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Bonus: How &Collar Uses Intelligems to Drive Growth with Pricing, Persona & Shipping Tests
00:30:41
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- [00:00]
A
We partnered with Intelligence to ab test prices on our core product, our dress shirt. We said, hey, let's set up a four way price test lower than 48, which was the base price at the time. Let's do a 45, let's do a 48, let's do a 49.99, then let's go to a 55, see if we can beat that $50 ceiling. And this was right when tariffs launched. And so customers were price sensitive, we were Obviously margin sensitive. 49.99 was basically a split with 48, which was encouraging because it's like, hey, if there's no loss, no profit per visitor loss, then why wouldn't we go the extra $1.99 paying IntelliGems 3.99amonth, finding $2 a unit times 500,000 units a year. It's like, oh, that test paid for itself.
- [00:51]
B
Ben, welcome to the D2C podcast. Super excited to talk about and collar. It's my first brand with an ampersand in it. Talk to me about why you built Ann Collarbone.
- [01:00]
A
Well, first to the ampersand comment. Would highly recommend not having that as the first, you know, letter, if you will, or first character in a brand name. Half the people it seems like in America don't know what it is. We get called at color a lot. A little bit damning when it when you're looking at education systems.
- [01:21]
B
But you've made it this far.
- [01:23]
A
Yeah, yeah, we made it this far. Apparently in spite of our name. I said on any future brand, whatever it is, just choose a word that's in the English dictionary or multiple words, very easy to pronounce and that don't get stuck in the throat. That's not what you asked. You said why we built it. Yeah, it was just to keep men comfortable. I mean I had to wear a dress shirt all the time and as to keep men comfortable. And specifically for me, it was supposed to be a college resume or uni resume builder if you're Canadian, so that I could get a real job and tell someone in an interview that I had enough initiative and drive to go source and sell $50,000 worth of product.
- [02:01]
B
Amazing. And talk to me about your growth journey. How long has it been and how do you characterize where you're at right now?
- [02:07]
A
Started in 2017, very passively. Launched on Kickstarter that first year we did 20,000 and that where we are and we've been able to. We've been fortunate and have grown top line every single year since 20 and this year, hopefully we'll end up, let's call it 13 or 14 million in top line.
- [02:29]
B
So you've got a couple trends. You've got one, everyone wants to be more comfortable, but two people are going to offices less where they even have to wear button downs. How do you think about that sort of those two market forces?
- [02:41]
A
I think about it every day a little bit less now today than I did in 2020, where that was when we decided to really go all in and pursue it full time. And talking about market forces, that was the worst possible market force for a dress shirt company with one of its founders talking his brand new wife into selling dress shirts online for a full time gig. And so yeah, 2020 was very freaky. And that's where we, the way we think about it is, okay, who still has to wear dress shirts? So we call it recurring and required. It's like, okay, what segments are recurring and required as it relates to wearing dress shirts or dressing up? And let's go own them. Let's own those micro segments. But today, thankfully, fingers crossed, I mean it's unfortunate as an employee, but as a brand outfitting employees, it's great to see you back to office mandates where it's almost this pendulum where people now are being required to go back to work. It's harder to find a job than it has been in a while. And one way to differentiate yourself in a candidate pool is to dress up again. So it's almost like the demise of a great work life balance is to our benefit. Which I know sounds horrible, but as someone who had to buckle down during COVID when literally everyone stopped wearing dress shirts, it's nice to see that market force, if we're calling it or pattern or trend, swing back in our favor.
- [04:14]
B
But you might as be, might as well be comfortable.
- [04:15]
A
At least you can be comfortable if.
- [04:17]
B
You'Re forced to wear a shirt, right?
- [04:19]
A
So some of the copy you'll start to see now in our creative testing is kind of a riff off of like Blink 182. Work sucks, but you could still be comfortable. Some, some something there that you can bring work from home comfort back to the office.
- [04:35]
B
So talk to me about, I know we're going to talk about testing. I'm excited to jump into that. But talk to me about the growth levers. You guys right from the beginning probably had a lot of SKUs or did you just launch, did you just launch shirts and then expand into other items or did you launch with a bunch of SKUs?
- [04:48]
A
Pretty limited compared to other Clothing brands. So very. To begin, we had 10 SKUs. We only had one fit of a white dress shirt in short and long sleeve. So basically five SKUs across both fits or for each fit. So 10 total. Then we've expanded that. Now we have two fits. So a classic fit and a slim fit. So now it's. I mean, it almost spiraled out of control where if you looked on our balance sheet number of SKUs and then just inventory allocation was all wrong. When white dress shirts drives 50% of revenue for the business. So it's like, oh, now in some way, shape or form because we have more skus of the white shirt, but less than 40 SKUs powers 50% of the business. And that's top line, where really it powers even more of our bottom line. All of that to be said, we got excited overeager to expand SKUs where it's like, hey, there's still a lot of Runway left in North America to be North America's white dress shirt. Everyday value white dress shirt. So skus got up to as high as 1500. Now active SKUs are closer to 1,100. And we want to keep it that way even as we grow.
- [06:05]
B
I have a friend who runs outweigh socks here in Victoria, and he. All of his marketing is about brightly beautiful, dramatic socks, but his. But I think 50% or more of his sales are millennial ankle socks. White ankle socks. Right. So it's like the staples still are what sell the most in a lot of cases. So how have you grown this brand? Is it a meta? Is it? Has meta been your darling when it comes to bringing new eyes to the.
- [06:35]
A
You know, I subscribe to just about every newsletter on the planet. I think DTC is a great one. And we have grown almost in spite of our paid spend where we've never been good at it. I've never been brought on as an expert in that field. So I mean, really, the growth levers we've spent. If you talk about Mer, it's like, oh, when we had our big jump in Covid, you were talking about baseball right before this, Eric talking about the Blue Jays and Dodgers. I mean, we said in Covid, my co founder and I, we said, hey, let's like swing for the fences or let's. Let's at least get out. Let's get out fast. And so we spent 800,000 on 2.1 million in top line. And that doesn't include content creation, which was another 200,000 at the time. So it's like, oh, I Mean, we know how to spend in probably irresponsible ways. That was the first growth lever where it's like just kind of spend in a crazy irresponsible way. Now, we've tried to be a little bit more dialed, but I'd say more than anything, the growth lever has been that recurring and required micro segmentation. So saying, hey, rather than spending against everyone, all advertisers on the same 25 to 38 year old, slightly more athletically inclined, has certain disposable income, all the same interest. Basically where I mean, that was just a bloodbath on CPMs and CPAs or whatever, KPAs, whatever metrics you want to call them, all those acronyms that you always talk about, it's like, oh, there's a bloodbath there. But then when you start to drill it down, say, okay, well what about if you go after public school, male teachers, it's like, oh, that's a little bit more palatable. And then you can create content specific to them and in that way do a little bit more of a personalized funnel. We're not all the way there yet and we're working on it, but that has been really what's helped us grow and what we forecast helping us grow even more is kind of running away from the competition.
- [08:37]
B
This is the third podcast in a row where the guest has talked about drilling down into their Persona's real motivations. Not just the segments of who they are, but like why they buy the product. Like for you, it's this idea of being required, hired or whatever. And then how it's. I know you're not an algorithm wizard, but that's what Andromeda is meant to do. Right. In a lot of ways is to really, is to match up the right creative with the right person for the right reason. So if you, if you're thinking about your audience and their reasons and really who they are at a, at a, at a. Like it Sec, or what's it called, like avatars versus segments is how Andromeda is prioritizing how they serve ads. So it's really cool to hear that that level of like, depth of understanding your customer is what's really allowing you to drive the sales.
- [09:27]
A
Yeah. And hopefully we get even better. Where we just talked yesterday, our big sprint through the end of the year, other than surviving Black Friday to set UP sub for 2026, is saying, hey, let's whatever, Personas, avatars, whatever you want to call it, let's do six that are representative of basically 100% of your total customer base. Can we tag them within shopify some of that self reported from like post purchase surveys so we do no commerce. It's like okay, can you attach a tag to anyone who reports or if they follow under the same parameters or behaviors and then hopefully feed that into our esp? It's like oh, can we never. Other than new product launches or Black Friday type sales, can you never send a list blast email again where it's like okay, we've got teachers as one of the six. You've got everyday guys, you've got orthodox Jews or whatever the six buckets are. It's like, okay, those are the only emails that they're going to see basically and hopefully have it be this flywheel. That's the hope. And then it serves back into top of funnel ads and Landers if we get there, who knows if we do, I think we'll be. Then you can talk to me about being a marketing expert, but until then don't feel like we are.
- [10:44]
B
Did you have a career, did you do marketing before this? Like did you, are you, are you like from a performance marketing or affiliate marketing background?
- [10:50]
A
No, this is my first job out of university other than some internships. Technically I had a digital marketing internship but I didn't do anything. I just was working on the website for and caller back then. So no, no expertise.
- [11:04]
B
How have you thought about pricing in your space and how have you gone about finding the right price, right thresholds for. For that.
- [11:13]
A
Yeah, for just listeners, I'm doing finger in the air on initial pricing for the first five years. Six years it was, hey, this seems about right. You do. Let's call it competitor analysis. You lay it all out on a spreadsheet. Okay, this group's in this band. Price band. This group's in this price band. I mean that's as scientific as it got. But hey, it seems like there's a spot for a sub$50 shirt where you've got Rhones, Mizzen and Mains. Lulu now has performance dress shirts, Ministry of Supply, I mean I could name a bunch who were all at the time in the $120 range. Now they've raised prices up to 150. Where we said, hey, we could do a comparable product, much lower gross margin, but I think on a units basis could really compete for a sub$50. So that was the hypothesis. There was no math or reasoning behind it other than that feels right. Pricing adjusted a little bit during COVID We went all the way down to 35 because we thought we're going to be out of business and just needed to move units back up to 40 and then 45 with no testing but. And we gauged success on number of support tickets we got and we got very few if any on those price changes. But then for the first time this year with tariffs got scientific. We partnered with Intelligence and I partnered with, we paid them partner is me doing myself a service. We just paid them money to test a B test prices on our core product, our dress shirt. You know, I said 50% of revenue comes from the white version but then in the patterns and solid colors then you find another 20%. So 70% of the business is from one style essentially. And we said hey, let's set up a four way price test lower than 48 which was the base price at the time. Let's do a 45, let's do a 48, let's do a 49.99 and then let's go to a 55, see if we can be beat that $50 ceiling. And this is right when tariffs launched. And so customers were price sensitive, we were obviously margin sensitive and aware. And so it was a great test and it found us an extra $1.99. $49.99 beat all the. Well, it was basically a split with 48 which was encouraging because I was like, hey, if there's no conversion loss, no profit per visitor loss, then why wouldn't we go the extra $1.99? And so yeah, found an extra $2 per unit which had trickle down effect to wholesale and so on and so forth. So paying Intelligems 3.99amonth, I mean finding $2 a unit if you extrapolate, I mean it's not totally clean because of sales and stuff, but let's call it, yeah, actually $2 a unit times 500,000 units a year. It's like, oh, that test paid for itself.
- [14:02]
B
Yeah. And how does it work with Intelligence? Like how did, like when you're running those four different tests, are they basically just four different versions of the website or purchase funnels where the prices are consistent with whatever the test is?
- [14:14]
A
Yeah, that's what we were most worried about was okay, how is there going to be consistency across the purchase Funnel for Eric vs Ben? Really, really incredible. Where we had one ticket across however many thousands of orders in the three week period it was live when we had one ticket mentioning hey, this price was this yesterday and it was just a visitor coming back and we didn't do enough cleanup on abandoned cart to clean that up. I mean apparently we did because there was only one ticket. But yeah, what they do is basically replicate and it's command, search and find almost and replace any mention of price. And so they do a really thorough job of like our flyout cart, which is an after sale or up cart product, our post purchase which is after sale and order editing everywhere in the purchase journey from top of funnel to end of Funnel, inside of FAQs, inside of Flyout cart, they replace and find any mention of price.
- [15:12]
B
And does it happen over time or is it all happening simultaneously?
- [15:16]
A
Simultaneously is my understanding. I mean I'm not, I'm not technical, but. So when we were setting up the test, they do a really good job of hands on. They have a CSM that walks you through it and you set up the test exactly the way that you want. They have you kind of go incognito mode across your team so that each one that you see each of the four variants or three variants of the site with the different three or four pricings and then yeah, it works. That doesn't really answer your question, but it works. Yeah, it works.
- [15:46]
B
Any other examples of tests? I see a note here about free shipping thresholds, which is something I think people don't think about testing or they like, they say they finger in the wind, they see what their competitors are doing. They're like, this is what it is. But what kind of impact can testing that have on the biz?
- [16:00]
A
Yeah, that one was even more significant in terms of like result impact. Probably not as much when it's, I mean, still significant impact. Not just not as much as a style that does 70% of revenue. That was our second test. We've got pretty major seasonality, got Father's day, weddings, end of school, new jobs coming in May, June through August. And that's the only time of year that competes with Black Friday. And so we got two quick wins under our belt with intelligence. Within six weeks we got the price test and free shipping threshold. Free shipping threshold was $100 because that's what we set it at at 2017 because everyone else had it never had been touched. And so we did three or four, excuse me, four variants, 100 versus a $75, a 125 and $149.99 option. Reasonings were 75. AOV is 123, but median AOV, if we're calling it AOV, still median is quite a bit lower where, you know, average is if we've got pretty significant outliers with 800 $900 carts. But median, especially when you look at new customers, is quite a bit lower than that. So we said, hey, can you increase conversion rate if you lower it at 7,500? Let's keep 125. Can you maybe get someone to add one more item per cart just to get over the 125 when AOV is anywhere from 121 to 123 in the year for us and then 149.99. Can you get them to add another shirt? $149.99. Major flop for us. Similar with the price test, as was the 55 ceiling. So it's like, okay, we've got pretty elastic customers or at least price sensitive customers to a certain point. Intelligems were really fascinated with the findings. Two major winners were the 75 and the 125 which matched our hypotheses. The 125 did get people to add an extra item. 75 just got people to check out. We ended up going with the 125 mostly because of worries about tariffs. We're like, ah, we just need to extract as much value as we can. Where in 2026, the name of the game for us is new customer acquisition. So we'll probably revisit that test and see if just see how you can drill down even more. Because 75 was the winner for just getting people over the line.
- [18:25]
B
New customer acquisition is the. Is the word of the year or incrementality. Everyone's talking about incrementality. Top of funnel. What are some of the ways that you're optimized? Like, I guess there's obviously the in platform stuff where you're using exclusions to make sure that you're not over saturating the bottom part of the funnel with retargeting campaigns and things. But what are some ways that you think about shifting your company's focus towards new customers?
- [18:49]
A
Yeah, the past four years or three years, even though revenues have increased, there's been a decline in new customer cohorts, which is encouraging that. I mean we've got really resilient repeat purchasers, but is worrying because it's like, okay, at what point, like are we going to start to see the drop off? So that's why more than anything the next 12 months we're going to push for that new customer count where now we've established a pretty decent and healthy level of profitability as a business. And we've got really strong, you know, 30, 60, 90, 180, 360 LTV lifts. So the way we're thinking about it is one. I mean you talked about the exclusions of a little tinkering really mostly just kind of platform testing more than anything where we're starting to spend more significantly on YouTube and just launched with Tatari. So TV saying, hey, let's do pure top of Funnel plays. We've spent a lot on production, so can you let this million dollars worth of content we've had finally fly and see the light of day or it's a little discouraging we've spent that much and still what happens is retargeting. You've got the DPAs or whatever catalogs crushing it. So hopefully just putting net new eyeballs.
- [20:10]
B
I love hearing you. We're actually releasing a podcast on Friday that you should listen to. That's our Google guy at Pilot House just talking about all the ways that those campaigns can be reaching the wrong people. How they built, really how to audit them to make sure that you're actually bringing the right top of funnel people. And not like men who click on bra ads or something like that, or children who are just streaming, you know, streaming their show or whatever. Because Google tends to want to include as much volume as it can always. How do you think about testing? Do you always have a next test in the hopper? Are you guys kind of ABT always b testing? Is that how that works?
- [20:51]
A
Yeah, trying to be abt. We've slowed down a little bit the last few weeks, but yeah, trying to build out our full 20, 26 roadmap. Obviously we're flexible and it's like, oh, something new comes up, I. E. A tariff or whatever. Oh yeah, then we can change the priority or if there's something fundamentally wrong. But yeah, trying to do it all. That's why we went with Intelligence where before we were paying for three different kind of CRO type apps. I mean we're the experts at having more apps than you need. So we had Shoplift, which was content first, content testing first. Then we had pdq which is checkout testing and then Intelligence, which makes it tough where it's like, oh, always, always, always be testing so much so that those interfere with. So it's like, okay, let's pair it, you know, let's strip it back. Let's go to Intelligems who can do all of them. So yeah, hopefully we've got our 26 roadmap and it's high impact stuff rather than testing against the test.
- [21:51]
B
You mentioned your first two tests which are there any tests that you've run in the run up to Black Friday that have informed how you're going to approach your offer or anything in the. In Q4, we were a little bit.
- [22:01]
A
Behind the ball on that one where we should have. So I mean we did a little one over Labor Day which was let's discount basically site wide everything but the white shirt almost Trojan horse our way in there that turned out really well. The findings were people still buy full price white shirts but seeing everything else on discount. One increases conversion rates, but two increases units per transaction. And for us we've got two types of customers, white shirt only customers. And you know, you can guess that those economics are much worse than white plus customers, which means at some point you've migrated to a non core SKU or style which is basically all incremental at that point. So Labor Day we were informed that we can drive that behavior to get you to migrate to something new while not discounting the real breadwinner.
- [22:59]
B
How do you take into account things like LTV, you were mentioning your 150 day or whatever, your long term metrics for customer value. How does intelligems, which I imagine is looking at things in the moment, increasing your conversion, how does it take into account LTV over a long period of time? Does it estimate it or is it something that it checks back in on? How does that work?
- [23:22]
A
They're building it out to be more robust because that was one of our things. It's like, okay, we don't want short term wins at the expense of long term profitability. And that's where I do like the way it's built right now. The whole thing is profit per visitor on that particular transaction where they do a good job of stripping everything. Where I think most other tech that we use has over attribution where it's very stringent on intelligem's side it's like, hey, this transaction Eric is making you this amount of money or this unidentified visitor is making you this amount of money. And it's like, oh, I mean we're setting up the business to be like 90 day break even. Where their tests are purchase, you know, first purchase or whatever purchase. It could be purchase 15 for you. But being specific, purchase break even. And that's where we like it, where you know, if they can beat 90 days, we'll take that all day. So doesn't really answer your question. They're building that out. But profit per visitor is the North Star metric within the platform and it's like, okay, if you can do it on a transaction level, then you can do it on a150,360 level.
- [24:30]
B
You mentioned getting the business to a good state of profitability. Good ebitda. What's your mindset around that and what are the key changes that as the leader you've sort of made to the company to, to get it where you like it?
- [24:43]
A
I mean one, making sure unit economics, like sharpening the pencil, making sure unit economics are good. Where when it was me running finances, I can't take credit for it. It's like, oh yeah, I take the optimistic look. I forget to bake in returns and exchanges, which is inevitable. As clothing brand, I'm doing unit gross margin rather than like at the factory level, rather than delivered and landed, you know, landed and delivered. So one just sharpening the pencil and doing very real numbers where I think most E Comm operators tend to like the optimistic ones. Where it's like, oh, I only paid five bucks a unit at the factory level, but it's like, oh, all in. That actually is costing you 12 bucks or whatever the number is. So that's one. Number two, this sounds very mercenary, like, but attaching a P and L to each employee where it's like, hey, a standalone, you've got to make money. It's almost like profit per employee as our North Star metric. So saying hey, whatever attribution we can give to you. So if you're an influencer manager, it's like, hey, we're gonna look at that at a fully baked level and not just a hey, what revenue did you drive? It's like, oh, actual contribution profit. Because guess what, there's a discount associated with that influencer's sale plus their commission plus your salary on top of actual gross margin of the profit item. So looking at it that way as well has helped change the business. Where it's like, hey, you and I agree that you have to drive value for the business. These are the metrics that in my opinion are what you're in charge of. And if you succeed on those, there's a spot for you here. And if not, it's like, then what are we doing?
- [26:24]
B
I love that. That's one level deeper than I usually hear people talk about it. People talk about like contribution margin, making sure that all their products but actually baking it into wages. Even one step further, to really understand how value has been being driven, do you go into things like time tracking or is it more just about the jobs to be done? As long as those are Being done.
- [26:43]
A
Not really time tracking since most of our people are full time, for example, it also applies to agencies. So we just a couple months ago switched over meta buying to attention out of San Diego. Okay. Whatever their retainer is, I couldn't tell you off the top of my head. 10K. It's like, okay. I mean, there's very. There's a very easy way, especially if you agree on it. Okay, what's the incremental revenue that you're driving with actual paid ads? What are the cost of those ads? Cause it's like, oh, I mean, we gotta factor in ad spend on top of your retainer fee, on top of whatever extra creative output we need, and then associated increase in, you know, in cost of goods. So when you sit across the table and it's like, hey, agency as well. This is the amount of revenue that you need to drive with this level of mer or whatever for it to make sense. And if you do that, it's like, there's always a hope for you in this partnership. So I think more than anything, it's setting expectations on an agreed upon P and L basis.
- [27:44]
B
You mentioned earlier, Intelligence is probably pulling its weight at its 399amonth subscription and the amount that it's been able to drive. So that's pretty cool. Where do you want to go with this bad boy? What are your goals with Ann Collar?
- [27:56]
A
I mean, I don't want to run a dress shirt business forever. I hate dress shirts, which is why we started it. So I think, realistically, hopefully interest rates drop, we can keep growing. It's like, oh, if you've got 10 or 11 years of annual revenue growth, never with a down year, Knock on wood. And bottom line, growing at an even faster rate. It's like, oh, I mean, really what we'd like, if I'm being totally honest. Let's get this to 35 million in the next three years. It's obviously a stretch goal, but it's like, oh, if you get it there and you're making 4 to 5 million, bottom line, let's go. I think there's probably a market for that business, especially when it's not a flash in the pan. It's white dress shirts, which is the most boring, least trendy thing on planet Earth. It's like, oh, I would hope that there is a home for that business.
- [28:47]
B
I'm just looking at your pants right now. I've been looking at this pair of Lululemon pants, and they're like $250 or something ridiculous. And they have pleats. Can you believe we're at a point where men are buying pants that have pleats in them again?
- [28:59]
A
Oh, I know. I look at it, I'm like, what is going on? We're coming back in time. Which again, let's go back to office. I always look at comments on Instagram of people, you know, Jamie Dimon, the CEO of JP Morgan Chase, he's very outspoken about back to work. And everyone's railing on him, saying, boomers are going to boom. And I'm like, please keep booming.
- [29:22]
B
Please keep booming, boomers. I'm sure all the commercial real estate holders are really hoping for a return to the boom as well, because that could be a big problem.
- [29:32]
A
Unfortunately, I don't have any real estate. I've just got dress shirts that I've got to sell.
- [29:36]
B
Nice. Very with. With crazy patterns on them. So they're more expensive. I like it. Very cool. Well, thanks for coming on the DTC podcast today. I'm going to throw, if you don't mind, your LinkedIn. So if people want to get in touch with you, talk about this growth, talk about maybe how you've used intelligence. Cause I think it's a. It's. It's a pretty cool tool. I think a lot of our listeners could potentially benefit from. I think it's a lot of things. People don't do it often. People just kind of. They set it, forget it, or they, or they don't know how to do actually test things to move the needle. And I think it's something that almost every brand could benefit from.
- [30:08]
A
Oh, absolutely. Yeah. Very, very pro. Intelligems.
- [30:12]
B
Nice. All right, well, special thanks to our sponsor on this one, intelligems. And thanks for coming on the podcast today, Ben. This was sweet.
- [30:18]
A
Thanks, Eric.
- [30:25]
B
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right right now at Direct to Consumer. All one word co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.