4 Insights That Make All the Difference When Launching a Direct-to-Consumer Business Selling only online to your customers has many perks. But the founders of Little Spoon want you to know four things if you want to see accelerated growth.
By Mark Klekas Edited by Dan Bova
Love them or hate them, you've probably already developed an opinion on meal kit delivery services like HelloFresh, Factor, and others.
Some consumers can't get enough, while others think it's a waste of money. However, it's hard to ignore the fact that the industry continues to grow at a staggering rate.
There is so much variety in what companies can offer in this industry. Meal kits can focus on health, protein, low-calorie, veganism or any other nutritional focal point. But when Little Spoon entered the market, they knew exactly who they wanted to target: babies.
Little Spoon is a fresh baby food delivery service that quickly gained traction and now feeds around 2.5% of American babies, according to the founders. But it wasn't easy for them, it was an uphill battle trying to convince parents to break away from the traditional methods of feeding their babies.
If you are thinking about starting an ecommerce business or already selling directly to consumers, there are some key insights you can learn from the founders, Ben Lewis and Angela Vranich. And as much as they know about baby food, their real specialties are in product innovation, branding and consumer behavior. Here are four insights we learned from the power duo that can help any BIZ Experiences:
If you prefer to watch: here is a link to the video Q&A.
1. Legacy brands are not your main competitors (yet)
When asked about dealing with legacy brands, Ben and Angela said you shouldn't think of it as a head-to-head competition. When they launched, Gerber was the market leader in baby food, but they didn't concentrate on taking customers away from them. They said in their early days, their competition was the customers themselves — the parents.
"We just observed that there was a fundamental shift in consumer behavior," Ben said. "The parents really hold this strong belief system and value around the importance of nutrition and high-quality food."
Ben and Angela say you need to look where consumers are going if it's not the big brands. Education was an important part of their strategy, and they knew if they wanted to get more parents to buy their food, they had to become thought leaders in the space. They focused on the parents who were not buying from big brands and worked backward to understand why they didn't and how they could offer a product that would be attractive to them.
So, their first piece of advice is to not concern yourself too much with competing against legacy brands at the beginning. Focus on what the customers really want.
2. Find out where your customers are doing their research
Where do your potential customers talk about products before they make a purchase? Is it social media, forums, or a physical location? Ben and Angela say you need to get in that space to help guide customers. They understood that parents of this next generation want to be more informed about the nutritional contents of baby food.
"Baby food is a premeditated purchase," Angela said. "Parents do their research online before they go into the store. So, we really wanted to be the first thing that came up whenever they started doing their research."
After you know what kind of product you want to sell online, look for where customers are doing their research about the industry and become a part of that conversation.
"Parents take baby food very seriously, we needed to win online," the couple said.
Little Spoon has a dedicated platform and blog called Is This Normal to help parents with any questions they might have about being a parent. It has helped them become thought leaders in the space and helps drive traffic to their food website.
3. Understand where you should put your product
When they launched, they had the option of doing retail or direct-to-consumer. What they found was that there was no real good place for them at the grocery store when they were first launching. They understood that customers only look in one place at the store for baby food: the baby food aisle. And their products had to be refrigerated as freshness was one of their key differentiators. So when they started, they opted out of doing retail because they knew most customers were unwilling to look in other areas of the store, like the produce or refrigerated sections, just to get baby food.
Related: Thinking About Taking Your Product Into Big-Box Stores? You Need Help in These 4 Areas
This ended up being a smart decision for the company and they realized direct-to-consumer was the way to go for them. They said it's important for BIZ Experiencess to make it easy on customers and they knew parents were online looking for options long before they entered the store.
"How to introduce solid foods to babies" or "fresh baby food" were some of the searches that helped them educate their potential customers. Ben and Angela say BIZ Experiencess should think about how customers will discover their products. If the current system isn't built for new and upcoming products, find selling avenues that make sense for your product.
4. Look for additional problems your customers are facing
Little Spoon understood that their customers would eventually no longer need them once the babies got older. So, they also make meals for toddlers and big kids. Soon after, they created a different product line that ended up being a bigger hit for them — it's sold out five times.
Ben and Angela paid close attention to what was being said online and heard the feedback from parents. What they discovered was that there was a market need for meals for the in-between phase of baby and toddler. So they launched "Biteables," and parents quickly became fans.
The couple said all aspiring BIZ Experiencess need to make the journey easy for their customers. Listen to them and find out how you can continue to connect and solve problems with your customers.
If you want to read more about Ben and Angela, check out this profile piece we did on the founders.
