around and that is really, really exciting for the company.
Now continuing on in this article, it actually...Peloton mid-March had to pause advertising spend because the demand was so high that supply was having some issues. There are elongated order delivery windows for customers, which is not fun, especially when you order something like a Peloton, which you're really excited because you want to get on it and you want to start cycling and you want to get your numbers up there. So that's not great. So they had to actually pause all advertising spend and now the way that they're acquiring new customers is mostly from customer referrals. Pretty cool, right? So we're seeing retention rise, we're seeing referrals rise, we're seeing churn drop, we're seeing acquisition rise and this clearly goes along with the circumstances of our world right now. It's a silver lining for a specific company out of a really poor situation for the world, but we're talking Ecomm Noms today so we're going to really try and stay focused around this.
Another thing that this article talks about is how Peloton’s situation is such a contrast to the traditional players in the industry. I canceled my 24 Hour membership this month. Gold's Gym again, seeing these kind of headed-toward-bankruptcy type situations and on its surface we could say, well it's because people aren't going to the gym. Boom. That's it. And that is very true because we cannot go to the gym. They are losing money and they are dependent on foot traffic, but also I think something else is going on. As people are starting to learn how to work out at home, as people are finding new ways to stay active with their family and to work it into their new normal, I think they're starting to realize that the experiences at those gyms aren't always great.
I don't know about you guys, but I am an almost 26 year old woman. I used to be a gymnast, therefore I am naturally in shape and I used to go to a 24 Hour Fitness that was 15 minutes away from my house every single day. Okay, four to five days a week. I ended up having to stop going because every time I went in, my mental health would plummet because I was uncomfortable. I was getting hit on. The equipment was always dirty. It was never organized. It just didn't really feel like a good place for me to go and then this all happened. I had been spinning in a studio for a year and I just realized I can't go back to lifting weights. I can't do running, so I have to find a way to spin in my home.
Then that's where Peloton comes in and this is where we get into something that's really interesting that I read in this article. They said, "Analysts say that even if gyms do reopen, Peloton is still well positioned for the future as new social distancing norms may continue to keep consumers at home."
Now I agree with this that even as gyms do reopen, people are going to be very hesitant. A gym is a cesspool of germs. It's where you go if you want to get sick, but I know that that's one piece of it. I think another piece of it is this experiential part of it that as people experience working out from home, as they try out the Peloton bike or treadmill, as they get the app and they start doing the at home workouts, I think they're going to start realizing this is much more of a positive experience than it ever was at 24 Hour Fitness or Planet Fitness or Gold's Gym.
Well, that's a really blanket statement and maybe that's just my personal experience coming through here and so I'm interested to see what you guys think. So after you listen to this, be sure to tweet at me, yell at me if I'm totally wrong, totally fine with that, but I think that the experience and the community and the subscription aspect of Peloton is really helping to drive these massive numbers. Sales are not super surprising, subscribers are not super surprising, but lowered churn rate, the lowest in four years, that's pretty surprising and I really do think it's because Peloton has taken such an investment into the community, into their instructors, into building love and connection and excitement within the product itself. When the circumstances started to fit that, they were ready.
They spent so long marketing to this mindset that when the world came to a point where we couldn't go to the gyms, how many of us went, "Oh well of course I'll go get a Peloton." That's what I did. So very exciting for Peloton, very interesting to watch. Also, a good lesson. If we all remember the commercial that we all hated just a little bit ago, we're not really talking about that anymore. So when you're a brand like this, when you've developed so much brand equity, you can recover from things like that. So Peloton is a really good lesson in why it's worth investing in your brand integrity, why it's worth investing in community, and the stories you tell and the mindsets you're marketing to and the people who are on your platform or subscribe to your product.
All right, now let's move on to the next big story of last week. Hydrant attracts a $5.7M Series A to quench America's thirst. One just a really great title of an article. So this is a super exciting announcement for Hydrant. I'm a really big fan of the brand. If you're looking for some inspiration in the inbox, go sign up for their newsletter. They have really great emails. The buying experience on Hydrant is really great. I actually just today as I was going through this, I actually went and bought a package of the caffeinated Hydrant and a t-shirt because the experience on the site was so good and then I saw their t-shirts were so cute and they just say "thirsty" with a crossed out line and it just, it really felt like it was all part of the experience and so I ended up spending more money than planned, but I am so excited. So that is my fangirl moment on Hydrant, but let's talk about this series A.
So last week as I said, Hydrant announced a $5.7M Series A round of funding, which is huge. Their total investment today is $8.8M and according to this article, the company plans to use this new funding to build up its team, work on its go to market strategy, new product innovation and invest in analytics and that last one is pretty exciting because I have an insider into the company and I know that some of those analytics they're looking at are retention analytics, which is super exciting.
Right now, Hydrant has 12 people on staff and the co-founders. They are saying that they're going to add up to eight people by the end of the year in areas like digital marketing and analytics so we can really see where the company is going. They're trying to really hone in on the digital experience, on the subscriptions, on the new products, and then that really big important part of making sure as they're investing in all these things, they're also investing in the analytics that can help drive the information behind all the moves they're going to make with this money. So I love that.
Something else that I wanted to quote from the article, the company expects 300% growth this year with revenue in the eight figure range. Huge numbers there and on a monthly basis, about 50% of the purchase volume is through the subscription model. Now again, if you have ever followed me, you know I love subscriptions. If you have any sort of replenishment product, put it on subscription right now. There is no reason to miss out on recurring revenue if it's possible, just get it launched and then start to perfect how you get people in it, but you're seeing it from Hydrant. 50% of purchase volume is through the subscription model. That means 50% of their purchases are on a recurring revenue basis and that gives so much to a brand.
Now I want to read a quote from one of the investors and I thought it just really summed this up well. He said, "Consumers are more wellness-focused now than ever before, but they also crave more accessible ways to obtain the brands they love," important to remember brands they love. "The trust, love and loyalty Hydrant's built makes them poised to continue changing people's lives and habits. The fact that their omni-channel structure enables them to deliver the product in a way that's easy to travel to and with the customer means they've broken down all the barriers we've seen in the market."
Okay. That's a lot to unpack and I know I stumbled over a couple of words. Forgive me, but I think the things we can pull out of this, are Hydrant was able to attract this kind of fundraising and do it in a way that feels really exciting to everybody because they spent so much time building up customer trust, love and loyalty. Maybe you're hearing a little bit of a parallel between the stories of Peloton and Hydrant. We are talking about two different brands that are on two completely different scale levels, but doing the same thing and seeing very similar success results. So I want you guys to remember as you're building your ecommerce brands that when you are focused on your customers and building community and loyalty, it's going to pay off one day.
Now I also talked to the co-founder, John Sherwin, to get a quote from him on this news and he told me, "We're super excited to announce this latest capital infusion for Hydrant. With it, we'll continue to invest in building out a world class team, support our retail rollout nationwide, and broaden our line of products with both new functions and new flavors." That's it in a nutshell, pretty excited.
Lastly, I did get a quote from my very good friend, Mark Johnson, who is the ecommerce manager over at Hydrant about this and he said, "The team at Hydrant is incredible and the product is top notch. I'm excited to be part of a company at such a pivotal time to help submit Hydrant's world-class Ecommerce experience."
Now again, let's highlight two things in there. Ecommerce experience and then let's extend it to the three to four words here, world-class Ecommerce experience and this is coming from the Director of E-commerce at Hydrant. Now Mark and I are so close because we've worked together on this thought process of the customer experience for Hydrant. Mark went so far as to run his company through a retention audit that I helped come up with and he came back to me and said, "This is awesome," and now we have so many more things to go after. Hydrant is purely focused on trust, love, loyalty and experience and now look at them. I cannot wait to watch them grow.
All right, the next story, let's nom a little bit on Pinterest teams up with Shopify to offer merchants a new way to sell. Woo. We always love new acquisition channels. We always love new ways to get in front of customers. We love new ways to become part of product discovery. So Pinterest announced this integration with the ecommerce platform, Shopify, which is going to be turning client catalogs into what they're calling shoppable product pins, or pins that allow retailers to update really how the pin looks, the price, the availability, product descriptions, all that on their Pinterest account, which then allows people to shop directly from Pinterest.
Now I know there's been some back and forth on Pinterest for a long time. Pinterest ads have never really worked for a lot of companies, but I think maybe this adds something new to the mix and we'll actually have to just see how it goes, but I'm pretty excited about the new opportunity. There is a stat in here that I got to read. Engagement with product pins on Pinterest has increased 44% year over year, with total traffic increasing 2.3 times in the same period. So you're seeing traffic go up and engagement go up. That's what you want to see in a channel that you're considering entering as a brand.
Now another really interesting quote that we're going to talk about, because it kind of relates to what we talked about last week with Shop, is that 97% of top searches on Pinterest are non-brand related. So that means customers are not searching for "Allbirds shoes" or "outfits with Lululemon leggings.” They're searching for things like "home office inspiration," which is what I literally searched today or "tattoo sleeve inspo," again, what I searched today. Things like this and it's the same as what we're talking about with Shop is that there were some complaints about Shop that you couldn't just search things like "shoes" and get a complete list of brands that have really cool shoes. It's almost the reverse of that.
Shopify works in the way where consumers aren't expecting to search for brands, they're expecting to search for content and then now brands can kind of come into that content in a way that feels much more natural. Now, I like that this quote from Pinterest, they said these generic search terms and the benefit of this for small business especially is Pinterest is saying it, "helps level the playing field for businesses of all sizes to be discovered," and I totally agree with the little bit of well if you have more money, it's easy to be more discovered, but this does give smaller brands a place to go and be competitive and be strategic about how you're landing in content, how you're presenting yourself because there's something interesting about Pinterest that I've always thought about and I've been really surprised to hear that advertising on Pinterest doesn't work because I think a lot of times when we're scrolling Pinterest, if we're searching something specific, a lot of times it's almost like you're right on the edge of being in the buying mindset.
You're looking for inspiration for something, that most likely you're going to have to buy. If I'm looking at home office inspo and I see a picture of a desk that I think looks much better than my completely cluttered and dog hair covered desk that I'm sitting at now, I'm going to save it, but think about it in a psychological way. That means if I'm looking at something and I'm thinking about how it would look in my house and how it would look and work in my life now, if there's suddenly a way to immediately buy it or even just go to a product that's similar and save it for later when I do want to buy it, now that's possible in Pinterest and I think that's a really unique value prop of Pinterest. I think that a lot of people skimming Pinterest are in this near buying purchase behavior mindset and so with the right approach and with the right branding and with the right engagement tactics and all of our conversion tactics, if we put it all into this channel’s native language, I think there could be a lot of success for people.
So let's talk about the quick, let's see, four new features that Pinterest has. First is going to be shot from a board. They define these as a shop tab that will now appear on a customer's home decor or fashion board that will showcase in stock products based on pins he or she has saved for a specific look or room. It makes sense that they are rolling out home decor and fashion first. So really what this means is if I save something to a board and then I go to said board, now it pulls up your pins and there's another slider that says "more like this," which I've done that a lot for things like tattoo sleeves where you go and you find some pins and then "more like this."
It populates a list of things that are very related to what you have pinned and saved, but now there's going to be a whole new tab that says, okay, based on your pins, other things like it, shop. So basically you now have this virtual wardrobe and I have a board all about clothing and I look at it as my virtual wardrobe. So now what this does is say, okay, this is your virtual wardrobe. Can you make it real? Absolutely you can. Go to this shop tab and scroll through things that look similar to what you have pinned and then go buy. Woo hoo. That is awesome.
The next one, shop from search. The new shop tab allows consumers to shop in stock products by using intuitive and vague terms in the search bar such as "home decor" or "bathroom design." Price and brand filters have also been added, so now you can search for something like "office desk" like we were talking about before. I can filter...I can't afford a $1,200 desk, no way, and then I can see things that not only are inspiring but also things I can buy. Pretty cool.
The next one, shop from pins. Consumers can now hover over pins to see related in stock items by clicking "shop similar." Very similar to what we were talking about with the board. You've got a pin that you really like. I'm looking at this really cute girl with a really cute sweater and I'm like, "Oh, I want that sweater." Now what I can do instead of having to click through to some random girl's Tumblr or to a page that doesn't load, I can actually just shop right there. Maybe that exact sweater is not purchasable online, but now I have an option to shop similar. So if there's something else out there that looks like that super cute sweater that I want, I can buy it right from Pinterest. Again, I'm that close to the buying mindset that when they put it in front of me, it's going to make it pretty easy to transition into the buying mindset.
Then lastly, style guides and these are really cool. Shopping guides will now appear after consumers search for home related terms such as "living room ideas." This is just a content play from Pinterest that's going to benefit the brands in this home-related industry. So basically if I want to look up living room ideas and then at the bottom I see something that's like boho living room and it's a guide that gives me all these products that I could get that would go together, really cool. So a lot of really big opportunities for brands.
Dogs, can you please not bark? I'm podcasting. Okay and now let's talk about the news from the SaaS world. Like I said, there are a lot of tools out there that many brands use a lot of them that many don't use. There are so many tools out there. It can be hard to figure out which ones are right for your stack. I totally get that. Even I get overwhelmed by it and I know the space really well so I wanted to just highlight a few brands that I've seen doing some pretty cool drops over the last couple of weeks.
So first Personable is a pretty cool tool, and they just dropped an app which allows brands to text back and forth with customers.
Next we are going to talk about Postscript, probably my favorite tool for SMS out there. They have an all-new dedicated analytics tab which moves extremely fast, lets marketers dive into custom time series data across messaging series type, calculating ROAS, breaking out unsubs, et cetera. Basically with SMS, with Postscript, now you can look at your campaigns the same way you do your email campaigns. Really exciting, really hope to hear from you guys and let me know if you like that new analytics tab from them.
Up next Churn Buster where I previously was Head of Growth and Community just last week released SMS dunning and I have to give the team a shout out. It is a huge value prop in the industry. Churn Buster is the only transactional dunning payment failed recovery platform that now has SMS in it. It is a really great way to make sure to plug leaks. We had a channel where responses were populated. The most popular ones we saw were, "Oh sorry about that. Let me go update it now." Or, "Hey, I'm getting paid on this day. Can you try again then?"
So these are customers that would have churned out of subscription, but the companies we worked with were able to get in front of them via SMS, save that recovery, save that churn, recover the payment and move on. So go check out that SMS dunning, really exciting.
Lastly... Second to lastly, Shoelace launched Prospecting, which is really cool. I'm going to read a little bit from their website because they know their story better than I do. Prospecting is designed to arm fast-growing brands with new customers...and another thing that I really liked...what they said was it's storytelling for the entire funnel. It helps you tell a cohesive story by combining Shoelace's prospecting and retargeting to generate greater returns, more repeat customers and higher AOV, all of the retention things that I love. So basically what this is is now you can pay for Shoelace to help you start prospecting completely new audiences based on your most profitable and most engaged social audiences that you already have, meaning they're helping you find best fitting customers based on your best fitting customers, which is going to drive retention. You guys feel me?
Okay, lastly on the SaaS side, we talked so much about Shopify last week that I really didn't want to do it this week, but Shopify just keeps dropping bombs, you guys. It's amazing. So we already kind of talked about the partnership with Shopify and Pinterest. Another thing they did last week was launch an entirely new point of sale system and to make it even sweeter, it is completely free until October 31st of 2020. So if your business has any sort of physical retail, this is definitely something to look into.
Some quick things that they did on this new new launch. Local pickups have become much easier. You can buy online pickup in store or curbside, which makes it just much easier to offer multiple solutions for your customer. Another thing, letting customers opt for local pickup. This is really just if your customers would rather come to your store and buy it and get it shipped, they don't want to pay for shipping costs or say it's a local cafe like the one that's two blocks from my house where I want to purchase online and pick up in the store. Now you can do that with Shopify's POS. I love it.
A couple other just quick bullet points, new reporting. There is smart inventory management, which helps free up cashflow. There's flexibility on it. So now in the POS, you can really customize the grid so that you can spotlight the apps and discounts and workflows that your particular staff needs and uses the most omni-channel search, staff permission, which is great if you, have multi location stores so you can give certain staff permission to certain apps so things don't break. Now you can also ship from another store. For a company like Buff City, this would be very beneficial. Say one store is out of stock, but now they can actually go straight into their POS and find out that a store 10 miles away actually has this. So we're going to ship it from that store, happens all automatically.
Then lastly, a lot of personalization to create that holistic online and offline experience for brands. So if you are running any sort of physical retail alongside your E-commerce brand, definitely go check out the new POS from Shopify. It's really exciting.
Okay, now we're got to wrap with something really, really fun. Liquid Death is a company that I've gone back and forth on. If you have followed me, you know how much I talk about emails. If you have seen my email inbox, Trello board, you may have seen some of Liquid Death's emails on there. I have gone back and forth between some of their emails being amazing, their brand being so strong and they are so committed and will not waiver from their brand, but also feeling that sometimes their brand is a little too rigid because there were some emails that came out during the crisis that I didn't think were the best worded possible. So I'm a little bit on the fence with Liquid Death, but they did this thing last week that I absolutely love. They released their own metal album, it's called Greatest Hates and it's made up of literally verbatim hater comments that people have left Liquid Death on social. That is what all the lyrics are.
You can stream it now from any of your favorite streaming apps, Spotify, Apple Music, but then they also have it where you can preorder it on a 12 inch vinyl, which is just just the most creative and crazy, interesting, unique way that Liquid Death has said, "You know what? We know our brand. We know our brand standards," and it was a really bold move. It's going to upset some people and that's okay with them and I really applaud them on this move that they're saying, "You know what? We're not for everybody and we're going to make fun of the people that we're not for by creating something entertaining, engaging, viral, hilarious for the people who do love us." So Liquid Death. You've brought me back and I'm a fan of yours now. It's a pretty interesting album and you guys should definitely check it out.
All right, that was a lot for an Ecomm Nom. I think we're close to 30 minutes now. Excuse me. So I hope that you guys have a bunch to munch on after this. You have a great day after this and keep on nomming. I'll see you next week.