How to Launch Your Product in the New Reality of Retail


Retail is facing a sea change, evolving on an almost weekly basis. How you launch a consumer product in this environment can be the make or break point for your company.

How you launch isn’t one moment, either; it’s a series of key decision points. Who is your customer and where do they shop? How are you funded and what are their expectations? Do you want to take the risks and rewards of selling on Amazon? Or are you going to go it alone with Direct-to-Consumer model, and try to emulate the astonishing success of Million Dollar Shave Club? Do you have aspirations to be on the shelves of brick and mortar stores? If so, are you suited for boutiques, high-end chains like Whole Foods, or big box stores like Wal-Mart and Target? Is it possible to succeed everywhere, or do you have to choose?


We explored these questions at July’s MAKE IT Monthly event. SmartyPants Vitamins is one of the few companies that have excelled at all channels, and its co-founder and CEO, Courtney Nichols Gould, kicked off the conversation with her war stories and lessons learned. Several other entrepreneurs who have successfully launched products weighed in with their guidance.


Pre-Launch: Understanding your Product and Audience

Before SmartyPants Vitamins, co-founder and CEO Courtney Nichols Gould and her husband Gordon launched Kids Complete. Kids Complete offered a holistic approach to improving kid’s brain health, but they were surprised at the overwhelming feedback from parents: “I want vitamins too!” Nichols Gould and her husband discovered there was a huge demand for vitamins with high-quality ingredients for adults. They quickly decided to reorient their business, and that changed their whole launch strategy. (To listen to Nichols Gould’s entrepreneurial story and more of her advice, see her profile and podcast episode here.)

This story illustrates the most important characteristics for an entrepreneur: situational awareness. While determination is important, you shouldn’t be so focused on your vision that you can’t adapt to new input.

Product development is an iterative process. At June’s MAKE IT Talk on Product Strategy, we learned about what makes a product viable and how to develop a product that will be a hit (read the recap here). But once you have a product ready for prime time, there are a variety of ways to get it to retail–all with their own risks and rewards.


Direct-to-Consumer: Popular but Not Always Appropriate

If you want to get new sunglasses from Warby Parker you don’t go to Target or Amazon; instead, you go to the Warby Parker website. They operate under a Direct-to-Consumer (DTC) model, which has two primary benefits. First, you control the data, which is vital for planning your next moves. Second, you shape the total brand experience.

With these benefits come additional considerations. Earlier this year at January’s MAKE IT Monthly event on packaging, we learned about companies called Vertical Commerce Brands, which are a pure DTC play. Casper, Bonobos, and Parachute Home all must give extra thought to design the full customer experience, from product discovery through delivery. For example, as your customer’s first physical contact point, packaging is an important opportunity for developing loyalty.

However, this approach can be tricky and is not always appropriate for your company. Successful DTC products generally share a few key characteristics: high margins, premium items with high price points, and infrequently purchased. DTC can also be appropriate if the market has intense market concentration, like shaving, which makes the market unusually susceptible to innovation.

Before going the pure DTC route, it’s crucial for entrepreneurs to conduct market research and determine whether their product is one that would do well under the model.


Amazon: Risky but Often Necessary

With e-commerce there’s Amazon, with 90% of the market share, and then there’s everyone else. If you want your product to be successful on Amazon, reviews are the name of the game. Amazon reviews don’t only impact sales on Amazon, they also affect your sales across the board. Often, customers will look up products on Amazon to read the reviews before deciding to purchase them in store.

Counterintuitively, Nichols Gould explained that negative reviews are the biggest opportunity. The smartest thing her company ever did was engage with every single negative review, reaching out to customers to fix any problems they encountered. These interactions drove sales, and customers were overjoyed to hear directly from the company. Often they would delete or amend their negative reviews. And she assured the audience that most people don’t read one-star reviews anyway.

This advice resonated with Rachel Rutherford, Chief Product Officer at children’s product company Seedling, Seedling. She encouraged companies to admit shortcomings up front. For example, one of their products warned, “The markers might run out before your child finishes her project,” and instead of avoiding the product, many customers went ahead and ordered two sets of markers isntead. She chuckled about one of their customers who gave them 5 stars citing the company’s honesty.

Amazon can be risky, because they can undercut your prices in other channels. But in most cases, it’s best to play Amazon’s game, as long as you play to win.


Crowdfunding: Not as Easy as it Looks

Depending on your product, crowdfunding can be a great way to validate demand, raise money, and build loyalty with your early adopters. But there are many potential risks and hurdles. Last fall we featured Exploding Kittens founder Elan Lee, who shared his secrets for driving momentum in a crowdfunding campaign. It certainly was not easy, but with social media and community-building prowess they became the largest campaign in Kickstarter history.

Ironically, one of the biggest challenges can be too much success. Liz Heller, who helped launched a record-breaking luggage product called G-RO on IndieGoGo, warned that entrepreneurs who launch physical products on crowdfunding sites usually under-estimate the cost and time to ship. Carly McGinnis, the General Manager of Exploding Kittens, agreed. Once they raised $8.8M, the work really began–they then had to figure out how to deliver the promised product to nearly a quarter of a million customers. To top it off, it was nearly impossible to get their product to customers in countries like Russia and Brazil because of their lack of reliable infrastructure.

When selling on the internet, McGinnis quipped, any product with Kittens was a sure to be a hit! But it’s important to set realistic expectations on how much you can produce and where you will be able to ship.


Brick and Mortar: Struggling but Still Important

For a variety of reasons, off line retail is currently undergoing a sea change. Ann Lawrence is a lawyer specializing in retail whose job has increasingly begun to focus on bankruptcy law. She put it bluntly, “Retail is broken right now.” Because of this, it’s important for entrepreneurs to not assume that stores know what they’re doing or if they will even be there in a couple years.

Despite all the uncertainty, brick and mortar stories can offer a lot of value to brands. Although Amazon and e-commerce are growing rapidly, the majority of purchases for most products are still done off-line. Further, being in stores can be vital for developing brand awareness; you don’t browse for new products while on Amazon, but you do in a physical store. Once SmartyPants Vitamins went nationwide in Costco, their brand awareness and online purchases went through the roof. Don’t ignore brick and mortar.


Big Box Stores: Do Your Homework

Big box stores can be the holy grail for brands when they seek to grow. But how does a new product get a foot in the door? Big retailers now expect data and analytics when you are pitching your product–basically, do your homework.

Lauren Gropper from Repurpose Compostables illustrated it with a story. Her company didn’t realize they entered the market with the slowest moving, most competitive, worst margin product of their line and they struggled. After looking at IRI Nielsen’s market research on the sector, they were able to shift their strategy, but she wishes she had done her homework earlier.

This type of analyst research can be prohibitively expensive for startups, so Nichols Gould suggested a more DIY approach to start. Simply pick a similar product to yours, visit the different types of major stores, and compare the prices and sizes of the same products across the different stores. Visit monthly to see how things change. Doing so can give you a tremendous amount of information about market trends, which is vital when negotiating for your product’s price point.

What if you running into a dead end with a chain? An important thing to remember is that even the biggest big box stores have local managers who can have a significant amount of autonomy. Often getting your product into individual stores is a simpler prospect than making a deal with corporate. In fact, Nichols Gould encourages entrepreneurs to focus on “velocity” (the speed of items off the shelf) in fewer stores to start before seeking volume through more stores.


High-End Retail: Image and Order Matters

One more consideration with brick and mortar retail is where your product is sold, which gives crucial signals to customers about quality and brand. For example, SmartyPants vitamins is a premium product aiming for consumers who expected high quality. Because of this, they decided to debut their product in Whole Foods, even though the margins were the worst of the major grocery stores, because of their reputation for quality, health, and upscale products. Planning the order of your product introduction can make a big difference for your brand.

There are no clear-cut answers on how to introduce a product, and every entrepreneur had their own unique experiences. But despite the disruptions happening in retail, the entrepreneurs all agreed on one thing: with all of the available channels, there are still plenty of opportunities for companies to “make it” in L.A.

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