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Do you drink kombucha? Do you even know what kombucha is? Don’t worry if the answer is no, you have plenty of company. In fact, various sources have put the awareness of kombucha at less than 50% for certain age demographics. Nevertheless, kombucha is big business (we’re talking a multi-billion-dollar market), and Health-Ade is right in the thick of the hunt for a slice of the pie. Health-Ade was created in a one-bedroom apartment when the founders were looking to create a product to regrow hair with the fermented tea’s living culture. The kombucha liquid was just a byproduct, but after getting an offer to sell the kombucha at a local farmers market, they jumped at the chance. Health-Ade now generates more than $100,000,000 in retail sales, and is sold in 30,000 stores. But just like any brand in an emerging market, the company is looking for ways to grow even bigger.
Enter Calvin Lammers, the VP of eCommerce for Health-Ade. Calvin joined Health-Ade after cutting his teeth at some of the biggest healthy CPG brands on the market, Kind, Bai, and Spindrift, where he launched a number of new products and elevated their ecommerce operations to new heights. But when he entered the world of kombucha, he had his work cut out for him.
On this episode of Up Next in Commerce, Calvin talks through how he not only had to develop and execute content to help educate a consumer base, but also about how he had to build an entire ecommerce department from scratch. He gives advice to other brands who are facing similar struggles, including what to focus on when building an ecommerce team and what metrics to hone in on in the early days. Plus he discusses why it’s important to have a holistic view of the customer journey.
Main Takeaways:
- Go Wide, Stay Shallow: Successfully launching a new product or product line is dependent on how many people you can get in front of. Regardless of if your product is niche, the goal should be to get your message to as many people as possible, and to have that message be simple and memorable. You don’t want to overload new customers or audiences with too much information, it’s more important to raise awareness.
- An Eye Toward The Future: If you are building an ecommerce team from scratch or scaling up your ecomm operations, long-term planning is important. Think two or three years down the line at where you want to be and build toward that, but make sure you are not overextending or, overspending or over hiring because more is not always better. In fact, having too many resources might be crippling down the line as your organization gets into crunch time as you try to reach the next level of scale.
- Small Tweak, Huge Impact: It’s not big or sexy, but focusing on small things like site load times and the checkout experience actually have the most impact in terms of ROI, so those are the things any ecommerce leaders should focus on when deploying their early resources.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“[Ecommerce] is one of the most cross-functional areas because you’re touching operations, you’re touching marketing, you’re touching finance, you’re touching brand. So there’s an innate need to interact, and work closely, and be involved with each respective area.”
“When I joined [Health-Ade], there was no dedicated eCommerce team. There were shared responsibilities but there was no eCommerce team to speak of. So, very quickly I had to be mindful with the roles that we were building out and filling right off the bat because we were building this essentially from scratch. So, I had to be very thoughtful and mindful about, ‘Okay, over the next two years, what areas of responsibility, and what departments, or what coverage do we need? And will that last us for presumably the next two years? Because we need to be hyper-efficient, and competitive with how we’re proofing out the success and viability of the channel. So, we don’t want to overload, and hire a 10 person department before we break six figures in revenue.’ So, we wanted to be very strategic in that.”
“I think that is really important for eCommerce leaders to be able to speak knowledgeably just about eCommerce fulfillment just as much as they are about eCommerce acquisition, or marketing.”
“The overall awareness and knowledge of kombucha is limited — it still is not as mainstream, or widely known as you would think at this point. So, that is impactful to how we’re approaching overall messaging, advertising, and overall content on digital. That follows through in everything from our Amazon product pages, to our own website, to our email flows, to our SMS marketing, to influencers. So, it’s hugely impactful, and I think that’s been a major focus for us in the brand, in that we realize that there still is a huge section of the population that not only doesn’t know Health-Ade, but doesn’t know even what kombucha is. And so, I think that, at the end of the day, presents an opportunity, and I think is what we see as the open lane for us, or an opportunity for Health-Ade to become a leader in terms of contents and education for kombucha, and gut health overall.”
“[Digital marketing] helps brands like Health-Ade, or even start-up and emerging brands, so you can create more engaging, and enticing, and interactive content in messaging that really can hit home the messaging and objectives that you’re trying to drive, especially as you’re building awareness and overall education for the brand or category that you’re in.”
“With a new brand, or really establishing any market space as a whole for a new brand, you’re going to have to go much wider, and you’re going to have to go much, much shallower with the content that you want to engage right off the bat because you’re trying to drag overall impressions, and touchpoints, and just top of mind awareness for that new product line, or new brand. And you’re going to have to go a little bit wider spread with your focus, and your tactics that you’re employing, and really going true, true top of funnel brand awareness.”
“We continually are looking at our conversion rates, our balance rates, our time on site, our click throughs, and the time to conversion. And that’s really what we’re holding as our key metrics here, to measure true success of the website before we get into consumer journey, lifetime value, and things of that nature, just the overall site experience.”
“A second in the digital age, or a D2C experience is a lifetime. So, that was a big focus just recently, just reducing page load times, reducing font sizes, page weights, image weights, all these things…just those small tweaks have huge impacts just right off the bat.”
“Instead of having this prior mindset where it’s like, okay, there’s brick and mortar, then there’s this ecommerce thing, and they’re separate channels, you need to be mindful of the entire customer journey because yeah, you might have a consumer that you have a programmatic ad that they get started with, and then they’re purchasing in store. Or, they see a programmatic ad and they’re purchasing on last delivery, or maybe they’re in store, or buying a pick up order, or maybe they’re ordering via an SMS channel. So, I think it’s just becoming more holistic with it’s not a matter of channel separating but having a true, unified vision of that customer journey, and approaching that as such as a company, and a brand.”
Mentions:
Bio:
Calvin Lammers is a nine-year eCommerce veteran who started his career on the retail side with Target. Calvin made his first foray into eCommerce with Quidsi, an Amazon subsidiary. Since then, Calvin has moved over to the brand side running eCommerce for a number of food and beverage disruptor brands such as KIND Snacks and Bai Brands. Prior to joining Health-Ade, Calvin was director of eCommerce at Spindrift where he built the brand’s eCommerce platform from the ground up.
When Calvin joined Health-Ade, he saw an opportunity to grow the brand’s eCommerce business, something often seen as a challenge. Calvin believes the kombucha category has opportunity for growth, especially in the online space, despite the packaging and fulfillment logistics used in cold-chain shipping. Additionally, Calvin is working to reduce Health-Ade’s packaging waste and ship eCommerce orders with eco-friendly materials.
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Transcript:
Stephanie:
Hey everyone, I’m Stephanie Postals, and you’re listening to Up Next In Commerce. Today on the show, we have Calvin Lammers, the VP of eCommerce at Health-Ade. Calvin, welcome.
Calvin:
Thank you. Thanks for having me.
Stephanie:
Yeah, I’m really excited to have you on. I was looking through your background, and you’ve worked at some of the hottest, healthy CPG brands. I was looking at Kind, and Bai, and Spindrift most recently. And so, I feel like you have a lot of good knowledge, and you’re a veteran in the eCommerce world.
Calvin:
Thank you. Yeah, knock on wood. Yeah, thankfully I’ve been able to be a part of some really great brands. I mean, it’s been fascinating from a personal level. It’s also been helpful from a selfish consumer level as I’ve been able to enjoy some really good product as well, while working for these companies. So, I think it’s definitely shifted my taste buds, I think for the better.
Stephanie:
Yes. That’s great. Yeah, I just started recently enjoying Spindrifts, and my two and a half year old wants one everyday now. It’s probably a bad habit that I’ve formed. This is so perfect California kid wanting his sparkling beverage everyday.
Calvin:
That’s amazing. No, I definitely got my niece and nephews hooked on Spindrift. And so, it’s always funny whenever my family send me photos of the kids taking a big sip of Spindrift. So yeah, love it.
Stephanie:
Yep, you understand then. So, with all this great background that you have, how did you land on this eCommerce path? How did you first get involved, and know this is what you wanted to do?
Calvin:
Yeah. So yeah, I mean, it’s definitely been a journey. Even just 2020 as a whole but even just getting to this point, it’s interesting because I always like to say that there’s no one linear path to eCommerce. I feel like everybody I’ve talked to that’s been in this space for a while, or even new to this space, they’ve had a different journey than mine. So different. So, going way back when, I graduated from college and was in the mid-west in Minneapolis, and worked at Target Headquarters. Obviously, knew Target, new and loved it. So, thought that would be a great opportunity. So, worked in the snacks department there for a while. Realized, not quite for me, too corporate, very big company, and wanted to… And also was in the mid-west for a while, [inaudible] Change of pace. So, was looking to get out to New York, and looking for a retail related jobs.
Calvin:
And happened upon this start up, or newer company called Quidsi, which Amazon had just acquired right as I joined, and they had multiple eCommerce sites, they had diapers.com, soap.com, and a few others but obviously, I was familiar with Amazon at the time, still pretty early in the journey but was familiar generally with it but had never worked at an eCommerce company. And yeah, thankfully landed the job at this Amazon subsidiary, and really cut my teeth in the eCommerce space, building eCommerce sites, overseeing assortments, [inaudible] overall UX layouts. Really just ran the [inaudible] And I think it was exciting because there was just a lot of, what’s now proven to be, it was a really good incubation for a lot of great eCommerce minds.
Calvin:
So, is Mark Laurie who is now the CEO of walmart.com. That was his former company, before he actually started Jet. There are a number of leaders there that they were at Jet, they started their own eCommerce companies, eCommerce D2C brands. And so, yeah, it just was really great learning around and realized I loved the entrepreneurial space, the vibe, and just loved that world. And so, obviously was working on the eCom retailer side, and decided to make the switch over to the brand, and basically be that voice and leader to build out eCommerce on the brand side, and have been doing that basically ever since. And so, as you mentioned earlier, I’ve been able to work either at a number of great brands, doing that same thing, in building a eCommerce focus and in channel strategies for the respective brands.
Stephanie:
That’s very cool. So, at Quidsi, you were mentioning that there was a lot of great leaders there that you got to learn from. What is some of the advice that you remember, or that still stays top of mind from some of the people that you learned from there? Because like you were mentioning, that was a good name there, jet.com, that’s great. I’m sure there’s a lot of good things that you refer back to every now and then.
Calvin:
Absolutely. So, I think the biggest piece of advice, and I still… This is how I think I view eCommerce, and what I’ve carried with me, is really viewing even if it’s a category, or viewing… Even if it’s a certain sub-category on the site, viewing that, and as well as eCommerce, there’s a whole in taking ownership, and business ownership, and really just viewing it as a business leader. So, through in through. So, while you might… Maybe you’re focused on acquisition, but really having a full view of how it’s going to impact the overall business where that’s just going to help you work cross-functionally if you’re on a team or a business leader, that’s going to really carry through to being more strategic with all of your decisions, all of your investments, all of your prioritizations. Just really keeping that lens on whatever you’re owning at that point in time, I think is crucial, and that’s just how I’ve carried through to at my various stops in my career.
Calvin:
And even now, we’re overseeing an entire eCommerce department, it really is a true business unit within the overall company since you have your separate operations, [inaudible] eCommerce divisions that companies have their own finance department, their digital marketing component. So, really having that lens, I think has been helpful for myself, and I think in general, that’s just been a beneficial way to how I viewed my surroundings in business, depending on the company that I’ve been at.
Stephanie:
Yeah. I think that’s an important reminder about how they are their own business unit but how do you make sure they don’t become a silo? Because I think I was reading in one of the articles that when you were working at Target, the eCommerce group was in a separate building, and there was two people or something.
Calvin:
Yep, yep.
Stephanie:
And I’m like, obviously that was a long time ago, and that’s how a lot of companies started out but how do you make sure that the team integrates with the company as a whole and doesn’t become, “Oh, that’s just the eCommerce group, that work on their own.”?
Calvin:
Yeah. Even now, it’s still a challenge, I would say but I think it’s become less of an issue, or a challenge, or a hurdle, than it was when I was at Target, or at prior companies, just again with the changing views of eCommerce as a whole. But as I said, you still need to work to be integrated and fully aligned across departments, full company. And so, I think that’s where… That’s the other piece, is that, that’s not always the case, it depends on the company. Some companies have eCommerce as it’s own business unit, sometimes it lives in marketing, sometimes it lives in sales. And so, I’ve had differing experience but the biggest thing is, it is whether you have those individual responsibilities, or head count in the eCommerce department, or they still live in different departments, it is one of the most cross-functional areas as well for that exact reason.
Calvin:
Because you’re touching operations, you’re touching marketing, you’re touching finance, you’re touching brand. So, there’s an innate need to interact, and work closely, and be involved with each respective areas. So, I think that’s where it really the whose… Any eCom leaders, or practitioners that are either starting out, or obviously, well into their careers, really making that effort to both educate in terms of why they should be caring about eCommerce, what of the benefit, how will it impact them, how will it impact the broader company and organization? And really just being that leader, and educational voice, I guess, for the company to gain that [inaudible] And sign on. And I would say that’s been one of the biggest focuses at any company, is really making those pitches, and sell-ins.
Calvin:
And then, obviously, at the same time, going the extra mile to show why it is beneficial for the respective department leaders to work closely with the eCommerce team, and myself personally.
Stephanie:
Yep. So, you were just mentioning around them being a cross-functional team, and when I think about a cross-functional times, I think about, a lot of times… And I was one of these back in my earlier days. You’re not always doing the work but you’re there to coordinate many groups, and bring them together, whereas in eCommerce, team having to also be a cross-functional team seems tricky. So, how do you go about building up a team like that? What are some best practices, and how do you make sure you hired the right people, and build up a good team who can do both of those functions?
Calvin:
Yes, I think that’s… It’s definitely something that I have very recent experience with. So, I think, a lot of times… And this has been the case at previous companies as well, where eCommerce was maybe less of a focus for a brand, or there weren’t as many resources put into the company, or the headcount was on the lower end of the spectrum. So, you have to be very, very efficient, and careful with how you were filling any headcount openings that you had available because that might be the only one you get for the next year, or the next budget cycle. So, it’s previously been super important for that reason but even now, as I just joined Health-Ade six months ago, when I joined, there was no dedicated eCommerce team. There were shared responsibilities but there was no eCommerce team to speak of. So, very quickly had to be mindful with the roles that we were building out and filling right off the bat because again, we were building this essentially from scratch.
Calvin:
So, had to be very thoughtful and mindful about, “Okay, over the next two years, what areas of responsibility, and what departments, or what coverage do we need? And will that last us for presumably the next two years? Because we need to be hyper-efficient, and competitive with how we’re proofing out the success and viability of the channel. So, we don’t want to overload, and hire a 10 person department before we break six figures in revenue.” So, we want to be very strategic in that. So, with that, I think that also goes back to my mindset from Quidsi where I still very much have that start up entrepreneurial mindset. So, I’ve worked at companies where I was the only person on the eCommerce team for a year.
Calvin:
And so, it’s a lot of work. I think it’s been helpful for myself, as I’ve touched every aspect of the business, and while I don’t work in a day to day at this point, I have at least a background and knowledge of how everything works, and I think that is really important for eCommerce leaders to be able to speak knowledgeably just about eCommerce fulfillment just as much as they are about eCommerce acquisition, or marketing. I think that is hugely important. And so, that’s been my mindset, is hiring people that are not the jack of all trades, but maybe a utility knife, where they’re able to… Quick learners, able to pick up things very quickly. They have an interest, they’re super curious. But they’re open, and willing, and wanting to touch multiple things of the business and not having very narrow minds that then, “Oh, that’s not my responsibility.”
Calvin:
Again, going back to having that ownership view, carries through to how I view headcount, and bringing on new team members because I think that’s just hugely important. Especially early on, as you’re building out a team.
Stephanie:
Yep. Yeah, you have to have those scrappy individuals who are ready to treat the company as if it’s their own, and ready to jump in wherever needed, even if they’re on a team that maybe isn’t relevant to the task.
Calvin:
100%.
Stephanie:
So, let’s talk a bit about Health-Ade. So, I’m a fan of Health-Ade. I have been following it for a while. I also just love the story. I mean, I think the CEO was selling it. She started with $600, and she was selling it at Farmers markets, and now I think I saw you guys generate over 150,000,000 in revenue, and you’re in 30,000 or more stores. So, I want to hear a little bit more about Health-Ade, what is it, and what drew you to the company?
Calvin:
Yeah. So, obviously, great to hear you’re a fan. I am myself, I like to say that, that’s been very much a part of my career path and choices where I worked at, and wouldn’t be joining a company if I didn’t really enjoy, or love the product, and that absolutely was the case with Health-Ade. Yeah, thankfully, I got connected with the team here. As I mentioned, they were looking to build out their eCommerce channel with really no focus, or presence to speak of before I joined. I was a big fan, it’s a probiotic tea, kombucha, is their primary product line, that’s as you mentioned, founders and [inaudible] Where they started out a number of years ago. That’s really been the key focus for the brand, and where we’ve seen most of that growth to that surplus of over 100,000,000 in retail sales.
Calvin:
We obviously have looked to expand the kombucha, and recently, we just launched a new product line called Booch Pop, which is a ambient soda made with kombucha. And so, looking to expand into some of these other areas but really, kombucha still is the first and foremost, and primary product line for us. And it’s been great to see obviously kombucha as a whole, has been a huge growth driver and really fast growing category, and Health-Ade has really been the primary contributor to that growth over the last few years. So, love the brand, loved what it stood for. Just loved everything about it. The unique challenge, and I think the thing that caused me hesitation was just obviously, with the kombucha product, it is [inaudible] Requires refrigeration, it’s also in glass bottles.
Calvin:
So, obviously, anybody that knows anything about eCommerce fulfillment, not really the easiest things to turn into a viable eCommerce business right off the bat. So, very difficult, very, very challenging, and very costly just from an operations standpoint. So, that was definitely the biggest hurdle, or thing that gave me pause but always like a challenge. I like to say that every single brand that I’ve worked at, I’ve wanted to make more difficult. So, I’ve gone from snack bars, to refrigerated beverages, so gone one end of the spectrum to the other, and the food and beverage space. And that’s been a big focus for us, and making that a very viable channel, and obviously just making sure that our operations and fulfillment is a strength for us, out of necessity really.
Stephanie:
Yep. Yeah, I’m definitely going to be diving into the logistics piece in a bit, so be prepared. It seems like you choose brands too that… I mean, maybe everyone say, every brand needs convincing, to convince a buyer to buy it. But you choose brands that aren’t very well know. I mean, I’m thinking about Kind, when they came out. I remember when I worked at Google, they started having the bars there but people still really weren’t sure what they were. Same thing with Buy, the coconut water. And Spindrift more recently, I mean there were so many sparkling beverages [crosstalk] Convincing someone of why you don’t want that artificial flavor, and why you [crosstalk] I mean, it seems like you have a pattern here where you’re picking harder, and harder things, and now kombucha.
Stephanie:
I think I was just reading that maybe between 20 and 40 year olds, more that 50% still don’t know what kombucha is. I saw that stat somewhere and I’m like… I mean, that’s crazy to me. Maybe it’s because I’m in California, and it seems like everyone here knows what it is but it seems like it’s a hard market. How are you going about educating people? Is that why you chose to do the soda route where it’s still kind of kombucha, but maybe might connect with a whole different audience, and bring them into the network of kombucha?
Calvin:
Yeah, no, and I think that was a definite thought and factor in the development of the Booch Pop product line, and having multiple ways in for consumers. To this point, there’s been… You’re a kombucha consumer but that’s something that we’ve done studies on, and have research on in terms of the overall awareness and knowledge of kombucha. It is limited, it still is not as mainstream, or widely known as you would think at this point. So, that also is impactful to how we’re approaching overall messaging, and advertising, and just overall content on digital for us. So, that follows through from everything from our Amazon product pages, to our own website, to our email flows, to our SMS marketing, to influencers. So, it’s hugely impactful, and I think that’s been a major, major focus for us in the brand, in that we realize that there still is a huge section of the population that not only doesn’t know Health-Ade, but doesn’t know even what kombucha is.
Calvin:
And so, I think that, at the end of the day, presents an opportunity, and I think is what we see as the open lane for us, or opportunity for Health-Ade, is really being a leader in terms of contents and education for kombucha, and gut health overall. And so, really making that case, and driving home that education piece around what is kombucha? What are the prebiotics, what are probiotics? Why are they important? What benefits do they actually help? How does that contribute to overall health and wellness? Because what we’ve seen, is that, that benefit is actually, strangely enough, unlike most food and beverage categories, taste is actually a second driver. It’s actually the health and benefits that is the primary driver that we are focused on.
Calvin:
So, we’re really making clear why somebody should be incorporating kombucha in their daily diets, what are the benefits? And just really driving that home. That’s, I think, where we see the opportunity. And so, that also relates to content and messaging. And again, you have a better ability, or avenue to do that on digital as opposed to just your traditional retailing on shelf, and you’re limited to just the label, or the packaging. So, I think that actually is where it helps brands like Health-Ade, or even start up an emerging brand, so you can create more engaging, and enticing, and interactive content in messaging that really can hit home the messaging and objectives that you’re trying to drive, especially as you’re building awareness, and overall education for the brand or category that you’re in.
Stephanie:
Yeah, I think the gut health thing is still new to a lot of people. I mean, my friend the other day just got a test done to show the bacteria in their gut, and it was really bad, the test results, where she’s having to do a whole entire diet reset, and take a bunch of things out, and then, re-introduce them, and take all these probiotics and stuff.
Calvin:
It’s certainly been an education process for myself because yeah, certainly, I had somewhat general awareness of good health, and probiotics, but even the amount that I’ve learned, being at Health-Ade for the last few months, yeah, it’s a very, very important part to the overall body, and there’s just so many aspects to it, that it does require a decent amount of education. So, it’s a journey that we’ve also got to bring consumers along. It is, as much as I’m going through the same journey myself.
Stephanie:
Yep. So, are there different channels that you utilize when you’re maybe going the education route, and you want to get in front of the new people, and educate them on why this a good product to try out? Especially now when they can’t maybe test it.
Calvin:
Yep.
Stephanie:
I mean, I remember, in the early days of Health-Ade, there was a lot of samples at Whole Foods, or wherever I would go, that’s how it came on my radar. But what are you doing now to introduce it to people, especially if they can’t really try it?
Calvin:
Right. Yeah, so I think that’s where we have a couple of different channels that we’re focused on. So, obviously, within the eCommerce and digital purview, we have our D2C businesses, we have Amazon, our eRetailers. And then, we also have Last Mile. So, obviously, on eCom, going back to the overall financials, and build of that business, it gets very difficult to [inaudible] individual bottles of kombucha. It just overall doesn’t work, the economics don’t work out. So, traditionally, we sell 12 packs, which again, are quite a bit of product for a consumer who’s new to kombucha, or new to Health-Ade, and hasn’t tried before. So, what we’ve done recently is that we built out some sampler packs, so included a couple of different flavors for our different product lines [inaudible] As well as our new Health-Ade plus line, which is our kombucha with additional benefits.
Calvin:
And so, that’s been our primary focus recently in driving new customer acquisition in these sample packs, or variety packs, and we’ve seen some really good responses mixed with that education which again, via our different channels. So, via paid social, we’ve tested out a few different things for longer-form content, and driving to landing pages, and that’s worked extremely well where you have use [inaudible] Initial tidbits, or insights that you include in the copy in the messaging with the paid social campaigns. And then, driving to the landing page which really fleshes out more of that storytelling piece. And these are all consideration and top of funnel campaigns and tactics, and we’ve seen really, really strong responses to that. And so, that’s been super efficient for us, and seen really good responses.
Calvin:
And then, at the same time, we also are focusing on… We have our delivery partners in Last Mile, partners like Instacart. And so, with Instacart, and these other channels, you can obviously purchase just one bottle. So, been really leveraging the ad platforms, and some of these emerging platforms as the way to drive trial where the cost to entry, or the barrier to entry is a little bit lower, just because they’re just buying one bottle. And so, we’ve been actively engaging in working with the Instacart ad platform to promote our products on Instacart as well, and really seen some huge gains there, and see that as a really good opportunity to drive trial on individual bottles when sampling isn’t an option obviously, currently.
Stephanie:
All right, so let’s talk a bit about launching products. So, you have launched a bunch of new products but also, for the first product maybe in the line versus launching a newer [inaudible] Like you just did with the soda. So, tell me about the differences when a brand is just starting out, trying to get the word out there, and putting out their first product or two versus launching something very different like soda to a market who’s maybe expecting just kombucha.
Calvin:
Yeah. So, I think it really goes back to, I think, overall with the roll out and marketing approach. So, obviously, with a new brand, or really establishing any market space as a whole for a new brand, you’re going to go to much wider, you’re going to have to go much, much shallower with the content that you want to engage right off the bat because you’re trying to drag overall impressions, and touchpoints, and just top of mind awareness for that new product line, or new brand. And you’re going to have to go a little bit wider spread with your focus, and your tactics that you’re employing, and really going true, true top of funnel brand awareness as opposed to a new product line. With Booch Pop, obviously, this is going to [inaudible] Similar or, if you’re drafting off a different category, like at Kind is probably the best example where Kind had it’s original nut bar line.
Calvin:
And then, came out with the clusters, then the granola bars, and came out with a number of different product lines. And so, with that, it’s different because once you establish that brand recall and awareness, you’re either able to leverage that and target within that specific category, or… I think this is the [inaudible] With Booch Pop, is that even people who might be aware of Health-Ade, or again, maybe they weren’t interested in kombucha, or they hadn’t tried before, and we’ve gotten this response to where it’s like, “Is it too healthy? Do we want to target some more mass consumers?” We can draft off of that brand persona and establishment, and cache, and either go super targeted within that and say, “Okay, these are the specific audiences that we want to target, and draft, and leverage that brand cache.”
Calvin:
Or, if there’s just general awareness, the brand can draft and go into an entirely new segment or audience, and utilize that established brand elements as much as you can. Obviously, finding that right balance and depth that you go is the… End of the day, that’s the biggest question but that’s, I think, the difference that I’ve seen in my experience and how that’s been incorporated to the roll out for new product lines, and yeah, very much similar story to how that played out at Kind as well.
Stephanie:
Yep, very cool. So, let’s talk logistics a bit. So, you’re talking about the cold chain process, and you’ve got glass bottles. What did it look like when you joined and they want you to build out the eCommerce channel, what did that look like behind the scenes? And what were some of the lessons as you’ve been going about that?
Calvin:
Yeah. So, I think right off the bat, when I joined, I guess the biggest thing is that we were utilized… And again, because Health-Ade, like a number of brands, saw huge demand and interest in eCom and direct-to-consumer earlier this year due to the COVID surge, and it was a minimal business. And so, right off the bat, needed to get things rolling forward to meet the increasing consumer demand. So, for the fulfillment itself, really hadn’t been a focus for building out what that actual packaging, and refrigeration, and insulation looked like. So, we were just using styrofoam coolers to keep the kombucha cold, and adding some ice packs, and shipping to consumers. So, not the most sustainable, or eco-friendly option, especially as we’re increasing volume. So, right off the bat, that was a big focus for us, is really finding, and implementing a sustainable, and eco-friendly liner and insulation option, which thankfully we were able to get in place pretty quickly when I joined a few months ago.
Calvin:
And so, that was one of the biggest pushes for us, is obviously, just fitting with our brand, and our persona, wanted to make sure we were also being very sustainable, and mindful with how we were actually getting product to consumers. So, that was the biggest thing right off the bat. Currently, we have three different fulfillment warehouses, and so that helps us get to most consumers in two day… Or, 95% of the country in two days. But it still poses challenges because there’s still that refrigeration requirement, so that limits the number of days because we don’t want a product obviously waiting in trucks over the weekend or anything like that, so it limits the number of days that we can actually ship.
Calvin:
And as consumers as we know these days get more and more… Their expectations for delivery times increases. There’s an opportunity to decrease the delays in delivery times with their products, and so, that’s the current focus, is how can we reduce from two days to even one day, or even next day delivery? Especially, in key markets So, that’s really the journey over the last six months that we’ve been in. And obviously, it’s been a lot [inaudible] In six months, and I got a lot more to go here going into next year.
Stephanie:
Yeah, and how’s the forecasting process been? Because I mean, the world’s just been so crazy, and especially, leaning into eCommerce right when things are crazy, how do you go about forecasting things so that you have what you need, you don’t go out of stock, you’ve got your variety packs? I mean, it sounds like you’ve brought a lot of new things to the brand but that’s a lot of new challenges that’ll come with it.
Calvin:
Yeah, you hit it spot on. So yeah, especially, we have no historicals, no base line to go off of, so that’s… Our team has been hyper focused in really nailing down, and narrowing in that forecast, especially, we added new SKUs to the mix. So, it’s really been… Thankfully, our warehouse and 3PL partners have been super, super helpful in partnering with us, in maybe over-stocking based on previous demand to ensure that we have sufficient inventory, especially if we have an upcoming promotional push, or we’re leaning more on any of our acquisition campaigns. If we were just going off of historicals, obviously, if we were selling a couple hundred cases a month a year ago, to then change and go to a few thousand cases, even alone, that’s a huge increase. At first glance, it’d be very tough selling with a lot of partners, or 3PLs that would take the traditional growth and forecasting route.
Calvin:
So, with that, they’ve been really helpful in loading, and carrying more inventory than needed to anticipate any increases. But then, on top of that, it’s really staying close to the vest and staying ery, very… Being very diligent with how we’re tracking it. So, we built our reporting to track by location, by SKU, on a daily basis for inventory levels. And then, if we see any risk, working quickly to turnaround shipments to get out the door, and get us back in stock. And so, it takes a village to say the least, and thankfully, it’s just again, having the right partners, and really having the team be hyper diligent, and stay close to it, has really made a huge difference.
Stephanie:
Yeah, I’ve got it. So, I’m guessing you’ve also had a lot of experiences when it comes to figuring out what platform you want to choose, or re-platforming at the brands that you’ve been at in the past. How did you do that with Health-Ade, and how do you figure out what platform’s going to work, and what kind of features you need, and how to make it so it’ll convert?
Calvin:
Yeah. So yeah, the platform side’s been interesting because even that’s evolved pretty extensively. So, for me, at the end of the day, you want to have scalability, and also enough customization, especially early on, that you can really make the full use of any platform.
Calvin:
Long term, you want a turnkey Platform that again, can scale, integrates well with most of their channels, apps you need but you don’t want a very dedicated, or customized CMS that will require a lot of heavy lift, or work whether it’s on the internal team, or external party because the cost and hours are going to quickly snowball from there. So, I think that’s where for us, again with a limited team, or smaller team, and especially early in our journey, that, that customization, scalability is really the biggest piece for us in deciding with platform we ultimately landed on.
Stephanie:
Got it. And what kind of metrics are you looking at after you… You’ve got the platform up and running, what kind of things do you look at to make sure things are going well, and how do you figure out what you want to maybe test maybe, and see how to even optimize it further?
Calvin:
Yeah. And that’s a big thing for us. Obviously, there’s a couple of components there. So, there’s the Platform A, but then there’s the overall site design, and architecture. And so, that’s the biggest piece that we still have in our journey, we previously were on WooCommerce with WordPress as the CMS. And so, a lot of that is legacy content, and pages, and code that’s been built there that we’ve evolved and tweaked it over time, before we had the eCommerce team. So, that’s where we’re making… We’re flying the plane as we continue to tweak it, and build it, but really, that’s the biggest opportunity, is that there’s only so much that a platform can do without the actual highly functional, seamless UX experience for consumers. Super engaging navigation and content, that’s still needed in order to best leverage and utilize whatever platform you end on.
Calvin:
And so, that’s the next piece, is we’ve seen… We continually are looking at our conversion rates, our balance rates, our time on site, our click throughs, and the time to conversion. And that’s really what we’re holding as our key metrics here, to measure true success of the website before we get into consumer journey, lifetime value, and things of that nature, just the overall site experience. So, that’s the biggest thing that we’re trying to address, and improve now over the next few months, now that have the right platform in place. So, working with an overall site redesign, and site build, to really bring our full digital experience for the website to match our brand persona, and really bring that up to speed, and make a viable experience for consumers that really will sustain us long term.
Stephanie:
Got it. Are there any changes that come to mind that have made the biggest impact around the consumer journey, or seeing those conversions increase? Even if it’s maybe starting to introduce that variety pack. What do you think the impacts have come from this year?
Calvin:
I think site load times, honestly. So, it’s just something as simple as that. Obviously, a second in the digital age, or a D2C experience is a life time. So, that was a big focus just recently, just reducing page load times, reducing font sizes, page weights, image weights, all these things. And almost impacting how the page are loading. Making sure that add to cart buttons are loading first, as opposed to maybe copy further down the page. So, just those small tweaks have huge impacts just right off the bat. And so, that’s really what comes to mind right off the bat, is just making sure the time from landing to checkout is as seamless and as quick possible because you want to make it as easy for customers to checkout and give as little reasons as possible for consumers to bounce. And so, I think reducing the page load times has been crucial, as well as testing out… Again, just where we’re driving new customers to.
Calvin:
So, we’ve updated our collections pages where we drive a lot of our traffic, and just updating the layout, and the overall structure, adding add to cart buttons on the collections page. Again, just to remove another step needed to checkout. So, those minor tweaks are really what we’re focused on now until we completely revamp the website as a whole, and thankfully, they’ve made some significant improvements, and had a marked impact so far.
Stephanie:
Very cool. So, where do you see the world of eCommerce and D2C brands headed in the next year or two?
Calvin:
Yeah, I mean, if I had $1,000,000, and wish I can do and embed on that because yeah, I mean, if anybody told me that in 2020 we would see eCommerce penetration go from the five, 6% to… I think the last figure that I saw was 11, 12% just in 2020 alone. Yeah, I would have said, “You’re joking.” So, who knows at this point? But at this point, I don’t think we’re going back. I think this is the new standard for new consumers. I think that’s what I’ve seen, is that every consumer, or most consumers that have either been forced, or shifted purchase behaviors to online, especially in the grocery space since food and beverages still being the lagger in terms of under indexing versus other categories in eCommerce penetration, and that’s changed tremendously over this year. So, I think that the consumers are going to stick with that trend.
Calvin:
So, a lot of consumers that have tried grocery delivery for the first time will likely stick with that over the next couple of years. I think it’s going to be more… I think the biggest thing is that it’s just going to become more seamless with… Especially, on the brand side with how they view channels, I guess. So, instead of having this prior mindset where it’s like, okay, there’s brick and mortar, then there’s this eCommerce thing, and they’re separate channels, you need to be mindful of the entire customer journey because yeah, you might have a consumer that you have a programmatic ad that they get started with, and then, they’re purchasing in store. Or, they see a programmatic ad, and they’re purchasing on last delivery, or maybe they’re in store, or buying a pick up order, or maybe they’re ordering via an SMS channel.
Calvin:
So, I think it’s just becoming more holistic with it’s not a matter of channel separating but having a true, unified vision of that customer journey, and approaching that as such as a company, and a brand, and that’s very much what we’re thinking off as we’re building out our collective efforts at Health-Ade.
Stephanie:
All right. So, how are you guys prioritizing retail versus eCommerce? Where are you investing right now? Are you pulling back a bit from retail, and learning more into D2C, or how are you thinking about that?
Calvin:
Yeah. So, I think that goes in line with my previous comments. So, we’re absolutely still supporting our retails channels since as I mentioned earlier, that is where the bulk of our business is currently but we’re also changing in how we’re activating and supporting those retailers. So, maybe traditionally, or previously, we might be supporting retailers in on shelf, or POS material, instead we’re running geo-targeted display ads, or paid social ads, or running a programmatic display campaign to support a specific retailer. So again, just leveraging more digital components as well as supporting the last deliver, or Last Mile platforms like Instacarts that still… Obviously, the revenue in volume is being pulled through the retail stores.
Calvin:
So, it’s definitely not a shift of focus, or priority, or in an investment, it change in terms of how that support is played out, I guess. So, that’s, I think really been the biggest change for us. And then, on top of that, obviously [inaudible] that support from the eCommerce piece, and how that plays into the mix. What I’ve also seen at previous companies, and a number of white papers, and research that I’ve seen, is that any eCommerce advertising, or digital advertising, it will drive eCommerce, and it has obviously a huge impact on eCommerce specific sales but a lot of the impact is actually seen in your traditional brick and mortar, or retail sales. And so, having that lens, and that… If you’re spending a dollar for eCommerce advertising, it doesn’t mean that entire pack is going to eCom, it is also driving the overall brand awareness, and retail sales.
Stephanie:
Yep. Yeah, which is definitely a tricky thing to measure, and then try and convince maybe [crosstalk] It’s having brand awareness, and it’s also driving those retail sales but I can’t exactly track it right now.
Calvin:
It’s the age old debate. Yeah, I’ve been there all too many times. That’s a fun one.
Stephanie:
All right. So, with a couple minutes left, let’s move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I’m going to ask you a question, and you have a minute or less to answer.
Calvin:
Oh, man.
Stephanie:
Are you ready, Calvin?
Calvin:
I think as ready as I’ll ever be, so let’s do it.
Stephanie:
All right. What’s the best piece of advice you’ve ever gotten?
Calvin:
Best piece of advice, I guess is… Again, don’t look back. Take ownership, and own your mistakes. I think you can’t shy aware from your mistakes, just make sure you don’t make them again.
Stephanie:
I like that, that’s a good one. What’s up next on your reading list?
Calvin:
Next on my reading list, I would say right now, I actually got a book that I’ve been meaning to get to for a while. It’s called The Sympathizers, it’s a historical fiction novel set after the Vietnam War, in the US. So, it’s one of those that I’ve had on my list for a while, and it’s about time I finally get into it.
Stephanie:
Sounds good, I’ll have to check that out. What do you not understand today that you wish you did?
Calvin:
I would say the biggest thing that I understand today that I wish I did was just the impact to that eCommerce operations and fulfillment has, and in total business. I’ve said this, I think, in the past speaking to other people but if I knew then what I knew now, I would have gone back and got an MBA in logistics and supplier chains, just with how much of an impact that has on eCommerce. And again, going into it, had no idea how crucial that is to a viable eCom business.
Stephanie:
Got it. That’s good, you pivoted the question which now I think I want to ask going forward because you took it in the route of what do you understand now, that you didn’t understand that you wish you did. So, I like that. That’s a new question I’m going to have to add in.
Stephanie:
So, if you were to have a podcast, what would it be about, and who would your first guest be?
Calvin:
Oh. I would say it would probably be about pop culture in… I guess pop culture and entertainment in the ’90s, and my first guest would definitely be Conan O’Brien, I think just because in general I love just talking about pop culture, and entertainment in the ’90s, and Conan O’Brien was one of… It still is absolutely one of my favorite late night hosts, and his podcast has been one of my favorites, and it’s been a good one to have a hefty playlist for his podcast episodes to get through the past few months.
Stephanie:
That’s a good one. All right, and then, the last one, what one thing will have the biggest impact on eCommerce in the next year?
Calvin:
Biggest thing I think will be, I guess technology at the end of the day but then, also, just again, how consumers are changing their shopping behavior. So, I’ve said this in other forums but previously, my biggest expectation is that integrating technology into just the kitchen and the pantry, again, speaking more on food and beverage since that’s been my space, my territory. I think that really seems like the opportunity where you want… Especially, if consumers are shipping more to eCom and digital delivery, having that be less of a top of mind thing, I think, and making it more efficient and removing any legwork on the consumer side will be beneficial in the long run. So, whether that’s scales that you’re placing products on, so that your subscription knows when you’re almost out of your coffee, and you need a refill, or anticipating based on your purchase behaviors, I think that is probably the next trend.
Calvin:
Especially, on the consumable side. That’s, again, just going to remove pain points in consumer’s journeys, especially when you’re getting it delivered to home, that’s really the biggest one at the end of the day.
Stephanie:
Cool, I like that. That is a really good, unique answer that we have not had so far.
Calvin:
Oh, great.
Stephanie:
I like it. All right, Calvin. Well, this has been very fun. Thanks for coming on and sharing all your eCommerce knowledge. Where can people learn more about you, and Health-Ade?
Calvin:
Yeah, you can find me on LinkedIn, Calvin Lammers. And if you want to check out more about Health-Ade, and read some more about that education content that I mentioned, you can go to health-ade.com.
Stephanie:
Thanks so much.
Calvin:
Thank you.
