Hear from Chris Rose, VP of Marketing, at Nisolo and Courtney Schack, VP of Client Services, at NaviStone as they discuss how they met the challenges of 2020 by testing and adapting (and generating an 8:1 ROAS!) with direct mail retargeting and how they are applying their lessons learned in 2021.
Courtney: Thanks so much Tina. Chris, it's so nice to chat with you.
Chris: You as well.
Courtney: Thanks. Tell me a little bit about yourself and your role as VP of marketing at Nisolo.
Chris: Yeah, for sure. I've spent almost 20 years in digital marketing and started in some direct to consumer brands on the e-commerce side in a completely different industry than fashion. I was in aftermarket automotive parts, so people that want to make their cars go faster or their Jeep go off road. I spent a long time in that space, really understanding the fundamentals of business and licensing agreements and really cut my teeth in a lot of different areas. Learned a lot about supply chain and fulfillment in things that I never had imagined that I would, and then wanted to get into physical retail and omnichannel retail.
Chris: So spent some time with a landlord that owns small properties across the US, and then some time with the fashion brand Guess out in Los Angeles, Forever 21. And then finally landed here in Nashville at a brand that kind of is in the crosshairs of the Venn diagram of everything that I appreciate, fashion, the ethical component of what we do, startup, and being able to have a big impact. And so Nisolo, my role there, my teams are our omnichannel team responsible for retail, wholesale, and marketplaces. The marketing team, all of your traditional marketing channels, digital print, and then the eCommerce and web team responsible for the website that you see.
Courtney: That's great. Thank you. And tell us about Nisolo. I know sustainability is a cornerstone of the organization and product. Tell us a little bit more.
Chris: Yeah, so we just celebrated our 10th birthday at Nisolo. We were founded 10 years ago, back when the word sustainability and clothing weren't really said in the sentence together. And nowadays there's this epidemic of green washing with brands that are very much taking the step to market. The way that they're going to treat the planet or the producers of the clothing that we all wear, but we were doing it back before it was really cool. And so our founder, who's a great, great individual was in Peru and saw this opportunity to have a really big impact on the local economy and stood up a factory and this brand Nisolo, with the cornerstones being 100% living wages and 0% net carbon, meaning that, from raw materials to your doorstep, everything that we do from sourcing it all the way to creating it, shipping it to you is going to leave no imprint on the world.
Chris: And so we're going to leave the world, at least in the same place that we found it and 100% living wages and all this stuff is verified by really important, third party accredited certifications. And so he really wanted to build the cleanest fashion brand out there that also still takes into consideration style, design, comfort, function, and all the things that you would expect when you're buying a nice pair of shoes in our price point. So really one of the first brands, 10 years ago to find that epicenter of like, let's do this the right way, but let's make sure the products are things that people would want.
Courtney: It's such a great message. And the organization has done a fantastic job of creating products that really help to make you look great, but you know are really good for the environment and the community as well.
Chris: Thank you.
Courtney: That's awesome. Chris, I think you had mentioned in the past that you had started at Nisolo just before the pandemic had hit. So given that your role began a month before the world stopped with the pandemic, were you able to stick with an original marketing plan as you joined the organization or did you have to make some changes?
Chris: Yeah. It was a wild time. I know everyone has their story of the pandemic and how it all came about. For me, I accepted my role here at Nisolo. And we talked all about this thing that we were going to build in 2020 and how great it was going to be. Myself and CEO, Patrick had great conversations. And then the world changed quite a bit between the time that I accepted the role and actually moving from Los Angeles to Nashville. Because flights were all grounded and everything like that, I drove from Los Angeles to Nashville on the 28th of March and got here on the 1st of April. And it was kind of like April fools, I couldn't buy a couch. The world was really locked down. So we had this vision for what we were going to go build.
Chris: And then it came to a screeching halt where our plans really became to protect our profitability, protect cashflow, try to rely on not only our core customer, but still somehow go out and acquire some level of new customers and keep as much business growth in the forefront. But overnight business going down 20%, 30%, 40% really changes your plan. But luckily one of our company mantras is be prepared. The plan is not the plan. And so we really leaned into that to start to think about different things that we could do throughout the year to add value to our customers lives.
Chris: And first and foremost, protect the people and the planet, the things that we were founded upon. So our producers are probably most at risk when it comes to the pandemic, they're in third world countries where they don't have great access to healthcare and vaccines. This is the thing that they rely on for their most basic needs, food and shelter. And overnight 40% decrease in demand can really devastate that supply chain. So we started doing things like building out relief funds, et cetera, but also we're thinking about what can we do with our business this year to keep as many people employed and protect as many of our workers as possible.
Courtney: Did you make any changes to your product line throughout all this time?
Chris: Yeah, for sure. So the first thing that we did was some quick wins. We've always had this ethical marketplace where brands that are like minded, they sign a code of conduct that basically says that they adhere to the same values that we do around people and planet. And so we sell some great products from a ton of different partners for your home or while you're out and about. So we actually made sure that we rewired our ethical marketplace to specifically cater towards while you're spending more time at home. [inaudible 00:06:58] You can see that language here. Here's some great things to make that space a little bit more enjoyable. And then we also introduced something called the Mask Marketplace, which for us, every brand was trying to figure out how to go out on the supply chain and manufacture as many masks as they possibly can or source as many as possible.
Chris: And for us, we're all about adding value to our customer and adding value to our producers. And so we thought about as a consumer, we're culturally in the US, not used to having to go out and buy and source and wear masks every day. And we didn't know a lot about it, and we were learning about it with everyone else. So what we did is we pivoted our business to just buy and sell masks from a bunch of different brands. A lot of them similar to the ethical markets, they signed our code of conduct, but we ranked them by style and fit and breathability and all of that, so that we could curate this collection of adults masks, kids masks, large, medium, small, some are cotton. Some are antimicrobial, some are copper or cork, there's all sorts of different masks that we had. Those were a couple pivots that we wanted to add value to our consumer, but also at the same time generate the cash reserves that we need to be able to protect our workers who again are some of the most at risk people globally.
Courtney: It just shows that you really were able to be very flexible and fluid with making such a pivot like that.
Chris: It's a lot of fun. It's a lot of fun.
Courtney: Yeah. How about marketing changes, were there any changes to creative or AOV points that you look at?
Chris: Yeah, for sure. I mean, when you're selling shoes that are $100 to $250, and then overnight you start selling masks and candles and sunglasses, definitely. There are some changes in your top down economics and even your bottom up economics, both leading and lagging indicators change fairly quickly. But in marketing, we really relied on some key changes to some of the areas of our business, where we leaned into, for example, travel was big for our consumer. We had a consumer in New York and Los Angeles and Chicago and major metropolitan areas that they like to travel. They like to go places during the pandemic. And fortunately it wasn't something that they were able to really regularly do. And we had even a shoe called the Travel Derby. It's collapsible. It's a great, lightweight, both women's and men's Derby that you can pack and put into a backpack or a tote bag and take with you and really convenient, but calling it the Travel Derby during a year where nobody could travel, just doesn't make sense.
Chris: So we made a naming change there, the ethical marketplace, changing that to at home, launching the mask marketplace. And then we had one other collection called the commuter collection, which is, we still have that now, which is all waterproof and rubber soles and really great for like when you're commuting and you get hit in that torrential downpour that you can't control, or you're trying to walk on a slippery subway platform they're comfortable and functional and stylish. You can wear them to the office, they're Chelsea boots and heeled boots and stuff like that. So they're very classic silhouettes, but the commuter collection during a year where everyone is working from home, again, something that we leaned out off and talked a little bit more about, like when you're out there safely social distancing and you're at a fall festival or doing something else that's outside. And when you can go out safely, these are the styles for you. A lot of it was just rewiring to meet our customer where they were at that [inaudible 00:10:37].
Courtney: You did a great job of really trying to figure out where the specific niches were to survive the 2020 timeframe. So nice going.
Chris: For sure. Yeah. And similarly, one of the reasons why we moved to Navistone during early 2020, and the success that we saw with direct mail was from the fact that people were spending so much time at home. And for us, things were getting even more expensive on digital and will continue to, and there was a day where print was very crowded, but we noticed an opportunity where our mailboxes started to thin out quite a bit during 2019 and into 2020. And for us, it was a no brainer to also go, okay, if you're going to spend a lot of time at home. Let's also make sure that we're getting [inaudible 00:11:19].
Courtney: Great segue because that's something that we saw as well. So just to give some additional context to the apparel category, in addition to everything, Chris has just shared. NavisSone is uniquely positioned to be able to aggregate traffic data. And so we've been able to see how site traffic has changed as a result of COVID. So here you can see site traffic in the apparel industry, one of the hardest hit industries in the last 18 months and how the first nine months of 2019, which is illustrated here in pink compared to 2020, which is shown in orange. And then the post pandemic period of 2021 shown in gray and 2019 is really an illustration of how site traffic trends looked for the apparel industry historically just as a frame of reference. But in 2020, we can really see what the changes in traffic were as the pandemic hit.
Courtney: First, we had a decline and then an uptick as people were stuck at home and browsing more, but there was nowhere to wear these new clothes. And so traffic really dropped as did purchasing, but as we're coming out of the pandemic, we can see traffic data is really supporting that fact that the number one place consumers are spending all these savings that they've had in the last 18 months is on apparel as they've purged their closets over the lockdown. And now that they can get out, they don't have anything to wear. I personally have that same problem. I really spent the last year doing a lot of spring cleaning. And so now that we're kind of returning to this new normal, and we have weddings and travel again, it's kind of nice to be able to shop with some purpose and actually have something to be shopping for.
Courtney: So it is one thing that's worth noting in terms of what's been happening with online shoe sales, according to some industry sources, we've seen that online shoe sales grew 10% in 2020 with online penetration of sales in fashion shoes, rising by 12%, just as an aside for others that are here today, if you're interested in seeing any of this data for your own particular industry, please just shoot me a note after the webinar. And I'm happy to share some data with you. Chris, are there any thoughts on this research given any of your experiences over the last 18 months?
Chris: Yeah, I mean, as an overall category of footwear, a lot of people were really leaning into athleisure and that actually applies to just apparel in general. For us, a lot of our styles were really leather, again, leather foot wear and accessories. It was really meant for when you're out and about. And we had to rewire a lot of our messaging to really explain the comfort and function and the occasioning of our products, so that it was more than just about the office because people were used to throwing on those Adidas slides for work every day. And so, yeah, there's definitely an uptake in athleisure, which is really where it was bolstering a lot of the numbers that you see when you kind of see this flat trend, whereas brands like us definitely saw much more of decline, but started to lean into those designs.
Chris: Like spring summer, we launched a platform sandal. That was one of our best, that it still is of our best sellers. And that came about from this need in the pandemic. And then the second thing that comes to mind is a lot of what you see here are these large omnichannel brands that lost on their in person retail side of the business, omnichannel, luckily eCommerce picked up the slack in some ways, not nearly to the degree that I'm sure they'd hope, but for us as a vertically integrated eCommerce digital first brand, it was a lot more difficult, right?
Chris: We only had eCommerce to rely on, we have a flagship store here in Nashville, which is now reopened and that's great, but it's definitely something where we didn't have this fleet of stores and this iconic name, these big brands that are within footwear and athleisure to be able to harness the fact that that traffic will just migrate to online. So as you're looking at these big numbers across apparel, and across foot wear, the nuance of omnichannel brands, the larger brands that have the ability to funnel that traffic online and the ones that are kind of positioned to be able to meet you in the comfort space really ended up being the ones that kept these numbers from being a lot worse.
Courtney: Yeah. So given all the challenges that Nisolo faced from product, customer experience, and marketing over the course of all of this. Tell us a little bit about some of the silver linings that came with the pivots that you made. Are there some examples of positive outcomes you can share?
Chris: Yeah. So for us, I think some of the key things that we did with our time at Nisolo first is just again, really making it about both our customer and the producers first. So here's an example of our CEO, Patrick, again, founded this company for all the right reasons to protect both people and planet in the fashion industry. And so there were a ton of different letters that were hitting everyone's inboxes from CEOs at first. And I think that he did a great job here saying like, it's bigger than all of us. This is about the people that are at risk already, that are in supply chains globally making all of our clothing. And the fact that that industry is about to really be devastated over the next X amount of months.
Chris: And at this point, when this letter came out, it was the foreseeable future. We had no idea how long COVID would last. So kind of just setting the tone for COVID and letting customers know that our business first and foremost stands for this, I think was really important. And something that did well for us. And then I guess the second part of that is really just taking the time to build out our strategic roadmap. As a brand, we had to make the decision, do we chase revenue, do we go and do promo after promo after promo? And don't get me wrong, we had plenty of promos last year that we felt we needed to do it for whatever reason at that time, but there were a lot of brands that were just constantly fighting for that top line revenue.
Chris: And it was more important for us to preserve profitability and cash so that we could protect our workers and come up with the plan for, at some point when people need our product again, and consumer behavior comes back to "normal", when that does happen, ultimately, what are we going to do differently as a business to scale to hit our main mission and our purpose, which is to push the fashion industry in a more sustainable direction. No one is paying attention to Nisolo at our size now, and our impact will grow extremely as we grow as a business. So that's really where our focus was, was that short term chaos was really for us mid to long term planning and figuring out what our next steps were.
Chris: And then from a marketing perspective, shifting all of our dollars to the areas where they made the most sense for that year. I would love to have been out acquiring new customers, but for us, it was really about, again, that short term profitability and be useful and helpful to our customers and be there for our supply chain and then figure out when things come back to some semblance of normalcy and people need our product again, how are we going to grow our business to ultimately put the entire fashion industry on notice that they need to do things the way that we've been doing it for 10 years. Yeah, so that's a little bit about what we did to shift our focus.
Courtney: And you really were able to stay the course in terms of what your core values were throughout everything that happened.
Chris: Yes. Yeah, and so one of the things that I did at Nisolo when I got there was our website, didn't do product justice and we kind of needed to rewire our website first, before any marketing even mattered, right? Because we weren't doing a great job of talking about our product or people and planet in a way that was consumable. And as a matter of fact, there were many areas where if you didn't land like on our homepage, you wouldn't even know that we're an ethical fashion brand outside of maybe some little icons from different certifications that we have, which are great and super powerful, but you need the context around that. And why 100% living wages and 0% in carbon is so important to us. So we rebuilt that landing page and then recognized that the next two important things to do, this isn't rocket science, is acquisition and retention.
Chris: And for us in a year where acquisition was really difficult and really expensive, and we are a small privately owned, funded, but small and privately owned company, it's really difficult for us to just go spend $20 million to go compete with OTT ads with our next largest competitor. Instead, we needed to find the areas where we could really get that return, but also start to acquire customers and we can't churn an audience and just keep with the same audience all year long, you have to have some level of growth just to keep up with the pandemic. So we started to figure out the channels that were most profitable. And one of the spots that we went was direct mail.
Chris: You have this opportunity again, to meet the customer where they're at home during this pandemic and showcase these new brand pillars and showcase this new comfort, which you can see on that women's postcard, shoot things in a comfort setting. And again, you're seeing that 100% living wage is 0% carbon. The intentionally designed, ethically made, fairly price is a great brand touch point that was where somebody was spending most of their time.
Courtney: That's great. We love that you're leveraging the solution of a direct mail retargeting program. Can you tell us a little bit more about how you used it and kind of, what are some of the results that you were seeing from the testing that you did?
Chris: Yeah, for sure. We've done a bunch of different A/B testing, lift studies and hold studies to try and understand the true incrementality and return on ad spend. And is this good for retention? Is this good for acquisition? Is it good for both? How big can this get? We had a lot of questions about it, obviously coming into our first push into this side of things. But I have a background with catalog and I understand the value of print and I know how powerful it can be, but we had question marks specifically around our customer, our product set in 2020 and 2021. And so, you can see some of the ways here that we started to like dip our toe in and understand, okay, well, cart abandonment, that's really low down the funnel. That sounds like it should have a high return on ad spend.
Chris: I know what that does digitally. We've seen the power of it there. What happens when we can get something that's timely and relevant in front of those people. But also at the same time, like I said, even during a pandemic year where we were [inaudible 00:22:37] and shifted wildly over to retention in comparison to where we are today, but we still needed to acquire some set of new customers and we couldn't completely stall as a brand. Can we send this to people that are look alike audiences, can we send this to people that are people that we've shipped orders to in the past that have dropped off and reactivate customers? What else can we do from an acquisition standpoint to bring in new customers? And so we got creative with the help of Navistone to really carve out some key audiences and do some tests and have seen great return on ad spend blended. And we found areas where we would lean into even further and some areas where we would shift dollars as you'd expect, but largely have been happy with what direct mail is capable of.
Courtney: That's great. I think one of the things that we've all learned from the pandemic is flexibility. I think that's pretty critical to life these days. And that's one of the really nice things about direct mail retargeting is it really lends to that flexibility. It's easy to toggle levers on a daily basis to get to what we need. So again, we're so glad to see that Nisolo is seeing the benefits of direct mail retargeting. And for those of you who didn't realize that you can be retargeting via direct mail, if I may, I'd like to just briefly tie that together for you. So no third party cookies are needed, but rather you use a first party cookie to collect your online site visitors and their browsing data. Then we segment, model, and score for the most targeted audience. Next, we leverage personalized content with data consumers are sharing with you during a browsing session, and we execute through direct mail within 24 hours of a site visit with 95% deliverability and the highest viewability.
Courtney: And last the program can be measured using both online and offline sales, which is pretty great. So with all of this information and everything we've been through in the last 18 months, what's next? I wish I had a crystal ball to be able to answer that question myself, but since we don't, we pulled our network to see what marketers are saying about holiday planning. And when we asked what your biggest priority is in preparation for 2021 holiday season, as you can see, we heard that promotions and inventory were the biggest focus, specifically thinking about identifying and finalizing promotional plans and doing what we could to make sure that inventory is in house on time to support upcoming demand. Chris, what about you? What are your thoughts as you prepare for holiday right around the corner?
Chris: Yes. All of these, yeah. This is really a great way to market this. I mean, for us, for sure, during this holiday season, we are like many people trying to figure out from an inventory perspective. It's really difficult to forecast coming out of such a crazy year, like 2020, but we're trying to figure out from a promotional standpoint, what that's going to lead to, what does that mean for inventory? And of course, we're categorically different in terms of our particular segment of the fashion industry and then within apparel and footwear, even within ethical fashion, we kind of have our own corner.
Chris: And because buying behavior is like I said, categorically different than last year, we're trying to understand what that looks like from a new versus existing perspective in Q4. So every single one of these resonates with me and in terms of waiting, it's funny and ironic that revenue is weighted the lowest in this chart. And we agree with that, for us this year it's really about getting the fundamentals right. And it's less about chasing the top line number and we're about making sure that we are leaning into customer acquisition. We've got great inventory available and we've got the deal that is needed to really be compelling to the consumer.
Courtney: That's great. Well, and then the next question really is around what's next? What does 2022 look like? which is crazy to think that's only a couple of months away. So we also pulled our network on what people are saying for '22 planning. And when we asked as you plan ahead for 2022, what are the three biggest marketing challenges you anticipate and are preparing for? As illustrated in this pie chart, we can see there are a number of issues that are plaguing marketers as they look to next year, customer acquisition and shipping and inventory that really topped the list, which is not surprising, giving everything that's happening with that. But channel diversification and marketing performance was really also another key area of focus. Chris, what about you? What is Nisolo looking at as you think to the upcoming year?
Chris: Yeah, I think this chart's pretty accurately weighted in my mind. I look at like the three biggest problems that you have there in terms of customer acquisition, inventory, and supply chain, and then shipping for us, those operational logistics and bringing in new customer and growing new customers. I would definitely say it's at least what you're seeing here in this graph, if not even more. And the rest of these problems for me are not noise. They are truly problems. But at the end of the day, those first three fundamentals, what you see here is like, do you have customers? Do you have products? And can you ship it to them? Those are again like tripod of fundamentals that if you're not going to get right, none of the rest of the things that you see here matter, you're not going to scale.
Chris: It doesn't matter what channel you bring them in on, it doesn't matter. Some cost goes up over in one channel, your attribution won't matter because you don't have the products. You're leaving hundreds of thousands of dollars on the table or millions of dollars on the table and your customer satisfaction rate's dropping because you can't ship it to them in time. There's a lot of other downstream impacts that come from getting these three things right. So for me, that is the number one, two and three problems for 2022. And we're in the process right now like other brands figuring it all out, and receipts were due yesterday for all these things. And you're trying to nail down a forecast, but yeah, I can identify with all these problems and I'd just argue that fundamentally focusing on those three and letting the other ones... The other ones will fall into place if you get the first three right.
Courtney: I completely agree. I mean, especially customer acquisition and inventory. I mean, those two things alone really are going to help drive next year and as much foresight and forward planning that can be done given the lead times that exist today, just will set you up for better success in the coming months and years.
Courtney: So to sum all this up, what do you think 2020 has taught marketers?
Chris: Yeah. I mean, what a year to be a marketer. I think that marketers that were going through the motions and were really stuck in the this is what I've always done mentality and came into their organization and inherited this program. And didn't really think critically about the strategy behind it, the people that were more micro oriented than macro oriented, they had trouble last year because a lot of the traditional means were used to being successful for them and throw money at that problem. It wasn't the year for that. So people that were resourceful and scrappy, they were the ones that ended up making it through the pandemic, smarter, leaner, and ready for anything. And for me, at least it was really easy to get complacent during, 2012, '13, '14, '15, '16, you see this growth in Q4 every single year and retail's booming and e-commerce is booming.
Chris: The consumer in the US at least, during Q4 shows up every single year without fail. And it's like memory training or like brain training. You end up getting a little bit lazy, just relying on the things that are working. And I think it's a good reminder for everyone to always have your strategy and your testing and things that are proven strategies versus things that are in the works always have that ready to go, because it could happen again at any time, the next COVID spike, or the next economic whatever. These things are always going to be real threats and anything that can shift your consumer behavior overnight can take your business down 10%, 20%, 30%, 40%.
Chris: And the reality is that, unless you're ready for that, it's every time going to devastate you in some way. If anything, I just feel more alert than ever about our business and making sure that our consumer cares about us and that we're protected to be able to do the mission that we were set out to do. And I just want to be resourceful and scrappy and think creatively about every project now. And I'm questioning everything all the time and hope that I can keep that same energy in three years.
Courtney: I think we all feel the same way. I think this last period has really shown how important to be nimble is within an organization and really just not accepting what is and listening to the consumer base and what their needs and wants are. And how can you be creative in addressing those things. I couldn't agree more in making sure that we remember the lessons that we've learned and make sure we carry those through in the coming years. Hopefully we get to a more stable place again and there isn't another spike or another COVID related issue, but if nothing else, let's learn from what's happened in the past.
Courtney: So Chris, thanks for all that you've shared with us today. I personally have loved learning how you've been able to navigate all the choppy waters that have happened over these last 18 months. And you really have come out very strong. I have no doubt that there are more successes to come from Nisolo.