#366 - 360° Brand Growth: How Premium Brands Crack the UK, Optimize Their Funnel & Scale Profitably

0:05This is D2C Pod, where the worlds of creators, consumer goods, and brands collide. We get behind the wheel to show you how today's biggest products and ideas are made, launched, and scaled. If it's shaping the future of commerce and culture, you'll hear it here first. Catch new episodes weekly on Spotify, Apple Podcasts, or d2cpod.com. Be sure to check out our newsletter for weekly breakdowns and recaps linked in the show notes. So before we kick off today's recording, I've got one more for you. E-commerce costs are rising. USPS changes alone could push delivery costs up more than 25 % this year.

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1:18What is going on DTC pod today we are joined by Natalia Chappelle, who is the director of Natalia Chappelle and Co. I'm super excited for this conversation because Natalia is based in the UK and has a ton of experience working with not only in-house with some super high profile brands on the luxury side of things, beauty, as well as a whole bunch of different sectors, but has a lot of experience in terms of like understanding the UK market and what it takes for brands, whether it's a US brand that's scaling up really quickly and wants to enter the market, what it takes to be able to pull off a successful entry into the market.

1:57So today, really excited for the convo. We're not only going to talk about what it takes to scale a world-class brand, we're going to be talking about specific markets and learnings that you can apply to your particular brand. So I guess without any further ado, Natalia, I'll let you kick us off. Why don't you just tell us a little bit about your background? How did you get here? Take us through your whole kind of career path that led you into the e-commerce world.

2:21Natalia Chappell:Thank you for having me. Yes, I guess I have always loved fashion. I studied fashion marketing at university and then decided to persuade my career in digital marketing. I sort of always thought all these years ago that I would do advertising, actual TV advertising. But then I quickly realized that data is king. And if you can combine that in creative, then actually you can drive some pretty incredible campaigns and results. So I accelerated my digital marketing experience for a very well-known brand in the UK, which had tons of data to go after. And I learned really quickly. I then decided that it wasn't fast-paced enough for me so I joined a business called The Hug Group or some people may know it as THG it actually entered the US market by acquiring them store and and a brand Biosynce the the beauty brand and so it's quite well known and sort of across the with some of the US entries, but really a huge e-com business.

3:35Natalia Chappell:And I headed up the marketing team within the luxury division. So there was a beauty, a MyProtein division. So retail and own brand, very, very good to different points of business that you can learn from in terms of your margin, how you manage the books, how you look after your P &L and everything. And we were sort of the luxury retailer called Coggles. So, storing and stocking quite a lot of well-known brands, talking about the US brands, that being Coach, Ralph Lauren, various different brands as such, and then UK brands, but also Scandi and European brands as well. So, price points, a couple of hundred pounds plus a couple of thousand pounds and US dollars similar and sort of really focusing on digital marketing primarily because it was a DTC brand with one store in the UK but primarily focused on how can we acquire customers make that relatively cost effective so that we could reinvest money into the marketing funnel and then continue to grow that whilst also looking after our retention obviously that is always like the golden method to make any business grow and but the reality of it through COVID and everything else is a challenge and as a digital marketing business it grew for us substantially in COVID because we were actually able to continue to deliver to customers when a lot of businesses weren't able to do that and that continued to grow from strength to strength but as a female founder speaking to many of those businesses and brands I recognize that there is an opportunity really for me to look at things holistically.

5:27Natalia Chappell:And what I mean by that is, you know, investing in your meta ads, but also making sure that the customer you're acquiring is actually signing up to emails and converting. Because we forget that we really need to be looking at the big picture. And, you know, the conversion path these days is so confusing with where the customer's first touch point is the last touch point and how that sort of looks into actually from viewing your brands to converting and and some of the frustrations I felt some of these brands we worked with had and and as a female in the workplace and I know the UK versus US varies in maternity cover and so on but I just really couldn't imagine how as a female and being a mother one day I would be able to do both of those things.

6:17Natalia Chappell:I'm lucky enough that I love my job and I really wanted to continue doing that but I just didn't feel that the corporate world would allow me to do so and so I stepped away from a very safe job and decided to set up as a proud female founder and we now work with very many brands of similar scope within the luxury fashion, home homeware lifestyle beauty and brands and and help them scale up sustainably very much so we don't sort of deliver short-term growth because that never is a good long-term view and there's always going to be some risks associated with that and I also very much so shout about the fact that as a female founder less than two percent of VC backing goes to those female founded businesses So I fly that flag very, very high.

7:13Natalia Chappell:And I hope to really spread that awareness so that more female founded businesses get the backing that we rightly so need and deserve. No, absolutely. And no, it's so awesome to hear. And I'd love to kind of talk a little bit about your strategy, too, when you when you start working with a brand. So first and foremost, you know, some of these brands that you've been working with more recently, who are they? How would you characterize them? I know we talked about it in terms of like sector, but what about in terms of the scale, right? Like when you, where do you feel like you do your best? And then I want to kind of talk about what does your playbook sort of look like?

7:53Cause like you said, you're not just looking for quick growth wins per se, obviously we'll take them if we can get them. But what does, um, what does your process look like when evaluating a brand and looking for, um, opportunities to drive success?

8:08Natalia Chappell:So we focus on, you know, a lot of what we do requires budget itself, plus the management fee. So when we speak with brands, they operate in the sector similar to, you know, what I've always worked on and the people that work on the team too. And that covers luxury fashion and lifestyle, homeware and beauty brands. But they are in sort of at the infancy of its growth. They are at the next stage where they are bringing, you know, one million pound plus revenue in a year and they're ready to grow and really sort of bring their efficiencies in. And of course, we need to look at that holistically.

8:50Natalia Chappell:So we very much focus on how we do that. and we understand that there'll be data loss from platform to platform but educating the brand founders and most of the time we will always work with their marketing team who are knowledgeable about marketing you know we don't typically work with people who are wanting to start their journey on meta and they've got very limited understanding of it because so much of it comes from education it obviously requires a budget itself um and so that's the sort of main focuses on how we would work with a brand um and the the ready and the next scaling up is very much to focus on we've got established channels we now just really need to accelerate that bring the efficiencies and ensure that we're continuing to acquire the customer whilst actually also retaining them.

9:45Natalia Chappell:So we often talk about that paid to free channel mix. And what we mean by that is your Google ads and meta, TikTok ads, and so on, those performance channels, you want them to continue to drive revenue with a really strong ROAS whilst having your organic channels and that being your email marketing, your CRM strategy, and everything sort of in the back end with people actually directly going on your website because they are already aware of you. and purchasing without needing to be nudged with an ad. So then your LTV and all your KPIs here are very well measured so that you've got really lovely channel mix and you're able to continue to reinvest your marketing to drive that growth and that sustained growth.

10:34Natalia Chappell:And everyone would love a click of a finger and a very quick growth overnight. But most of the time, if you're going to do that, it's because you've invested tons of money in one channel and if you're just relying on that one channel and god forbid something happens such as a new product is rolled out or replaced with the one that's currently driving your revenue then you will be in quite a sticky situation so how would you characterize um where a lot of these businesses i guess are at maybe when they start you know start working with you so i guess we've got that from a revenue point of view but But like when you're onboarding them, when you're looking at their mix between paid and organic, you know, I think one thing that I constantly notice in like e-com, it's probably, you know, maybe they found a lot of success in paid channels or maybe they found an unlocked one, you know, really content driven channel that's working really well.

11:29But a lot of times like you're to your point on the organic side, there's like a lot left on the table. So how do you kind of like get in there? What do you typically see when you're onboarding a client? Are they set up? How much are they spending a month in meta? And how do you, A, evaluate their existing channels? And then B, what are the conversations and things you are talking about? Obviously, it's a little bit different with every client. But how are you balancing that channel mix? So what you're saying, it's like you've got the organic, which is feeding the paid, and the paid is feeding the organic.

12:07and everything, you know, the business continue to drive a really healthy ROAS so it can continue to grow?

12:12Natalia Chappell:So most of it always comes down to the data. And without that, we can't optimize anything. And a lot of the time, you'd be surprised how, despite a big brand driving, you know, minimum 1 million plus in revenue a year, it's not actually utilizing. There'll be cracks in the walls in terms of actually the hygiene setup so typically always analyze the amount of traffic and that you are actually getting to your website what your signals are you know if you're running all of your ads are they actually all tracking properly is everything tagged on your website accurately and again caveating that will there will be data loss but first party data is so important now to make sure that you're delivering the best possible marketing that you can for your customers and treating them the way that they should be spoken to depending on their journey so that's a huge level of analyzing that we will look at and actually spin it around to say we can support you in growth but what does that growth look like to you because a lot of people just want double digit sort of consistent growth for revenue but it's not just about that is do you have the amount of products that you feel comfortable so from meta you know you could be spending you could be tripling your budget and that being a couple of you know so let's say 30 000 pound of meta at spent just on in on a monthly basis you could double that to tripling that and that's all well and good but if you're driving traffic to your website which isn't sustainable to drive that conversion piece because there isn't enough of product skew and breadth of it then you're going to waste your money so we try and educate people and understand actually what the business goal is for the next 6 to 12 months and categorize it in the sense that if we feel confident that we can drive the conversions because we rely on data so much then from a paid point of view we can continue to accelerate it and forecast everything on the existing data that we have because most of the time with somebody who's spending you know thousands of pounds on meta and that's meta alone then you've got google ads lots of these people will be tapping into tiktok shop we've got a lot with on tiktok ads we've got enough data to be able to say okay this is how we can scale it up now because our cost of acquisition is x and then this is what we anticipate for it to be scaled but we very much so educate people that there's obviously so much you can do if you're a beauty brand you more likely have a lot more breadth of stock than if you're a fashion brand because your skew depth is less wide than your actual offering of your products you've got your size and limitations and loads of different things a lot of people forget that they just want to see how they can grow and we know over the past couple of years the challenges with cross borders and getting your product and you know in the UK US we've got loads of different issues now with customs and stuff so there is actually quite a lot that we try and educate because whilst we can spend all the money it ultimately still comes down to making sure it's efficient and on top of it we need to continue to grow our creative strategy and from that we look at content creators and UGC because that's really really what drives your strategy forward on meta and so it's really just understanding on where you're at now and how can we forecast that growth to be there because it's that's not the issue it's actually anticipating that increased traffic and revenue growth on your website and making sure that it actually converts because that was without that we'll obviously not be able to get the conversions feeding back to meta and therefore that won't be as successful and your money isn't going to be very well spent yeah and i think that's such a good point to what you're saying it's like what you're really trying to do is create this like kind of flywheel where everything starts to feed itself you've got your organic, which feeds the paid, you've got the paid, which goes back into learning, which gives you more fuel to have more creative, which means you can, you know, have a more diverse creative, which means you can scale your budget and, and on and on and on.

16:48But I want to kind of take a step back, we were talking about data. When you're talking about data, how do you like, where do you where are you referring to? Are you talking about in your Shopify dashboard, you're pulling a couple of reports there? Are you looking at Google Analytics? When you're thinking about, okay, a lot of brands don't have good data hygiene, even once they're past the seven figure mark, where do you start and what are you setting up on the data and the tracking side to make sure that moving forward, you're going to have the numbers and the data that you need to help them continue to scale profitably?

17:27Natalia Chappell:So we've got, you know, yes, you've got GA4 and Shopify data. Always caveating the, you know, Meta, GA4 and Shopify will have different attribution models. So there will be cross, you know, reference in terms of data. Sometimes there'll be, you know, duplications. and many of our clients both when I worked in-house and and now sort of doing that um on my own for for brands will always ask the golden question of why doesn't it all match and I always say you know if I had the magic answer to making sure that every single one of the results and numbers add up then I would probably be currently doing Pilates in the Maldives not doing this and what I mean by that is we all ask that question you know it's it's marketing's worst nightmare to know that not every single one of these numbers will add up so the hygiene on meta is making sure that your cappy is activated and that is using your conversion API always making sure that that data is fed through and then you've got all your first party data the amount of times Klaviyo and Meta will somehow have failed and you haven't got your up-to-date segments feeding through you know how are you defining your new to existing customers have you refreshed all of your segments do they are actually look okay we it's so often over and sight by many of these brands that you know they say oh it's been a while since we reviewed our flows on email and then you think well you've got so many more people now in your database but you're not talking to them the right way and that applies to your organic strategy on your email how you operate that into making sure that your all your audiences are uploaded into google ads as well because otherwise you know if you're wasting spend by talking to your returning customers as if they are new customers then that's you know something that should be a quick win for you to turn that into an efficiency you should in theory be retargeting customers with a much higher ROAS than you are of course by acquiring your customers because those people already know you as a brand and they should be so much more efficient for you and so these are the kind of things that we typically do.

19:58It still amazes me how many people either have not refreshed it in a

20:04Natalia Chappell:while or attempted at doing something and then, you know, didn't really do it. A lot of the time, they trust that the web developers will do it, but they may be out of touch slightly. So it really is just understanding that everything is linked properly and up to date. But caveating that there are also third party platforms that you're able to look at that pulls all the data together. And it sort of matches up your different attribution model to make sure that your results are there, but that you're optimizing appropriately to everything that your data is telling you. No, I love that. And I think it's such a good point.

20:39And even, you know, the point that you just made about making sure your meta audiences are set up the right way. So your existing customers, you're targeting them with the right ads for the right part of the funnel that they're in. And just making sure you've got everything going the right way. Like, for example, one thing that we did in one of our brands that helped a lot, that's something that even some brands that are getting set up just don't do, is Meta knows what's converting and what's working on that side. But Meta can't take attribution for customers that are coming from organic channels.

21:15So you should make sure you're feeding those customers back into your Metapixel so it can continue to learn. So again, your organic is helping show meta what those lookalikes should look like. So again, I think, you know, just being smart about that and making sure the, you know, the ad engines that are, you know, driving your traffic, they know they have all the right up to date data so that they can, you know, learn the right way as well as optimize and serve the right content to the right customer in the right stage of the funnel.

21:44Natalia Chappell:Absolutely. And to your point there, your organic engages anyone else there should be fed into your paid strategy. And that's exactly what we talk about when we refer to the holistic approach and making sure that the customer is there, whether it's paid or organic, and it should work in conjunction with each other rather than against each other. Perfect. And let's talk about, you know, let's talk about on the organic side, right? Like, what do you do to help a brand optimize on that side? What are you looking at? Is it, you know, is it SEO? Is it direct traffic? Is it Google shopping? Like where when you think about like organic traffic and building a sound strategy to complement the paid stuff?

22:25You know, how are you doing it? What are you thinking about? How are you getting that set up?

22:29Natalia Chappell:I think a lot of the times we treat your direct website as the first sort of point of optimization, because anything that is being driven to from a traffic point of view, we want to make sure that we analyze it. and yes make sure that all of your sites have got possibility to run the best that they possibly can so really tapping into seo and best practices making sure that your product description pages are your sort of most optimized and best optimized that they possibly can be if that's where your conversion pieces um are from a landing page point of view what learnings can you do there So very much so doing a big website audit and highlighting the things that are misses in terms of, you know, your product descriptions could really be doing with updating.

23:24Natalia Chappell:And you haven't actually got reviews added to all of your pages that are necessary to be added. So a huge part of this is making sure that once the customer lands on site, they're actually treated very similarly to as if they walked into your store. They will be greeted by an assistant, asked what they're looking for, and then guided based on their answer to the right product. And that's exactly what the online experience should be to that customer. You should never treat your product description page as an assumption that that customer is going to add to cart and then check out. It needs to be there with recommendations, similar products.

24:03Natalia Chappell:If the product is out of stock, it really needs to be converting them at any given point. then secondary to that we always make sure that the content strategy within your influencers and UGC and everything there is is really really strong because again how you're talking about your brand who is talking about your brand is so important to potentially reaching that new customer and then landing them on your website and getting them to convert it is something that a lot of people assume isn't the right approach or you know it can be it can look like an ad but I think that's where we come back to authenticity and making sure that you choose the right person particularly in the UK market it's a huge focus on choosing an authentic content creator to produce your content for you and then how you're utilizing it you can absolutely make sure you upload it on email on your paid ads as well it just needs to be utilized to make sure that's fit for purpose but very much so looking with that content first approach to tell a story about your product and about your brand and that's quite a huge thing that we focus on and help with all of our brands we work with i think that's super important and i want to just double click on that really quickly in terms of like aligning your content strategy from others to align with your brand and how to pull that off the right way.

25:33I think one thing that's always like so fascinating is, you know, we live in a world of views and you see, you know, you're like, oh, if this thing does a million views and you get X amount of conversion, like you're rich, right? But in reality, you know, I've seen it time and time again, you can have a content piece go super viral and it does really well, but like it just doesn't convert. And a lot of that comes down to the message. So it's like that question, am I better off getting like five to 10 ,000 views of something that's like right on the money in terms of like what we do, what the value prop is that's like geared for conversion?

26:09That's like, you know, really, really hitting at that bottom of the funnel, or are you creating like fun entertainment, top of the funnel content? Maybe it goes viral, but, you know, it doesn't really go anywhere from there. So, and then obviously when you're scaling your content through UGCs and affiliates, that becomes really, really important to get right, because now it's not you controlling your message and tweaking it really simply. It's like, you already have one layer of like, it's like playing the game of telephone where they're already probably not going to say exactly what you're saying.

26:39So how do you think about that? When you're playing the game of conversion, you're looking at the data, you're trying to like have the right strategy for the creators that you're working with, how do you equip them for or how do you prepare them for success and conversion? Do you have them play the numbers game? Do you have them play the conversion game? How do you think about it?

26:58Natalia Chappell:I think there are definitely two sets of objectives to that. And we always very much so try and educate everybody about exactly how UGC and content creator strategy works. It's time consuming. It's about relationships and actually building a trust with somebody you work with. That goes back to the whole idea of do you want to go viral or do you actually want to convert those sales? And sometimes there are people who are just going to drive traffic to your website and brand awareness. But as you said, that doesn't necessarily mean it'll turn into any form of monetary value. And therefore you can deem that as let's aim to go viral.

27:38Natalia Chappell:I think anyone who does that and hopes for the best is probably not going to be in the market for a very long time because you should always aim for that sustained growth. And with the right content creators who actually generally love and are passionate about your brand will have a very, very engaged following who will also tap into that specific product that you're offering. In terms of how they portray the brand, you always really want to trust them with the fact that you've chosen them for the right reason. And that's why it takes time because you're going back and forth. You want to make sure that the product selection is appropriate, that the education is there.

28:16Natalia Chappell:But what you're effectively doing is giving up some of your control because you know that it's their content they're producing it's them who's creating that authentic content with their audience that will hopefully convert nine out of ten times that will happen but you just have to be aware that you're going to have to let go of some of that control and look at your brand through someone else's glasses that's kind of what we always say it is a lot to give up especially if you're really really precious about your brand but if somebody is passionate about the product then it's no different than how your community of people and customers it operates with your brand too and I think that's exactly what that UGC and content creation does for you it can be a huge impact and can drive loads of revenue for you if it's executed properly but just caveat in that it does take time because relationships don't happen overnight and you really have to nurture it and it can be cost effective if it's executed well but I wouldn't just go for the big numbers and assume that that's what's going to turn your brand around overnight and how do you think about uh creator like running and structuring um the creator programs a lot of times one of the trickiest things is finding sourcing and onboarding creators.

29:38So what do you guys do? Do you have creators that you've worked with? Like you say, you have relationships. Do you, you know, kick off every new project and try to figure out the perfect creators for that particular brand? Do you work with an agency to help on that side? Like what's, what's worked for you guys and how do you think about that? Because I know, you know, there's so many creators, some are really good. Some are not so good as a brand you're being like okay how do i set this up who am i sending product to who's getting the brief who are we onboarding and all of this so yeah how do you how do you think about uh that

30:11Natalia Chappell:side of a creator and affiliate program i think a lot again we've come a long way um through an affiliate program we are actually able to also track things a lot better now and so the way we sort of structure it um we have loads of relationships from being in the industry for a number of years now to be able to know who I always sort of go to and some people who we know we trust and that will a deliver and they will be reliable and that will also actually deliver the results that we want them to and they want to work for every single one of the brands that that we work with hence why we've got a number of those people and and how we sort of keep in touch and make sure that we've got good relationships as well as through number of events that we've run with brands in the past.

30:57Natalia Chappell:We typically will also engage with those content creators because it's actually a really good way to build those relationships. There's always a brief that we will always include and it's super clear on this is what we want to get out of it. Are you keen to get involved? This is what you get out of it. Please select some of your products. We would love if you were able to follow some of these and here are some of the guidelines on brands and making sure that that's covered and then off to you to see how you sort of operate some of the influencers and content creators will be will directly work with some will have managements and that's when it becomes a bit of a three-way relationship and conversation so to speak but most of the time it very much just stems from the relationship that you will have with those people the trust but also actually the tracking so affiliates are great to be able to do a lot of those will have you know urls through um platforms such as awin obviously ltk is huge a lot of content creators will want to use that and we always say that anyone who's saying we will work on a commission basis versus oh no no i would really love to be paid 10 000 pound or 10 000 us dollars and i actually don't work on commission basis that's when you will then want to question whether they can provide any further insights into their own results their own growth of their following because sometimes you you can make substantially more money on a commission basis than you can on a flat fee and and that's when you can say well maybe this is more of a traffic campaign rather than a revenue campaign and it just comes that comes down to the objective what do we want to achieve out of it but i can't stress enough of how much of this is relationships and And a lot of those people that we work with, that we have on the books, have been with us for a very long time and will always create incredible content for us.

32:56Natalia Chappell:And they don't really let us down. No, I think you're spot on there. Switching gears up a little bit, Natalia, I want to talk about what it takes to break into the UK as a brand. One thing that we were chatting about when we were chatting offline was just how, you know, there's been some brands that do a really great job of making that transition from, you know, whether it's coming in from the US or a different market and entering the UK. And some have like totally flopped, right? So you've seen the space, you know, the messaging that hits, you know, the marketing that hits, all of that. Why don't we just chat through a couple?

33:32well maybe we can just start with what does it take to break in right from a x and o's like logistics point of view what what do you need to do to be able to like sell in in the uk and then we can talk about um you know different specific brands um so of course it'll all depend on your

33:51Natalia Chappell:um product and your offering and your actual um aav or your you know basket value and do you have or plan to have a warehouse in the UK because regardless of where you are in the world we know the customs unfortunately are really tricky and overcoming those loads of paperwork and saving yourself a headache is huge and I trust that everybody in the world both the US and the UK market are very similar in the sense that customers want it tomorrow want it now and so are you able to really offer that service which is a huge thing aside from your actual logistics and your location of your warehouse and your customs and all your sort of duties that may impact therefore your your bottom line and your margin on your product secondly can you deliver the service that a lot of customers will absolutely want to get out of the product and and how your delivery thresholds and your actual charges apply being aware of the various different people and um the the services offering that people offer in the UK is really hugely important.