Name: How Companies Are Finding New Customers In Under Seen Markets
Uploaded: 2019-12-11
Duration: 16 min 49 s
Description: Companies are finding new markets by looking beyond what’s already popular, to what should be.

Welcome, we're so happy to have you at NextGen with us this morning. Thank you. So Dear and Co a plus size fashion stylist and e- commerce company thinks a reusuable period underwear company not neccessarily like a million things in common. Off the top of the head, but I think it is really notable that both of your companies are serving a need for female consumers that is not new. It's been around, but that the sort of established players and even like the sort of male dominated VC ecosystem Have not really addressed. And so, Notty, I'm gonna start with you because the stats about the plus size market really blew me away. Women, tell me if I get this right, women size 14 and up account for almost 70 % of the population. But in 2016 plus size clothing was only 17 % of total purchases. So this is a huge potential market. Why do you think it has been overlooked for so long? In so many ways, that's the key question of the business that we've built. I think the fact that those numbers side by side seems so ludicrous when you actually think about them is not new. It's certainly not something that we discovered. I think the big debate in our category is whether or not it's a demand problem or supply problem. And I think if you speak to most people in the industry Really anyone in the value chain what you'll hear is that it's a demand problem. There's something about this woman that's different, she doesn't wanna invest in herself, she's left interest in style. There are some less positive reason or the demands that you'll hear. And I think for us at the end of the day. That just seems ludicrous. I've been a plus size woman all of my life. I've always loved fashion, I've always loved style, and the idea that as a woman I could intrinsically change when I cross this imaginary line, and the [ UNKNOWN ] just seems absurd. And so in our view it's a supply problem and really thinking about all the ways that the supply ecosystem would need to change. To actually bring a compelling enough set of experiences to the market where this woman can re- engage, is really kind of the core that we've been focused on. Yeah. That makes a lot of sense. Maria I want to ask you so that the feminine care products market is $ 1. 6 billion industry you guys can tell I did some research before this panel But I think one of the more notable things you're up against is the fact that our periods are still a taboo for some reason despite being a very common experience. [ LAUGH ] But one thing that is really interesting to me is it seems like things has really embraced that. And specifically I want to ask about you did your first nationwide TV commercial? We did. And Sadly, we can't show a clip of this but if you haven't seen it, it's about what the world would be like if man got their periods. [ LAUGH ] [ LAUGH ] Imagine the mind boggles. [ LAUGH ] And there were actually networks that refuse to air the spot and tell you, removed a scene where you Saw a man's tampon string. Right. Hanging out of his underwear. Right. [ LAUGH ] Everyone's gonna wanna watch it now. Yeah. [ LAUGH ] I was gonna say, viral marketing right here. But what we trying to achieve with that ad like, we're you expecting that push back or you went away looking for it? We were in a way looking for it. And that's part of why we were founded, right? We really were put on the map for those of you who don't know, the subway campaign in late 2015 in New York City, in which the MTA rejected the ads. And the ads were. You know, women in very natural positions that happened to be in her underwear, but they were next to images that represented the female anatomy. So egg yolks, grapefruits, nothing that was overly sexualized at all, but it was rejected and we really had our community. They went to MTA. We went to the media, just to tell them how ridiculous it was right you go for those of you who arrived in New York City subway regularly, you have lots of ads with women with, you know, holding up images of lemons, grapefruits and oranges to represent the different breast augmentation surgery yet, right? That is sexualized, yet somehow our ads won't get approved. And so our whole point is not to shock and awe, that's not the point. And this goes back to the TV commercial. The point is to get people to talk and to get people to talk you have to make them think. And making them think sometimes is being out, Out in front of them with something that can be very thought provoking. Some would say shocking, we don't say shocking, some would say shocking. And so the TV ad we did was very much with that intent in mind is how do we get more people to know, one, It's ridiculous. We can talk about these things. And two, and this was pretty slight in the ad is like period underwear exists. Most people don't know that it does And so, we were very successful, we reached over 60 million people. Who have either engaged with the ad or actually come to our site. So huge numbers. And so we were successful in that regard. And now we have to figure out how to convert them into actually buying the underwear. Yeah, that's a very important part. Nadia, you mentioned that to some extent Dean & Co was based on your own experiences as a consumer. I think a lot of companies in general are founded by people that see the need themselves. But I wanted to ask you about one story you told about your personal shopping experience that really stuck with me, which was When you were in high school still, obviously long before the idea for the company had formed, but you were trying to find something to wear to prom. Can you just tell us a little bit about that? Yeah, so definitely early or very early in my life and certainly not directly attached to the founding of [ UNKNOWN ] but I think the first time that it really occurred to me that I probably saw myself differently than the world did was when I was shopping for prom 11th grade. And my mom and I went to try to find something for me to wear and I've always loved style. So I had a very clear image in my mind of exactly what I wanted the dress to look like. And there was A very very stuck and unfortunate kind of reckoning when I actually got to the store and realised that almost everything that was in my size, at that time I was size 22, was really much more suited to a grandma on a cruise than a 17 year old girl. It was heartbreaking, In that moment, what my mother and I decided to do, which I will be forever grateful to her for is to make my own dress. And I was able to wear exactly what I wanted to wear. Yeah. [ APPLAUSE ] SMy mother is extraordinary and I think really has played a big role in this but Really, the takeaway from me I'm not years later, was the fact that the world may not always agree with what we believe is right. And the last thing we can do as women is really internalize the identity and the value that you can deduce from those experiences because there was a very clear message to me and my 17 year old self That something was wrong, and that I shouldn't be able to dress the way that I wanted to, feel the way that I wanted to, and experience this milestone moment in my life in the ay that I wanted to, but I could do something about that. Yeah, and now you're giving plus size women multiple options for how to shop, correct, because When you first launched DIA, It was a styling service, similar perhaps to like a Stitch Fix or that type of model. And now very recently, you've pivoted to also offer a direct e- commerce version. Question. So can you talk about like, what were you hearing from your shoppers that said, we want this and we want that? [ LAUGH ] So one of the things that has always been unique about this is our commitment has always been to our community and to the very specific women that make up our community plus size women. And not to any single way of serving her or even a single brand. And so our compass has always been the Very clear and very engaged feedback of the woman that we serve. And what we're hearing from her over time was that she had multiple needs in her life from a shopping perspective. And she really valued being able to work with a stylist and there are these magical experiences that you can get working with a stylist that really get you outside of your comfort zone. Change. Maybe what you would pull off the shelf yourself. But there were also moments where she wanted to be able to know that she could have access to the same great merchandise. And that wasn't necessarily possible in the previous way that we had finished up with us and so there's been a slow evolution for us and really expanding. How she can be transacting with us and therefore how much more access she can get to the clothes she loves you. And Maria, you are have also pivoted the thinks model a little bit. It was originally a direct consumer brand and you've started going into retailers can you. Why is that important for the future of the company. Yes. So 98. 9 % of people still buy their feminine hygiene products in offline mediums such as target CDs, etc. So we knew that was always going to be a major channel. And then secondly, we have a huge behavior change, right? And so being able to talk to a salesperson Be able to touch and feel the underwear is a huge chunk of why somebody is going to buy. So it's not just such an easy purchase decision that they will purchase online. Those are kind of the really the early adopters, but to get the people that we call the fence sitters, being in other mediums becomes very important. So we last year in June of 2018, we launched in [ UNKNOWN ] in the UK So premium retail, which is a bit unusual, we really wanted to get our feet wet first there, and then in next yea, next January, not not 2000 but 2021 we're actually launching a lower price point product that has the same level of absorbency. We're not sacrificing and that element. But the it won't be as quite as expensive in terms of the materials and that will enable us to reach a much larger group of people and become a much more accessible brand. Yeah. I also wanna ask you about another pivot point in the company's history, which is when you took over as CEO This was in 2017. And you took over from the founder, Mickey Agarwal. She was a sort of big personality founder. I think it's fair to say. And she ultimately was accused of some inappropriate behavior. In the workplace and ended up stepping down as CEO. I should say that she denies that. But the company was in a bit of upheaval around that. So I guess two parter, what Why did you feel like yes, I wanna walk into this difficult situation. Yeah. And be like what was the number one thing when you got in the door you were like, this is the first thing I have to achieve. I started looking at this rule actually prior to that news, hitting So it was about as much of a surprise to everyone else as it was to me. And so you can imagine, I thought I do not want to touch this with a 10- foot pole. But I got convinced to continue the conversation because it's such an interesting market and I really believe in the product, I was a customer prior to becoming the CEO. I also went through years of infertility to have my first child. And in the process I learned a lot about, you know what's in tampons and pads and how it can create infertility and endometriosis. And so I really was looking to be a CEO or it really I didn't even care if as a CEO, I just wanted to work at a company where I cared so much about the product. So that combined with when closer to when I decided to join, they sent me the financials and I literally had to ask them if they had been audited because the unit economics were so so strong. So I felt, both from a business side as well as the personal side you don't run across that many opportunities and that are like that and so I just jumped at it. And I did think a lot about like, what will the first six months, nine months twelve months look like? Because I'd never gone into a situation like that. And so it was very much about how do you build trust with a team. They had gone through a lot of chaos, I think especially externally right with the media and how much had had covered this particular story. And so I spent a lot of time with them like really making them understand who I was as a leader and my personal connection to the brand and to the product as well. And then I spent a lot of time building up, we didn't have an HR department, and that's not unusual. We were only 32 people at that time. So I don't think it was bad on previous management that they didn't have that per se. But it obviously needed to change. And so we built up an HR department, we set up a bunch of new policies. We focus a lot around. Okay, what is our strategic Northstar? And how do we make sure that we have the people Both internally as well as externally in terms of advisors, board members, etc that really can get us to the next level. And the last thing, which I think it kind of happened to us earlier, but because of the focus and negative attention on us, it really made us figure out early on how to build scale. So I spent a lot of time around process and procedures and bi and data and building that into the systems which I think contributed to where we are today. Interesting. I want to see if we have any questions for Maria or Nadia Sorry, I should have given you guys a heads up about that. But I see a hand over here, get the paddle, she's coming. [ LAUGH ] Please introduce yourself. Hi, Mr. Patel from Accenture, [ UNKNOWN ] my question is for you and the industry that you're in is a billion dollar industry with some incumbents in there that I'm sure Had a hard time with you coming in as a disrupting firm. I would like to understand how you trying to find your market also dealt with the with those incumbents that were feeling challenged with what you were trying to do and achieve. Yeah, that is a good question. So I will say that early on in our company's lifecycle, I was not there. So this is back in 2014. We could not raise money, and we cannot raise money because a lot of things you just mentioned, the incumbents, there's two of them PNG and Kimberly Clark that play a huge role. They're really a duopoly that owned the market. And typically venture capital doesn't invest in that type of stuff for all you venture capital country, people out there, and it's. It's hard and it's hard to change behavior. In a market that's very, very cold. There's a lot of cultural stigma as we talked about. And so we were forced early on, to really focus on how to be as profitable as possible. And so we raised $ 1. 4 million in early 2015 from our manufacturer who had a big focus on feminine Hygiene and that was kind of the only reason we really made it and last year we reached 50 million in revenue. And we did that on a million dollars, a little over a million dollars. And so I think that, [ APPLAUSE ] thank you. And I look at that like, and this is what goes to your question. And we've proven out that there are people out there that want a new solution, right? It's ridiculous, there's been lack of innovation almost 100 years. And in September, we actually took money from, we raise $ 25 primary and a hefty secondary as well from Kimberly- Clark. And so they obviously saw that this is becoming a market that's very interesting and we're playing a role in that. And I hope it's the first of a much bigger company to come .>> Unfortunately, we'll have to leave it there but I do think that's an interesting trend. I mean, we're seeing a lot of Companies like that invest in the more disruptive startup companies like the two of yours. So thank you so much. Thank you. [ APPLAUSE ] [ BLANK_AUDIO ]

How Companies Are Finding New Customers In Under Seen Markets

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Companies are finding new markets by looking beyond what’s already popular, to what should be.