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EPISODE 88

Flipping Ecommerce on its Head

With Kathrin Hamm, founder and CEO of Bearaby

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Imagine this: it’s Black Friday, the biggest shopping day of the year and you’re a brand with customers on your website pushing the buy button, but instead of moving them down the funnel, you stop them and interrupt the buying process to ask them, “How are you feeling right now?”

Seems like a crazy thing to do right? Especially in a world that is dominated by closing sales and doing everything possible to get a consumer to hit buy. You’re literally pausing a conversion, making a customer examine his or her activity and second guess making a purchase. Nevertheless, that was the strategy Bearaby put into practice this past holiday season and the results might just surprise you.

On this episode of Up Next in Commerce, Kathrin Hamm, the Founder and CEO of Bearaby, tells us that that mindfulness experiment, while risky and not advised by her industry peers, paid off in big ways. Bearaby was able to gain insights into consumer behavior and gather data that helped predict whether or not a customer was likely to return a product or not. And, most importantly, Bearaby was able to build more trust with customers and foster a more authentic relationship centered around mental health and the customer’s well-being, which in today’s world goes a long way toward creating a loyal base of customers. Kathrin also explains why adding more mindfulness and behavioral queues into the customer journey could have a positive impact on return rates, overall customer satisfaction, and your NPS score.

Main Takeaways:

  • Do You Need This?: So many brands are trying to optimize for sales and push people through the funnel, but what if you took a step back? At Bearaby, by introducing mindfulness into the buying process and asking people how they feel throughout the process of a sale, the company was able to build trust with its customers, understand the behavior of people who returned products, and increased the overall net promoter score of the brand.
  • Making it Work: As a small, independent, DTC business, being agile and having the ability to accelerate a product are assets. But when you expand and begin to take on retail partnerships, your internal processes need to adjust. Rather than thinking a month of two ahead, you need to fit into a production timeline that is already planned two years in advance. To do that, it’s critical to have the right backend operations in order to analyze data and manage inventory so you can meet the needs of your partners.
  • Stop Selling, Start Connecting: Most brands see social media and SMS messaging as tools to sell products and get information to customers about deals or products. But what if you used those platforms to be a resource to your customers and offered them help in ways unrelated to your products? Bearaby took this road when establishing itself on social media and found that sparking natural conversations led to more curiosity about the brand overall, and subsequently led to sales with truly engaged customers.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

“I’m naturally a risk-averse person. I know other entrepreneurs are like, I had my idea and I knew I always wanted to be an entrepreneur and I just went for it. I went the other way.”

“When you are a smaller brand and let’s say you have shorter planning cycles. So when we have an idea, we’re saying, ‘Oh, we would like to come up with this color, we want to try this.’ It usually takes us more or less like two months to bring that style on our website, because we’re very agile as we’re producing in house. But now with a retailer…they’re like, ‘We’re already in March 2022.’ So, just the planning cycle and then adjusting the volume for it means that we need to have the analytics in place for the inventory planning.”

“We came out with a black blanket for Black Friday, and we wanted to introduce the concept of mindfulness around it, because our hypothesis was that mostly we’re buying a lot of stuff at a discount that we don’t really need, it ends up in landfills and it doesn’t make us happy. So we wanted to see, first of all, how it would be if basically our website is shut down, and people are sleeping through Black Friday. And then if you still want to come back the next day, we’re still making it difficult for you to get the product…. In addition, we wanted to see how you’re evaluating your feelings and how you are mindful when you purchase…. Basically how it worked was you come to the website and before you click to purchase, another question box pops up that literally makes you pause and asks you how are you feeling right now. And not like the normal, how are you and then you move on — we wanted to have people reflect on it and ask people do you really need this product right now? And if yes, how are you feeling? Are you anxious? Are you calm? Do you feel lonely, sad, happy?”

“If there’s a business case that we actually can show this is not only good for the consumer, but it’s also good for the brand to actually have more mindful purchases instead of driving people aggressively down the funnel… we will pilot and test more and work with our community to see how we can actually bring mindfulness into the ecommerce purchasing experience.”

“We will systematically also test in the next couple of months on what are different interventions that you can take before you click on the buy button that has a calming effect on people.”

“My initial hypothesis was that the conversion rate would go down, because you’re making it that difficult for people to get a product — you’re asking them to wait, sleep on it, listen to a poem, take a breathing exercise, tell me how you’re feeling and then take them into a consent form before you then finally can buy the product. So I was actually expecting that we wouldn’t sell any of these blankets. I was telling the team that was working on it I’m like, ‘I think if we’re selling two blankets, that would be a good result.’ And we were quite surprised that our conversion rate was double our regular conversion rate.”

“What works well for us is that we’re trying to be helpful for the community. So instead of just us as a brand talking and sharing what [products] we have, we realized a lot of the community is actually struggling with mental health anxiety. So what we did, for example, is that we used Instagram and connected it to an SMS platform. Where usually you send an SMS to inform people about the sales, we use it in a reverse way where we had actually an expert sitting on the other end of the line — a psychologist or general mental health counselor — and people could send in their questions that we got from Instagram but that also we got through SMS….We brought all these experts and we had to message this community of helpfulness and chat. And I think that just sparked a natural conversation and I think then people stick on and want to see what else the brand is doing and I think if we listen to that and we are reciprocating and not shouting out but we’re listening, it’s just organically … the community grows and is also excited about the brand.”

Mentions:

Bio:

Dr. Kathrin Hamm is the Founder and CEO of Bearaby, which she launched in 2018. Prior to founding Bearaby, Hamm worked in the finance industry and has a PHD in Economics.

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Transcript:

Stephanie:

Hello everyone and welcome back to Up Next in Commerce. This is your host, Stephanie Postles, Co-Founder and CEO at Mission.org. Today on the show, we have Kathrin Hamm, the CEO and founder of Bearaby. Kathrin, welcome.

Kathrin:

Thanks so much for having me.

Stephanie:

Tell me a bit about Bearaby. I was looking at your website, I saw how amazing your weighted blankets look. They’re knitted, they’re awesome. I have a couple other weighted blankets, but they are nowhere near that, so tell me a little bit about the company and how you thought about creating it.

Kathrin:

The idea of creating Bearaby was really when I had sleep problems myself. I used to work for the World Bank as an economist, and I was just traveling a lot. I just had moved from Washington to the Middle East, and then from the Middle East to India, all within two years. I was traveling a lot and I was never a good sleeper, but this constant travel and jet lag really put me over the top. So I was just looking for a natural sleep solution. I tried many different things and at some point I came across this really simple concept of a heavy blanket that’s supposed to be 10% of your body weight, that you put on top of you in an equal way, and it’s supposed to help you calm, relax and sleep better.

Kathrin:

The concept itself is not new. Weighted blankets have been around for more than 60 years, especially for children that have sensory disorders. I ordered one of these blankets into India, and I tried it on a Saturday afternoon, and I napped for four hours. Which never happened to me before, and I was just sold on the idea. I’m like, “Okay, that’s it. I can move on with my life, I just get this blanket and things will be good.” The next night I woke up again and with the weighted blanket, but I was sweating and it was really hot.

Kathrin:

I think that’s when I realized that all these weighted blankets are made with these artificial filling materials, so usually you find 20 pounds of plastic beads in it. Obviously it makes you hot, like an oven, but it’s also really not good for the environment. At that point, I was really just searching for a product myself, and I realized there’s nothing out there. Even though the product has been around for such a long time, somehow no one had really innovated on the concept. That’s where the idea started to make something different and use innovation and design and at the same time try to come up with a product that’s addressing these needs while being sustainable at the same time.

Stephanie:

That’s awesome. So this was back in 2018 when you launched your company and you still had your day job and you launched it on Kickstarter, right?

Kathrin:

Yes.

Stephanie:

Tell me a little bit about that thought process. What was in your head when you were like, “Okay, I have a full-time job, I’m in India, and I’m going to go on Kickstarter.”

Kathrin:

I think I’m naturally a risk-averse person. I know other entrepreneurs are like, I had my idea and I knew I always wanted to be an entrepreneur and I just went for it. I went the other way. I’m like, “Let’s try it as a little side hustle and see it more of a project at the beginning.” So I really mapped out in a business plan, so what do I need to have first? How do I think about the product? How do I think about the IP? And at some point you come to the funding, and when you do the numbers you realize that it actually takes a lot of money to launch a product or a brand, and you don’t know in the early stages if people even will like it.

Kathrin:

It’s when I realized that I think crowdsourcing is a good way to fail really fast or get feedback really fast. So we put together a short video, with the initial idea, and within a month, we had more than quarter million dollars already on the Kickstarter campaign. And the feedback I got from people is that this is just a product that more people are looking for, and I think that gave me then the next confidence boost to say, “Well, it might be not only a project, but this might be a real business idea that I can start exploring.”

Stephanie:

That’s very cool. So, what did it look like after you had that money in your Kickstarter account, and you’re like, “Okay, this is real.” What did it look like after that?

Kathrin:

Well, the money didn’t last really long. So I actually emptied out my whole retirement funds. After I had had left my job. I think at that site, I really believed in the product and I knew I was onto something that I wanted to bring to the market. So the next step was the manufacturing. At that point, I had a prototype that I actually had developed together with my mom who’s a really avid knitter. And we came up with the idea that instead of using any plastic or glass beads to make a product heavy, it’s like a knitted rug. And if you use layers upon layers of fabric, you actually also get to a heavy blanket that comes up to 20 pounds.

Kathrin:

There was a small piece of a blanket. And then I went around and I just had a list of different manufacturers. I think I had a list of around 40, and I just picked up the phone and were talking to people. “This is my idea. Is it something that you could help me produce? Could you help me make this?” And I think one of the issues was that most people didn’t know why do you even want to make a heavy blanket? We’ve been working in the industry since 30 years to make a light product, a light blanket. So I think that was an issue. Then I also obviously didn’t have any credibility in the space where there’s like, “Okay, even if we’re trying to make this, how many units would you take?”

Kathrin:

And I’m like, “Maybe 100.” And then I think they already hang up the phone.

Stephanie:

[crosstalk] thinks.

Kathrin:

So I got a lot of nos at the beginning. Yeah, I just realized that nobody had done this before, even with apparel that said we have similar we don’t have these machines bedding, we don’t have these machines. So I actually went back to the drawing board and without before I actually launched the Napa our product, I first had to come up with a machine to make the weighted yarn that we’re using. I was working with a manufacturer in Germany, a machine maker. At first was creating the yarn to then go into the final production.

Kathrin:

So that took me quite some time to really figure out that supply chain piece. And yeah.

Stephanie:

I think most people would have given up when they found out they had to make their own machine. That’s wild. What was your mom saying during that whole process?

Kathrin:

They thought I’m crazy. Because I left a pretty solid job that I studied for a very long time for. I have a PhD in economics. And then suddenly in my mid 30s I’m telling my parents, I’m leaving my job because I want to sell these heavy blankets that nobody had heard of on the internet. So, even my friends thought this is just a phase or maybe like a midlife crisis. And when you have these dinners with friends, where everyone is sharing like, “Oh, I got a promotion.” Or, “I’m on to the next step.” And I had for a very long time, I had nothing to share where I’m like, “I’m about to build a website. It’s not there yet, just give me a couple of more month.”

Kathrin:

And everyone was like, “Oh, yeah, that’s very cute. Good luck with that Kathrin.”

Stephanie:

Yeah.

Kathrin:

Yeah, it was sometimes not an easy time. Especially like the first year.

Stephanie:

Yeah I can imagine that’s such a fun story. So now, you’re partnering with big brands like West Elm. You’ve got celebrities who love your product. I saw Rachel Zoe and others love it. So how many blankets are you selling today? Yeah, I want to get into the partnership piece after that. But yeah, what does the world look like today?

Kathrin:

When we launched in December 2018, we just had our website, and we got an article on Fast Company. I think just five months later, where they were describing that this is the most sustainable weighted blanket in the market, and it was just a category that people got notice of and that was the time where it’s like, this is a sleep solution and there are these weighted blankets and then we came already in a market where it was a product that was different, it was something you want to keep on the couch, something designed worthy and not something that you might want to hide in your bedroom.

Kathrin:

Then we got a call from West Elm just literally a week later. Actually first it was an email, and at that point I thought, “Probably it’s not real. Maybe someone is scamming us.” But I thought, “Well, doesn’t hurt to just jump on the call and have a conversation.” And yeah, I ended up speaking with the buyers and they were excited about the product, they were excited about a category, and we’re looking into it also for some time and they liked the idea of having a sustainable option that also fits with their interior design. While they asked me where’s your showroom, and at that point, we’re like, “It’s actually my living room. So we don’t have a showroom yet.”

Kathrin:

But they still took a chance. And we were a very small company at that point. And they helped us work through the process of getting on boarded with such a big partner very early on and working on the color collections. I think we learned a lot from a design perspective and that now we’ve expanded the partnership, we’re now also in Pottery Barn Kids with our kids collection and it’s turned out in a really beautiful partnership which I never had expected or hoped for that early in the stage of the company.

Stephanie:

That’s amazing. Have you already sold some blankets? Were you doing DTC before West Elm approached you?

Kathrin:

Yeah. So we started B2C as a primary channel. That’s just for the reason that I wanted to educate people around the product, because I felt a lot of people still didn’t fully understand what are the medical benefits of the product? How do I choose a product? I also wanted to create something that’s different from other weighted blankets where it’s really [inaudible] and into something, it’s healthy to talk and there is actually joy in napping. So this branded experience, I knew I could only establish on our own website. So we didn’t think about any other channels at that stage.

Kathrin:

Really we’re focusing on how do we communicate that we’re different? And how do you communicate the heaviness of the product without people being able to touch it?

Stephanie:

Yeah, that’s tough. So how did you show that value on the website?

Kathrin:

I think that’s still one of the most asked questions that we’re getting why people are figuring out what’s the best choice for them. We came up actually with a customized quiz, where we work with a sleep scientist, where people just … we didn’t keep it too long. But just a couple of questions that give people a guidance. Were this is the right product, there’s a recommendation that comes out at the end of it. And then we also have a detailed section that goes into the fabrics, the different options that we have and how it makes you feel.

Kathrin:

But I would say it’s definitely an advantage for us to have West Elm as a partner because if people are still unsure on, we don’t know what a weighted blanket feels like, I can tell them, why don’t you hop on a bus and go into the next West Elm store and to see and test it out there on the couch there when you come and you can try it out, and most of the people actually really go right away and enjoy trying it out.

Stephanie:

Yeah, that’s really cool. So how did you go from being DTC to then all of a sudden, you’re going to be … you have to expand your stock, you have to start selling nationally. What did you have to do behind the scenes to make it work with West Elm?

Kathrin:

It’s really a process that we needed to prepare for from an operational standpoint, because when you are a smaller brand and let’s say you have shorter planning cycles. So when we have an idea, we’re saying, “Oh, we would like to come up with this color, we want to try this.” It usually takes us more or less like two months to bring that style on our website, because we’re very agile as we’re producing in house. But now with a retailer, we had to see … when we talk January, we’re like, “Okay, let’s talk March guys.” And they’re like, “We’re already in March 2022.”

Kathrin:

Like a year later we’re like, “Oh, okay so, just the planning cycle and then adjusting the volume for it means that we need to have the analytics in place the inventory planning.” It forced us to some extent to really look for the numbers and have our inventory planned out and the analytics on what are we selling and how are we converting on the website? And then how do we allocate the volume to West Elm? So that was one piece. The other piece is obviously supply chain that became in the beginning just much more difficult. So we had to onboard an additional warehouse to just fulfill the requirements … coming from the labeling and the other requirements that we had to do.

Kathrin:

So it was a really … I would say stressful time for the team. But I think having a partner who guides you through it was helpful too. And I think now we’ve done it and we really learned a ton in these couple of months. It also helped us I think we prospectively just be better as from a operational standpoint.

Stephanie:

Yep. So, what happened this past year when it came to COVID and holidays and Black Friday? Was there anything interesting there that you had either planned for or that you found out after the fact?

Kathrin:

Generally we saw an increase in demand, especially with people being at home. People were more looking for the product. People had struggle with sleep and anxiety levels went up. So, we’ve seen really a spike in demand, which we try to fulfill from our end from a supply chain perspective. Then again, on Black Friday there was another spike. But this Black Friday, we actually decided to go on a different road. Usually as you know, Black Friday is the biggest sales day of the year, and every brand is getting ready. What we actually did is we literally slept through Black Friday.

Kathrin:

We came out with a black blanket a black Nappa for Black Friday. And we wanted to introduce the concept of mindfulness around it, because our hypothesis was that mostly we’re buying a lot of stuff at a discount that we don’t really need, it ends up in landfills and it doesn’t make us happy. So we wanted to see first of all how would it be if basically our website is shut down, and people are sleeping through Black Friday. And then if you still want to come back the next day, we’re still making it difficult for you to get the product. So we had designed a website experience where you only were able to access the product when you actually slept on it.

Kathrin:

In addition, what we wanted to see and we worked with behavioral scientists on a component of feelings, so you’re evaluating your feelings and how you are mindful when you purchase. We work with Duke University and the Advanced Center of Hindsight. And basically how it worked was you come to the website and before you click to purchase, another question box pops up that literally makes you pause and asks you how are you feeling right now. And not like the normal, how are you and then you move on but we wanted to have people reflect on it and ask people do you really need this product right now?

Kathrin:

And if yes, how are you feeling? Are you anxious? Are you calm? Do you feel lonely, sad, happy? And what we found is that, first of all people were really excited about this campaign, that it made them feel like maybe I don’t need a second blanket. And what’s most surprising for us was that people who were anxious, were five times more likely to return the product afterwards. But people who were calm, or people who felt grateful while buying the product, we had close to zero returns on that. So this is something which I was really fascinated because I think for us as brands as we move through the learnings that we had in the last years, I think people are more conscious about what we’re buying.

Kathrin:

But I think for brands we also think this is now expected and what can we do actually to take the customer experience to the next level and as more and more brands are coming on to ecommerce, is how do you establish the trust actually as a brand? I think that aspect of mindfulness and not pushing people to buy, and if there’s a business case that we actually can show this is not only good for the consumer, but it’s also good for the brand to actually have more mindful purchases instead of driving people aggressively down the funnel, this is something I was very excited about the results.

Kathrin:

And we will pilot and test more and work with our community to see how we can actually bring mindfulness into the ecommerce purchasing experience.

Stephanie:

Wow, that’s such an interesting test. So it’s different than I guess a lot of brands right now who are so quick to just try and optimize for that sale, quick conversions. And sometimes, especially the earlier ones and now you’re even thinking about the returns later on that are very expensive. How are you taking those learnings and applying that into your business going forward? What new tests are you doing? How are you thinking about things differently now?

Kathrin:

So one thing is definitely the returns for a product that on average is 20 to 25 pounds. Our shipping costs are quite high. So how can we actually optimize that we really have an experience for customers that it’s a purchase decision that is well thought out through. And that we’re actually helping people to guide them through the decision. One is the science of sleep science quiz that we have on the website, where we really educate people along the way to make the right decision on what product they should buy.

Kathrin:

But we will systematically also test in the next couple of months on what are different interventions that you can take before you click on the buy button that has a calming effect on people. Furthermore, one thing is obviously returns. But then, would that also help people to feel more satisfied overall? Is the net promoter score going up of people who basically were in a mindful state while buying and testing different interventions? And we work obviously closely with the behavioral science lab on that to find these different ways on inventing on the brand, and inventing on the consumer experience and not only having a mindful product that should bring a relaxing effect, but also how can this be a holistic experience for the brand?

Kathrin:

Because if I’m sending you three abandoned cart emails, you have to buy it now it’s gone. It’s just also contradicting for what we stand for as a brand. So I think that’s really something where I want to look into how we can expand that experiment, and bring it across every touchpoint in the brand cycle.

Stephanie:

Yeah, what are some example tests that you’re doing that you’re like, “I’m not sure if this is going to work, but we’re trying out this to see if we can convince the consumer to get into a more mindful state and then come back when they are.” What kind of things are you testing out or are the behavioral scientists testing out right now? Or thinking about doing?

Kathrin:

One thing is obviously connection with people. So, if one thing is you being aware about what you’re feeling right now, but then the latest is that there is a digital map where you actually can see, it opens up and then you can see close in your area, there are 10 other people at the moment that feel similar to you. So, elements of community and connection. And if it’s just on a website, seeing and that makes you actually realize, it helps you realize your own feelings to a larger extent that you’re not alone in front of this website and trying to buy something, but it puts things into context.

Kathrin:

The other things is gratefulness. So one of the things we found is that if you’re feeling grateful, that increases your happiness and your satisfaction with the purchase. So how can we increase that through for example like giving back and giving consumers the option of choosing a giving back component while purchasing while checking out? That’s the second thing. Another interesting approach that we already tried for Black Friday was a poem. We worked together with a poet who created a really beautiful poem that just came up before clicking to purchase.

Kathrin:

The topic was not generally about mindfulness, but really reflecting on who you are as a person, why are you buying this right now? And yeah, it’s a very beautiful, stunning piece that Adria had developed for us. I think that emotional reaction of people really is something that was stunning from a results perspective.

Stephanie:

Yeah, that’s really cool. That’s … like I said, just such a different mindset than what’s happening right now with a lot of companies. And not only is it good for consumers, but it’s good for business. So, how much did you see returns decrease compared to before when you weren’t doing that? What savings was your company experiencing from now doing this and trying this out?

Kathrin:

My initial hypothesis was that conversion rate would go down, because if you’re making it that difficult for people to get a product, you’re asking them to wait, sleep on it and you’re ask them … Listen to a poem, take a breathing exercise, tell me how you’re feeling and then take into a consent form before you then finally can buy the product. So I was actually expecting that we don’t sell any of these blankets. I was telling the team that was working on it I’m like, “I think if we’re selling two blankets that would be already a good result.” And we were quite surprised that our conversion rate was double than to our regular conversion rate.

Kathrin:

Now our return rates again, have less than half the return rates than our usual process. And we had the project run for three months to really collect a robust set of data, and I think we’re really onto something with this whole concept of calm buying, that goes a bit in the opposite direction of optimizing and driving people down the funnel of thinking if there are actually other ways more authentic and honest ways as a brand to communicate, and I think so far is what we see actually the numbers really speak for themselves.

Stephanie:

Mm-hmm (affirmative). Yeah, that’s really fun. Such a different conversation that I’ve had so far on the show which is just really exciting. So what did your partners think about this test? Were you working with West Elm at the time? And if so, what did they say when you’re like, “Conversions could go down to zero, but there’s something better coming.”

Kathrin:

So this was actually something we only tested on our website, because it’s quite complex. So we couldn’t roll it out. And I actually just got these results in last week.

Stephanie:

Got it.

Kathrin:

So everyone was like, “You guys go first.” If we monitor and it’s a nice idea. But let’s see how that turns out for you guys. We were all nervous obviously. Black Friday is a big sales day and like having the potential that you are losing out on that day, definitely was making us uneasy. But our partners also said, “We’re quite curious to see good luck with that.” So I think that’s why it’s even more exciting now that we say, “Hey, we’re actually onto something that we probably could build up on and maybe even share with the broader community of B2C brands.” I know it’s like a lot going on and there are a lot of shifts in what’s happening and there’s maybe an approach that … yeah, we’re happy to share the lessons learned that we have and maybe more people are coming on board and see if it works for them as well.

Stephanie:

Yeah you’re reinventing the DTC playbook and thinking about it in a whole different way. Have you had other brands who are interested in trying this out or that you’ve talked to where you see an interest in the industry?

Kathrin:

I think the early conversations that we had especially brands that are focused on sustainability. That is, we had initial discussions where people are surprised that it really matters or it directly impact conversion and it impacts our return rates. So I think there is an opportunity to build that with a smaller group of friends and innovate on it. But yeah, it’s early days, so I think we will work a bit more on getting some more findings and testing a bit more what works the best. And then obviously sharing it with everyone.

Stephanie:

Yeah, that’s great. So where are you headed? What are you hoping to do with Bearaby over the next one to three years? What are you guys innovating on or looking into or trying out outside of the already cool work and behavior science that you’re testing?

Kathrin:

Yeah for us, it’s I think, looking into what consumers are expecting from us is definitely I think a lot of the things that happened during COVID will stay. People are expecting such deliveries from us, almost same day deliveries, so we were piloting on same day to our window delivery options. I think that’s something where, how can we make it easy and comfortable for people to not leave their house yet, but still get their product in a timely basis? How do we set up from a infrastructure perspective that we’re able to hold that pace? I think that’s something that we’re looking into. Then just generally, we’re always interested in looking into new products and new product innovation in the wellness space.

Kathrin:

Obviously we launched last year the children’s edition that we really also launched from a direct demand during COVID, what we heard from parents that were homeschooling children. And I think that just listening to our customers is one of the things that we also I think probably started. In crowdfunding you always stick to the principle. Whenever we have a new collection coming up or a early product idea. We have a small group of people from our loyal customers, we call them the Nappa hood club, that can try out products and where we get feedback and listen to it.

Kathrin:

And Instagram for example when it comes to color selection, we just discussed our fall colors that are coming out. And yeah at the end, we took two colors out that people on Instagram were not excited about and literally gave the whole vote to the community of the colors that they want to see. I think that’s another interesting thing where obviously we always took feedback from people, but in a less systematic way, and now we’re really putting the consumer first and the decisions that people are telling us and the colors we will put on the market. Even despite maybe some other designers that would go for other colors.

Kathrin:

And yeah, let’s see how it goes.

Stephanie:

Yeah, that’s great. How did you build up an audience on Instagram? Because I was reading it, quite a bit of it was organic and you were more interested in working on the supply chain stuff and sending out samples and get on people’s radar. So how did you build up your Instagram now where people are actually commenting and giving you feedback?

Kathrin:

I think on the early days, I didn’t have much experience on Instagram. So I really had to test and figure out what works. What I think what works well for us is one of the things is that, we’re trying to be helpful for the community. So, instead of just us as a brand talking and sharing what we have new, especially during the last year, we realized a lot of the community is actually struggling with mental health anxiety. So what we did for example is that we used Instagram connect it to a SMS platform. Where usually you send SMS to inform people about the sales. But then we use it in a reverse way where we had actually an expert sitting on the other end of the line.

Kathrin:

Psychologist or this general mental health counselor where people could send in their questions that we got from Instagram but that also we got through SMS. So we connected both platforms and I think what the beauty of that was is that mental health often is a very personal issue, it’s not something that you want to have on Instagram life, if you have a question. So that’s why people could actually send the SMS question in privacy and there’s an expert answering it expert from NAMI. I think that helpfulness and where people say, “Well, this is actually relevant content.” And we’re asking them, “So which expert do you want to speak to?”

Kathrin:

And ranging from people who have a longtime experience on how to homeschool children, now teaching people who just have to deal and have to get to learn how to get into that new mode. We brought all these experts and we had to message this community of helpfulness and chat. And I think that just sparked a natural conversation and I think then people stick on and want to see what else the brand is doing and I think if we listen to that and we are reciprocating and not shouting out but we’re listening, it’s just organically … the community grows and is also excited about the brand.

Stephanie:

Yeah, and that’s awesome. You’re once again doing something in a reverse way. I love it. It’s so contrarian but also yeah, amazing to hear how it’s impacting the community. Would you take their questions or would the experts take them and answer them on Instagram Story or something so others could benefit from the questions coming in? Or were you making it more one-to-one where they were actually responding in a text to that person?

Kathrin:

So what we did at the beginning is like you’re sending in a question and it’s really a one-to-one answer. And then what we did for the community later is that we anonymized the questions and then have them on Instagram Stories for people to learn basically what the most common answers were. So you still have that one-on-one feeling especially for things that are personal, but then we’re still making it available, and just routinely having these cycles where it’s like, these are fixed dates where we announced this as the expert that we’re having on the line. So people can share questions in advance. The experts can prepare for it because they have to take on a back end a lot of questions, because it’s really this one-on-one conversations.

Kathrin:

But then making sure that we can scale it to a bigger community later so it’s really helpful and it also stays there as a reference and as a helpful resource in the future.

Stephanie:

Awesome. I love that. All right. Well let’s shift over to the lightning round. The lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I’m going to send a question your way and you have a minute or less to answer. Are you ready Kathrin?

Kathrin:

Yes.

Stephanie:

All right. First, what one thing will have the biggest impact on ecommerce in the next year?

Kathrin:

I think the centralization of data. Where we have more different inputs from supply chain, from customization and customer journey and how do we actually get that centralized in one place and created experience for the consumer that’s helpful and adapts to their needs.

Stephanie:

I love that. Have you seen anyone who is doing a good job in that space so far that you’re watching?

Kathrin:

Generally I’m always looking at what Tesla has been doing. I think if you look at the example on how they really reinvented a space that no one thought it’s doable, that you have no car dealers and that you actually have software on the car. I think just thinking about ideas that are a bit broader. So obviously we’re watching what the latest trends are on B2C. But I think it’s also really helpful to see in other industries that have been completely reinvented. And see what were the initial impetus that we can take as obviously as a smaller brand, we’re not Tesla, but taking bits and pieces after thinking and put small bets and test what we can do to maybe reinvent the wheel at a small point and then scale it from there.

Stephanie:

Yeah, that’s great. Yeah, Tesla’s always a good one to watch. What’s up next on your reading list?

Kathrin:

I’m just finishing up the No Rules Rules of Netflix, reinventing culture. I think now that we are getting bigger as a company, we’re having a lot of similarities that I guess every startup is going through. You’re a small group and everything is informed and you have no rules, and then suddenly you’re more than 20 people, 25 people, and how do you actually keep the culture as it is without limiting people and the creativity and establishing artificial rules and too many approval processes? So how can we stay agile as a brand? Again, we’re not Netflix, but I think there are a couple of things especially early on that you can take from the book.

Kathrin:

One is really the transparency that even if it’s uncomfortable, if things are going wrong, is that we talk to everyone. So there’s no hidden desk or anything with any documents, we keep our revenue information for example, for everyone visible on the board, so people can see how we’re doing. So there are no secrets. And I think that just brings a level of accountability to the team, and without us having to establish rules that limits the strongest performance and people were actually most excited about driving things forward.

Stephanie:

Yep. Yeah that’s great. That’s a good book too. What’s one thing that you don’t understand today that you wish you did?

Kathrin:

I would say, some of the new channels TikTok is one of those where I wish I would be earlier to the game. I think there are a lot of interesting things going on, and I’m getting actually taught by people who are much younger than me. What’s going on? So I think, for us going forward is like, how do we expand beyond the channels that we learned and we are good at and where we have an established community and how can we go about new things and finding out about it and placing small bets, trying something and see if it sticks? But yeah, I think that’s something always good to be early to the party.

Stephanie:

Yep. Yeah, I agree. All right, Kathrin, this has been such a fun interview so different, which I loved. Thank you for coming on. Where can people find out more about you and Bearaby?

Kathrin:

Yes, you can find more about us on bearaby.com. And you can also find us on Instagram. And our handle is @mybearaby.

Stephanie:

Thanks so much for joining us. It was a pleasure.

Kathrin:

Thanks for having me.

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