Building A Vertical Brand - Insights from Founders

We recently hosted a dinner in London for a dozen Founders of fast growing, digitally native vertical brands. It was a refreshingly candid conversation and we wanted to share a summary of insights from the evening:

A maximum impact social strategy

- Start off by focusing on one channel and do it really well, rather than having a scatter gun approach

- Once you diversify, each channel will need its own content strategy. Twitter is great as a customer service channel, while Instagram is best for branding and tends to be more informal. Facebook can be quite transactional

- Millennials don’t often trust advertising, so create human and authentic content to achieve better engagement, you need to have a differentiated “voice” (for example the Emily Weiss’s voice, CEO of Glossier, on Instagram, has been instrumental to the company’s success)

- Think about using ‘micro influencers’ as part of your broader influencer programme as they can help you reach new networks in a credible way. Sometimes a post from one influencer with 20k real followers can have a bigger impact than a celebrity with 1m followers. These influencers can either be rewarded financially or through gifting product (fashion brand NA-KD has had a big impact from using local influencers using local influencers)

- If an organic post performs well, it might be worth putting paid spend behind it to broaden the reach even further

- Partnerships with other brands who share a similar target audience and a close alignment can be helpful when your brand is establishing itself (for example Sézane’s successful collaboration with independent, French, underwear brand Ysé)

- Personal relationships still count, invest time in building offline relationships; these could help your online profile down the line (for example Whitney Hawkings from FlowerBx built brilliant relationships in the fashion industry after 20 years working at Tom Ford)

The newsletter isn’t dead…

- There has been a move from more established brands to invest in original content and some now have dedicated content creation teams

- There is a great book about newsletters called “DO OPEN” by David Hieatt

- Newsletters, done well, are still driving traffic and sales, and can give people a better understanding of your differentiation and brand at regular intervals

- Some entrepreneurs suggested creating a full newspaper experience (for example Papier with The Fold)

Vertical brands need to be all about story telling

- One of the benefits about having a vertical brand (as SKU is lower) is that you have space on your website, to tell your story, unlike marketplaces which have to give space to brand and product descriptions

- Blogging can be a really useful way to convey your brand message, and can give your team a place to be creative and express new ideas and thoughts

- Short-form content like top tips can perform as click-bait and encourage users to visit the website, improving SEO. The more timely and seasonally relevant the better (for example Luca Faloni’s post “All you need to know about cashmere”)

- Despite being more expensive, video can be the most digestible way to convey your message and is often worth the investment (for example Bloomon’s videos)

“Packaging is 80% of the whole experience”

- Packaging was a topic of great debate. Many opted for sustainable and re-usable choices. Some were in favour of subtlety and discretion, helping customers to conceal multiple purchases (for example Net a Porter’s ‘basic’ unbranded brown packaging)

- While others around the table put forward a compelling case for packaging as a brand awareness tool (for example the ASOS packaging, which is recognisable from across the street)

- Packaging can be part of the actual product experience, and one of the most visible way to deliver key messages, especially as often the only physical interaction a customer has with an online brand

- Take packaging away from operations and give it to the creative team - it’s the only way you’ll drive innovation. You should think about it as a marketing expense rather than a COGS  

- Consider inserting printed brand collateral into the packaging as it can help raise awareness among friends and family. One CEO told the group about the success of the ‘colleague effect’ which had been instrumental in driving sales for the business, this is the idea that if someone in the office orders something which then arrives in eye-catching packaging with easy to share printed materials it causes a ripple effect, and more orders result  

- Some also mentioned the idea of offering small gifts, which might surprise the customer (Vision Direct includes gummy bears in their deliveries)

Heavy users don’t matter more than light users

- Light users are just as important as the heavy users of your product

- It is good to listen to your key customers’ feedback, but very engaged customers may push you to develop product lines or offerings that are not right for all and could push you further towards a niche

- It is more important to get your 80% 1-time buyers to repeat once more than to satisfy your 5% most engaged users

Offline presence - a no brainer?

- An omnichannel approach, seemingly, had the buy-in of every person around the table

- Although it can be hard to drive direct sales from pop-ups and they take big investment, the benefit on customer loyalty and awareness is significant: it gives people a real experience of the product (this is particularly important for more expensive products like furniture and jewellery). It can also help you to target a different demographic - like older customers who value an offline experience

- Lots of stock isn’t always required at pop-ups or in showrooms, samples and the ability to order online in store can be a cost-effective option (for example MADE showrooms)

- Customer experience is critical, try to do something differentiated and memorable. There may be an opportunity to involve local designers or influencers (for example Ace&Tate had their shops designed by local designers)

Next stop, the world

- In Europe, your home market is often too small to achieve any real scale. To become sizeable, pan-European or even global expansion becomes critical

- That said, before launching new countries, operations and logistics have to be right, otherwise you may damage the customer experience and repeat purchases will suffer

- Realise that you may face regulatory restrictions when you enter new markets, be smart about these and research them upfront

- PR can be a useful tool when you’re moving into a new market, giving you an immediate customer base

- Be strategic and realise you might have to adapt your brand messaging for the specific market

- Meet or hire people that have some local intel and experience and can share key operating principles Many entrepreneurs thought it was easier to keep all operations in their home country, even when selling abroad, so they could keep control of culture and operations

We’re pretty sure we only scratched the surface of debate over dinner which is why we’ll be looking at other topics to discuss and write about in the coming months. Sign up to our newsletter if you’d like updates and if you have questions or comments tweet us @8roadsventures or contact Michael Treskow, Lucile Cornet or Asheque Shams to discuss vertical brands. 

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