Podcast Summary: Limited Supply S11 E2 - "The Low Down on DTC Data, Deals, and Discounts"

Host: Nik Sharma
Guest: Isaac Medeiros, Founder at Kanpai Foods
Release Date: January 16, 2025

Introduction

In Season 11, Episode 2 of Limited Supply, host Nik Sharma engages in a candid and insightful conversation with Isaac Medeiros, the founder of Kanpai Foods. The episode delves deep into the intricacies of the Direct-to-Consumer (DTC) landscape, focusing on data utilization, strategic deals, and innovative discount strategies. Throughout the discussion, Sharma and Medeiros explore the challenges and opportunities that DTC brands face in today's rapidly evolving market.

Navigating DTC Data Challenges

Anonymous Traffic and Data Identification

Sharma opens the episode by highlighting a critical issue for DTC brands: "You know that you're spending hard-earned dollars driving traffic to your site. The problem is 98% of that traffic is anonymous and you don't know who they are." This sets the stage for a discussion on the importance of data in converting site traffic into loyal customers.

Isaac's Take on Attribution for Retail Media

Isaac Medeiros shares his frustration with the lack of effective tools for attributing retail media spend to actual sales velocity. At 06:33, he states:

"Attribution for retail, for media spend, there's like, no, no one does this in a meaningful way. And I've tried finding like a good platform and I've asked other founders and I can't, like, no one has like data in the back end to see how that, you know, performs."

This insight underscores a significant gap in the market, presenting a billion-dollar opportunity for innovative solutions that bridge the data disconnect between media spend and retail performance.

The TikTok Conundrum: Opportunities and Geopolitical Impacts

Divesting from TikTok

Medeiros discusses his brand's strategic decision to divest from TikTok two years prior, emphasizing the geopolitical tensions influencing this move. He remarks at 03:14:

"That was the first kind of, hey, this is like really not a good idea to be super invested in here."

He elaborates on the risks associated with China-based businesses, drawing parallels to historical geopolitical climates:

"It's like, Imagine during the Cold War if the Soviet Union bought like Fox News. And it was like, you know what? We like communism. It's awesome. Like, that's inconceivable."

Impact on Brand Legitimization

Contrary to initial fears, the entry of large corporations like Mars into the freeze-dried candy market actually legitimizes smaller brands:

"They're pouring a lot of money into it and it legitimizes the brand."

Isaac emphasizes the positive side of competition, noting that increased awareness benefits emerging brands by validating their market presence.

Innovative Ideas to Enhance the DTC Ecosystem

Throughout the episode, Sharma and Medeiros brainstorm five innovative ideas each, aiming to address unmet needs within the DTC space. Below are the key ideas discussed:

1. Enhanced Attribution Tools for Retail Media

   • Isaac's Insight: The current lack of effective attribution tools for multichannel retail brands presents a massive opportunity. He suggests the development of a platform that integrates data from various sources to provide real-time insights into media spend effectiveness.

   • Notable Quote at 09:14:

     "It's just really a billion dollar opportunity."

2. Guerrilla Sampling at Scale

   • Concept: Utilizing branded vehicles like Cybertrucks to conduct sampling in front of stores, democratizing the sampling process beyond in-house retail agencies.

   • Discussion at 11:54:

     "It's ingrained in everyone's psyche in America. So crazy assembly campaigns with scale do work."

3. Centralized Content Management for Social Commerce

   • Nik's Idea: Developing a tool akin to Contentful or Salsify but tailored for social commerce platforms, allowing brands to update content across multiple channels simultaneously.

   • Isaac's Feedback at 14:36:

     "That's the use case. It would make sense for large catalogs like Foot Locker."

4. AI-Driven Multilingual Advertising and Website Translation

   • Proposal: Leveraging AI technologies, such as those from 11 Labs, to create seamless, multilingual advertising campaigns and translated websites, facilitating global market penetration.

   • Isaac's Vision at 16:17:

     "Imagine if you're getting a subscription to Kanpai, right? Your next subscription order is about to ship and you get a text and it's an app clip."

5. Automated Retail Media Campaigns Dashboard

   • Nik's Suggestion: Building a unified dashboard that automates and optimizes retail media campaigns across various platforms like Target, Walmart, and DoorDash.

   • Isaac's Enthusiasm at 24:38:

     "Somebody should build that. Would you invest in that? Yeah, I'll drop an angel check."

Exploring the Future of Referrals and Group Buying

Reimagining Customer Referral Systems

Sharma critiques existing referral platforms for their cumbersome user experience and proposes a more seamless, integrated approach:

"Most referral platforms today are, you know, such a shitty experience. It's not even worth $10 that we would collectively save."

He envisions a system where referrals can be initiated directly within the mobile site experience, reducing friction and enhancing user participation.

Group Buying for Quality Discounts

Drawing inspiration from platforms like Groupon, the duo discusses reinventing group buying to focus on quality brands and meaningful discounts:

"It's like a group buying. Imagine if we could buy, get like 5% off of Rolex if we bought this together."

This concept aims to revive the social aspect of shopping, fostering community-driven purchasing power for significant savings.

The Potential of App Clips in Enhancing User Experience

Leveraging App Clips for Seamless Interactions

Sharma introduces the idea of using App Clips to simplify user interactions without necessitating full app installations. He highlights scenarios such as:

"Imagine if you're getting a subscription to Kanpai, right? Your next subscription order is about to ship and you get a text and it's an app clip and it says, you know, choose your free sample that you want in your box this month."

Isaac's Perspective on Adoption Barriers

Despite recognizing the utility, Isaac expresses skepticism about widespread adoption due to entrenched preferences for platforms like Snapchat:

"I don't think it's going to get very far. Because I think Snapchat is just very sticky."

Concluding Insights and Future Outlook

As the conversation wraps up, both Sharma and Medeiros reflect on the abundance of untapped opportunities within the DTC ecosystem. They underscore the importance of innovation, data-driven strategies, and maintaining authenticity over superficial PR tactics. Sharma reiterates his commitment to cutting through industry noise and fostering honest, impactful discussions with seasoned industry leaders.

Closing Quote at 35:07:

"Well, thanks for listening to this week's episode. I hope you have a good rest of your week and I'll see you next week."

Key Takeaways

• Data Utilization: A pressing need exists for robust attribution tools that accurately link media spend to retail performance, offering a lucrative opportunity for startups and investors.

• Strategic Platform Choices: Brands must navigate geopolitical landscapes carefully, as exemplified by Isaac's decision to divest from TikTok amidst rising tensions.

• Innovative Marketing Strategies: Guerrilla sampling, centralized content management, AI-driven multilingual campaigns, and automated retail media dashboards represent frontier areas ripe for development.

• Enhanced Customer Engagement: Revamping referral systems and exploring group buying can reinvigorate customer acquisition and retention efforts.

• Technological Integration: App Clips and similar technologies hold promise for enhancing user experiences, though adoption may face significant hurdles.

Notable Quotes

• Isaac Medeiros at 06:33:

  "Attribution for retail, for media spend, there's like, no, no one does this in a meaningful way."

• Isaac Medeiros at 09:14:

  "It's just really a billion dollar opportunity."

• Nik Sharma at 14:36:

  "That would start with the ones that are core here in the US but immediately I think you."

• Isaac Medeiros at 24:38:

  "Somebody should build that. Would you invest in that? Yeah, I'll drop an angel check."

Final Thoughts

Season 11, Episode 2 of Limited Supply offers a treasure trove of insights for DTC brands seeking to navigate data challenges, optimize marketing strategies, and innovate within a competitive landscape. With thought-provoking discussions and actionable ideas, Nik Sharma and Isaac Medeiros provide listeners with valuable perspectives to drive their brands forward.