S13 E1: Listener Mailbag: DTC to Retail, Meta Ads, and Clothing Brands

0:00Nik:All right. So for today's episode, the opening of a new season, we're going to actually do a listener mailbag to open it up. And the reason is because there were so many questions from last season's end listener mailbag that we didn't get through all of them. And a lot of these were actually very relevant and great questions. So again, all these questions are derived from our limited supply Slack community. So if you're not already in there, I suggest you get in there. You go to nik.co backslash Slack, N-I-K dot C-O slash Slack. there's about 5 ,500 people in there that are talking on a monthly basis, all things Amazon, 3PL, D2C, Facebook ads, attribution, measurement, retail launches, where to find freelancers, everything that you could ever imagine gets talked about in there.

0:47Nik:And if you don't know where to start or don't know where to get an answer to something, you can message Shin, who's our community manager and is running the community day to day. And he'll make sure you're in the right channel. All right. So without further ado, I've got a handful of questions here that I want to get through. And so let's get started. So the first one comes from Chris. Chris asks, is there a suggestion on how a brand can navigate the transition from primarily direct to consumer to rapidly expanding in retail through paid and owned channels? Well, Chris, a couple of thoughts here.

1:19Nik:So I'm just going to ramble and hopefully there's a good answer in here or for anybody who's listening. So first off is you want to focus on creating content that travels well. Now, what I mean by creating content that travels well is you want content that gets a lot of shares or gets copied or screenshotted or a link in a group chat. You want to mainly focus your organic content on this and your paid should just expand on that. Meaning once you figure out what type of messaging angles are working or I remember when poppy launched in retail they did a ton of tiktok and crater content around the craters or the founder even going into the store picking up the product trying it talking about it explaining it and those were some of their best always evergreen kind of viral tiktok videos that they did on organic and then for their paid they would just run dollars behind that so if you can especially figure out an organic content strategy that works and travels well meaning it gets a lot of engagement, gets shares, lots of comments, people are excited by it, then for promoting that, you should just really put money behind that.

2:25Nik:Especially if that call to action is already traveling or focused on getting people to retail. When I launched Hint Sunscreen and Target about eight years ago now, the budget was first run by the brand marketing team. And it was essentially just taking these nice animations and putting the logos of Target on top of all these animations and running them toward using paid social, you know, Facebook and Instagram and et cetera, to basically just tell people, hey, Hints on Screen is now available and it's in Target. And the thing that we learned was no one gives a shit. No one cares to scroll through an ad or watch a six second video animation that says that your product's now available in Target.

3:12Nik:And, you know, that's even worse than a normal paid social ad because you can't really buy it right there. It's just telling you it's available somewhere else. So it's really like an extremely passive billboard that you would be driving by on the highway. And what we did instead was we shifted toward a strategy where we focused on basically influencers and bloggers. So think the reward style or the like to know it type of bloggers, mommy bloggers, etc. And publishers like The Skim, BuzzFeed, Refinery29, some podcasts, etc. And we basically had them create content that then we would push with dollars behind it.

3:50Nik:So it came off as a third-party validation with our own targeting behind it. That was a very effective strategy. But essentially, you want to do everything you can to make it so that other people are telling people about the product and where it's available versus just your own ads and commercials saying that, hey, we sell the best sunscreen and it's available here now because that doesn't really make anybody want to do anything or want to go buy. Next recommendation here is to do everything you can with your email and your SMS list. So if you can segment people out based on where they live, based on the type of product they buy, based on how many times they've bought.

4:33Nik:But really, if you can just focus on isolating geographical clusters to different stores, then when you launch in a new chain in that area, you can send these people to go buy. 21 Siege, which sold to Diageo, did an exceptional job of this. Anytime there would be a new retail launch or there was a time where we had to really push sell through in certain regions, we could isolate the segment we wanted to go after or that city or those few zip codes, and then just create an offer or a blast and focus on those people directly. Another one you can try is cashback or couponing programs like Aisle, or you can build your own version of it.

5:10Nik:I know that some brands have built their own versions of this. So they create the program, they advertise it, you know, you send in your receipt by text or by email. You log that information, you make sure where they, you can see where they bought, you can see what they bought, you can see what else they bought to try to create personas, especially with the, with AI and with these LLMs, you can actually start doing a lot more with that and segmenting better. And then of course, once you validate that they bought your product, if there's some sort of a cashback offer, you can send them cash back via Venmo, you can send them a Visa gift card, you can send them an Amazon gift card, whatever it may be.

5:47Nik:But you want to make sure that you're basically driving sell through of your minimum required units sold per store per week. If not, then you risk the entire brand being taken off the shelf and being deprioritized in the next time the planogram is designed. The planogram is the, think of it as the wireframe for the shelves at the stores. I believe it's done usually once a year for the whole year. And sometimes stores do it on a quarterly basis or a half year basis. But for the most part, I think they're annual. But again, if you can't drive sell through and you've got six flavors of a product, if one of them is not driving sell through or two of them are, but four of them or five of them are killing it, then you risk the whole brand going down.

6:35Nik:Last couple of points. One is your landing pages, your website product pages, your TV ads, your YouTube ads, they should all include your retail placements and where people can find you locally. Any sort of view through based channels, whether it's app loving, whether it's TV, whether it's a print ad in New York times or a magazine page out of Vogue, they should all aggressively display the retail partners that you're available in. And you should be running some sort of measurement. So whether it's MMM or it's incrementality experiments to understand what the media spend is doing across different doors.

7:11Nik:You want to make sure you're running that so you can correlate what is the actual incremental effect of a media channel on your retail doors specifically in different geos. Last point here is in your ad comments, especially if you sell a product that's a high price point, or a lot of times if you sell food, beverage, cosmetics, beauty, you know, you have to buy it or bundle them in higher quantities or higher AOVs. So a lot of times people will comment on your ads and basically say that they want to just try it or they want to sample it for cheaper, but they don't want to buy the$50,$70 pack online.

7:45Nik:To which you can reply and say that you can go buy it on Instacart, in a retail store that you're in, on GoPuff, which usually most brands are on if you're in that retail chain or in the retail channel as well. But all of these will solve their problem. It'll give insights to those who are going to comment that next and generate some more awareness of your retail presence. Okay. Next question is from Paul. Paul asks, where are you finding the best marketing talent these days? LinkedIn feels overwhelming with low quality applicants and Upwork has turned into a mess. Are there more specific platforms or communities?

8:24Nik:Yes. So LinkedIn, I've always thought is a kind of a cop out for hiring. You're basically, you know, you're just finding people who are constantly searching for jobs and the best people are not searching for jobs because the jobs find them. So, you know, the short answer is like, you just got to work harder and find these people. You know, the best way to do it is you can spend an hour or two yourself on LinkedIn to try to aggressively search, message, and pester people. You can cold email them. But if you want some communities or shortcuts, here's a few. So the first one is Marketer Hire. It's a platform I invested in years ago.

9:05Nik:It's amazing for finding freelance talent. It's harder to get into Marketer Hire as a marketer than it is to get into Harvard as a student. And because of that, they've got a long wait list. but you can go to marketerhire.com slash NIK to skip to the front of their waitlist. And just let them know you came from me. They'll hook you up and put you on the red carpet. Another one is called The Starters. Jay Delwani, who was formerly the CMO of Wink, started The Starters a couple years ago. And it's also an amazing network of talent. I've recommended them to a ton of startups and they've only ever had good things to say.

9:36Nik:If you need good offshore talent, I can't recommend Ocean's Talent enough. That's where my guy Ramiz is from, who I've talked about a lot. And we have another probably seven, eight people from Sri Lanka through Oceans as well. If you're looking for senior hires within the US, I would recommend using a recruiter. There's a few. You can email me if you need an intro to one. But depending on what you're looking for, whether it's creative talent, whether it's more strategic or tactical or analytical talent, or whether it's more kind of like worker bee talent, like more routine things. There's different recruiters I've used for each.

10:12And then of course, the last thing you can do is identify a list of target candidates you want to hire and try to figure out your work backwards to see how you can get warm intros to them,

10:24Nik:or you can get somebody to text them that there's an opportunity that may be relevant for them. That's usually what I found to be the fastest way is like, for example, somebody reached out to me with a job description this past week. I said, hey, there's actually somebody I have in mind for this. And he just said, you know, can you shoot him a text and see if they're down to connect about it? That is the best way to get it because if a text comes from a warm intro or somebody that they already know, you know, the response time is going to be much faster than trying to cold email somebody and just get a yes or no.

10:54Nik:The only last thing I'll really say here is just make sure that you really need to hire a full-time team or a full-time employee. Sometimes you're a better fit using an agency that can grow with you and handle everything. For example, at Sharma Brands, we have a ton of clients who don't have an internal e-commerce team. We handle their website, their acquisition, their promotions and sales, their emails, their new product launches, et cetera. So sometimes you just need a good agency that can help kind of be your backbone or get things done for you, especially if your product already has good product market fit.

11:26All right, next question. So Nick, not me, but another Nick, asks, as a new brand running meta ads, I see a lot of good top of funnel metrics, click-through rate, cost per click, and add to cart rate. But lower funnel metrics from add to cart to checkout initiated and checkout initiated to checkout complete, those numbers are very poor.

11:48Nik:Well, so for context, if you're unaware, what Nick is actually talking about is the dashboard view inside Meta Ads Manager. So you can see how many impressions there are, then you can see your click-through rate, then you can see your cost per click, you can see how many people landed on view content, what your cost per view content is, your add to cart, your cost per add to cart, all that kind of stuff. You can see all those. So the idea is that you can basically look at this table and very quickly just understand, oh, if 500 people landed on the site and 350 people added to cart, but 40 people checked out, you know that the discrepancy is there.

12:23So that's kind of where, I don't know if those exact numbers are for Nick, but Nick is basically saying he's got great CTR, CPC, and add to cart, but then add to cart to checkout is very low. So here's a couple of thoughts.

12:37Nik:One is Nick, you likely have a product that is pretty compelling or an angle that is getting people interested, which is why you've got a positive click-through rate and great CPC metrics. But my guess is that your price point raises eyebrows and people want more validation before making the purchase so this is where your mid funnel efforts need to be much stronger now mid funnel efforts are not necessarily your top of funnel is what you're already doing it's driving traffic your bottom of funnel is really just focusing on or at least in this journey i consider bottom of funnel really focused on driving the conversion but the middle of funnel has to get somebody to align mentally and say yes i do want to buy this product then it's up to the bottom of funnel to make sure that this product is purchased through that uh funnel or that website versus maybe an Amazon or a competitor or something like that.

13:25Nik:So a couple of things. One is you need to focus on answering what is the solve that somebody gets from this and why should somebody care about this product and how this product is going to benefit them. The second is what shows up when people search for the brand or this product on Google, on TikTok, on Reddit, on Twitter. Is there enough social proof on these platforms? Does your on-site product page or landing page, does that have enough social proof? Are there unboxing videos? Are there testimonial quotes? Are there quotes from publishers? Are there quotes from influencers? Are there screenshots from TikTok comments?

14:01Whatever it may be, you need to have enough social proof that also looks like it was not just bought and paid for. You also may have an egregious shipping cost that no one feels comfortable paying for. So remember, Amazon, fortunately, or unfortunately has trained the whole world that e-commerce is a commodity and so is free shipping. So you may just have to increase your product's price by a few dollars and lower your shipping cost or just kill your shipping cost altogether. Another thought is, you know, how aggressively are you collecting emails? Because it seems like there's a lot of opportunity to retarget these engaged site visitors through email and SMS, whether you have their email or you use something like instant and get their emails through a third party.

14:49But I would recommend using Alia for your pop-up. If you're under a five or 6 % email collection rate, that should be closer to 10 to 12%.

14:57Nik:And honestly, the last thought that I have is, you know, there's a story I always think about that I heard about a decade ago when Victoria's Secret was running programmatic ads and had a weird situation like this, where they had crazy high CTR, really low CPM, really low CPC. And, uh, you know, once people got to the site, no one was buying. And essentially what they figured out was that it wasn't that, you know, the media agency that was running, it was like, these numbers are amazing. The metrics are there, you know, we're hitting all our KPIs and that's all they were responsible for. The website team was like, hold on, wait a second.

15:34No one's buying any of this. This traffic is garbage. And it turns out that the agency was actually just running Victoria's Secret women's ads to men. And that's why they were getting all these clicks and the traffic was engaged, but nobody was buying. So it could be something similar to that as well.

15:48Nik:I'm not saying that you're doing that, but it could be something similar to that where you're just missing one variable, you know, working properly. And that is what's causing this to essentially not work the way that it should. All right. Next question's from Jim. Jim says, how do you think about ad spend and marketing budget that goes to testing new channels and tactics? How much of the budget do you put towards this? Is it worth the short-term loss for potential long-term gain and diversification away from Facebook and Instagram? So it's a great question. So as a rule of thumb, I try to stick to test budgets around$10K per test for media-related tests.

16:26If you're running a test with a creative partner, it's usually something different. It might depend. There might be an agency where their floor for a test is$25 ,000. It might be that it's$5 ,000. But for media-related stuff, whether you're testing a new channel, a new tactic on an existing channel like advertorials using Facebook, I would still focus on that$10 ,000 to$15 ,000, $20 ,000 range budget. Obviously, if you're spending a billion dollars a year in advertising, your test budget is going to be more like$50 ,000 to$100 ,000 because you need a lot more statistical significance to show that a platform can work for itself.

17:05But all that said, 10K is a good kind of rule of thumb, but it really depends on what your AOV is, how many purchases a platform needs to properly optimize itself, and how hard of a sell or how long your sales cycle is for your product. You may also need to ensure that you have the right ways to track this new channel's performance. So for example, again, if it's app loving or truck side billboards, you want to make sure you're tracking directly attributed sales, but also tracking incremental sales driven in retail on marketplaces like an Amazon or Etsy or eBay or B2B channels as a result of these new channels, new media channels pushing for customer acquisition.

17:44It is absolutely worth testing new channels, but I would recommend doing it in a systematic way with a proper channel expansion plan. Don't just test whatever's thrown at you by sales reps. You know, in fact, one thing to note too, most of the time, these meta and Pinterest sales reps that reach out, and I think possibly Reddit, they're not real employees. They're just contracted people overseas who are sending emails and trying to get calls locked in. And those calls are also with people who are not actually working at meta or Pinterest. Google and TikTok and Twitter and Snap. And yeah, mainly those that I just mentioned, those reps are usually from the companies directly.

18:31But again, you get kind of a lower quality rep when they're just reaching out to you. Unless you've got real volume of spend, especially volume of spend showing quarter over quarter growth, you're not going to get a legitimate rep. So most of these people who reach out are just salespeople that are trying to get you to spend your first, you know,$100 ,000 on the platform. That said, I would not focus on just testing whatever's thrown at you. I see this happen a lot where people get excited that somebody thinks they're ready to test TV or podcasts or out of home or, you know, sponsor a music festival with an experiential activation.

19:08And because it's not done in a cohesive way or a systematic way. You're just sort of blowing dollars testing new channels. And I'm not a fan of it. There's also enough channels you can test in a way that is direct response first before you sort of switch over to channels that are more view through focused or brand focused. So, you know, anything like meta, Google, TikTok, YouTube, Snap, affiliate, TV, podcasts, these are all directly attributable channels. And then when you move to other channels, whether it's, you know, Retail marketing like an Instacart, out of home, events, things of that nature, those are a lot more view-through based.

19:43And so it just requires you to have better measurement and understanding of what's actually working. Okay, next question comes from Rahul. Rahul says, there's a difference between apparel and a lot of other DTC brands because a lot of the tactics don't apply to apparel. How would you approach apparel ads? Great question, Rahul. First off, you're totally right. Apparel is essentially focused on selling an entire catalog. You're not just focused on selling a specific product. Although there are companies like Everlane or Outdoor Voices or honestly any apparel company, they've usually got their flagship products.

20:21So they may have a set of ads that focus on their top selling products or top selling SKUs or top selling collections. But what you really want to do is either focus on a, well, you need to actually focus on like what you're selling. So, for example, are you selling the softest cashmere in the market? Are you selling the lifestyle associated with wearing Xenia or Loro Piana? Are you selling the innovative and proprietary material that you created that allows for instant cooling while working out? You know, you need to focus on your focal point because apparel is all around building around that.

20:57It's really all focused on brand. Now, once you've got the brand out there, it's a lot easier to focus on collections or individual products. But a lot of that is sort of done by more of the targeted advertising, whereas the brand marketing and brand advertising should focus on what is the selling point or the focal point of the brand. Once you've got something to focus on, then you can ensure that all the other pieces are in order. So, you know, a high converting website with the best UX and UI practices, product pages with thorough product information about materials, who it's for, why they should wear them, you know, where the material is sourced from, why it's better than the same type of garment from another brand.

21:39All these things need to be on the product pages. And if they're not, then you are going to get people leaving or, you know, actually a good point here is if you don't have all this information on the product page, you better, you better be somebody who's like a Louis Vuitton or a Tom Ford that has crazy brand awareness or a Kate Spade or something like that. Or you need to have it where when somebody Googles your product, like, um, you know, if they Google outdoor voices, workout dress or whatever it may be, there's a ton of social proof that's doing the selling for you. If you don't have either of those two things, if you're not a Kate Spade, and if you don't have social proof like Halara, for example, then your product pages need to be full of information because you're just risking losing these people and buying the same product from another brand.

22:28And yes, of course, 99 % of the stuff you sell is probably already sold by somebody else, even though you think it's not. Last big one here is catalog ads. So these are the most successful form of advertising for apparel brands and fashion houses. I remember in 2017 when Bonobos and Marine Layer and Canada Goose, when these guys were all advertising on Meta, the reason that they did so well was because they figured out the code to crack catalog ads. So with catalog ads, you essentially take your catalog feed, which is automatically generated by your site tool like a Shopify. You can upload it into a tool like BarPipe because they help you organize and segment your catalog so that you only advertise products that are actually generating profit, not just what Facebook thinks is going to sell quickly and may not generate a lot of profit or may actually generate revenue at a loss.

23:22And they'll help you run promotions on top with custom creative. So if you're running a Memorial Day sale, you can just easily modify your catalog ads creative to reflect Memorial Day. You know, if your product has 600 five-star reviews, you can make a rule that if a product has over 400 five-star reviews, you know, you display that count on the actual catalog creative itself. But regardless, when you're running catalog ads, you want to also make sure that your PDPs are like landing pages because this is the first place people, first and only place people will go on your website when they click a catalog ad.

23:54Catalog ads also do extremely well outside of Facebook and Instagram, whether it's on a GoPuff, whether it's on Snapchat, whether it's on TikTok. And now actually catalog ads also work well on TV. Last question comes from Jono. Jono says, what are a few effective ways to get press and or awards to increase your brand value and social status? To be honest, Jono, there are not a lot of super creative ways here. I can just tell you the few that come to mind. So one is like you figure out how to get your own press. You create your own hype. You create a story. You create a reason for somebody to go talk about the brand.