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EPISODE 92

The Pivot From Retail to Ecommerce

With Israel Moreira, co-CEO of Doughp

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By now we’ve all heard about the thousands of businesses that pivoted to ecommerce in the wake of the pandemic last year. What we haven’t heard as much are the lessons both companies and consumers have learned in the process.

On this episode of Up Next in Commerce, I was excited to dive into those lessons and more with Israel “Iz” Moreira, the co-CEO of Doughp, a company that sells edible (and delicious) cookie dough. Prior to 2020, Doughp relied heavily on its brick-and-mortar stores and the foot traffic they delivered. But Iz saw potential in expanding the company through ecommerce channels, and, luckily, laid the groundwork for the infrastructure for that pivot even before COVID-19 forced Doughp to shutter its retail doors. With a now fully-online company, Doughp has started to centralize and increase its shipping capabilities and has seen success, but it wasn’t a cake (or should I say, cookie dough) walk. Iz explains some of the hardships Doughp faced on its journey to ecommerce success, including how little information-sharing there still is in the business world when it comes to cold shipping. Plus he dives into the recent revelations he’s discovered about whether free shipping actually matters as much as you think it does. Enjoy this episode!

Main Takeaways:

  • Secrets Are No Fun: Multiple players in the ecommerce space have reported struggles in optimizing the logistics of cold shipping. Some have figured it out on their own, while others have known the answers all along and have been keeping them close to the vest. Competitive advantages are still alive and well in the business world, so the level of information sharing when it comes to cold storage is still quite low in order for places like grocery stores and meal preppers to maintain their edge.
  • Lead With Mission: Depending on your industry, you should be thinking about how to best reach customers in a differentiated way. Testing is required to find the right strategy, so don’t be afraid to experiment with personalization and messaging. And if you are in a more commoditized industry, finding that one thing that separates you from the rest of the pack is going to be the difference between a customer choosing you or not.
  • Does Free Shipping Matter?: While 2020 was a struggle for most, there were some bright sides, including the education of consumers on the world of shipping and logistics. As more consumers became educated on the hardships businesses face when it comes to shipping and handling, the customers have become more willing to pay for shipping.

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

Key Quotes:

“In March, when the pandemic hit, I had staff of the store and I had the space. I had no customers to serve. So, that helped us in that I started using those resources to fulfill the ecommerce orders.”

[On cold shipping] “If you talk to some specialist companies in packaging and box design and coolant design, then yeah, they will know everything, but it’s proprietary information because it’s their product. So, they don’t want to be sharing this with many people. So, you don’t find a lot of that information online consolidated in a how-to book. That’s the first problem. The second problem is we had grocery stores operating before all this happened. Now, obviously that trend of going into ecommerce was already happening. But when the pandemic hit, it just accelerated exponentially. So, the speed with which the information was shared was not equal to the speed with which people needed that information. So, we have this major gap right now in which some players know what they’re doing and some players are still trying to figure it out.”

“We have a very different scenario here than most brands that you see in the grocery stores. It’s because we lead with our mission and our giving back, right? We have a mission. We talk about mental health and stigmas around mental health. We also give 1% back to the community. That’s just not something that other brands out there do. So, if you associate that with a kick ass product, which is what we have, then you have the winning formula.”

“As you go into a commoditized industry, leading with the mission is more important. If you’re not in a commoditized industry, then your product has major differences against its competition. So, it makes sense for you to lead with more of your product and how it is and why is it better than a competition. Although we have differences from our competition, it is a more commoditized product. If you go to a grocery store right now, you’re going to find Pillsbury, Nestle, and other big brands right there. So, leading with the mission in this case, I think, is more relevant.” 

“As you centralize, it’s easier for you to keep control of what you’re doing and keep your processes consistent and whatnot. That’s what we do. But as you want to reduce the time in transit, you have to do that. And then you need more labor, more headcount to make sure that everything happens, and more inventory. There’s more cash tied up into that inventory. It just goes crazy. But most people that don’t know what goes behind running a business just think, ‘Oh, well, this brand doesn’t know what they’re doing, because Amazon is doing it in a day.’ So, there’s a lot of educating consumers about shipping and logistics for them to understand why Amazon is able to do this. Whereas the small brand that you’re trying to support cannot do that. It doesn’t make sense on their unit economics.” 

“The brands that are the most prepared in the ecommerce world are the ones that are going to succeed in the experiential events side of things.”

“We have to make sure that the people that come to an event don’t come only because of the influencer. They have a very good experience there as well provided by us. So, it’s about leading with the messaging and the 1% giving back. We’re not here just for you to see this influencer and just for you to try this cookie dough. We’re also here to foster raw conversation about mental health and addiction recovery.”

 

Bio:

Israel “Iz” Moreira is the co-CEO of Doughp. He has a background in civil engineering, construction, and project management, which he brought to Doughp in 2019. Today, he leads teams to collectively build a vision of the overarching expectation and apply a disciplined, determined and enthusiastic approach to plan and further execute that vision into reality. 

Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

Transcript:

Stephanie:

Welcome back to Up Next in Commerce, your number one spot for all things ecommerce. This is your host Stephanie Postles, CEO at Mission.org. Today, I’m chatting with Israel Moreira AKA Is. Welcome to the show.

Israel:

Hey, thank you for having me, Stephanie. Nice to be here.

Stephanie:

I’m really excited to have you on here. I’m excited to have a company on here called Doughp, which I’ve said now multiple times, “Why was I not innovative enough to create a company called Doughp?”

Israel:

Yeah, I have to give full credit to Kelsey though. She was the marketing brain behind this brand. So, it’s really interesting. Coming from Brazil, Doughp was not part of my English skill. So, when I first heard it, I was like, “Wait, what is this?” And then it makes sense.

Stephanie:

So, maybe let’s start there before we dive into what Doughp is and your role there. Tell me a bit about coming from Brazil. When did you come over to the US? Why? What was that process like?

Israel:

Yeah, for sure. So, I have a civil engineering background. I went to school for civil engineering, started working in construction in about 2010, 2011, some time ago, and eventually became a project manager for a construction firm in Brazil. I loved working in construction per se, because of all the changes and all the new stuff going on around. Being a project manager is really relevant in any industry. You can just transfer that skill set across multiple industries. So, I love doing that, but living in Brazil was not something that fulfill me per se. I would say, safety in Brazil, public education, public health, everything you hear in the news here about third world countries, most of it is true.

Israel:

So, being raised there, my parents always told me like, “Oh, if you ever have an opportunity to leave and study abroad, just go do it. All the other countries out there, they’re way better for you to have a better career.” So, I had that mindset built into me in my upbringing.

Israel:

So, in 2015, I decided to make the change. I did a backpacking trip to the United States and Canada, because I wanted to be in an English speaking country. English was always my second language. So, I was like, “Well, I’ve got to go during the winter and find out if I can withstand the winter and the place that I’m going,” because the summer is fine, right? I was born and raised under the sun. So, I did this backpacking trip of 30 days going across the US and Canada, which was awesome, but it led me to find out that I wanted to be in Berkeley in California. So, I applied to a course there, an international student course that gave me the ability to stay here studying business management and marketing, which were not my strong suits.

Israel:

I was always a project manager. So, I wanted to know how to manage a business. The marketing side, because I’m so focused on operations and finances, was never my strong suit. So, I wanted to be a little better in that regard. And then after studying here, I was able to secure a job in San Francisco, which my head was just blown away by that. Yeah, eventually just stay here, working in SF, and then the love story begins between me and Kelsey. But after working for Product School, which was a company I was working for in SF, I joined Kelsey at Doughp.

Stephanie:

Yup. So, Kelsey founded Doughp, which is a raw cookie dough bar, but it doesn’t have raw eggs in there, right? Is that the right way to explain it, or maybe you can do it better justice?

Israel:

No, that’s correct. I like it. It does not have any raw eggs. We use heat-treated flour. So, it’s super safe for consumption. So, the whole idea of this is to bring nostalgia by the scoop. So, you just probably grew up here trying to eat the cookie dough that your mom or somebody in your family was baking. Everybody was saying, “No, you can’t eat it, because of the eggs and you’re going to get salmonella and whatever.” So, Kelsey did found Doughp in 2017 to solve that problem. It’s an interesting story as well, because in 2015, she became sober. She was struggling with alcohol, working for Intel for 10 years. In becoming sober, she rediscovered her passion for baking.

Israel:

So, she just launched Doughp in 2017. In 2018, she started the Pier 39 store that she used to have in San Francisco. It was a rocket ship, I got to say. She then launched in Oracle Park in a kiosk. And then in 2019, Doughp opened the store at the Las Vegas Strip. So, in 2019, Doughp have basically three brick-and-mortar operating stores.

Stephanie:

That’s awesome. So, everything was brick-and-mortar at that point. When did you enter into the company? What year was it? What does your role look like as Co-CEO versus what Kelsey works on?

Israel:

Right. So, let me start with the second question, the Co-CEO role. Kelsey and I have very different skill sets. She is a marketing guru and a business development wizard, I got to say. She’s great at that. I’m great in operations and finances. So, we have very defined responsibilities, if that makes sense. So, whenever she comes to the problem, obviously, I’ll be the sounding board, but she’s the one that’s the expert in marketing, for example.

Israel:

So, if there’s anything coming up in a marketing campaign, then she’s the one who’s going to say, go or no go, the final word. Vice versa, in operations and finances. So, it’s a really fortunate situation, I got to say, because it makes it easier, right? Especially having a relationship as well. Right now, I’m speaking from the office. We try to keep all Doughp matters in the office. So, the relationship also happens, but it’s a challenge. But anyway, I think we have a very fortunate situation in this skill set.

Israel:

As far as your first question, when did we transition into the ecommerce? When did I join the company?

Stephanie:

Yeah. When did you join the company? Because that’s where I want to get into the path to Shark Tank and all that. So, what year was it that you joined?

Israel:

Right. She went to Shark Tank before I joined the company. So, she went to Shark Tank in 2019. So, right after she opened the store here in Las Vegas, she went to Shark Tank. I joined the company late 2019. So, it was about six months after the Shark Tank episode aired.

Stephanie:

You are in the midst of the growth then, because I was listening to an interview with some stats around… I think it was in November 2019. You guys were maybe shipping 30 boxes a month. And then by April 2020, you were shipping 3,000 boxes per week, which is crazy growth. So, I want to hear. I mean, it sounds like you were right in the midst of that, of entering into… She was on Shark Tank. She didn’t get a deal. But then she started opening more retail locations, grew like crazy, and then COVID hit. Tell me a bit about that.

Israel:

Right, exactly that. So, you just summarized everything. I joined the company in November of 2019, which was exactly when we were doing the small amount of boxes a month. When I joined, one of the first things I did with her was to have a big brainstorming session about all the operations that she was doing, right? So, at the time, she was doing catering events. She was doing a little bit of wholesale, a little bit of ecommerce. She also had the stores. So, it was a very wide breadth of operations and not having a lot of success in any of them per se, right?

Israel:

So, the stores were still the bread and butter of the company, but none of the stores were growing astronomically. We were already seeing some foot traffic decreases. Happening so much so that as soon as I joined the company, I was like, “We got to make sure that the unit economics of these stores are a little better,” right? So, we were paying way more in rent than we should be paying based on foot traffic. So, renegotiations started happening back then. So, out of that brainstorming session, we used a very rudimentary framework, I would say, but it was super helpful to understand what type of work was being done in each distribution channel to serve customers versus what type of return that was giving to the company.

Israel:

So, the outcome of that situation was, “Okay, brick-and-mortar is still the bread and butter of the company. We are not going to change that, but we need to find one other channel, not five, six, seven, whatever she was doing back then, that will be the 20% revenue, right? We’re going to keep the brick-and-mortar 80%. We’re going to have one of these as 20%.” Ecommerce was the one we decided just because of the “infinite possibilities” of having foot traffic not being limited by foot… It’s not actually foot traffic. It’s actually eyeballs. So, we decided to go into ecommerce in November of 2019 together. That’s when we started shifting all of our resources into growing our website and our paid acquisition channels and our social media strategy.

Israel:

When the pandemic hit, thankfully, we were ready. So, although it was awful for the brick-and-mortar stores, it was great for the ecommerce because people were at home. They were not very happy being at home. They were trying to find novelties to fill the time, right? They’re just not happy at home. Being an impulse buy, a nostalgia buy, we just skyrocketed. That’s why 3,000 boxes a week happened.

Stephanie:

What kind of things did you have to adjust on the back end when it came to logistics? I mean, I’m thinking about shipping perishables. It’s one thing to ship it to a retail location. You’ve got it all set. You’re planning for your orders on average every week. How do you prepare for shipping all over the country or world? How did you set things up to prepare for that?

Israel:

That was a big learning experience, I got to say. There’s a lot that co-chain shipping entails. Back in 2019, we knew almost nothing about it. So, there was a lot of talking to people that are already in the space and flying and driving to fulfillment centers and co-packers and seeing how they work, really learning how they work. But at the same time, we didn’t have all the resources to go into a co-packer and a national last mile distribution contract. So, we have to be scrappy as well. So, we had to use all the resources that we had.

Israel:

In March, when the pandemic hit, I had staff of the store and I had the space. I had no customers to serve. So, that helped us in that I started using those resources to fulfill the ecommerce orders, right? So, January, February, we were already having some growth, not astronomical, but still some growth. I was already using that labor to fulfill the orders. And then in March, when the pandemic hit and ecommerce just went through the roof, I was able to use our staff to help there. But as far as the logistical implications, we have a lot of limitations, because of cold shipping, but now I thankfully can say we know what we’re doing.

Stephanie:

That’s a plus.

Israel:

Yeah. When we first started, finding coolants and insulation that will be able to keep our product refrigerated through the time in transit. Also, making sure that you find that sweet spot between the winter and the summer, because in the summer, we’ll need more coolant, but you also can’t forget about the coolants in the winter. It was a big challenge, but now we got it dialed in.

Stephanie:

I mean, it seems like this area of cold chain shipping and logistics has a lot of room to grow, because we’ve had a couple people on the show who… We had Yasso on. It’s like frozen yogurt bars. Everyone talks about building their packing materials from scratch, depending on what you need, which seems insane to me. It seems like there should be some shipping materials. If you need something under this temperature for five days, here’s the box to go with. Why do you think this industry is lagging behind like that when it seems like this is the way forward? I mean, everyone’s going to be doing grocery delivery and online orders much more frequently now. It’s the way we’re moving, but it seems like that area has definitely lagged behind.

Israel:

That’s a great question. I do think there’s a wide or a vast lack of information around there. There’s a little amount of players that know a lot, right? So, if you talk to some specialist companies in packaging and box design and coolant design, then yeah, they will know everything, but it’s proprietary information, because it’s their product. So, they don’t want to be sharing this with many people. So, you don’t find a lot of that information online consolidated in a how-to book. That’s the first problem.

Israel:

The second problem is we had grocery stores operating before all this happen. Now, obviously that trend of going into ecommerce was already happening. But when the pandemic hit, it just accelerated exponentially. So, the speed with which the information is shared was not equal to the speed with which people needed that information. So, we have this major gap right now in which some players know what they’re doing and some players are still trying to figure it out.

Stephanie:

Also, it seems like as a middle ground if you don’t have the resources to invest in your own shipping materials, you could do the middle ground of working with grocery stores and letting them take care of it, ship it to the grocery store. They can do the online orders, the in-store pickups, and all that stuff. You don’t have to figure out the logistics from end to end in the beginning.

Israel:

Right, right. Yeah, that totally makes sense. I think that’s why most brands did not adventure into the ecommerce space, I think. Now, we’re just seeing so many brands going into ecommerce, because people are at home and they’re not buying from grocery stores as often, which is a whole different conversation, right? Are they ever going to go back to whatever normal is, or are they going to continue buying from ecommerce? My take on that is that they will continue to buy from ecommerce not as much as now, but definitely, they’re not going back to what that rate was before. So, yeah.

Israel:

So, having this central player is also another reason why the information was centralized, right? They have this competitive edge, and they don’t want to give it away to their competitors. So, if you’re talking about Whole Foods, they have their own distribution chain. So, they have their own ways to make their profit at the end of the day. So, they don’t want other competitors to find out what they’re doing, I bet.

Stephanie:

Yup, yeah. It makes sense. So, when you were going through these transitions of going from mostly retail to ecommerce, what were some of the areas of the business that needed the most adjustments? When you’re focused on retail, you’re thinking about foot traffic. What neighbors do you have moving in? What other stores are nearby? You’re mentioning unit economics. It seems very different when you’re shifting almost completely to online sales. What things that you have to adjust or completely cut out from the business? The whole way of thinking, what do you have to change?

Israel:

Well, the unit economics of the two channels are very different, right? So, if you’re thinking about a brick-and-mortar store, you have to consider labor as one of your biggest costs, along with ingredients and packaging. And then as you go into ecommerce, ingredients and packaging are still there. They’re not going to go away. So, the major difference is shipping, handling and shipping. So, these are the major differences. Some people consider shipping within the cost of goods sold universe. Some people say it’s out. But then after shipping, it’s a contribution margin. Whatever you may say, shipping is a major cost to serve your customers on ecommerce channel. So, that is the biggest change, I think, we’ve seen.

Israel:

Ingredients and packaging as we’re selling the same product do not change. Operating expenses and SG&A, we’ll have a whole different conversation as well. Because as you go into ecommerce, you’re acquiring customers in a very different way as you mentioned. You’re not dependent on foot traffic. You’re not dependent on a shopping mall management, what happens with the world, flights. Especially in the Las Vegas Strip, it’s a very tourist-based area. So, going away from that gives us a lot more independence, but at the same time, because everybody got into that space last year, it got very competitive. So, although the cost structure is different, that competition makes it hard.

Stephanie:

Yeah. Did you have a customer base that you could tap into from your retail locations, where you’ve got these loyal customers coming back? Maybe they’re getting points. Did you already have that baseline to tap into and be like, “We’re moving to retail. We’ll see you there”? Or did you have to start from scratch?

Israel:

So, it’s a 50/50 response here. Yes, we did. It was great, right? We had a lot of customers through the Pier 39 store and the Las Vegas Strip store. They were indeed activated for the ecommerce. Whenever we were ready to ship, we sent a blast saying, “Hey, guys, here we are. We can ship to your house now.” This was January, pre-pandemic. So, that part was great, but at the same time, we just grew so much in March and April, that I would say most of our customers right now did not go through our stores before. So, although we did tap into that, that’s not the majority of our customer base.

Stephanie:

So, then how are you thinking about customer acquisition now? Because once again, it seems like such a different hat you have to wear of how to attract customers in the online world versus I could do a billboard. I could go out and give out samples of the cookie dough. What are your top performing channels right now that you guys are leaning into?

Israel:

See, our top performing channels are paid advertising and social media organic. I think we have a very different scenario here than most brands that you see in the grocery stores. It’s because we lead with our mission and our giving back, right? We have a mission. We talk about mental health and stigmas around mental health. We also give 1% back to the community. That’s just not something that other brands out there do. So, if you associate that with a kick ass product, which is what we have, then you have the winning formula. I think this is the way that we lead with our brand messaging. This is what’s made us so successful so far.

Stephanie:

How do you think about balancing that? Because we’ve had a couple brands on the show who also have missions. We’ve had Bombas on. We had BLK & Bol‪d Coffee. But they also talked about the unique balance between thinking, “Do you sell with the mission, or do you sell with the product and then showcase the mission afterwards?” Because it depends on who you’re getting in front of or who you’re trying to reach. How do you guys think about that balance of we have an epic product. and we have a great mission without muddying up the website.

Israel:

That’s a very interesting question. I think you said the answer in the question.

Stephanie:

I just answered my own questions.

Israel:

I actually agree with your answer. I think it depends on who you’re trying to sell. It depends on what your product is. I think there’s many ways for you to do this. In our particular case, we tried to lead with the mission. I think as you go into a commoditized industry, leading with the mission is more important. If you’re not in a commoditized industry, then your product has major differences against its competition.

Israel:

So, it makes sense for you to lead with more of your product and how it is and why is it better than a competition. Although we have differences from our competition, it is a more commoditized product, right? If you go to a grocery store right now, you’re going to find Pillsbury, Nestle, and other big brands right there. So, leading with the mission in this case, I think, is more relevant.

Stephanie:

I like that point. That is a good way to think about it. Depending on the industry, you should think about how to reach your customers. I also think you could maybe segment the customers depending on what they’re searching for, what they’re interested in, if they’re past customers. We’ve talked a lot about loyalty on the show and how you should be giving different messages depending on who the customer is and how they’ve engaged with your product. Do you guys think about doing a more personalized approach depending on how your customers are interacting?

Israel:

Yeah. That also talks very closely to our landing page strategy, right? We have different offerings for different customers. So, it makes sense for you to segment your customer base and say, “Okay, I got to potentially have a loss leader to have this customer in the door. And then I’ll make sure that this customer loves the product enough that they will come back because of the mission.” So that’s one potential strategy, but again, it depends on what customer you’re trying to sell to and what your product is. In our case, we have many different customer personas. We try many different approaches to each of them every single day. So, there’s a lot that goes into A/B testing and understanding what performs better to each audience. So, that’s a lot of our time.

Stephanie:

Yeah. What are some of your favorite experiments that you’ve run or results where you’re like, “I wasn’t expecting that, but now we’re leaning into that strategy after deploying that”? Any good stories around that?

Israel:

Yeah, shipping.

Stephanie:

Let’s hear it.

Israel:

Shipping is very interesting. We’ve run many, many tests around shipping. It seems to be a seasonal thing or it has something to do with a pandemic. We’re not quite sure about the reasoning behind it, but it seems like in the very beginning of the pandemic, people are more sensitive to the free shipping messaging, right? You were testing free shipping against the $2.95 shipping. Free shipping would convert like crazy versus the 295. Whereas now, it seems like people are more understanding of the world situation and how shipping works and how expensive it is for brands to ship.

Israel:

So, right now, the latest test that we ran about shipping, we didn’t have a very significant variance in conversion between… I think it was a $9.95 shipping versus a $7.95 shipping. So, giving discounts on shipping right now is not as relevant as before, which to me just blows my mind because what you think in shipping, you consider Amazon, right? Customers are getting spoiled with Amazon, “spoiled.”

Stephanie:

I’m spoiled.

Israel:

Exactly, you just go on Amazon. I literally went on Amazon last week on Friday to get some vitamins and I got the vitamins on Saturday morning.

Stephanie:

Yeah, I got a leaf blower in one day.

Israel:

Wow.

Stephanie:

That’s a whole different level of being spoiled, but I mean, I’m all for it.

Israel:

Exactly. That talks closely to how expansive their distribution network is, how many warehouses they have, and how much inventory they hold in each of the warehouses to be able to do that, because as you centralize, it’s easier for you to keep control of what you’re doing and keep your processes consistent and whatnot. That’s what we do.

Israel:

But as you want to reduce the time in transit, you have to do that. And then you need more labor, more headcount to make sure that everything happens, and more inventory. There’s more cash tied up into that inventory. It just goes crazy. But most people that don’t know what goes behind running a business just think, “Oh, well, this brand doesn’t know what they’re doing, because Amazon is doing it in a day.” So, there’s a lot of educating consumers about shipping and logistics for them to understand why Amazon is able to do this. Whereas the small brand that you’re trying to support cannot do that. It doesn’t make sense on their unit economics.

Stephanie:

Yeah, I mean, I think that’s the silver lining of 2020 is that a lot of people did experiment with new DTC companies. They went places they would have probably never shopped before then and were buying things directly from brands. So, I think they probably became more accustomed to paying for shipping to where going forward, that might be a more normalized thing, or going forward, people will just be like, “You need to just include that in the cost.” Because oftentimes, I do think if you were just to increase the cost by a couple of dollars and tell me I have free shipping, I probably would be happier and just not care where it went. You can charge me for it, but just don’t show me that extra line at checkout.

Israel:

Right, right. That’s exactly how we did that first test. We just did exactly the same total cost for the customer. One had the shipping as a separate line item, and the other one had the shipping baked into it. Again, the free shipping converted way more. But now the last time we ran it, it didn’t. So, yeah. Who knows what’s going to happen now?

Stephanie:

Yeah, I mean, that’s definitely a good test to run. So, what’s next? What are you guys preparing for right now? Are you going to re-enter retail? Are you going to start working with wholesalers? What are you guys planning for over the next one to two years?

Israel:

That’s a great question. It involves a little bit of forecasting in times of uncertainty. To the best of our ability, we forecast that potentially until late this year or probably mid-next year, we’re going to be back to whatever normal is. So, there’s many other channels that will come back to normal aside from ecommerce, right? Ecommerce is now our bread and butter. We’re heavily focused there, but we foresee some opportunities, for example, in grocery stores and wholesale that we might pursue as well. So, that depends a lot on where the market is. I think by now, we know exactly how to pivot and persevere whenever needed. We learned that lesson during the ecommerce and pandemic shift.

Stephanie:

Would you re-enter retail with… Would you do anything different now, where you’ve had a year plus to think about it and think through the strategies that you were using before? Would you go about it a different way?

Israel:

Retail as in to brick-and-mortar stores?

Stephanie:

Yeah, brick-and-mortar.

Israel:

No, no, that’s definitely not in our intention for the future. I think retail can work in some ways, but that’s not something we want to do anymore, just because right now, we have this brand awareness. We have this momentum that the brand generated with the ecommerce shift and everything that’s going on around us that we just think limiting your product to one single store that depends on the foot traffic around that store is not where we want to be. So, on the brick-and-mortar side, no, I don’t think we would do anything different. On the ecommerce side, perhaps we would have started earlier.

Stephanie:

You can’t have that kind of hindsight, but yes, I’m sure everyone’s like, “Why didn’t we do this a couple of years ago?”

Israel:

Yeah, definitely.

Stephanie:

What about samples? So, that’s always my thing with everyone who’s come on the show who is in the CPG area and foods and snacks and all this stuff. I mean, I always think about Costco, which I love so much. I miss their samples a lot. I think about a product like yours, especially with buying it online, it’s like, “Well, I don’t know how it’ll taste. It’d be nice to be able to try it out in a small amount first.” That’s why I think retail is so great. So, how do you guys think about introducing it to customers like me, who would be maybe harder to sell to online without really knowing if I would even like it?

Israel:

Right. Well, I think you touched a very important point in the wholesale/grocery store channel, which is they do their own experiential marketing. Some of them do. Some of them have fairs and other types of experiential marketing. That’s one thing that we’ll definitely tap into. Organizing our own events is something we thought about, but not depending on real estate that’s under a lease agreement, if that makes sense, right? Because an event, you’re going to generate all that buzz and bring potential customers to your event.

Israel:

Maybe you can even do brand partnerships to generate even more buzz. Those people will come and try your cookie dough or whatever product you’re selling, and then potentially buy from you at the grocery store or the ecommerce side. Whereas if you have one space, you’re going to have to conduct business as usual. You’re going to have to hire staff and keep staff and train staff, keep the lease. There’s a lot of difficulties that encompass operating a retail store. I think for what you’re saying, acquisition of customers, I think there’s other ways to find that.

Stephanie:

Yeah, I love that. I think there’s going to be so much pent up demand around people wanting to, like you said, getting into these experiences and experience brands but in a different unique way, whether it’s events where you try something out or meetups or whatever it may be. I do think a lot of people who are changing quickly with the times will see it how you do around, “We don’t need just one location. We can tap into the Walmart’s and the Whole Foods, and then go to these events and just not be so reliant on one channel or one retail location.”

Israel:

Yeah. I think that brings us to a very important point that’s happening because of the pandemic, which is the decentralization of population density, right? If you look at population density of San Francisco, LA, New York, Chicago, all the big cities in the US, there’s many people that just left.

Stephanie:

Got out of there. I’m one of them, peace. Bye, California.

Israel:

So, do we. Now, we’re in Nevada. There’s a lot of people that just don’t need to be in a physical space. They just work remotely. There’s no sense in keeping all the lease or whatever mortgage you have for nothing. So, that creates a very interesting moment for the industry, because there’s a lot of other cities that otherwise would not have had so much foot traffic or population that now do, right? Las Vegas now has a big boom. There’s a lot of people moving to Las Vegas. So, initially, you would have thought, “Well, I’m only going to launch events in New York, LA, SF, Chicago, Dallas, because these are the biggest cities.” But now, it makes sense for you to go a little scrappier and do smaller events in cities that were not that big.

Stephanie:

Yeah, I was just thinking that too of exploring micro events that seems like it’ll be a lot more logistically, because to actually tap into that same maybe amount of people that you would have before 2019 or before 2020, you really have to do a different approach, which seems like a lot of new and different kinds of work that many brands probably weren’t and maybe still aren’t prepared for.

Israel:

Totally agree. I believe the brands that are the most prepared in the ecommerce world are the ones that are going to succeed in the experiential events side of things, because they’re going to have to ship cold product and make sure that the consistency and quality is kept throughout the time in transit. The companies that are doing the best in ecommerce are the ones that are going to succeed there.

Stephanie:

So, when thinking about experiences and focusing more on maybe the longer tail, like you said, the big cities, how do you think about leveraging influencers? Because to me, that could have a big impact too if you have events going on and you get an influencer from some city in Alabama, probably will have way better results than pulling in a Kardashian. How do you think about utilizing them over the next couple years?

Israel:

Well, that’s a great question. That’s a great question. Definitely, something I did not think about, but now, I think-

Stephanie:

I got the wheel spinning.

Israel:

Yeah, no, I think you got the wheel spinning. I think if we’re starting the events in these smaller cities, I think the local influencer is going to have a better result as you said, right? Instead of spending millions in a Kardashian, for example, we could spend way less than that but distribute it across 20, 30 influencers in 20 or 30 different cities and bring more people to the event for sure.

Israel:

I think for the acquisition side of things, that will help because people will try our product, but at the same time, we have to make sure that the people that come to the event don’t come only because of the influencer. They have a very good experience there as well provided by us, right? So, leading with the messaging and the 1% giving back. We’re not here just for you to see this influencer and just for you to try this cookie dough. We’re also here to foster raw conversation about mental health and addiction recovery.

Stephanie:

Yup. Yeah, that’s cool. Also, maybe brings up a point of having volunteer events and smaller micro activities like that to bring people in for the mission. And then you’ve got the cookie dough, and you’re making this well-rounded experience that people walk away with. They’re like, “That brand had a really cool thing that I wouldn’t have known about unless they hosted it.”

Israel:

Yeah, love it. That’s a great idea.

Stephanie:

You’re welcome, man.

Israel:

I’m taking note of this.

Stephanie:

But I am thinking now about attribution piece too, which I think is going to be a big thing that brands have to think through over the next couple of years of, “How do you know if your efforts are paying off?” The world’s changing so quickly. If you’re moving to these more smaller locations to focus on things that are becoming more distributed, it seems like there’s going to be a lot of work to do around, “What’s actually working and what’s not?”

Israel:

Yes, yes, you just find a situation there, right? Attribution in marketing is the hardest part, because some marketing pieces are going to be for brand awareness. How do you quantify that? It’s super hard. So, a good approach for that is to just put everything in the same bucket and say, “Okay, revenue this month versus spend in marketing this month and just have that metric follow you through times for you to see whatever changed this month is doing okay or is not doing okay.”

Israel:

So, obviously, it’s a very simplified metric. There’s way more refined metrics, I would say, for you to use in each and every channel, but that is a quick indicator of, “Okay, you’re messing something up,” or “Okay, well, something’s going on that’s doing well here.” So as attribution goes harder and you mentioned it quite well, when you said, “When we start spending in these events and other stuff, how do you know that that person actually purchased from your website because of the event or because they saw an ad on Facebook or because they watched Kelsey on a podcast or me on a podcast?” There’s limited ways for you to find that. So, I think that’s a good way for you to gauge your results.

Stephanie:

Yeah, yeah, it’s going to be a tricky world going forward. All right. Well, let’s shift over to the lightning round. Lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I ask a question and you have 30 seconds or less to answer. Are you ready? I just saw your eyebrows though.

Israel:

I’m ready.

Stephanie:

That’s your game face, I guess. All right. What one thing will have the biggest impact on ecommerce in the next year?

Israel:

Experience, customer experience. I think when you receive a box from a brand, if you’re the brand, you got to make sure that that box is the best you can do for that customer to have a great experience, because the convenience factor is there. Yes. But if you tell them or if you send them an experience that’s underwhelming, you’re not going to keep that customer. So, I think that’s the most important thing in ecommerce.

Stephanie:

What’s your favorite thing you did to your unboxing experience that you’re like, “I’m real proud of that”?

Israel:

Is that still under the 30-second limit, or can I expand that?

Stephanie:

This is a new one. Yeah, this is your next 30-second question. I just added on.

Israel:

I think as of now, the coolest thing that we do is to send a note card for each and every one of our customers talking about our mission and what to do with the product. If there’s anything that’s wrong with the product, please contact us. I think some brands don’t take the care of telling their customers how to reach out to them in case anything goes wrong. I mean, let’s consider I’m the customer now, right?

Israel:

I’m paying whatever I’m paying for a cookie dough to receive cookie dough in my house. Something happens and I’m not happy with the product. I’m going to go after it. I’m going to go ask the brand, “Hey, I just paid this amount of money for cookie dough. I could have paid way less in the supermarket. Can you please make it better?” If you’re not ready for that, then you’re not going to succeed in ecommerce. You’ve got to be ready to make sure that the customers have the best experience. So, sending that card and making sure that they know what to do and how to reach out to us has been a great victory for us.

Stephanie:

Yup, yeah. I love that. I think gone are the days of, “There’s our chat bot. You can talk to them. Try and solve it through them.” Nope, people are over that. That was something that maybe worked in 2019 for a little bit, and everyone was headed in that direction of tech can solve everything. It can take out your whole customer service team. It can solve all your problems, but I think now people are looking for that experience. They’re looking for the brand to actually solve their problems and help them.

Israel:

Totally agree.

Stephanie:

All right. Next question, if you had a podcast, what would it be about? Who would your first guest be?

Israel:

Wow, you got to tell me that these things are coming now. The wheels are spinning here.

Stephanie:

Sorry, I can’t. It’s the lightning round.

Israel:

What an interesting question. If I had my podcast, I think it would be about hustling. There’s so many people that do so much cool stuff. We never hear about it. there’s people that are intrapreneurs. They’re entrepreneurs inside their own organizations. They’re still in their job, but they’re doing very cool stuff within their companies. There’s a lot of glamor around just entrepreneurship and whatnot. So, the hustling side would be interesting for me to hear. Who would my first guess be? That’s a great question. Does it have to be a person that’s alive?

Stephanie:

Nope, they can be whoever you want.

Israel:

Okay. I would probably interview Steve Jobs.

Stephanie:

That sounds good. I would listen to that.

Israel:

Oh, cool. I think he must have had very cool stories about hustling. There is some controversial information about his managerial skills, but I do believe he was a hustler. Apple is what Apple is very much because of what he’s done to it. So, that would be a very interesting conversation.

Stephanie:

Yeah, I think that’d be really cool. I mean, yeah, there are so many people within companies. You see new product launches. You see new features. I think people just associate it with, “Oh, that’s the brand.” That’s Google. That’s Facebook. That’s whatever. But there’s people inside there who maybe had that idea and actually brought to fruition. I want to hear from this people. That’s a good one.

Israel:

Exactly. Yeah, there’s so much PR around the people that are on top of the company, but little is said about the people who actually bring those ideas into life.

Stephanie:

That’s a good one. All right. What’s one thing you don’t understand today that you wish you did?

Israel:

Oh, wow. Interesting question.

Israel:

Well, the wholesale world has a lot of question marks to me right now, just because we’re not in it very deep, I would say. So, I would love to learn more about the wholesale and direct grocery store channel. I will probably know a lot more in a year. We can redo this.

Stephanie:

I know.

Israel:

My answer will be-

Stephanie:

We’ll do a round two. When you guys start exploring wholesale, you come back with that. And then the last question, what’s the nicest thing anyone’s ever done for you?

Israel:

Wow.

Stephanie:

We go deep here.

Israel:

Yeah, I love it. I love it.

Israel:

Okay. So, when I was doing this backpacking trip in 2015, I think it was in Vancouver, Canada. I had just missed my flight going to Toronto. It was the first flight I’ve ever missed in my life. I was very upset, very upset. So, I just went into this Starbucks shop. I was like, “Okay, I’m going to have this coffee. I’m going to just de stress. I don’t want to think about this.” I was alone. There was this gentleman sitting on a table right next to me. We ended up striking up a conversation. I was a little stressed because of the flight, but still, whatever. I’m just here to make friends and see what it’s like to live here.

Israel:

And then this guy, I just told him everything about my life, but I lead with what I was doing in Brazil, right? I was like, “Well, I’m a civil engineer from Brazil, yada, yada.” And then in the middle of the conversation, he’s like, “Oh, so who are you, Israel?” I’m like, “What’s going on here? I think this guy is a little odd. He didn’t hear what I said.” And then I’m like, “Whatever. I’m just going to say it again.” And then I started saying, Well, I’m a civil engineer from Brazil, yada, yada.” And then he stopped me in the middle. And then he said, “You are not defined by your job. You are defined by your passion. What’s your passion?”

Israel:

And then it made me think like, “Oh, my God. I describe myself by my job today. I’m literally here trying to find a new city for me to live in. I’m trying to lead with my job.” So, I think that was really kind of him to do. It was an interesting thing. I don’t know that he thought it was going to be so impactful for me. By the way, if you’re listening to this, I don’t remember your name, but you’re really cool, dude.

Stephanie:

You’re the best.

Israel:

Yeah. So, as I went through my backpacking trip, I just kept that question in my mind over and over again. I was like, “I got to find my passion. What is the passion that I’m trying to solve here or trying to pursue in moving to the United States?” That eventually got me into a very deep reflection. Civil engineering was not my passion, basically. That’s the bottom line of that reflection. My passion is education. I want to do something around education. I think education is the key to change the world.

Israel:

One of the things I want to do whenever I do have some more time… Right now, I don’t. But one of the things I want to do is to found a nonprofit in Brazil to help with education in underserved areas. I think that’s the key to go. I’m so grateful for the education that I had in Brazil all in all, because that’s why I’m here, right? If I had not had that education, then I wouldn’t be here. So, that’s a long winded response.

Stephanie:

That’s a good one. I think that is awesome of that person to give those thoughts. I’ve had that same reflection when I was living in the East Coast. People were very much into, “What do you do? What’s your degree?” Always starting off with that. And then when I moved to California, it was very much not that. And then moving to Austin now, it’s like, “What do you like to do? Do you like to hike? Do you like to paddle board?” That’s a different conversation, but it makes you think very differently about, “What do I like to do? Who am I?” So, I love that. That’s a turn for the philosophical and I am all about it.

Israel:

Love it.

Stephanie:

Thanks so much for joining the show. If people want to try out some Doughp, where can they get it from? I’m going to keep saying it like that, Doughp.

Israel:

www.doughp.com. It’s D-O-U-G-H-P.com. You can also follow us on social media. Most of our handles are @Doughp.

Stephanie:

Amazing. Thanks so much for coming on. It was a blast.

Israel:

Thank you for having me. I had a blast.

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