At a time when the major channels, like wholesale and hospitality, have slowed down, brands are trying to make their products available in more convenient ways.
At this week’s ModernRetail+ Talks, Ugly Drinks’ co-founder and CEO Hugh Thomas explained why meeting customers where they are is more important than ever. This is especially true for young DTC-focused brands, who may not have the resources and reach of big CPG players like CocaCola.
“Whether it’s on our website or at the sandwich shop,” the U.K.-founded brand’s strategy has been to be in as many places as possible. With many restaurant and cafe partners remaining closed, a combination strategy of DTC and Amazon has helped make up for lost sales, said Thomas. At the end of the day, you have to pick “the right products, the right brand and the right market.”
What we learned:
- Understand pricing and promotion strategy depending on the market, to keep everyone happy. For Ugly Drinks, this included “breaking it down state by state” and rolling things out over time when it came to tackling the U.S. — as opposed to trying to do everything at once.
- Be as ubiquitous as possible. During a health pandemic, this means ramping up direct-to-consumer and figuring out how to attack other channels like Amazon.
- Understand what each channel’s margins look like and how certain product placements affect sales.
Have a specific strategy for each distribution channel.
- Have goals and metrics for each channel beyond revenue. For example, take consumers’ temperatures via surveys from DTC sales and use that data to aid product development. “Ask the community what they care about,” said Thomas.
- Ask “what are the reasons to come to the site and why is the experience special?” Having a DTC e-commerce channel “needs a wow factor” to keep bringing customers over, such as limited edition flavors.
- Consider and reconsider the Amazon route. While it’s the biggest e-commerce platform out in the United States, it’s also easy to get lost in the shuffle. You must “adjust and optimize,” said Thomas. Figure out what to offer and not offer on the platform, like offering variety packs and limited edition flavors.
Make sure you’re an expert in each sales channel.
- Leverage expertise, especially in new spaces. “Hire people who know what they’re talking about,” explained Thomas, and then analyze collected data to quickly learn as you go.
- Understand that the pace of physical retail is slower than DTC, and requires a different skill set and management style.
- Use data as much as possible. In the early days, brands have to rely on hunches to make strategic decisions. Over the last few years, the Ugly Drinks team amassed sales and consumer data, which better informed its overall strategy.
Make a new strategy when need be.
- Reallocate when needed. When the pandemic hit, Ugly Drinks pulled back on summer promotions in both the U.S. and U.K. markets, to use in upcoming quarters.
- Move ad dollars from outdoors to online. With on-premise spending cut, the company moved the budget into digital, such as investing in updating the website, content and search.
- Get paid ads and email marketing right. For example, the company used its social presence to crowdsource flavors ahead of launch as a way to build community.
- Be disciplined about brand consistency, especially when many channels are involved. “Bringing it all together at the end,” said Thomas, is key.