How Literie built a candle business on specificity and brand partnerships

0:03Hello, everyone, and welcome to the Modern Retail Podcast.

0:30with companies that grow and get their name out via really interesting collaborations. And I want to talk about all of that. But Erica, how are you doing? I'm good. Thank you for having me. Absolutely. Excited to have you. So first, let's start with you because you have a pretty interesting background. And based on my research, it lends itself into some of the decisions you've made with literary specifically, even though you weren't necessarily in candles before. Is that right? Correct. Yeah. So what were you doing before you got into the candle business? So I've always had a background in PR and marketing.

0:59I've worked on the agency side and the in-house side. So I've had a lot of experience with different brands, different products, things like that. So developing a product wasn't anything new for me. I had, before I started this company, been a partner in a licensing agency, which, you know, develops product under different brands and labels. Um, so the, the development of a company part wasn't that, um, you know, difficult to figure out. Um, and in fact, when I started literary, there was no intention of creating an actual company. This was supposed to be a pandemic hobby. Um, I turned 40 in 2020 and kind of had a midlife crisis.

1:48What am I doing with my life? I had been sitting on this idea for a few years at that point. And it was my husband who was like, why don't you just take a few thousand dollars, figure out how to launch this thing and like do something because the idea is great and we can figure out the rest. So I started this company with the intention of selling 2000 candles. That was my initial purchase. I was going to create a website on Shopify and basically sell them to my family and friends who were willing to purchase it. So the goal was selling 2 ,000 candles in one year, and we sold 9 ,000 in nine months.

2:30Oh, my God. So first, let's just start. So what would you say the idea, like the idea was beyond it being a candle company? Like what was this idea you've been mulling over for the last few years? So it was really what I like to call a love letter to New York. I was born and raised here. I've lived in all different parts of the city. Obviously, I've had experiences all over the city. And I think commuting, especially, you just walk by all of these iconic moments. And it really all started with the hot roasted nut cart, especially in the winter. You kind of smell that steam as you come out of the subway station, whatever it might be.

3:10And I really just felt like I wanted to bottle that. And it was like, well, okay, what else could you, you know, if you're going to create a candle line of New York scents, what else would that look like? So the 28th Street Flower Market, a Mr. Softy, you know, ice cream cone, brunch in the West Village, kind of the experiences that I was a part of on a weekly basis in the city. And then it grew from there. Got it. So this first year, walk me through that growth from a projected 2000 to 9009 months. How did that all work? Yeah, so we launched. And the first thing, like I said, I had a PR and marketing background.

3:55So I knew immediately I had to hire a PR agency. And my initial thought was, let me hire them just for a couple of months to send out some press releases, get the word out. Maybe a New York Post will pick it up because it was such a New York story. And that was the right move for sure. We had launched on March 20th of 2021. And for April Fool's Day, we came up with a funny candle called Summer in the Subway, which we didn't actually create. We just did it smell like hot trash. That is exactly the same. No, it was hot trash. And we just kind of made up the candle and took a few pictures of it. It didn't exist.

4:38And that just went viral. The PR team had sent it out. People started sharing it. They started coming to the website and it kind of just took off from there. One thing to note, during the pandemic, the number one home item that people were purchasing were candles. It was the least expensive way to upgrade your living space. The other problem was retailers, were working with companies who had their products coming in from overseas. And there were issues at that time, you know, getting these freight shipments in. We were made in the USA company, and we were able to fill a lot of those holes that retailers were trying to fill.

5:29Yeah, I was about to say that it seems like your launch time was around a confluence of a very, I don't know if zeitgeisty is the right way to say it, but home was booming. People were pretty much still at their homes then. It was a product that's not as expensive as a couch, but also does make the house better. I don't know. I feel like you really tapped on the right spot. So talk to me about how long did it take from when you said, I'm just going to try this out to actually launching the product? How did you go about sourcing? I feel like candles requires a certain amount of know-how to be able to manufacture them so they smell the way you want them, right?

6:04When we decided to launch or when I decided to really move forward with this company, that was the summer of 2020. And we had our website ready to go with product in March 2021. So essentially nine months from when we made that decision to retail. And really, it all started with a Google search. I mean, I searched for candle manufacturers in the U.S. It was hard to find one that was willing to do such a small amount of product. So I didn't really have a lot of choices. We ended up using one in Los Angeles who also had their own scent lab and developed scents. We had given them, you know, the five candles we wanted to launch with.

6:53They created different samples of those scents, sent them to me, and it kind of just took off from there. We did some quick approvals. The hot roasted nut cart took some nuancing. There was more back and forth on that because we wanted it to be so perfect. But that was really it. This company or this brand, I should say, Literary, is more about the names of the scents. And you want to definitely get that when you smell the candle, but it's not a fragrance company where you're trying to develop these notes and become the signature scent of someone's home. It really is about what is this scent or what is this name bringing into my life?

7:36What is the memory it's evoking? So for us, it was really more about the packaging and less about the scent selection process. Yeah, I was about to ask because, you know, the scents that you have are very, very specific. And I've talked with candle companies in the past, and they are all trying to harken back on a memory. But it's something like we talked a few months ago with a company called Scandinavisk, and their entire thing was like walking in Denmark and experiencing the city. And that's not like nuts. You know what I mean? You know what I mean? Like, is that easier? Is it easier when you have a specific product and like place in mind, like brunch, than it is to create an overall atmosphere of a time and place and memory?

8:17You know what I mean? Like, is that an easier thing to do? Absolutely, because it's quite literal. You know, Brunch in the West Village, we picked that scent to be essentially a bottomless mimosa. That's an easy scent to develop. What your idea of what New York City smells like when you're walking around, first of all, is going to depend upon the neighborhood. Are you in a park? Are you by the river? Are you in the middle of Hell's Kitchen? To have a broader scent, I think, is quite difficult that a lot of people are going to relate to. So who would you say, like, it seems like, at least with the first scents, it's very much a gift and almost a novelty.

8:58Like, I don't mean that pejoratively. I just mean that like, you know, people in New York know what a hot nut is. It might not go everywhere. Like, are New Yorkers your target demographic? What is the use? Was it mostly as gifts? So talk to me about like the first year in terms of who the customers were and what you discovered. Yeah, so immediately, for sure, the customer was New York. But what we were seeing were, so the orders, you know, come through. And in the beginning, of course, I'm paying attention to every single one. and I got to read every single gift note that went along with the orders.

9:31And really what I was seeing were people from all over the country sending these candles to other people all over the country with notes of, remember when we went to New York for the weekend and did this? Or I can't wait for us to meet up in Central Park again. It was during that time where people weren't traveling, people weren't seeing each other. And it became this way of friends letting friends know that they, you know, were thinking about their past experiences together, parents sending things to children who maybe were feeling alone at the time, like, don't worry, we're going to travel again soon and we'll meet up here.

10:09And that's how we quickly expanded out of this New York market. It really became a brand that if you just visited the city at some point, you would be able to connect to one of the scents. Got it. And was that the moment, because you said, At the beginning, I thought I was going to sell 2 ,000. This would be just sort of a side project. Was that the moment when you're like, oh, this is a brand. This is what I can be doing. Or was there another moment? What made you realize that this could be a full-on company? Absolutely. I think when we got that first big retail order, it had come from Macy's.

10:45I think they had wanted to purchase 10 ,000 candles, something like that. And I was like, I didn't even know at that point. I mean, the amount of back-end work that has to happen for you to ship product to Macy's is unimaginable. I really thought that I could have my manufacturer develop these, ship them to me, and I would throw them in my car and drive them to Macy's. That's genuinely what I thought the process would be. And I think once we realized we had to invest in these back-end programs and really now, okay, well, now we need a warehouse. We were shipping these products out of my mother's garage.

11:24at up until that point. It was like, OK, we need people involved to help us do this. At that point, it was like, OK, if we're going to start investing just to do this Macy's order, then we have to really work to to make this investment worth it. If we need to get a warehouse, then that warehouse should be holding lots of inventory. And if we're investing in these systems, then we should have other retailers a part of that system as well. Let's walk back a little bit. How did the Macy's partnership, was that outbound from them where they said, we heard about you and we want to carry you? Or how did that all come to be?

11:59And was retail ever on your mind before then? Yeah, retail had been on my mind, but it was more about small brick and mortar stores in neighborhoods that I thought maybe would buy five or 10 at a time. I, in my previous careers, had worked with buyers at these larger stores. And I just sent an email to the home buyer there, someone I had a relationship with at a prior job. And that's when she was like, we need candles. I mean, she made the purchase without even smelling them. It was more about we need stock. So if you have it, you know, how quickly can you make it? Then yeah, let's do this. And how quickly were you able to scale up to 10 ,000 after her saying, sure, we'll order them.

12:48It took, what was good is they just wanted to reorder what we already had developed. So it was just a matter of placing the order with the manufacturer at that point. So it probably took six weeks, which from a lead time perspective for them was totally normal and expected. But then look, what came into that became financing and, you know, all of that fun stuff as well. So we had a quick education on how to do this and figure this all out. Was your manufacturing able to totally handle that? Like, I feel like I always hear about those stories when you have small manufacturing and then you get that purchase order and you're like, oh, God, and sometimes they switch it over to another.

13:32Like, has that ever changed or how has that worked? Yeah, that never seemed to be a problem. And even since we've moved to a new manufacturer in Massachusetts. And when we get into talking about partnerships, we could discuss a little more. But I'm actually surprised. You know, I was talking to them about a potential 50 ,000 unit order. And it was like, okay, yeah, we just need it by this date. It doesn't seem to shock anyone or freak anybody out. So yeah, they, you know, when I think about the different brands that they're producing and how many candles they must be producing each day. It shouldn't be shocking.

14:12We'll be right back after this message from our sponsor. Please stay with us. Walk me through the retail trajectory. After that, did you say we're going to go after other bigger, more chain retailers, or how has that developed? Yeah, so it really turned into a focus on these smaller brick-and-mortar stores. When we launched the brand, it was this smaller, inexpensive jar with a lid. It wasn't the most attractive, but it was the most economical way to launch this. And as we started to talk to other retailers, they had given us feedback that for the price, they wanted a sleeker, nicer vessel for the candle, even if it meant the price had to go up.

15:05Um, and so about, you know, a year into it, we were like, okay, let's, if, if, if we're actually moving forward and doing this, let's think about the packaging. So we upgraded to a nicer candle that went in a box. and once we did that we started doing some trade shows and that's really when it it took off and really turned into this idea that people are purchasing our packaging not necessarily the candle especially because the amount of candles that are sold through our website you can't smell them yeah so um people are really buying the name buying the experience buying the packaging. And because it all looks so colorful and pretty on a shelf, that's really when the retailers started coming to us.

15:56Got it. So let's talk about the partnerships and collaborations. You know, doing research, I found a bunch of really interesting ones. Like you've done one with, I believe, Bravo, was it Real Housewives? Is that correct? And with the US Open, I feel like it's zeitgeisty and they're kind of disparate, but they have a very specific tie-in that a fan would want to buy. So how did you go about doing that? Was your past licensing work at play with this? Is that how that came about? So there was actually no intention of ever doing licensing for this brand. The Real Housewives came about because their head of licensing happened to see a post about the brand in my LinkedIn feed.

16:35And we weren't even connected. It was just, oh, she opened her feed and there was maybe it was a New York Post article or something. and she had reached out and said, we've been wanting to do candles. We haven't figured out the way to do it. Is that something you'd want to partner on? The U.S. Open was genuinely me playing tennis one day and my tennis partner saying, you should make a U.S. Open candle. And I found out who their, you know, head of merchandising is and sent them an email. And it was the same response. Yes, we've always wanted to do a candle. we haven't figured out how to do it yet.

17:09So most of these partnerships were either inbound or just an easy email away. Yeah. With the U.S. Open one, does it smell like a tennis ball? No, it smells like the Honeydeuce, which is their signature cocktail. Oh, that's much more enjoyable than the smell of a tennis ball. I happen to love the smell of tennis balls. Yeah, when you open it, just like hits you in the face. Absolutely. How major of a revenue stream are these partnerships or like, is that more on the PR side where it gets your name known and maybe you sell a few, but it all ladders back to the core business? Or is this a major engine for you?

17:48I would say it's both. I would say, look, you're paying royalty rates to all these brands. So, you know, you're making money, but it really is because of the marketing angle you get out of it. Us being able to put our name out alongside Bravo, having their social media teams post about it brings more followers to our accounts. And I would say 50 % of the time that there's a customer coming to purchase a Bravo candle, they're also purchasing one of our core candles also. And now I have a customer's information for life. So as we put out new products, you know, they're receiving those emails now.

18:32and coming back to purchase other things. And would you say you have more or less over the last few years systematized your approach to these partnerships? Or is it still that you get an idea and I'll shoot out an email and maybe it'll work? Or how do you choose what to do next? It's both. We have a licensing contract now with Paramount. So shows like Emily in Paris, we're doing something fun for Mean Girls next year. That was an easy process because we had been through it already with Bravo. So we knew what the contract should look like. We knew how the approval process would go for those things.

19:11But to be honest with some of the other partnerships, some aren't licensing. Some, they're 100, like even the US Open is not licensing. They're just coming and purchasing that product from us all at once and selling it. those are the best types of partnerships because we make money on them and we don't have to hold the inventory. Yeah. And you know that you're going to sell it because you've already sold it and then they can deal with it. Exactly. Exactly. With the Paramount thing, that's super interesting. It seems like a lot of the entertainment companies are trying their hand at merch and like quasi digital commerce or just commerce in general.

19:51I just wanted to get your sort of thoughts on that? Does it seem like it's more increased now where if there's a new potential IP, they're going to be reaching out to people like you more often than they were, say, five years ago to try and have products tied to it? Like we have Netflix, who's doing their own types of stores. There are all these different entertainment companies that are trying to do more retail-y things. And it seems like their partnerships with you are symptomatic of that. What are your thoughts? Yeah. So I actually think the idea of licensing for a lot of these companies and where those teams grew really came about when Fortnite was introduced.

20:28Yeah. Fortnite went crazy in licensing. They were happy to put their name on anything, a backpack, a pair of socks, whatever it might be. And that company made a ton of money because of it. It's very passive income for these brands. They have other companies developing their product. And all they need to do is make sure that these companies are using their logos correctly, using their IP correctly, and they're getting a cut of the sales every quarter of whatever's going out. So yes, I think a lot of these parent companies or individual brands are growing out those licensing teams because they realize it's an easy way to make money with not a lot of, I guess, effort from they're in as long as they find a trusted partner to develop the products for them.

21:20And how important is it for these partnerships that you do that the literary name is on it? It's 100 % important. We won't do it without our brand name. I won't name names, but we had an opportunity last year, which would have been huge for us. And really, it came down to when we provided them with the designs, they were like, oh, this is great, but we want to take literary off of it. And at that point, I'm not a manufacturer. So if you just want to make your own candles, then I'm happy to move you along. But I don't need to put the time and effort into something that isn't going to get people to come back to my website or give us more name recognition, things like that.

22:02How would you say the core business and the core offerings have evolved? For example, I was on the website and I noticed you have a scent that's catered to sleep, which strikes me as a more traditional type of candle than, for example, the nuts one. So are you changing your core offerings or what are you thinking about in that regard? Really, the focus for the core line is to move out of New York. So in the past year, we now have a candle for Washington, D.C. We did one for New England. We launched a candle for Malibu. So we're focusing more on different parts of the country, mostly because our customer base from our website is they're based everywhere.

22:47So if they're coming and purchasing New York-centric candles, they'll probably also purchase candles from other places that they've traveled or been to. Yes, we're focusing more on these partnerships as well because they're always helpful, but it's definitely a push more for the core line. We'd love to move internationally. There's no reason why we shouldn't have candles for London, for Paris, really the most popular travel places one might go to. That makes sense. Can you talk a little bit about how, so you have your DTC website, you're in some stores. I saw that you're also on Amazon. How have you strategized all of that?

23:28Has it just been, if there's demand, we'll be there, especially for a company that is so focused on branding. You know, Amazon is nicer to brands than they were in the past, but it's still also Amazon. So what made you decide we're going to be on there? I really came down to there are people that want to purchase on Amazon because of the ease of it. I am one of those people. I'll find a brand. I shop around to find the best price. And if it's available on Amazon and my information is saved and it's two clicks, then that's where I'm going to buy it from. And Amazon is really more of an experiment.

24:03Let's see what sales would look like. Are we losing customers because they don't want to set up a new account or go through that whole checkout process? And it's been great for us. We have a team that manages all of it. Sometimes there's a fight for inventory, especially right now as we're going into holiday. Because we didn't really have experience with Amazon, they, I guess through AI, send us emails saying we need, you know, 250 units of this to meet whatever demand we see happening. And I'm like, I don't have 250 units to give you. I would prefer to have those units sold on my website. So it's understanding how that process works and that dance between keeping things exclusive.

24:55We don't have every single cent available on Amazon because I wanted our most popular things to still only be available on our website. And when did when did you launch on Amazon? Um, over the summer. So not not too recently. It sounds like it's been overall positive and you're still figuring out like the it's always the dance of like, what do I want to give? They want everything, but you certainly don't want to give them everything. But what have you it hasn't increased the new customers that you wouldn't have expected otherwise? Or are these just people who are just looking on there for literary because they already know literary?

25:31You know, unfortunately, with Amazon, you don't get to see who the customer is. So that's the difficult part. I'm going to assume those customers are people that don't know about, didn't know about us. You know, we're searching for a specific type of candle. And I would love to believe that the customer wouldn't have purchased it from our website, but saw it on Amazon and thought, okay, I'll just take it because it's easier. And it's unfortunate that we can't know who that customer is. I would love to be able to see, is this someone who had purchased from my website previously and now want to do it through Amazon because of the ease?

26:16That's the unfortunate part of working with them, but it's kind of, if you have to be in the game to play it. Yeah, and they allow you to now do a retargeting email, but it's just an Amazon email saying, like, did you like this? I always find it so interesting, the little things. I want to talk a little bit about marketing because it seems like this type of company, you've really mastered the owned media side of things. If you do an interesting collaboration, there will be a story about it, and I'm sure that that leads to more people searching you. But have you done a lot of other types of digital marketing or customer acquisition?

26:50Or has it been mostly this, you know, PR focused, word of mouth, that kind of stuff? So PR is definitely one side of it. But the bulk of our budget goes to advertising, and it's only digital advertising. So with Meta, with TikTok and Google ads. And that's really where we're spending our money. We're definitely making use of, you know, targeting tools. I'll give you a quick example. This past weekend in New York was the New York City Marathon. Most people who ran the marathon stepped foot into the Javits Center, which is a huge convention hall here, on Thursday, Friday, maybe Saturday. And we are able to send ads to all those people now for our I Ran the Marathon candle.