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- [00:00]
Benjamin Shapiro
The Martech Podcast is a proud member of the I Hear Everything Podcast Network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com.
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From advertising to software.
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Kelly Thornton
As a service to data across all.
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Unknown
Of our programs and clients, we've seen a 55 to 65% open rate.
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Kelly Thornton
Getting brands authentically integrated into content performs better than TV advertising.
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Benjamin Shapiro
Typical lifespan of an article is about.
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Kelly Thornton
24 to 36 hours.
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Unknown
If we're reaching out to the right person with the right message and a clear call to action, then it's just a matter of timing.
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Benjamin Shapiro
Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast you'll hear the stories of world class marketers that you technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.
- [01:15]
Welcome to the Martech Podcast. I'm your host, Benjamin Shapiro and today we're going to discuss D2C marketing. Joining me is Kelly Thornton, who is the founder and CEO of Tiege Hanley, which is a provider of uncomplicated skills skincare systems designed specifically for men, equipping them with essential skincare tools to confidently tackle their day. And today Kelly and I are going to discuss if D2C marketing has peaked. All right, here's my conversation with Kelly Thornton, the founder and CEO of Tiege Hanley. Kelly, welcome to the Martech Podcast.
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Kelly Thornton
Thanks for having me. Ben, your skin looks amazing. What are you using?
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Benjamin Shapiro
Let me just start off by saying thank you. You sent me a very robust skill. Instead of samples. I did try them. I've been using the Kiehl's products that he got from the mall like 10 years ago. And honestly, I switched to yours through the samples and couldn't really tell a difference. And great stuff, man. Thank you. I try to take care of my skin and I really do appreciate the samples. I did try them. They were wonderful, very pleasant.
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Kelly Thornton
I really appreciate that. I would love to stand on the podium along with Kiehl's any day of the week. They are an outstanding brand.
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Benjamin Shapiro
I'll be honest, my face is probably not the best billboard for your brand, but I do try to take care of my skin, Ken and I did appreciate it. And why don't we start off this conversation we're having today? We're going to be talking about D2C marketing, the rise and potentially the fall. Let's start off with the elevator pitch segment. We're going to go into the 37th floor of a tower high rise in New York City and tell me a little bit about who you are before we get to our end destination.
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Kelly Thornton
Real quickly. I am a serial entrepreneur. I'm on my third business. I'm a little bit older as an entrepreneur, although I don't know if that's a myth or a fact.
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Benjamin Shapiro
Your skin looks great and no one can tell.
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Kelly Thornton
Thank you. Yeah. So I've started three companies in school, in college, and for about four or five years I had a painting company. It was really great. I lived in New England, so there's a lot of houses up there made of wood clapboard and so a lot of painting. I love that a lot. It helped me understand business and quotes and talking with customers and hiring people and managing people. And then I went into 18 years of sales with little company called International Paper. They're a couple billion dollar, probably a 30 or $40 billion forestry and packaging company. And I was able to work with them in their in store display division. So I was making in store displays for consumer products. And that led me to my second business called Purchase Point Design. At Purchase Point, we helped companies like Unilever and Procter and Gamble and Clorox and Kiehl's develop in store strategy. So how do we communicate the value of the product at the retail. So it's really understanding the psychology of the retail environment and the shopper within that retail environment. We go to stores for different purposes. We wouldn't go to Costco to buy a gallon of milk. I guess you could. And then I started a company called Purchase Point Design, my second company, this in store design strategy company. And I was very, very fortunate to build a global agency with offices in London and in Taipei. And we served the Asian markets and we served the US market in a kind of 24.7model where we were developing concepts, working on those in the back office in Asia and delivering those into the US and European market. And that was parlayed into the skincare business. Tiege Hanley. My third business and the way that happened was I was really helping big consumer product companies around the world understand buying habits of skincare for men. And the big global companies were really interested in understanding how to engage men in this space because it is and remains an area of growth in the personal care cosmetic world. So that's my journey.
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Benjamin Shapiro
It seems like an uphill battle because generally I think that skin care is not something that is necessarily targeted towards men. You're Basically trying to change buying behavior to get us guys to think about how we're cleaning and caring for our face and our bodies. And hey, we're rough and tumble and out working in the shed all day long. I'm obviously stereotyping here. I sit in front of a laptop most of the time.
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Kelly Thornton
Right.
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Benjamin Shapiro
Which is interesting. Not only do you have a services business that went into retail, obviously have a marketing bent, but then you created a DTC business in a category that is traditionally not targeted towards men. It's mostly targeted towards women. So you picked a small, maybe underserved segment. What the heck are you thinking?
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Kelly Thornton
There's two main points to unpack there. One is I was spending so much time, particularly with Unilever in Asia and Southeast Asia. We were working with them to understand how shoppers, male consumers, were shopping in these environments. They wanted to develop more of a male personal care presence. And I was dumbfounded by the level of engagement that outside of the US and actually includes South America and Argentina and Brazil, we spent a lot of time down there too. How much engagement guys were in this category compared to a US guy? We're still like Marlboro man, like you said before, out in the shed or like on our horse smoking cigarettes or something, not thinking about our skincare. So I saw a huge opportunity. I'm like, oh my God, people are going to be thinking about this in the US and then secondly, no guys goes into stores. So I was like our US consumers not running into the store. He's not like saying, I'm going to run down to Ulta and see after this basketball game what they've got new for men.
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Benjamin Shapiro
Tell me the last time you went into Sephora. Never.
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Kelly Thornton
It's crazy. So that's why it was dtc. That is the beauty of and the whole concept around direct to consumers, like having a direct relationship with the customer. And we want to have a direct relationship with dudes, talking to them about taking care of themselves. That's how it happened.
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Benjamin Shapiro
So third time around when it comes to running a business, let's put you in the serial entrepreneur category. And now you're in D2C. How long have you been running this business?
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Kelly Thornton
Nine years.
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Benjamin Shapiro
Nine years. So you've got some skins on the wall here. Let's talk a little bit about the history of dtc. Let's start off at the top and go through the rise of D2C. As you've been going through your nine year journey with this brand. What's been happening in the sort of class of business you're working in.
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Kelly Thornton
Personally, I might have a little spoiler alert here. I think DTC is phenomenal space to be in. I think it is a very, very good space for companies that want to be disruptive with either technology or concept or personal care. I think it's a great opportunity. It started off like anything else, I think, like the way AI is today, or nil, if you're familiar with that. It started off as like the wild, wild west. Companies like Harry's and Dollar Shave Club and Allbirds, Warby Parker, these really iconic brands started out and they weren't really sure how far they could take it, how far they could scale, how big of a company they could be just being dtc. And then some of them, for better or worse, decided, well, we've got to open up our own stores in the case of Allbirds and Warby park and. Or we need to go into retail, which Harry's did and Dollar Shave Club actually did not, which people Money morning quarterbacks look back and say that was kind of the demise. Even though they sold for a billion dollars, it was a demise of their brand. So early on, people weren't really sure where to go. They knew that DTC was a great channel. And by the way, it is a channel. And in my humble opinion, if you're in dtc, it shouldn't be your only channel. But figure out how far you can take DTC and make sure your brand is strong before you either try to get into bricks and mortar and. Or try to open up your own stores, which is a lot of capital. So loosely put, we had some early disruptors, early adopters to dtc. Some of them are still alive, some of them didn't make it. Some of them pivoted primarily out of DTC into retail. We, tiege Hanley, after eight years, are still almost 99.9% DTC. The other 1% is we just started selling last month in Nordstrom Rack, which is actually in my humble opinion, Nordstrom's a great retailer. They have a really strong brand, although they gone through a leadership or ownership change I think just last month, but a very strong brand. Our dudes are there, our guys that are thinking about what to wear and how to be cost conscious but still look sharp and stuff like that. Our guys are going there and they're in the right location. So in 2025 we will have a much larger wholesale or retail presence.
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Benjamin Shapiro
So when we think about the history of D2C, you mentioned Warby Parker, Allbirds, Harry's Dollar Shave Club. I think those are the brands that a lot of us think of as that first generation. And they were disruptive because they were able to have better margins because they're going well, direct to consumer. No shocker there. But they also had the data of what conversions were looking like. So they were basically be able to prop up these digital brands, which was disruptive. They didn't have to wait and have this intermediary that was actually getting the purchase data. You're talking about. Well, when you get to scale, you need to go to these other channels. You need to think about your retail strategy. You've been doing this almost a decade and now you're bridging the gap into expanding beyond dtc. But it seems like the story here is DTC is a great way to prop up a retail brand. And then as you expand, you think about a retail presence. Am I reading the tea leaves correctly?
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Kelly Thornton
Yeah, I think that is correct. You have many a brand that just stayed dtc. I mean, I'm thinking Casper did try to. That just crashed and burned.
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Benjamin Shapiro
They have this weird store where you can't buy anything. Just like Bonobos. It drives me nuts. You can go in, but you can't walk out with the products you want. Yeah.
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Kelly Thornton
And you know, Bonobos is another brand and I really, really like that brand. We didn't talk about that. So here's the thing. It all comes down that you have to have a voice. And what I mean by that is you have to be able to break into a market, in our case, brand skincare and be an authority and be able to talk about your brand in a way that is part of a conversation about a dude taking care of himself. And that's super hard. So how do you do that? You have no authority. When you go to wholesale and you knock on the door of Target, you knock on the door, fill in the blank. Walmart, Nordstrom, Costco, on and on, Ulta, Sephora. You have no authority. Why would they even take you? And I'm saying if you're starting out that way and maybe have a great story like, I'm a famous dermatologist and so I'm, I'm knocking on the door, Ulta. So maybe they take me in. But to try to get momentum that way is very, very, very difficult. So the concept of maybe going DTC first and establishing a brand and establishing some affinity for your brand and a tribe for your brand, and then going to a retailer and say, and by the way, we have 650,000 customers and we can tell you where they're located around your stores and we could drive, help drive traffic. And our consumers want to buy our brand and we want them to find it quickly. So how about we put it in your store? That's kind of been our approach.
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Benjamin Shapiro
Let's get into the meat of the topic here. DDC brands have obviously changed and now there's this blending of DTC brands needing to scale to get to retail. But there is a common theme related to marketing. So talk to me a little bit about the common DTC marketing tactics. When I think of DTC marketing, first thing that comes to mind I think it was Harry's, maybe it was the Dollar Shave Club with the funny YouTube video and that that went viral and all of a sudden they had this huge brand that everybody loved. That's harder and harder these days. What actually works for D2C today from a marketing perspective, again I use the word.
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Kelly Thornton
It was wild, wild west. 10, 15 years ago. You could easily attract people on social platforms with mid level effort both in creating content and spending money to, you know, if you showed like a pretty simple piece of content that had a pretty simple message for a fairly reasonable price point, you could engage a lot of customers. Native did that. As another example, their CPAs were very, very low, like low single digit CPAs and they were able to spend a lot of money to attract customers at that point. And as social commerce has gotten much more complicated, much more competitive, we have to spend a lot more to get eyeballs on the same one piece of content. Then in addition to that, the content is becoming much more complex. People aren't stimulated by a simple piece of static artwork that has a picture or product on it. Most people are not paying much attention to that. So how do you continually figure out a way to make content that drives eyeballs to your brand and do it in a profitable way? So you constantly are relearning what is engaging in a consumer's mind. At the same time you're looking at a lot of different channels.
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Benjamin Shapiro
Yeah, I was just about to ask you that. It seems like the channel mix actually hasn't changed all that much in the sense of like social advertising is pretty much the channel. Facebook, Instagram, but maybe you're on TikTok, you're doing YouTube. But I'm assuming a lot of what you're doing is advertising in social as the primary demand driver.
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Kelly Thornton
Yeah, I would say it's correct. I would say the importance of the channels change relatively frequently for us, I think for all DTC brands because what happens Is you see perhaps things working on one channel that's not working as well on another. You see that you're able to attract and scale more customers on one channel than another. So you're pivoting money. And the beauty of DTC is we can pivot dollars on a daily basis, it's definitely on a weekly basis from one channel to the next. So you're constantly trying to do channel mix marketing where you're understanding on a daily basis your cost to acquire customers on a channel versus another channel. And you're shifting and then you're seeing what content works on what channels at what time. And again you're constantly kind of shifting. So I think there's concerns about where Google and Google search is going to be. I think there's a lot of concerns about how AI is already in a very short period of time impacting search and impacting the cost of playing in paid search.
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Benjamin Shapiro
I think a lot of D2C because the brands traditionally are smaller. Right? They're upstart brands because they don't have a retail presence. And so a lot of the challenge early on is discoverability, which means that it's social advertising because you can push your ads out into the place where they are, create the awareness, have high frequency, build your credibility relatively quick and get quick conversion data and then start optimizing on who your tribe is. The channels have changed. It used to be all Facebook, then Instagram, now it's probably TikTok as the primary driver. YouTube's always been there, maybe becoming a little bigger like it's the social media channel du jour. But to me the biggest change is it used to be what you said, the sort of flat display creative and now it's this high fidelity. But it's not just like you have to be better at producing video, it's also the rise of the influencer. Talk to me a little bit about how your advertising strategy has changed where it's not just the in house created brand, but leveraging people's audiences and their creative capabilities.
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Kelly Thornton
Yeah, I mean that's how you magnify. That's how you exponentially are able to grow your audience by linking your brand to people that have built tribes around content. And hopefully there's a synergistic connection between what it is that we're trying to accomplish our goals, helping as many guys as we can look and feel amazing to what content is being created by a quote unquote influencer or an authority around a subject. So we spend the majority of our time Creating content around subjects that we know our guys are thinking about. So if you're thinking potentially as an example about how to position your 401k and you're looking for financial advice and there's someone who's well respected in that community who's talking on YouTube about it, and we think that our audience is there, we may be integrating our product into the conversation around why it's important to take care of yourself and so that you have enough money when you retire or something like this that you look good when you retire, are you able to get that house in Boca and look million bucks when you retire. So that's pretty much the way that we look at it, is we look at how do we leverage audiences that are analogs. They're speaking synergistically about things that we know our guys are interested in that are more likely to purchase from us because they're in that headspace.
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Benjamin Shapiro
As you were talking about retiring to Boca Raton, the thing that came into my head was look good, feel good. Hey, you've got the money, you're getting up in the years, you got to work harder to look good so you can feel good. There's my consulting package of the day.
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Kelly Thornton
There you go. Very good.
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Benjamin Shapiro
Let's land the plan here on dtc. And what has changed? Talk to me about what works the most today. We talked about the channel mix has changed. Social influencers. What's the recipe look like if you were launching your DTC brand now?
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Kelly Thornton
Well, you are right. What you stated earlier is what the recipe is and you stated just a minute ago it is about the right type of content. The sophistication and the importance of the content is what has changed the most in the game over the last eight years. So yes, all the things I talked about, channel mix and understanding contribution margin by channel by content, by offering all that stuff, while generally it ebbs and flows, let's agree that it's relatively similar with the addition of TikTok and Temu and everything else. What's really changed is what it takes to have content on those channels that do truly engage a customer or truly engage somebody who could be potentially interested in your brand. And that's where we're at today. I think a lot of us, I was on the phone the last couple of days getting a take for how Everybody's thinking about 2025 with some of my friends that are in that have similar businesses as I do. And the take is, is that how do we make content that is relevant and interesting and engaging and is able to communicate the value of our brand in a way that doesn't seem too commercial. So that is the name of the game for 2025.
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Benjamin Shapiro
Here's my takeaway from our conversation. We think about DTC Brands as these upstarts. And maybe it's just me or guys like you and me that, you know, it's been 10 years of D2C brands and the little startup brand that could taking on Procter and Gamble and the big razor manufacturing companies. Those are now billion dollar companies that are 10 years old and they've expanded beyond just D2C. And we used to think of D2C as these little startup upstarts that had all the data that could do social media marketing and optimize their roas. And they were nimble and quick and they could take on these incumbent brands. And now they are incumbent brands. They're scaled and what's happening, they're expanding beyond D2C. And I think the most insightful thing that you said is DTC is a channel. It's probably the first channel for most retail brands because it doesn't require the overhead to have physical locations. You don't have to have the type of vendor relationships. But it is not the only channel. And so now we're seeing what traditionally were D2C brands expanding into traditional brick and mortar retail. But the way that their marketing hasn't dramatically changed, the channels have changed, the optimization tactic have changed, we've gotten more sophisticated. But fundamentally you're using social, you're using content to build reach and frequency and credibility to get that first set of customers. And you're optimizing for the people that love your brand to build your tribe and you take it from there. And that's the world we live in. When it comes to D2C, you've nailed it.
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Kelly Thornton
It is just a channel. It is everything you just described. I will say data has played a much bigger role over the last several years. And it takes a long time to get to a level of sophistication with your data where you understand how you're spending money. But everything you just described is correct. It's just a channel. And your choice is what is best for your product, what type of disruption, what is your product, what is it doing that another product isn't doing that you're competing on. Right. Because we've invented a lot of stuff. Humans are pretty smart and we've invented a lot of things. So a lot of us are trying to figure out ways to do things better and give consumers more options. So how is it that you startup brand are going to enter the market? What is your entry point? And DTC is a good entry point, but it is very competitive. And your point earlier that we can cut a lot of costs by going directly to the consumer? That's no longer really accurate because we're paying so much money to acquire customers that the margin that we're giving up for that doesn't necessarily make us which is why a lot of these companies we've talked about aren't in business anymore, where they burned stacks of cash because they were acquiring customers at a point that was unsustainable for them.
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Benjamin Shapiro
Yeah, let's say D2C is the way to get into retail, but it might not be the end destination. And that wraps up this episode of the Martech Podcast. Thanks for listening to my conversation with Kelly Thornton, the founder and CEO of Tiege Hanley. If you'd like to get in touch with Kelly, you can find a link to his LinkedIn profile in our show notes. You can DM him on Instagram. His company's handle is Tiege Hanley. That's TikTok T I E G E H a n L e Y Or you can visit his company's website, which is just teege.com, t I e g e.com if you'd like a summary of this podcast, or if you'd like to apply to be the next guest speaker on the Martech podcast, head over to martechpod.com you can also find our video clips for the martech podcast on YouTube, Instagram and on X. And if you'd like to contact me, let's connect on LinkedIn. My handle is Ben jschapper b e n J S H A P and if you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed, hit the subscribe button in your podcast app and we'll be back in your feed tomorrow morning. All right, that's it for today, but until next time, my advice is to just focus on keeping your customers happy.
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Foreign thanks for listening to the MarTech podcast and I hear everything. Production Looking to launch or scale a podcast like this one for your brand? Then visit iheareverything.com.