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I had been growing the pet supplement line for my company, HAPPYBOND, through direct-to-consumer channels for years, but when we launched our unique shelf-stable dog food last January, I thought selling primarily via pet retail was going to be our route to success.
For one, the product is sold in a glass jar—delicate packaging that is more suited to retail than shipping. But more than that, I wanted the customer to experience the product firsthand: to understand that it sits on the shelf and doesn’t need to be refrigerated, to see the whole and healthy foods through the glass, to easily be able to buy a jar or two to bring home for their pet to try. I predicted that was how thousands of customers (and their fur babies) would fall in love with our food.
Instead, it flopped. The customers who did find our product loved it, but sales were slow, and working with big distributors and retailers was challenging for our small company. On the financial side, distributors took a chunk of our already tight margins, and the 90-day payment terms from most retailers made cash flow difficult. On the customer education side, we had little control over where our product was placed and whether store associates were talking about it correctly. How do you sell if your product is hidden somewhere on a bottom shelf?
I knew from my previous experience with direct-to-consumer (D2C) that it offers a lot more control over the finances and the customer experience and can lead to seemingly instant results when you get it right. I also felt that adding a subscription option for our dog food would allow us to better meet customer needs and support our company with reliable monthly recurring revenue (MRR). So, we pivoted to a D2C subscription model for our dog food in September. By October, we were already seeing 263 percent growth to over $40,000 MRR and are now trailing to $100,000 MRR just one quarter later.
Of course, with more control comes more responsibility in the hands of the company. Here’s exactly how we made the change and how we helped our D2C sales quickly succeed.
We got our operations in order first
It’s easy to only think about the marketing aspect of pivoting distribution approaches, but a lot of the initial work for us was actually operational.
Selling via retail is a completely different process than selling via e-commerce. With retail, you simply ship a pallet to the distributor and then check in the next week to see how sales went. When we shifted to D2C, everything fell into our hands. We had to make sure our supply chain was airtight (because you can’t be randomly sold out when customers are relying on a regular subscription). We had to build special shipping boxes for our glass jars, set up a seamless purchasing experience, and ensure we were shipping to customers on the correct schedule so they never ran out of food.
It took us about four months to get all the operations in place to be ready to launch in September. While I had some previous experience with e-commerce D2C sales, I was learning a lot from scratch, given the frequency and shipping challenges of this new product. For new questions that came up, I relied heavily on my network of other pet brands and advisors who had launched D2C arms. I always encourage other business owners to recognize that they’re not the first person to do this and to be unafraid of asking for help and advice.
We found ways to replace that in-person experience and appeal to new buyers
Convincing customers to switch dog food can be challenging, which is why I initially thought it would be important for them to experience our product in person. I realized that’s not as important as I thought—in fact, buying online can be a better experience because you can thoroughly research a new product instead of standing in a store surrounded by dozens of options. When pivoting to D2C e-commerce, I wanted to find ways to support that new customer discovery.
At its most basic, this meant a lot of high-quality visuals and content on the website so customers could deeply understand the product before they purchase. Customer education was now in our hands instead of store associates’, which overall was beneficial to the brand but meant we had to be sure all of our marketing materials were crystal clear. We also created a variety sample set so curious customers could test each flavor before they commit to a subscription. This has become our most popular item, and over 70 percent of customers who purchase a sampler end up signing up for a subscription.
I also knew online ads would be important for getting in front of new customers, but I wanted to do them strategically, given our limited startup budget. We partnered with Cognetix AI to embed an on-site tool that identifies the types of customers who are converting and spending the most. The system generates customer groups you should target, plus keywords to include and script ideas for ad copy. This helped us narrow our audience and make the most of our ad spend, ultimately decreasing our customer acquisition cost by 50 percent within the first ten days.
We let customers be our biggest advocates
With direct-to-consumer sales, consumers are often your best sales advocates. So, when planning our marketing strategy, we wanted to find ways to celebrate the customers we already had and utilize their experience to make our content feel authentic.
For instance, instead of creating our marketing materials completely in-house, we’ve relied heavily on user-generated content. Nice pictures of our products don’t really convert, but people talking about why our brand is different and how their dog reacts to our food is a big hit.
We started with two designers we worked with, who happened to have dogs and love the products. Because they believed in our mission to change the pet food industry, they were willing to work for free product and a small fee, helping stretch our budget. As we scale, I think it’s important to have different people talking about the product, so we’ve also started using Billo, a platform that connects companies with creators to generate UGC videos that work for their budget. This has streamlined our content creation process and is more successful than anything we could create in-house: Our ads all have a ROAS (return on ad spend) of at least 2.5x.
Finally, leaning into the old business advice that it’s easier to keep a customer than gain a customer, we launched a reward program alongside our D2C launch. Customers get points for purchases and interacting with the brand on social media and can redeem them for everything from free shipping and discounts to a donation to pet charities.
Ultimately, I think we’ll find long-term success through an omnichannel strategy because both retail and direct-to-consumer have their pros and cons. We’re still servicing mom-and-pop stores via wholesale platform Faire and are in talks to be stocked in large natural grocery chains later this year. But, for now, focusing on the D2C side has been instrumental in growing our revenue and our brand.
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