Endcaps
After FTC suits against Billie & Harry’s, the real question shouldn’t be about exits. It should be about growth.
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For a minute earlier this month, it felt like the only thing the DTC world was going to talk about was razors.
The FTC sued to block Billie’s sale to P&G in mid-December; then, right after New Year’s, Inc. Magazine dropped a profile on Harry’s life-after-Edgewell reality; and—just days later—P&G and Billie said their deal was off.
With BigDaddyCorp (a brilliant term Andrea Hernàndez coined) acquisitions off the table, the question went, what would exits look like?
A reasonable question, sure. But it ignored a more instructive one for most CPG brands: What’s the growth strategy now?
Retail Brew’s Halie Lesavage had an under-the-radar Q&A with Harry’s GM Jaime Crespo that started exploring that. What caught our attention, though, was this line from Lesavage:
“Crowdsourcing product ideas is a DTC trademark; so is realizing big launches need big distribution funnels.”
and this quote from Crespo:
“We do end caps or holiday packs where we bring those products together, and they really resonate with our customers a lot. When we place them together people buy a few of them. There’s a lot of cross sell, but we’re not forcing them on the shelf. “
None of this is new, of course.
But what resonated with us was the fact that, to do what Harry’s does, you need a distribution channel (i.e. retail) that’s wildly different from your DTC operation. At least today.
But here’s the thing: Consumers are starting to look for this type of experience online.
According to a trend report from Coefficient Capital and The New Consumer, 43% of consumers start an online grocery order with a previous order.
Consumers are, in effect, anchoring their purchases to past behaviors in the same way Harry’s is anchoring new product expansion to existing consumer preferences. But make no mistake: Consumers are hacking their way there. The experience is clunky, difficult, and limited in its ability to introduce complimentary products. At least today.
Headless commerce is thought of as a more nimble front-end experience to websites. But that seems to be too narrow a use case. What if headless were to power DTC experiences that are one-off and unique in nature, and as focused and curated as the endcaps and the merchandising displays you find in store?
As CPG continues to invest in DTC, traditional retail merchandising tactics will migrate online. And with good reason: The possibilities won’t just grow lines of business, they’ll provide a cleaner dataset that will become invaluable to strategic decisions.