Bold vs. Minimalist Branding - Which One Actually Sells More?

Bold vs. Minimalist Branding - Which One Actually Sells More? Speaker 1: When people talk about Lalo's design, I hear words like minimal and modern. The only word that matters to me within our collection is timeless. You know what Lalo stands for, and that's a timeless aesthetic. It's not going to go away. That being said, one thing that we've learned is when you do something great, you have to have an expectation of being copied. So if you are going to lead, you don't stop leading. Even slow-moving organizations, it may take them five years, but they're going to come. We look at trends and interiors and fashion and art, and we say, how do we want to apply that to the way Lalo is? Because those are the things that our customers actually care about. Speaker 2: Welcome back to another episode of Chew on This. Today we have the founder of Lalo, Michael. And Michael's somebody that I've gotten the chance to get to know over the last few years. But more importantly, it's a product and a brand that sits all over my house. I have a two-year-old that eats his food on your table, plays with the toys that you've created, and somehow my wife spends money on your brand every single month. So you're part of my monthly review, my personal finances. So Lalo's a huge brand in terms of our household, but also many other households. But before I explain more, Michael, give the few viewers who don't know you a little bit about your background. How'd you get into creating stuff for kids and families? And a little bit about how you've been growing Lalo lately. Speaker 1: Yeah, well, look, it's families like yours that make us do what we do every day. It's those moments every day, being with your kid at the play table, seeing those tiny, tiny little moments that keep us going. But the journey to Lalo, I'd never made physical products. I was never in retail or e-com before this. My background personally is all over the place. I started my career in sports and entertainment. As far as music manager, I was producing concerts, became a sports agent, and then ultimately bootstrapped my first startup, which was a fitness tech company. And I'm not a big fitness guy, but eventually that led me to the tech world, where I met Greg, who's my co-founder for Lalo. I was working at a early stage startup as the fifth employee. We were in HR tech space for early stage recruiting a company called Way Up and Greg was the fourth employee. And when I joined, the CEO of that company said to Greg, I just hired your best friend. What she didn't know is that she hired his future co-founder and so years went by from that and Greg had moved on to another role and we were catching up and Greg was like, there is something crazy about baby stuff and neither of us had kids at the time. My wife and I were trying. We were deep in our infertility journey at the time. Greg was just getting married. This is crazy. Parents don't know what they're buying. I was at a friend's house. He just got all these gifts. He's like, what is this crap? And he's like, this is so wild. They don't know what they're shopping for, at least when you have a wedding registry, which he was going through at the time. He knew he cooks omelets and he wants his pots and pans to work a certain way, so he used Carraway. That was his His take, but you know, he's like, there's something crazy here. In my true fashion, I was like, let's do it. I don't even think he asked me like, do you want to start a business together? But on the spot, we like came up with our first name, which wasn't our name in the end. And from there, it was kind of off to the races, creating a brand that was all about supporting parents through multiple steps, not just one product, but a brand that could be about this lifestyle of parenting and connecting with parents through all the joy of parenthood. Speaker 2: Sometimes when you're starting your brand, you don't directly connect with the product or the brand you're building. Like, you know, we sell collagen to 50-year-old women. Sometimes we're like, wait, what are we doing in this space? And then you're kind of like, wait, I really believe in this space, right? Tell me a little bit about that shift, right? Where, like you said, you were still trying for kids. You kind of understood the world of family and kids. How does that connection change with the brand? How does that help development? But also, how does it kick-start the passion? Speaker 1: Yeah, I think there's two things. I'll speak as a founder, but also as a marketer. From the Lalo perspective, early days, it allowed us to be super, super objective. We can talk to our target audience. We can take all different viewpoints in and opinions and then distill down sources of truth within everybody's opinion to find the ones that we wanted to go and tackle. We didn't have our own bias. We really came with a blank slate. But then as we learned and uncovered, what we realized were early days, we were sitting in the exact same position as first-time parents. We didn't know shit and neither do they. And so what's different in our space is that you're buying stuff you have no expectation, what it should cost, how it works, what brand stands for versus the next. And so you're a complete blank slate in this category. It's not like buying anything else. Truly. And so that was like from the Lalo perspective and that's shifted over time, right? Now we have a different perspective. I have two kids. Greg has two with a third on the way. So we're very much in our demo and we have a team of people in our demo and we bring a different perspective, but we also have surrounded ourselves with different perspectives. So we can separate a kind of a little bit of like what's for us and what's for the greater whole. The other thing is just from a marketing perspective and great marketing is like method acting, right? You have to assume the role and live that role whether you know, you're Timothee Chalamet being Bob Dylan. You got to really hit those notes regardless of if you're in the demo or We're not in the demo. And so we preach that to our team. We have people on our team that aren't parents. We have a lot of parents too. But you gotta feel what the customer is feeling and think the way the customer is thinking and ultimately to put out the best product, to have the best brand and to scale. Speaker 3: If you were to start over or start a whole new brand all over again, would you go down that same route? Speaker 1: Oh man. I love this category. So I think that You know, if I was starting all over again, I'd definitely start in this category. I think that being in a category that inherently has so much emotion tied to it is a cheat code for a great marketer, right? You can build a brand through emotion, right? There's a difference between marketing a product and marketing and building a brand. And you have to bring those two together as you scale. But in building a brand, if you have that true emotion, you're going to accelerate if you can hit on those right chords. And so in this category, every day there's so much emotion. You said it at the opening of the call round. So yeah, I would stick in this category and I would double down on the emotion from day one. Speaker 2: I'm very curious, so I think where it started though is you've been big on, whenever you talk about it, especially when I've talked to you even in person, you're very hands-on on the product development, how things look and feel, but also the emotion tied to it. And when I say hands-on, I remember even talking to you like, yeah, I'm in this decision, I'm also helping make this decision. Tell me a little bit about that. Why was like, Design and aesthetics, such a profound piece to how you've been building the bricks for Lalo. Speaker 1: Yeah. Well, I think when we started the business, started working on the business in 2017, we launched in 2019. So we had about almost two years of working on it behind the scenes, nights and weekends. It was a year full time between quitting our jobs and launching the company. Publicly, we had a learning curve, too. We were not physical product people. We were not product designers. We had our own consumer taste, our own aesthetic taste, and we were approaching it objectively. Seeing what was going on in the market, and the bar was so low, right? Like, baby brands, we're talking about bright green plastic and things shaped like whales, right? So, that's what the market was known for, and at the time, we were like, this industry was probably the last to go online. Like, COVID accelerated this industry online probably faster than most industries. You saw it in furniture, too. We were tangential to that in the products we were making, but this industry was predominantly In stores, the year before we launched, Babies R Us went bankrupt. And then last year, Bye Bye Baby went bankrupt, but ultimately responded a little bit, but basically went away, right? So we were at kind of the forefront pioneering this shift online. We saw it going there. We said, things don't look good, brands don't connect with customers, and the way people shop for this is broken. We want to kind of fill out that triangle with Lalo, right? And if we can do that, we'll win. Speaker 3: I want to get into some of the marketing side of things. For me, especially being in that supplement space where we do have a pretty large catalog, We still will, you know, lead off with our flagship product, right? For you guys, it would almost feel odd if there's just one thing that's on the website that you guys are pushing so it makes sense to have a pretty substantial catalog, right? How do you guys handle kind of marketing the entire story versus just maybe just a flagship and how do you get people to kind of shop all the other items as well? Speaker 1: It's definitely a balance, right? And it's not something that's always been easy either. Like, I think it's important in these kinds of discussions to acknowledge, like, this is not a straight road forward. It's not up and to the right. This is hard work. Like, you are gonna have shit that doesn't work. You're going to hit other things that do work. And sometimes something that was working is going to stop working too, right? And so you need to be nimble. You need to keep iterating and keep pushing yourself to do better each day. I think for us, with the products themselves, there's a bit, as we've expanded the category, there's a bit of seasonality now that plays into it. So you'll see our play products featured a lot more as we enter into Q4. But there's our heroes, our high chairs, our tried and true and what we've been known for for a long time and the products that go around that. Obviously, especially within paid social, you got to make the economics work of it too, right? So can you put as much paid dollars behind a $9.99 set of utensils? Probably not, right? And that's why we've looked at expanding distribution as well. Points of distribution as a way of gaining awareness for that greater collection. But we've done a lot of work also within our website to focus on cross-sell and up-sell in really smart ways. We do, you know, all sorts of bundles on our site. We do all sorts of, you know, we have kind of in-cart, in-checkout offers, post-purchase offers to make sure if you didn't get there some way in navigating your shopping experience as you walked our virtual aisles, we'll make sure you see it at checkout. We have that, you know, at-the-register kind of impulse as well or just at least a reminder, right? So I think those are some ways we've navigated it. Speaker 2: I think what's another kind of a cue off of that, I think there's this whole game around like LTV and AOV, right? I'm really curious because part of where for you guys it's maybe different from like a collagen brand is you have people who are buying your product, not necessarily, I'm not gonna come back and buy another table, even though my wife would love to. We're not gonna come back and buy another table. Maybe I'll buy some of those coloring sheets again, but that's $14.99, right? I think what I'm curious about is how do you guys think about the fact that You know someone who's gonna buy this probably isn't gonna come back and so you're creating some ancillary things but How do you go about thinking, well, how much do you want to invest in somebody where, hey, after they grow out of this, I'm going to have to either develop another product or that's it. That's kind of the end journey with this customer. Speaker 1: Yeah. Speaker 2: Unless they have another kid. Speaker 1: Yeah. Speaker 2: So how do you guys kind of think about that entire life cycle of a consumer? Speaker 1: Yeah. I mean, right now our focus is to be in as many decisions, buying decisions as possible for our consumers, right? So if I'm thinking about buying this thing for my kid, We want our customer to think, does Lalo make that? And so one of the things we look at is we look at our null searches on our store. So to see what people are searching for that we don't have. Speaker 2: Smart. Speaker 1: Right? And so that tells us, oh, why don't we have, you know, for example, there was a learning towers or our kitchen helper kind of stool was one that kept showing up. Or bento boxes were things that kept showing up. And so we've added those things to our assortment over time. You'd be surprised how many people do come back for additional things, but every customer is also a potential gifter, right? So if you're in this life stage with kids, you probably have cousins, friends, co-workers that are in a similar life stage as you, and if you love this brand, you're more likely to gift it, or at the very least, tell them they should have it on their baby registry if they're registering, or find a moment to gift it to them when the moment is right within your relationship. Unknown Speaker: Love that. Speaker 3: Kind of going more into like the retention side of things, how are you guys approaching, you know, the different customers and the different purchase behaviors between everybody and kind of like segmenting accordingly and, you know, having the right, you know, upsell flows and things like that? Speaker 1: Yeah. You know, I think for us, We're trying to look at our customers as personalized and as segmented as possible. Some of this is through how we do navigation and see where they're clicking and try to get them into products or how we kind of look at abandoned carts and kind of track their behavior. But there's also things that we can track, you know, whether that's, you know, this is a promotional shopper, this is a gift giver, or this is just, you know, we can see people essentially that have multiple homes, right? So we can see, based on their buying behavior, kind of what different buckets they fall into. But then we also have buckets. We have a loyalty program, because even though you're not coming back and just buying replenishment on the same item, there are people that are spending thousands of dollars with us. And they're probably gifting as well. We do have a loyalty program right now that people are earning points back. They can keep doing it. We have different tiers and those tiers unlock different benefits of free shipping, different earning tiers. It's modeled after the best Loyalty programs, airlines, and credit cards. We're not making up some DTC BS. This is just tried and true, give people what they want, which is the opportunity to buy fittings in the future for a little bit less. Speaker 2: In terms of getting into the aesthetics of the product you built, I think you've touched on this before in different ways, but there's design that's Bold, there's design that's subtle. There's something about the way you guys went about design that almost feels like this fits in my home, right? Like this, whether you have, you know, oak hardwood or you have black walls, like there's somehow this just fits. You know, till this day, whether we have family, cousins, friends coming over, They see that little table next to our main dining table and they're like, that's so cute. That just looks so nice. I think as DTC people, sometimes we actually take product for granted because it's typically done and made turnkey for us. There's very few companies that we get to even interact with or have on the pod that have actually designed the product. And so I think it'd be really cool to understand both the pros and cons of that and how much work goes into that. Speaker 1: A ton of work goes into thinking through product and we work probably faster than most companies in our space to do it. You know, you hear a lot of words when people talk about Lalo's design. I hear words like minimal and modern or chic and the only word that matters to me within our collection is timeless. We don't want our products to just exist in a set of today, right? We want them to persist over time. That doesn't mean the products won't change or they won't improve or add colors or change features, but you know what Lalo stands for and that's a timeless aesthetic. It's not going to go away. We're making something that's great. That being said, one thing that we've learned is when you do something great, People notice and you have to have an expectation of being copied. And so you have to consistently remind yourself to stay ahead. So if you are going to lead, you don't stop leading. You keep leading. You keep your foot on the gas pedal because even slow-moving organizations, it may take them five years. Speaker 2: They're coming. Speaker 1: But they're gonna come. So you got to stay ahead of them so that they're always chasing your tail. And for us, you know, when we think about design, Aesthetically, we think about, we call them design houses. So, we have kind of our signature look, right? That's something, you know this is Lalo. It's gonna be very clear. But then, to hit our entire addressable market, we're looking, do we have to have a more stylized or more bold, as you put it, approach to this product or color palette? And looking at trend, we don't look, there's no baby trend. We are the baby trend. So, we look at trend in interiors and fashion and art And we say, how do we want to apply that to the way Lalo is? Because those are the things that our customers actually care about. Their Pinterest board is not filled with a bunch of baby crap. It's filled with beautiful objects and art and design that's going to kind of create their aesthetic. Speaker 2: Very true. Speaker 3: So the way that we've kind of approached product development has, the beginning of Avi was, all right, here are two flavors that we saw other industries doing really well with. Then it escalated to what are our customers asking for? Then it went to, okay, well, this is doing really well in marketing. Let's double down here. And then there were a few products that we came out with because we wanted to come out with. So what's your balance between, okay, well, this is working really, really well on maybe the marketing side. Let's kind of double down here versus, well, as a parent, I know what I need and I want to kind of put it out into the market. How do you find a balance? Oh, and then you also have maybe customers, you know, searching for, you know, certain things that you may not have. So how do you strike a balance between all the different avenues where it's like, well, we can make this, but should we? Speaker 1: Maybe it's like, it's like that, you've seen that social trend, like four, three, two, one. You see that way? So it's like maybe a little bit of a pyramid like that. Like start probably with the customer, like start with four things that the customer wants and then bring it down to, you know, maybe it's three things that are working on marketing. And then ultimately it's like the last thing should be things that I want, right? Because, you know, there's, but there's gambles that you take, right? We think this is a place that's going to grow our business. Ultimately, the way we look at what can be added to the collection or how do we expand is going to be what's going to give us kind of an outsized chance at growth, right? So the marketing one is tricky, right? Because if you're just continuing to pour into that The one thing that's out of your control is the marketing. Not the actual tactics of the marketing, but call it the marketplace. Are CPMs going to go through the roof tomorrow? Is there going to be a cyber attack on this ad network? Speaker 3: Algorithm changes. Speaker 1: All of a sudden Google's telling you to do this, and the next day they're telling you, no, that was a bad practice, do it this way. That happens all the time, so that's out of your control. Follow where your consumer behavior, that's gonna win probably nine times out of 10. Your gut is probably gonna win 50-50 and then everything else is kind of a crapshoot. So follow where you think it's gonna create outsized growth levers and then model that into your business because the unit economics have to work too. Speaker 2: Chew on This is sponsored by... If you want to build a profitable e-com brand these days, then you need retention. Lifetime value is the lifeblood of your brand, especially when cacks keep going up. Being first purchase profitable is great, but you only really start to print money when that customer comes back over and over and over again. It's why subscriptions are such a big piece of our strategy here at Opti. There's a big reason brands, no matter the size, are using a tool like Recharge. What we like is that they're not just adding a subscribe button on your site, they're a complete subscription engine, helping you convert buyers to subscribers, preventing cancellations, winning back churned customers, and they're even driving more revenue through smart upsells. That's why big brands such as Dr. Squatch and even Vital Proteins are using Recharge. So if you're looking for a powerful, all-in-one subscription platform, head over to Get Recharged today to see how you can pump up your LTV for your brand. Now, let's get back to the episode. One thing that I always heard, and I think it even got us excited to where we got into the pet space, you know, just to kind of dabble our feet, but one thing that we always heard was pets and kids are two of the hardest categories to sell into. Once you get into their homes, the loyalty is typically very tight, right? Because you get to a point where like, okay, as long as my kid or my pet's happy with this, I'm gonna stick with this. I'm curious, like, your journey into cracking the first household and now, you know, thousands of households, what's that been like in terms of how you've had to think about marketing that doesn't feel like you can just copy the DTC brand next to you and just run a different style of ad and whatnot? You have to really build off trust. And so obviously I'm sure now you have so many trust factors that it's easier, but the first thousand was definitely not easy. Tell me about that first thousand customers. Like if you have to be like, hey, trust me, I believe this product's good. How'd you kind of go through that? Speaker 1: Yeah. I mean, in the early days, Greg and I would use the terms trust and validation ad nauseum. Like it was all we talked about is we need to build trust and validation. And the thing about marketing is, Marketing sets an expectation, but product has to deliver on that expectation. That's what creates that longevity you're talking about. If you infiltrate, you know, what's our Trojan horse into this home, is that through a product, through the brand, and you set that expectation. But if the product doesn't live up to what you expect, it's going to fall apart. And so, got to have that combination. I think beyond that, You know, as we look at how we've gone to market over the first thousand customers, we wanted to feel different. And in our space, like I said, the bar was low, right? We needed to show up differently. It wasn't that hard. Everybody was telling you, if you don't buy this, your kid's not going to sleep or they're not going to eat or, you know, they're going to have a diaper rash forever. It was all fear-based marketing. And we Introduce something different, which was love-based marketing, right? Can we have something that's just based on love and connection and celebrating moments versus inciting fear? And so that was very different in our space. What was different was also our aesthetic was different. Our, you know, both from the products, but the way we shot video and the way we shot photo, it was beautiful. And we could set an expectation of what we stood for that our customers then could imitate on social media too, right? Once again, do something great, you're gonna get copied. So we need to continue to do that, but also trust is an equation, right? And so at the denominator, that equation is self-interest. And so the more you make self-interest obvious to your customers, the lower your trust. And so we need to strip out as much as possible self-interest from everything we do, whether that's a promotion, a new product launch. We got to make it about the customer and that will ultimately ladder to, you know, the best trust you can have and longevity within the space. Speaker 3: How do you guys go about making sure that you still instill the values but still appeal to the people that are, you know, consuming the content? Speaker 1: Yeah, I mean for us we've We certainly leaned away from polished content at times for social. We lean a lot on our creator community to create great content as well. But I'm still making ads sometimes. I still get in there and I'm like, I got this idea and I could tell someone To do it, but then there's a chance of broken telephone. I see it in my head. I'm a visual person. If I see it, it's better for me to get into Figma and build it, or to shoot it, or do whatever. At the very least, it could be inspiration. It doesn't have to be the final asset. But I need to execute on it to bring it to life. I mean, just the other day, we cut prices on 90% of our products knowing that tariffs were coming. We knew everything was going to get more expensive for our customer, starting with childcare is already through the roof, right? You know it, Ron. But now the avocados they buy are more expensive. The car they're shopping for is more expensive. Potentially their electricity. Everything is getting more expensive. So we don't want to be that burden. We want to be accessible to more parents. So we lowered price on 90% of our goods and we put out a post that was a long-form letter from the team saying here's why we did it because we support parents and it was By far our most engaged posts. Crazy amount of shares, crazy amount of saves, great likes, comments, like all the sentiment. There were no trolls even in the comments, which is so rare on the internet, right? To have a troll-free post. And so what we did last week, I was like, why aren't we using that letter? It wouldn't show up in ads. Normally you don't see a long-form letter from a brand as an ad, but we created a carousel post where the first Post, the first frame was the letter and then the subsequent frames showed the old price versus the new price of each product. So we can show people actually the proof of, we're not just saying we're lower, here is the difference. Our high chair is now $40 less than it was three months ago. And so that really, you know, it's, it's, you know, off to the races and doing great out of the gate, but we do have a ton of content that doesn't work too. Recently, we actually rolled something out called the Writer's Room. It's inspired by SNL. And every two weeks our team gets together and everybody has to pitch an idea in under two minutes. And after that, we all vote on it. Everybody gets a vote. We vote twice. And the top two pieces of content that get voted on have to be produced within seven days. So it doesn't matter what it is. And we put it out. And if it's a flop, we take it down. And we move on and we learn. But the hope is we strike iron once and we learn, oh, that's a winning formula. Let's go down that path. Let's double down there. But it's hard. You see so much on the internet. It's really hard not to just, Copy that DTC brand. Everybody sees an ad and they're like, oh, I like that. And they assume it's working for that other brand too. It can be a total duck. Speaker 2: So true. I mean, you've always been so good about sharing some of your tactics and just shared some great insight there. Talk me through some of the challenges, right? You've been building for a while now and in a space that again, clearly has its own challenges, but Maybe you can reference some of the challenges. I think we're kind of post the COVID era now, but maybe in the more in the last like 12 to 18 months, right? I think there's been algorithm challenges. There's obviously been tariffs. There's so many different things coming about. Maybe you can share a couple of challenges that have been maybe a little bit more crippling to the point of not even just revenue, but just mentally or whatnot. And then how you were kind of fighting some of those. Speaker 1: Yeah. I mean, for us, our business has grown Quite a bit over the last six years since we've launched, and it's not all up and to the right, like I said. Luckily, it has every year been up and to the right at different slopes on that curve. There have been moments whether it's, you know, the team or it's, you know, this growth is creating stress because we see opportunity here, but we've planned for this or we've, you know, planned for growth in this product, but it's these products taking off. So we're overstocked in this product, but we're understocked in this product. And so you have to balance the cash flow concerns of a business with the demand for the brand and the products. And that's not always easy. At the same time, we've had tremendous opportunity come our way where this week we're launching in Target. That's been six months in the making and, you know, it was just, to be honest, it kind of fell in our lap. It wasn't something on our bingo card and something that went along the lines of a strategy Target was exploring and was a great opportunity for us. But we had to redo 45 pieces of packaging in three weeks. And in those three weeks, we had to determine if all of those 45 pieces would fit in the space that we were getting. So we had to design packaging when we didn't know the size of the packaging to figure out what would fit. And so there's been this tremendous strain where there's all this opportunity ahead. But you also have to win today. And so that creates an amazing amount of stress. And a lot of this did happen to fall on my side of the org. At the same time, my partner is dealing with the finance side of it. How are we gonna manage the cash flow? We have to buy the inventory. We have to build the displays. We have to do all this at the same time. We gotta pay for our Facebook ads for Black Friday. So how is that gonna work? So we need to, it's a juggle, it's a strain. Two kids at home and real-life shit going on that's way more important than the CPM today. So, you know, that's kind of definitely where we've seen stress over the last 12 months. Speaker 3: How much of this kind of puts into perspective how important having the right team around you really is? Speaker 1: The people you have around you ...are certainly the most important. And I would say what we're really, really lucky on is that we are certainly a marketing-first organization. But what we've seen is that things where we as founders and, you know, in being kind of focused on the most, the other side, the like less sexy part of it, If we didn't have the most amazing team on that side, it'd all fall apart. Our operations team is incredible and so we can focus on being a marketing team, a marketing-led organization, because we have incredible people that are going to keep it all together when a target PO comes in or we got to fulfill the Amazon FBA. It's all going to happen with no worries. Yeah, the creativity, the ideas, managing people is tough, but we're there also supporting families. Like 75% of our employees have kids under five or something. I think that's around the number. So we got real life shit still, right? We got people with sick kids getting sick. We have people who have to take their kids to the hospital. Real life gets in the way. We had five People have kids last year out on parental leave, right? So, you know, talk about, it's unbelievable to welcome that in a business like this, but we had to plan and people had to step up too, right? Like, when you miss five people from not that big of an organization, everybody else has to step up. So there was an incredible team effort at the same time that we were going through these growth opportunities too. Speaker 2: When you look into What the next 12 months look like, right? Clearly with just the indication of how, you know, you're launching into Target and I'm sure that's gonna blossom really well. I think one piece that is probably on your guys's vision board now is what Omnichannel looks like, right? Talk a little bit about that. Maybe even just a little bit about your journey from DTC to then Amazon marketplaces and now retail. What does that look like? What are you excited about? What are you nervous about? Speaker 1: We launched DTC, DTC only. In 2020, we introduced BabyList as a channel because, you know, fast-growing baby registry on the internet, especially with the changes in our space, we had to be there. But it took us all the way until 2023 to launch Amazon. And that was, I think, a really, really strong decision for us as a brand because we were setting out and building a brand, not just a product. We had to build our collection, but also having awareness for the brand and the products meant that we had more of a guarantee that Amazon would work. And we went on Amazon because we got some data around how much search volume we were getting on Amazon. And we knew that, you know, definitely not 100% of people would see that we weren't there and come find us somewhere else. They were finding something else, right? A large percentage of us. So we knew we were missing sales not being there. I think one thing we didn't necessarily calculate is how much of that is incremental and how much is cannibalistic. And does that matter? And understanding the unit economics across all the channels, that's a really big part of Omnichannel. How can you create parity, at least at a contribution margin level, across all your channels to make the business work is really important. And now with Target, it's a whole other set of factors, right? Certainly it will be incremental, but we've learned from Amazon that there's going to be a redistribution of our channels a little bit too. But there's going to be a great surge and a change maybe in how we market because now we have points of distribution at physical retail where people can see our products, can touch and feel them and feel the brand in a different way. You know, we have eight feet of branded space in Target. That's never been done before in baby. So people actually can see our high chair and our bathtub on display and then see 40 plus other SKUs on display and really feel it, but we're not talking about corrugate boxes with white print anymore. Visual merchandising is marketing, right? And so you don't have the benefit of a PDP. You gotta hit them on the shelf. It's gotta be clear, I want this. So we worked a lot. We got some great insights from people who have been there before and been successful at retail, working with the Target team as well. They were really influential in saying, make sure people can feel the quality of your feeding products, the silicone. It's such high quality. And so, you know, we made sure, okay, we have to have the product on display, be touchable, but it has to be secure so people don't walk away with it. That's a challenge. We got to test that and we had to do it all in truncated time. So this shift has changed everything, obviously how we do operations, how we allocate and plan inventory. And the shift into marketing is going to be continuing over time as well. Speaker 3: Some of the stories that we've heard and also faced ourselves, right, while getting into retail has been Okay, cool. You get into a retailer like Target, Walmart, and then you start to see maybe a shift from DTC to retail. How are you guys going to balance the efforts between both of them? You know, we've had strategies where we'll go into, you know, our flagship went into Walmart and we had to pretty much come up with a new flagship for online, right? So, how are you guys kind of, you know, accounting for that and what are you guys going to do there? Speaker 1: Yeah, I think the breadth of SKUs that we have helps a little bit and the fact that we've really set ourselves up to be a lifestyle brand and not just be known for one product. And it's shifted over time. That's really helped. But we've definitely, like, you're going to see our DTC continue to lean into play. Big area for us to win. There are also bigger items. There's not really room on shelves in retail there. And there's, you know, a lot of, there's plenty of margin to market against in those products. Whereas our other products and distribution, you got to build that channel strategy not just from a marketing lens but from a product lens, a margin perspective on it. Like I said, make sure you're maintaining down to the bottom line as much as possible. But we're cool doubling down where things are going to win, right? So if we see, similar to what you saw, that this hero skew is shifting out of DTC, There's a, I think there's going to be a million different ways we can, levers to pull on and we can say we need to make DTC work or we could say we need to make, we need to shift our marketing to better support wholesale and pour gasoline on that fire. So I think it's, it's a little bit, every decision as we've grown is how much fuel to pour on fires and how much do energy to lift things up that are struggling. And that balance is hard because none of us have unlimited capital. Speaker 2: Right. Speaker 3: Makes sense. Speaker 2: Curious on influencers and gifting. I always find that to be an interesting space where people like you have products that aren't, you know, $10 a ship, are expensive both on a cost but also shipping basis. But gifting is still a huge piece of it. And I know you guys have like celebrities and stuff too that have naturally bought the product and stuff. And I remember you telling me at Etail as well, like you kind of just lean into it in a more very organic way sometimes where So somebody, someone DMs you and you guys are like, yeah, you're treating it as almost like a normal customer. But touch a little bit on a little bit of that celebrity exposure, but also how are you guys thinking about gifting and the rise of TikTok shops when, you know, it's expensive to send something that's three, $400. Yeah. Speaker 1: Yeah. So, I mean, obviously, you know, we build this budget based on our product costs and our shipping fulfillment and all that. It's our second biggest marketing line item is gifting. So it's important to us. We see tremendous amounts of content created out of it. Our products have this kind of inherent specialness to it. When you gift product, it's just gonna naturally show up. And they're gonna show up in the cutest moments of the day, whether that's your kids trying a new food for the first time. You're gonna be capturing that. You're giving them a bath. You have their undivided attention. They're playing, they're doing art, doing something at the table. These are cute moments and they're habitual moments, right? So they happen every day, which creates a compounding effect on content. And so we see tens of thousands of pieces of organic content get posted Just off of our seeding program. So it's a content vehicle as much as it's, you know, an awareness vehicle. So we try to leverage that. We see someone create a piece of content. We didn't contract them to use it for ads. We're like, this was amazing. Can we use it or can we, you know, and we create a deal with them and we, you know, or they come into our affiliate program and they start earning off of how the sales they're driving. So, you know, we're not going to let up there. I think that's where we're going to keep doubling down and it's, It's protected from the algorithms to a degree, right? Speaker 3: Any tips or tactics that you guys deploy to make sure that you are gifting to the right person just given how expensive it really is? Speaker 1: It starts with kind of how you define the right person too because there definitely are different types of personas we want to hit, right? We certainly have a lot of like Fashion and lifestyle and interiors and we have experts and we just have like normal everyday people who are content creators or moms content creating. And so for us, sometimes it's just that their audience is so captive. They can have 5,000 followers or 10,000 followers, but they're just talking to 10,000 moms. And so we're gonna wanna gift them. Sometimes we're surprised about who wins, right? Who creates the best content? Whose content generates response or a sale? So for us, defining what right means sometimes is tricky because we're surprised all the time. And we get a ton of inbounds. And these influencer communities, they're tight, right? And they, you know, They're all interconnected and they see someone post and they know they got it gifted and they're reaching out inbound. So we have a full-time headcount, you know, someone on our team whose job is like solely influencer and she's spending a lot of her day creating community within our influencers. I mean this year we did what we called, I mean it was almost like an out front, an up front if you're familiar with that in the ad world where We actually brought our influencers in for a webinar with me. We brought in an influencer, one of our top influencers to give tips on how they've been successful within our program. We gave them a sneak peek on the Target launch. We gave them a sneak peek on products that are coming later this year. So we brought them into the community to build that excitement before they can even share it. A lot of these people may not even get a product, but we also brought them in so they're excited about our brand. They feel our brand in a different way. They have that insider access. Speaker 3: I think relationship building, especially in the influencer side, is like super crucial, right? I think even having that right person manage that communication, it could either make or break the entire program entirely. Speaker 1: Influencers are people too. I think, you know, I said at the beginning of the show, like my background is in talent management, right? So not influence. I did represent an influencer at one point, probably one of the first kind of Instagram influencers, but These people, they don't want to be treated like a marketing channel. They want to be treated like people. So if you know their names, like our influencer spreadsheet, like these thousands of people that we've interacted has like They're kids names and birthdays and so if we get super tight with someone, we want to give them a special feel, we can wish their kid a happy birthday. We can send them something personal and treating these people different, going back to your question about the first thousand customers, treating people differently in these important relationship building moments is really key. We have an advisor named Will Goddard. He owned Eleven Madison Park. Has a really great book out. He's a hospitality guru, right? And so one thing he told us early on as we were building those first thousand, he said the same thing. Your first thousand customers, they're gonna be the most important. How are you gonna treat them differently? He's like, I don't want you to tell me you're gonna send them a piece of branded swag. No one fucking wants a piece of branded swag. And so what we would do in the early days off of that one piece of advice is we would stalk the shit out of our customers. I always remember this one person, Who bought a product early on. We found out she loves dogs. We ended up donating to the shelter that she volunteered at. We sent her a gift card to the farmer's dog from our friends there. We sent her a new like leash and collar set. We sent her stuff to make her feel that we cared about her family and her family extending to her dog. And we care about her as a person and her interests. So we go out of our way that way. In the early days, we would go and ride the PATH train to New Jersey to show someone how to use a product if they didn't get it or help them assemble it. Or during COVID, I drove a table that came damaged to someone. I drove them a replacement up to Westchester in New York. On the way, it wasn't my fault. I rear-ended somebody. Totaled my car, got out, hopped in an Uber, grabbed the table, Ubered there, came back for my car, and towed it away. And so like, those little moments, they pay dividends. And we try to bring that into every day. Now that we're bigger, we can't go total our car and deliver a table to everybody. But, what we can do is we can make sure we show up with empathy to our customers. We can treat everybody's situation a little different. When someone brings in, we like to Think about what is this person going through right now, right? Oh, our shipment maybe missed Christmas. As a parent, I understand. You are living for the smile that you see when they unwrap that gift and maybe we fell flat by not getting it there on time. We're so sorry. Here's how we're gonna treat you. So like, we need to connect really, really deeply with people every day regardless of if it's what we were doing in the first thousand customers or now with hundreds of thousands of customers. Speaker 2: I think that's the type of affinity you should have with brand building versus product selling. I think that's incredible. I just remember even when me and Asha had gotten the opportunity to invest in Lalo, it was It was something you guys were building that was special, that was like, hey, this is different, and you guys have always carried that messaging through, and it's really cool to see. One question before we wrap up. I'm curious, how do you also stay away from distractions, right? Because in my mind, I'm like, you're selling a table where people eat. How have you not launched Baby snacks and baby food and all this stuff that feels like it's just partner with this and just start selling this and doing that and you know become this wider offering. But you've also stayed extremely focused over these six years. How do you say? Speaker 1: Yeah, I think there are definitely times where we've gotten distracted. The hands down and we've noticed them and you know we try to correct it when we can and it's obvious we're going through process now where we're trying to like Look at unproductive SKUs. If you look at all of our colorways and everything, we have like 450 SKUs now. Not all of those need to exist anymore. And so maybe we have gotten distracted. We're trying to eliminate those, but we've tried to stay focused and we try to say we're zero to three. Your buying window, your kid has to be zero to three. They can use it longer. We hope they do use it longer. It has to be for the home, right? Has to be things you use in the home or at least store in the home. We have some bento box you may take out, but we're not making strollers, right? We're not making carriers. We're not making baby food. Just because you can do something doesn't always mean you should. And so it's a constant reminder because we're entrepreneurs. We're opportunistic. Trust me, there are times where we bring something up to each other as co-founders and it's just like very clear, oh, I shouldn't have said that. Unknown Speaker: No, we're not gonna do that. Speaker 3: Incredible insights the whole episode. If there was one thing you wanted viewers and listeners to kind of take back and implement in their business today, what would that one thing be? Speaker 1: Yeah, I would say, you know, for us and what, you know, the advice I always give is write your own playbook, right? There's a lot of best practices out there in the world, whether that's for social or email or anything you're doing on the marketing side or running your business. But your customer is different. Your brand is different. The people you have are different. So you have to really focus on writing your own playbook. Build your own best practices. And the only way things become best practices are because someone once did something different. So write your own playbook and don't just follow, you know, don't just focus on copying the person next to you. Speaker 3: Chew on that. If you want more from us, follow us on Twitter, follow us on Instagram, follow us on TikTok and check out the website ChewOnThis.io.