DTC brands reap the rewards — and risks — of taking a stand
Newcomers like Billie, Knix and AUrate benefit from customer relationships built on mission. But bolder stances invite scrutiny of their promises.
When Joanna Griffiths began researching a business idea for her inclusive-focused intimates brand Knix, there was one thing that kept coming up in her interviews with women: the category was making them feel bad about their bodies.
That's something that Billie Co-founder Georgina Gooley also noticed when looking at the way in which shaving companies historically marketed razors to women. "The category had basically been shaming women for the last 100 years for having hair, and that was how they were selling products," Gooley, whose brand is built on tearing down "the pink tax," told Retail Dive in an interview in December.
Similarly, upstart jewelry brand AUrate was founded on a mission that flips the traditional marketing messaging in the category on its head: women don't need to wait for men to buy them nice jewelry. "We came from the principle that our woman, she wants it all. It shouldn't be a question anymore asking is this ethically sourced? It should be ethically sourced," Co-Founder Bouchra Ezzahraoui told Retail Dive in an interview.
"They feel they're marketing to women not at women, and in the language of gender studies much of the marketing is stripped of the male gaze. The message is: This is for you, not for anybody else but you."
Founder and CEO of the Female Factor
While these three companies span very different product categories, they have a few things in common that signify a larger trend within a subset of the direct-to-consumer world. For one, they're all female founders, Bridget Brennan, founder and CEO of the Female Factor, told Retail Dive in an interview.
"Out of the gate, [these brands] have declared missions that are communicating to women: We understand you. We've got your back. We're solving a problem we've all noticed," she said. "They feel they're marketing to women not at women, and in the language of gender studies much of the marketing is stripped of the male gaze. The message is: This is for you, not for anybody else but you."
Brennan, who is the author of a book coming out next month titled, "Winning Her Business: How to Transform the Customer Experience for the World’s Most Powerful Consumers," is an expert on how companies market to women. Female culture is always changing, she said, and the brands that are the most successful are the ones that stay in-tune with exactly how that culture is changing.
More and more, that's shifted toward featuring untouched photos as opposed to models in marketing, and featuring women's real stories about how products intersect with their lives. The direct, and often emotional, relationship that these kinds of brands have with their customers, particularly over social media channels, also presents a unique opportunity to take a stand on issues the companies feel are important, whether that's conversations about infertility, body hair or ethical sourcing.
For Knix, Billie and AUrate, having these conversations is critical to the long-term relationships they're building with their customers. But with a bolder stance, mission-driven DTC brands also open themselves up for more scrutiny if they don't live up to their promises.
Stand for something, anything
High-quality products, fair prices, convenience and storytelling — that's the basic formula for a DTC brand these days, with the last one being one of the most critical differentiators from category incumbents.
"You could go through the mall and ask, what do these brands stand for? Urban Outfitters, Anthropologie, their storytelling is maybe in some of their catalogues, but what do they stand for? Maybe Anthropologie stands for cool funk? It's all cool products but what else beyond that?" Sucharita Kodali, an analyst at Forrester, said in an interview with Retail Dive.
Big brands and retailers often don't try to stand for anything, she added. And there's a reason for that. "The main reason is it is very hard to quantify an ROI [return on investment] around it and it doesn't lead to sales in the near term," Kodali said.
But when you ask young founders of DTC brands with social consciousness baked into their DNA, it's clear they see this as a way to win over consumers in the long-term.
"Other brands can change their marketing and they can do huge campaigns and buy billboards, but you can't buy authenticity."
Knix CEO and Founder
"There are so many new entrants coming into the space. There are older brands trying to stay relevant and my viewpoint is that as a company, having authentic relationships with our customers and being a brand they love is the one thing you can't buy," Griffiths said. "Other brands can change their marketing and they can do huge campaigns and buy billboards, but you can't buy authenticity."
So last year, Griffiths got personal with her Knix customers. On Mother's Day, she suffered a miscarriage. While her friends urged her not to go on social media that day (where she would undoubtedly be ambushed with cute photos of mothers and children) she posted an image to the company Instagram account that acknowledged all kinds of mothers, including those who had lost children or yearned to be mothers.
"The comments were all saying 'This is a space where I feel acknowledged' and 'I feel heard.' In that moment my mindset changed. The way I looked at women changed," she said, adding that the moment also sparked one of their boldest campaigns, one titled #FacesOfFertility. "We looked online and said 'Are people talking about this at all? Is this something people want to talk about?'"
Griffiths had begun to see some of the ambassadors the company works with talk about issues of fertility, and after six months of work, the campaign rolled out in October with her own personal story too.
Tough and awkward conversations about topics like fertility, periods and mastectomies are core to Knix's social media strategy and marketing. It works for Knix, which Griffiths views as a "challenger brand," but she doesn't expect the same message to work for larger brands in different categories.
"A lot of these brands have done a nice job with wearing their hearts on their sleeves so to speak and kind of leading with passion," Kodali said. "And it's compelling to some consumers, not everybody, but a lot of the early adopters." She's referring to a small subset of tech-savvy consumers who are eagerly drawn in to try out new brands, often built on social networks that share the kind of emotional storytelling that Griffiths does.
"It has forced the incumbent brands to improve their offerings and to think about things they've never thought about before in their value proposition," Kodali said.
One example of that was a Gillette commercial that went viral in January. The razor brand received mixed reviews on an ad that tackled toxic masculinity. While the ad was a hit with many people, some pointed out that the message could come off as inauthentic and as an attempt to gain sales amid pressure from e-commerce businesses like Harry's and Dollar Shave Club.
Newcomer Billie, which is just over a year old, is also challenging the space to eliminate "the pink tax," or the notion that women's personal care products are often marked up more than the same products that are marketed to men. Early on, the brand launched a "pink tax rebate" to help spread awareness about the issue.
Lately, the brand has also attracted attention for advertisements in New York City's subway system, among other places, that feature women with body hair. The campaign, dubbed Project Body Hair, encouraged women to embrace their bodies and to shave if, when and where they want.
"I think it's important that you don't have this company customer relationship but you're building more of a relationship that comes from a place of respect," Gooley said. "And I think maybe that's a longer-term strategy rather than just peddling your product and getting discounts and getting people to buy as quickly as possible but it is a much more sustainable way to build a long term relationship with your customer."
Social media is doing a lot to help brands like Knix and Billie stay on the pulse of what conversations and movements their customers are interested in, Brennan said. "You still see perfect images but then you're also seeing something you might not have seen 10 to 15 years ago — celebrating the joy of the not perfectly polished image."
There's a certain relatability to the way that these kinds of brands use storytelling, she added.
"They're really touching on something," she said. "They are telling their story in a way that is true to the brand. On the AUrate website they talk about how the founders came up with the idea over a series of brunches. They are able to communicate how the company came to be."
The risk factor
There's a reason big brands stay away from big messages.
"I think that companies have learned from the environment of the past four to five years and the transparency that we live with every day that if you state you're mission-driven, you genuinely need to be," Brennan said. "If you're not, it will come out."
Take Thinx for example. From the get-go, the underwear brand was built around a social mission to construct a product that allowed women to go to school, work and do everything they normally do without their periods holding them back. But the staunchly feminist mission backfired in 2017 when a former employee accused the company's founder, Miki Agrawal, of sexual harassment. She eventually stepped down, leaving behind a tarnished company image that stood in contrast to what the company said it stood for.
"... If you state you're mission-driven, you genuinely need to be. If you're not, it will come out."
Founder and CEO of the Female Factor
Thinx had a direct impact on boosting Knix sales, Griffiths said, adding that the company noted "a huge spike" last year and in part of 2017 in its leak-proof underwear sales, the product Thinx is most known for. Griffiths also acknowledges that Thinx's brand mission helped lay the groundwork for brands like Knix. "I think they did a great job of helping build that awareness around the category and concept, and now search volumes are way up and so for sure we've seen an organic spike," she said.
Under new leadership, Thinx has since rallied behind its original mission and begun to rebuild its credibility through recent partnerships, including one with Nordstrom.
"Every brand in order to survive has to be able to demonstrate what it stands for," Brennan said, adding that these days many consumers are responding to a message of inclusivity and mission-driven, female-founded brands.
When you do stand for something bold, controlling the mission is imperative. It's one reason that Knix pulled out of the wholesale business that helped it get off the ground. From the beginning, size inclusivity has been an important part of Knix's mission, Griffiths said. And the fact that their retail partners, including many athleisure and athletics retailers, wouldn't carry their full assortment (0-22 in bottoms and up to 43G in bras) was ultimately a deal breaker.
In 2016, Griffiths pulled the plug on wholesale to become a completely DTC brand. "Especially when you're getting a brand off the ground, saying no to dollars is really an intimidating prospect," she said, adding that she's glad they did. "It kept us really focused and allowed us to do more."
The bolder you get, the more pushback you get too, Griffiths said. But for now, the brand's detractors have only emboldened its core customers to defend it. In her eyes, "It's connecting on a much deeper level."
'An alternate voice'
To be clear, not all DTC brands are mission-driven, and not all consumers care.
But, for those that are, they're reflecting a broader cultural change, Brennan said. "Brands are being much more inclusive of everything from body type to self-care to how you choose to wear makeup or not wear makeup," she said, adding that brands like Knix, Billie and AUrate have established themselves "as an alternative voice, a new type of voice in these industries."
Whether that cultural mission translates to sales has yet to be seen, Kodali said. "They often get a lot of early traction with early adopters who are willing to buy the product online and then they kind of hit a wall because all of e-commerce is a small fraction of retail," she said.
The challenge, she added, is that for many high-frequency consumable products, like razors for instance, the options are ubiquitous. "I think some of it is just that there is so much competition and in the consumers' mind they might like the packaging or some aspect, but it's not enough to make you just exclusive just to one brand. I think that's really what it comes down to," she said.
Correction: A previous version of this article misstated the title of Bridget Brennan's book, which is "Winning Her Business: How to Transform the Customer Experience for the World’s Most Powerful Consumers."
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