How Sunday is trying to shake up the yard and garden industry

0:06Hello, everyone, and welcome to the Modern Retail Podcast.

0:30Wangle Coulter Lewis, the founder and CEO of Sunday Lawn Care, into a room. We're going to chat. Coulter is a special guest because he's actually, and I rarely allow this to happen, but he's an alum where he's been on the show before. And usually I try to say you get one chance, then you can't go on again. But he joined before I was even hosting the show. My predecessor, Shereen, was hosting it. And you should listen to the episode because it was really interesting. That was four and a half years ago, or no, five years ago, probably. Or no, it was about four years ago, exactly. Yeah, yeah, right around four years ago.

1:00That makes sense. And so I want to go into how the last four years have been because it was February 2020 and, you know, a lot of things happened then. But anyway, Colter, how are you doing? I'm doing great. It's great to be on, Cal. I appreciate it. First, for those who might not have listened to the first episode, because that was an early, early episode of the Monitoring Podcast, why don't you just give a rundown of exactly the story behind Sunday? Sure. Yeah, you know what's kind of exciting is it is the same story and same mission we set out to accomplish. That's very rare. Yeah. In Feb 2020, a couple of things happened just right after that.

1:36At that time, we were hearing about this virus that was starting, right? So it was quite a ride since then in an amazing four years. But yeah, so what Sunday exists to do is help people take better care of their little piece of the earth. And that's a little bit abstract. I can get more specific on that. but we sell products and a complete kind of solution experience to help people care for their yard and their garden and everything outdoor home and so this is a category people need lots of support lots of help it's really very complicated it's kind of agriculture and so we use satellite data soil data climate data all these sort of things to do something kind of like ag tech for the backyard to give people exactly what they need when they need it and make it really easy to take better care of your property.

2:18In a way, it's better for people, pets, and the planet. So I'm going to do this comparison a lot just because I think it'll be interesting. How many products did you have when you were interviewed in 2020, and how many products do you have now? We had probably four SKUs at that time. Okay. Yep. And what do you got now? 65. Okay. So I imagine, you know, one thing I find really fascinating about Sunday as a company is that you're generally considered a DTC company. That's how a lot of the business press, us included, wrote about you when you first launched. Now you're in a lot of stores. You're in Costco, you're in Walmart, Lowe's.

2:57Am I missing any? Target, that's a good one. But has expanding into those wholesale environments changed your product strategy down the line? I mean, not significantly. I think to talk about our product strategy, I need to go a little bit into this category and what makes it so unique. So first of all, like me getting into this was really around addressing the fact that our yards are the third largest crop in the U.S., right? It's 40 million acres of yards. And by I say yard, I mean lawn, garden, everything outside your home. And so it's 10 times more land than all the organic farms combined. Huge chunk of the country.

3:33But the challenge that people that are caring for it have other jobs. And, you know, they really stick on this complex task of caring for all of these living things, and doing it in a way that meets their values is a lot to ask. So Sunday really, you know, with launch just to address that challenge. And from a product strategy standpoint, the way we achieve that is both through physical products and digital experience. And so when we think about retail, you know, that is more heavily focused on the physical products, but we've innovated there and launched an incredible portfolio of really unique products, unique ingredients, and things that are, you know, aligned with our mission of not doing harm to the environment and actually being a net positive.

4:10So that's remained consistent. And that's our place in the market, and that's how we want to change this whole category. So talk about that second part then, the customer experience, digital experience, you said? Yes. Okay. How has that evolved? Yeah. Yeah, it's gotten much, much deeper, much more comprehensive. I can give an overview of kind of what it looks like and how a customer would experience it. So when you get to Sunday, to our website, guestunday.com, your first experience is entering your home address. It's kind of a wild thing to ask someone for as a first kind of touch point. And we first started Sunday, we thought, like, no one's going to do this, but we'll just try, right?

4:45And it's actually been, it continues to be our first touchpoint for customers. And the reason we ask for that is that we analyze your home. So, we pull imagery of your home. We now have the largest soil database ever created from our customers. I can talk about that later. And so, we pull all of that data from your neighbors. And we learn about what your property specifically needs and create a solution just for you. And so that solution is based around things like fertilizers and weed control and seeds. And all of that is timed and sized and selected specifically for you and your lawn. I was talking with a company a couple of weeks ago on the show, Jolie, that makes filter showerheads.

5:22Oh, awesome. And they do a very similar thing. And I'm very interested in this tactic where they have you give your address as well. But then they give a water report. This is the water that you get. And so, like, how have, like, why do you think that works so well? Is it that it's personalized? Is there almost a fear, like, where, like, this is what I know is wrong with my house and I need to fix this? I think, you know, we have a really unique space that we operate in. And kind of the best part of it, you know, is that we get to help people. If you take the average person and ask them, like, you know, tell me what you know about lawn care.

5:57Tell me what you know about, you know, all the trees in your property, all the things you keep alive. the response almost universally is like, I kill houseplants. Like, this is not my jam. You know, this is, and the reality is it's actually really complex. And it's also not fixed. Like, every single weather event changes things. Like, every year is different and presents new challenges. And so people need help, and they know it. So that's really why Sunday's, you know, unique kind of fully supported approach really resonates here with the customers, is that a lot of our customers come in and we actually ask this question as part of the purchase process of, like, how much have you done before?

6:34Is this something you're accustomed to? And most people are like, no, I haven't. This is something that I was either too intimidated by or it was too toxic. I just kind of opted out. And so we're really kind of engaging the next generation of people to go outside and care for their property. And did you have that exact experience when you first launched? Or how has it become more, I guess, technical, robust? You know, how has it changed? Yeah, I mean, so when we talked in 2020, these were all ideas. And really not like a Shopify website. Not executed. I mean, yeah, I don't even get into the jankiness of the technology at that time.

7:09But, you know, since then, we now have, I think, half a million-ish soil samples. So our customers get a soil test they send back to us, and we analyze the soil in their property to spot any deficiencies or any particular needs. And so through that, we've actually now had the largest sole database ever created. So we have these kind of new assets, data assets, that enable us to be better predictors of what you need and when you need it. So we've gotten smarter and smarter. And I would say the other part is we're trying to offer a customer an end-to-end experience. And the reason why you don't see that on the Internet is it's really hard to do.

7:44And so that means not just like we've customized something and sold it to you. We're now going to steward you through that entire process that whole year. And then next year, we're going to do it again. every single step of the way, support every step of the way, guidance, timing, all of the information needed. So really what's changed the most, I would say, since 2020 is the depth of that experience and how much we're able to support people through the whole process. And talk about the database. So is that you just have people sending you soil and do you just use that for product development?

8:12Do you have, like, what is the ultimate purpose of that? So it's for that particular customer, their incentive is due because it helps us tailor their plan. So we look for things that they might need specifically in their soil, and then we adjust what they're getting based on that. So it is really real time in that regard. You know, one of the reasons why our tech stack is fully custom is that we have this really unique model where what you get and when you get it is dependent on you and you alone. So it adds a lot of complexity. So there's a need for that individual customer to send their soil in to get better results.

8:40But at the same time, we then have this aggregate of data we can use to develop products and things like that. So you see that show up in retail. we have products that are specifically tailored to different regions. And that's based on the soil data we have in that region and what their deficiencies are. So we're able to make kind of really tailored, specific, targeted products. You said you have a completely home-built, that's not the right word, but a tech stack. Yes. Has that always been the case? It has been always the case, yes. And every year we look to understand if there are options and what we can buy, not build.

9:13And really we offer such a unique experience that there isn't a single platform that supports it. Do you, I mean, how big is your tech team? I imagine if you have this big of a company and you're having to do that, keeping that all afloat is quite difficult. It is, yeah. We have a really strong tech team. It is all done internally at Sunday. Great tech leader. And that is something that we've invested from day one. And really a lot of that solution that we're trying to create for our customers and an experience, it's all powered by technology. We have to be strong there to offer that. Got it. Talk a little about the wholesale side of things.

9:53This is something, you know, every quote-unquote digitally native brand, DTC brand, is now, for the most part, 99 % are selling in some stores. It makes sense, a product like yours would sell in stores. But you mentioned how you use, for example, the soil data to inform your product selection strategy. It makes a lot of sense. Do you do anything sort of on the flip side of things where you know you have people who are buying you in Costco, but you want them to be a digital customer? Or like, how have you built that out to make that more of a, I hate to say it, omni-channel experience? Sure. Yeah, no, I think it goes back to like people needing more help and support in the category, right?

10:30And them going outside and being like, this is confounding to me. I don't want to mess this up. You know, I'm trying to care for all this living stuff out here and I want to make sure I do a good job. And so we want to be able to offer that kind of support to all of our customers, right? And so we do that to some extent on retail customers as well. and we have QR codes, things like that, to drive those customers to be able to use our software and be able to know, like, when's the next application? What else should I go buy at Lowe's and that sort of thing to help support them? But it's an area of focus for us, so we'll keep on developing that.

11:00All right. And how has, you know, you're in the major big box stores. Was that always the plan? It was always the plan. So the plan here was really around impact and around changing a category. So again, this category is one of these behemoths, is hiding in plain sight. It's about$50 billion spent on DIY lawn and garden. You know, that makes it just as big as like cosmetics, for example. It's one of those massive categories. But when you walk in that part of the store, right, you smell it from 20 feet away. It is legacy brands, legacy branding, and incredibly confusing and intimidating. And so it's just the kind of ratio between the market size and opportunity versus the amount of innovation and energy in the space is really, really off in our market.

11:40And so, you know, Sunday is aiming to become the next household name in the category, the one you trust. And how, so, well, in 2021, you raised a Series C, is that correct? Or is it 20, was it? 2022 is a Series C. 2022. So like, when you get a Series C, that's when you're really trying to sort of take things to the next level. Sure. How, like, how has that manifested? Was that just on like getting into more stores, launching more products? How does that fit into this plan of yours? Yeah, yeah, in many ways. So certainly that aided our expansion into retail and also just more expansion and direct-to-consumer, driving a larger customer base overall.

12:15But from a company standpoint, like, you know, you introduced us to Sunday Lawn Care. Like, we're Sunday Outdoor Home now. Oh, I apologize. So, you know, really, we did start off with the American Lawn because it is, you know, kind of the perfect beachhead for us in the category. But we want to help people with everything outside their home. And so we've moved into all of those adjacent categories, things like garden and pest control, and expanded to bring our smarts to those other categories, too. Got it. And how do you ever fear, like, I feel like this is the tightrope that a lot of founders and companies walk of getting too outside or, you know, going too far afield.

12:51So how do you, you know, the outside is a big space. So how do you make sure that it is within the wheelhouse and you're not investing in something that won't pay dividends? Yeah, I mean, that's a constant challenge. And you're only right in hindsight on that one, I think, typically. And I've also never been accused of being too focused. I get really excited about all the things we can do. You look at these categories and, A, how poisonous they are, and, B, how confusing they are, how people need. And it's hard to not go after them. The guardrails we've set as outdoor home, nothing inside house.

13:26And really, to be an outdoor home platform that we want to be, you really need to be able to be across these categories. But yeah, it's a challenging thing to find the right level of focus. But we've seen really great traction with our customers. And I think the nice thing about having such a large DTC base is still over 75 % of our revenue as a business. Wait, still is over 75 % of our revenue at DC? Yes. I just blurted over that, but yes, you understood what I said. Yeah, 75 % of our revenue is direct to consumer still. And both are growing rapidly. But we have that relationship with those customers.

13:59Again, our relationship with our customers is very different than a typical direct-to-comer business. We're not just selling them a good and saying, enjoy that, hope you do well. We're actually stewarding them through their entire process. So we have lots of two-way information from our customers to test these new categories and get it right. We're going to take a quick break, and we'll be right back. So you said pest control. What else are you in? Garden. Garden. Yeah. And so how would you, like, is it pretty much when you go into one of these new areas, you send an email to the people you know who have big yards and say, hey, we have this new product?

14:30Pretty much what I'm asking is, what is the repeat customer rate? Or do you have divisions of customers that use one product but not the other? Certainly that exists. You have different customer types 100%. But before we make a thing, we talk to people about it. My background is in a lot of it in design research and product design. Part of what I learned, I worked at a place called IDEO, which is really an amazing design consultancy. I was lucky to be there, is this deep ethnographic research. So we talk to people about how do you think about pests? Tell me what's going on. And you learn about them, the life they live, and really build an intuition for what they need, the kind of solution they need.

15:05So that's the step you take before we actually make the thing. We don't make the thing and say, how do you like it? We learn about the customer and learn about what their needs are and their values, too. And so a big part of Sunday in all of these categories is being able to allow people to extend their values into their backyard, right? I always thought it was kind of a mismatch that we have a country that's kind of giving up on dairy milk. There's 50 different natural options for dish soap, but we're putting literal poison in our backyards. And that's across all those categories. I mean, I won't go too deep into this, but it is unbelievably far off base the way we treat our property.

15:44So a typical house, a yard in the U.S. gets about five times the pesticides per acre compared to an industrial farm. So 5X in your own yard. And when they test people for all these compounds in our yard, because they're industrial pesticides, they're in all of our bodies. Like, it is something that is so mismatched from where our values are today that, yeah, it's pretty exciting to be able to offer a good alternative. Do you, this is a question I ask a lot of companies who are talking about things in terms of the, not the health value, but like the, like there's something bad and you should be doing something good.

16:17And like, do you actively market that? Do you say, like, there are toxins in your garden and you're eating them, use sundae, and that won't happen? We don't. Yeah. Yeah. And I think it's a little bit challenging sometimes. Sometimes you really want to. Yeah. I think what we're offering instead is a no-compromise solution. And I think a lot of the people are waking up to this. I mean, we have a roundup that's the most popular product in the category. It's we control. It has a$10 billion settlement right now. That's the third largest in consumer goods history, number one being Philip Morris. Yeah.

16:48And so, you know, awareness to what these compounds are and how poisonous they are is, I think, more and more commonplace. When I talk to people, this idea of kind of holding your breath in that aisle, everyone's like, oh, yeah, of course, hold your breath in that aisle. It's like, okay, well, maybe we shouldn't be holding our breath. So we have a pretty good base of awareness out there that we can build off of. And then just talk about the benefits and talk about how you can still have a beautiful yard and an amazing garden and grow vegetables. All those sort of things you can still do as successfully as you did before, but with better.

17:16Sure. So talk a little about, you know, if you, you know, you talked a little about how you're messaging your products. How are you, how are you finding the customers? Like, you know, I, is it, I imagine wholesale plays a big role in that where you're getting, you know, major visibility down there. But what have you, where, where are you finding most of your customers? Are you, do you spend a lot of money on digital acquisition? How is it working? Yeah. Well, I'll start with the wholesale side of it and our retail partners. I think first off, I spent prior to starting Sunday, my wife and I started a brand called Quintin Snacks.

17:49It's a CPG food brand you'll find in pretty much every store in the country at this point. But that was built brick by brick. And really my exposure to agriculture and working with our farmers and that business is what led to Sunday. So that's where all of that came from. Now, because Quintin started brick by brick, we were really just hoping for two slots on the shelf. You know, early days, just like kind of give us a spot on the shelf, please. But what we found with Sunday is the ability to have retailers that are real partners and give us like a good presence in store and promote the brand and make it so that we do actually drive some awareness around it and start building some of that brand momentum.

18:21So, you know, amazing retail partners that are behind the brand and behind the mission. That's been fantastic. And that certainly drives a lot of awareness. The other thing to think about, and it's probably relevant to a lot of your audience too, is that retail drives credibility, right? If I'm on store and on shelf in Lowe's, that says something about the efficacy of the product and the presence of the brand and the validity of all of it. So that's been a key component. On the digital side, yeah, we do spend on marketing. We certainly do drive awareness pretty heavily. The positive of our solution approach is that we have high customer lifetime values, right?

18:55Because we're helping them do something they couldn't do otherwise, and they stick with us for a long time. So that really high customer lifetime value enables us to have the ability to spend more and be able to drive more brand awareness. I want to ask about that first thing, because I feel like it makes a lot of sense. You want to have retailers who are behind you, and you want to be shown widely and explained well. How do you do that? I feel like I've talked with a lot of CEOs who have said it was because we had this end cap in Target and they believed in our mission. But did you show digital sales velocity?

19:33Do you have any tips for how it is that you can actually get a buyer or merchandiser to say, okay, we will give you the marketing you deserve for this aisle? Yeah. Well, I think I'll get into some detail, but the first thing I'll say is you do have to say no sometimes. Yeah. And that's really, really hard in the moment, especially when you need to grow and you're on that trajectory. But that's important. And that's a requirement. And then on the other side of that, it's these are people. The buyer is a person who has their own values, their own things they want to accomplish in the world. And so it's a personal connection is really, really important there.

20:06And so, yes, being able to show sales data and traction, it's a no-brainer. I'll drive more consumption through these slots than the competitor will. Like, yeah, there's those things. But when we were starting out, we didn't have any of that. We had no data, right? And so it was really, I mean, I had to give credit to the buyers to be able to say, I see this. I believe in this. I want to be a part of it. And having that personal relationship with that person is what enables us to have a better presence in that store and find success, too. I mean, I think deep down they also understand that if you're two slots in the bottom shelf, you might as well just not do it.

20:37That's no way to launch a brand. It's really just not going to work. Can you talk a little bit about the customer research side of things? You said you came from IDEO. So is this all post-purchase survey data? Like how are you doing this so that you're able to get actual good data about what you should do next? Yeah, you know, it's amazing. I will say a few years in now, this year is the first year I can say we have really, really solid data. Okay. And so deep quantitative data on our customers' behaviors and actions and, you know, preferences. And so we have that view now, which is really fantastic.

21:11But prior to that, and I think it was always a good complement to that, and maybe for me, to be honest, it actually is the lead, is more around really talking to people and getting deep intuition around your customer. And so, yeah, you have the quantitative data. It's just 17 % of people choose this over that. That's really helpful. But if you look at our purchase experience, it's an experience that's designed around creating an emotional response. It's not all about product attributes. It's not all about discounting. It is this is a solution that will meet your needs and getting the person to feel like, I can do this and it's going to work, it's a whole journey, right?

21:44And so that comes through really knowing our customers, talking to them regularly, and just having a deep intuition for what their needs are. Got it. Yeah. So I'll switch gears a little bit just because we've been talking for a bit, but we're at Shop Talk. I feel like we have to talk about it a little bit. But why are you here? What does an event like this do to you? Well, I'm here to give a talk, for one thing. All right, what are you talking about? We're talking about customer loyalty and loyalty programs. So we're going to share a little bit about that. And, you know, the take that we'll have at that talk will be different than I think the other speakers will have.

22:14And for us, it's really around, you know, going back to kind of beating a dead horse here a little bit, but being a solution for our customers, right? It isn't about you get more credits or better discount if you come back. It's like we're going to actually help you every step of the way. And that's what drives loyalty at Sunday. And that's why we have retention that is, I mean, I think probably the best consumer goods retention there is. And, you know, up there near Netflix and things like that. So that ability to drive a relationship with a customer and then, you know, actually help them all the way through the experience.