Member Brief: Checkout is acquisition


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The lead article of Member Brief No. 40 is by Micah Rosenbloom, a talented and proven venture capitalist at Founder Collective in Cambridge, Massachusetts. In his most recent Tech Crunch article, there’s a great passage:

What strikes me as most unusual and unpredictable is that most of these companies were founded by entrepreneurs with analytical, business training. They’re strong on finance, marketing, and customer acquisition. It’s not what you would have expected in categories noted more for an ineffable “cool” factor than feature lists. Creative design helps a brand stand out, but accounting acumen is what keeps it alive and on its way to becoming a unicorn.

He’s mostly right. But let’s not forget the left brain skill set of appealing to a consumer’s psychology. It’s an amalgam of art and science that the lasting brands master and the trendy brands ignore. There are more dead-in-the-water DNVBs run by quant-types than there are successful ones. But for the direct to consumer brands that succeed, it takes a combination of the quantitative and the qualitative.

Look at the high flying DNVBs and CPG brands and they’re cofounded by industrial engineering-driven, business-minded, graduate school-educated, (likely) former consultants. When founding Mizzen + Main, Kevin Lavelle was still part time at his consulting firm. Bonobos’ Andy Dunn earned his MBA from Stanford. Rogue’s Bill Henniger graduated with an MBA from Michigan. And Away’s Steph Korey earned her MBA from Columbia University. As you may have guessed, the list goes on and on.

But somewhere down the line, spreadsheet-driven, logistics-minded leaders began to value the holistic nature of brand marketing. And that movement is beginning to separate growth companies from the also ran’s.

The winners in the space realized that brands have to move you and emotion cannot be calculated. From social media collateral to site design to the checkout process, brands are customizing the experiences to build deeper relationships with their target customer. This is no longer math or logistics, this is psychology. And it doesn’t get the credit that it deserves.

This past week, I tested three very well-positioned eCommerce brands: Kiel James Patrick (KJP), Chubbies Shorts, and Away Travel.  Though KJP is quite a bit older (it was founded in 2009), it’s important to note that the companies’ growth paths are each different. KJP is a bootstrapped retailer, the brand’s chief marketing tools are its Instagram and Tumblr followings – where the combined audience surpasses two million viewers. Chubbies has a more traditional acquisition program, including a robust paid acquisition model. With over $16 million raised, the company has an omnichannel strategy that accounts for nearly $25 million per year in revenue.

Comparisons aren’t necessarily 1:1. However, neither of the companies are small. By our measure, KJP is generating $7-10M per year in merchandise and Away will eclipse $125M in 2018. While Away is a bonafide behemoth, Chubbies and KJP are companies known to organically market through visuals and lifestyle branding. Each brands’ marketing is meticulous. Every pixel is by design – well, almost every pixel.

Re-read Issue No. 270: For DNVBs, Brand Matters. 

For aspirational products, consumers choose brands that fit their lifestyle, belief system, and goals. From the very beginning, Away achieved something that very few DNVB’s understand early on. Building the product is only half of the battle. This means that no matter what arduous regulations they may encounter, they will maintain a canvas to build products that are relevant to their community of passionate, millennial travelers. It’s likely that as traditional sales continue, you’ll see a growing number of SKUs, styles, and add-ons that are beloved by millennial travelers and commuters. Yes, Steph Korey and Jen Rubio sell luggage, but Away is a travel company. And Away will go where she wants.

Brands fail to optimize for customer acquisition when they ignore their checkout workflow.

Screen Shot 2018-09-14 at 2.55.04 PM
Screen No. 1: Kiel James Patrick uses standard Shopify

Here is the screen for Kiel James Patrick after a purchase. When you click on “view your order”, there is no additional pertinent information. There is no customization, no additional brand statement, nor a call to action. For such an exquisite experience from top of funnel to conversion, this is the universal “we convinced you to buy, now bye” screen. After three days of awaiting updates, I had to call them for updates on the shipment. This experience negated the good will of their exquisite customer acquisition funnel.

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Screen No. 2: Chubbies uses Shopify Plus

Because Chubbies is a bonafide volume seller, they use Shopify Plus. Shopify’s enterprise offering allows some customization here. But the experience still signals a shift from brand experience to platform experience. Every aspect of their sales UX screams individuality. Thanks to the handy work done by Brand Value Accelerator, a typical user cannot tell that Chubbies is using a cloud based platform. That is, until the product is purchased. Chubbies is one of the few retailers to maximize what’s possible on Shopify. Most Shopify Plus retailers rely upon the first format.

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Screen No. 3: Away Travel uses a custom built site (Ruby on Rails)

Away’s screen has two useful functions: this pop up and a call to action. The checkout screen is a continuation of the site’s brand and the embedded tweet function allows you begin the process of evangelization.

Web Smith on Twitter

Finally made the jump to @away and I have a few observations: 1. I ordered yesterday afternoon. 2. They shipped within a three hour window (rare). 3. It arrived this morning. 4. The tracking system is very efficient. 5. The unboxing / collateral experience is very good.

Checkout is acquisition. There are several moments upon purchasing a product that can trigger a customer’s desire to advocate others for purchase. Away does this successfully, by (a) collecting data and (b) influencing outcomes.  The ease of tracking and the unboxing processes continue the checkout process. This all feeds into what we previously discussed: The Infinite Loop. The process was so notable that I made the rare decision to discuss my purchase with the public.

Re-Read Member Brief: The Infinite Loop

When you think of shipping, you think of beautiful packaging, tracking, and delivery. Industry observers rarely consider the impact of returns and exchanges on a brand’s bottom line. Returns can eat into direct margins while stressing the logistics infrastructure of the company. Addressing this solution is where Loop will excel, but there is opportunity to address another growing issue in online retail – customer acquisition costs.

To combat this (lack of) cloud customization issue, another commerce provider partnered with Bolt to speed up the checkout process, allowing BigCommerce’s retailers to customize the experience from beginning to end. BigCommerce released a new checkout SDK to allow retailers to improve their experience.

With the new BigCommerce Checkout SDK, merchants or service providers like Bolt build a checkout page replacement rather than making changes to the existing checkout page. Essentially, retailers place a skin over the built-in BigCommerce one-page checkout with a completely new user interface that merchants can design themselves, BigCommerce says.

Katie Evans, Internet Retailer

Retailers like the one below can use BigCommerce’s checkout SDK to create the same ease of purchase as Amazon while also innovating the post-purchase screen like the fully custom stores (Away Travel, Glossier). Read more from Tracey Wallace here:

The Checkout JS SDK provides methods for building a checkout page replacement rather than a way to make changes to the existing checkout page. Essentially, you are replacing the built-in Optimized One-Page Checkout with a totally new UI that you design and build yourself.

The SDK provides JavaScript methods for completing the necessary steps of checkout, like displaying and selecting shipping methods, and communicating that information back to the BigCommerce backend.

Tracey Wallace, BigCommerce


As brands begin to realize the importance of customizing every pixel of the digital experience, I’d expect eCommerce behemoths like Shopify to further innovate around this matter. DNVBs are highly concentrated on the Shopify platform. One thing’s for certain, product individuality is an important differentiator for those brands. And more than ever, consumer psychology extends beyond checkout and to sale confirmation.

Quants are especially important to direct to consumer retailers; optimizing customer acquisition costs (CAC) has become a sought after science for brands. But for eCommerce, customer acquisition is often built on the art of influencing consumers from top of funnel to confirmation. For brands, checkout and confirmation is as important as the first click. And emphasizing those final experiences will reveal that will help drive down CAC and increase lifetime value.

By Web Smith | About 2PM

Special note: Micah Rosenbloom is great. 

Issue No. 273: Modern Luxe Doesn’t Bend

Pictured: Outdoor Voices, from our Open Letter to DNVB CEOs

In November of 2016, Lean Luxe’s Paul Munford penned somewhat of a scripture to upstart modern luxury brands: promotion-heavy retailers will not last. There are few takeaways from “The Downward Spiral” that are worth mentioning as recent economic reports suggest that the retail apocalypse is coming to an end, a great sign for aspirational DNVBs that are looking to expand into physical retail.

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We are in a time of unprecedented retail brand launches, collaborations, acquisitions, and re-imaginations – much of which is online-first. This begs the question, what will separate the winners from the commodities? There are early and permanent decisions that determine a brand’s trajectory. For every Mizzen + Main or Ministry of Supply, there is a State and Liberty. For every Outdoor Voices, there is a Bandier. And for every Away, there is a Raden. Each decision matters. And no decision matters more than pricing and a brand’s promotional tendencies.

Here are the top ten takeaways from some of Munford’s best work:

  • No maneuver in retail appears to be as easy to roll out, yet no strategy is as detrimental to a retailer’s long term prospects as the heavy discount. It is a palliative pill: wonderful for the consumer in the short run, but ultimately bad for both business and shoppers over time. It commoditizes the brand, forcing companies to differentiate on price. 
  • The second problem, also related to scale, is systemic to the industry itself: The need to constantly add more and more products at regular intervals, flooding the marketplace with goods that are newer, but rarely better.
  • The lure of the discount, then, becomes too hard to resist. It provides a short term boost to the bottom line and the illusion of growth, but at the expense of brand reputation and sustainable profit — two vital arteries for a business’s overall health.
  • Modern luxury companies have figured out the formula, and it’s remarkably simple: create less merchandise than will sell (and predict, if possible, the sell-through rate, with pre-orders), keep demand high. Embrace the waiting list, as Everlane, Glossier, Caraa, and Alala, among others, often do. 
  • Never discount; preserve the standing of the brand. These tactics certainly do not work, however, or at least for very long, if product standards are below par.
  • Hermes, for instance, is notorious for never slashing prices. Its products carry a prestige because of that, and there is always a demand, no matter how frivolous the item. And they certainly are not above testing the limits of consumer devotion: It has even gone so far as to repackage its cutting floor leather scraps to sell them as high-priced gift boxes.
  • That opposition to discounting would come from founders within the emerging modern luxury industry is no coincidence. For one, it displays the trademark sense of calm confidence in the product that this group is quickly becoming known for. 
  • As for Mr. Preysman, the full price mantra feeds into his mission to constantly refine the product, to make it better, and push it ever closer to perfection according to the standards of the brand.
  • Surprisingly, rejecting the discount is also quite consumer-centric. The eternally-wise Ben Franklin said it best, of course, when he offered this observation: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
  • It takes superb maturity and a great deal of resilience to fight the urge for the temporary discount boost at the expense of preserving a long term reputation. 

Maturity, patience, grit, and perhaps temporary poverty are keys to developing the types of brands that grow to compete with age old legends and fierce (but hopefully friendly) rivals. In 2013, Brooks Brothers commented on Mizzen + Main’s influence on the shirting industry for the New York Times:

While Brooks Brothers experimented with “performance” shirts akin to Mizzen & Main’s, [Brooks Brothers’ spokesman] Mr. Blee said that customers preferred the general wearability of conventional all-cotton. The stretch fibers felt synthetic to them. Although a range of Brooks Brothers oxford shirts have moisture-wicking properties, he said, “We are known as a natural-fiber house: 100 percent cotton, 100 percent cashmere.

Just five years later, Brooks Brothers is launching a competitor to compete in a menswear world that is being re-defined by technical fabrics and other innovations.

Mizzen+Main on Twitter

we’re old enough to remember when Brooks Brothers laughed at performance menswear:

I remember the joy of that article hitting the newsstands on December 18, 2013. Not because of the notoriety that it would provide but because it had been over a year and half and we really needed the sales. We stood firm on our price while we built allegiances and Kevin worked feverishly to improve the product. And the company lasted. What Lavelle and team has done today is nothing short of spectacular. And it has allowed the brand to stand, eye to eye, in the same clubs and on the same courses as the company that invented the polo shirt (sorry, Ralph).

To achieve growth and longevity, branding cannot be viewed as a soft skill. Price cannot be viewed as an arbitrary number to manipulate. The five forces must always be considered. And patience must be paramount because great brands start slowly. In the age of modern luxury DNVB’s this is as important as the products themselves.

Read more: An Open Letter to DNVB CEOs (Issue No. 254)

Read the rest of Issue No. 273 here.

By Web Smith and Meghan Terwilliger | About 2PM

Issue No. 265: Can A DNVB Achieve Modern Luxury?


Om Malik and Lean Luxe‘s Paul Munford had a thought-provoking exchange. Does the modern luxury go-to Lean Luxe (and the industry as a whole) have a grasp on what luxury means in online retail? On its face, a physical product that makes itself available to the masses cannot be a luxury product.

Lean Luxe on Twitter

@om Sure, by the old definition of luxury – you’re correct. But don’t judge modern luxury brands’ bonafides using the old set of luxury rulebooks. More here: and here:

There are very few products, if any, that digitally vertical native brands (DNVB) sell that would qualify as traditional luxury goods. Here is Munford’s definition:

The key strength of a modern luxury brand is its emphasis on the entire package, rather just the product (or logo) itself. It’s a different mode of operation that takes some getting used to, but it disperses with the conventions of the old, blingy version of luxury, and is best optimized for today’s new consumer behaviors and expectations.

The fact of the matter is that competing on product quality alone leaves a brand open to exposure. MLCs have smartly understood that a better overall package or bundle — in an open market like today’s — can be far more compelling to shoppers than just product alone can.

Lean Luxe

Munford makes an important point that I’d like to take a bit further. Lean Luxe tends to maintain a narrow focus on hard goods and the packaging that they arrive in. But what about the purchase process and the attentiveness to customer happiness? And what about time?

The definition of luxury: an inessential, desirable item that is expensive or difficult to obtain.

2PM’s Meghan Terwilliger had this to say:

Luxury, however you define it, is a brand’s embodiment of characteristics that make it desirable. Historically, those characteristics have been more ‘What’ features like quality, exclusivity, and cost. You can still define luxury as characteristics that make a brand desirable, but those characteristics have shifted. Quality is table stakes.

The characteristics that make brands more desirable are ‘how’ features like excellent customer experience (how do I experience the brand), meaningful brand mission (how do they give back/make a difference), and community engagement. Is it artist-created and excessively expensive? Maybe not. But if it is a product, or even an entire experience that is highly desirable, it can be considered a luxurious brand. DNVBs just so happen to possess a great infrastructure to support the characteristics that define modern luxury.

Luxury is always relative; it is loosely defined to meet the times and the market. If you walk through a great mall in the United States, you will visit brand experiences that will provide a luxurious taste. Take Ohio’s Easton Town Center as an example. The indoor / outdoor mall features Burberry, Tiffany and Co.,  and Louis Vuitton. However, your perception of luxury changes when you walk through the Bal Harbour Shops in North Miami Beach.  Bal Harbour is considered the finest mall in America. Both malls are considered “luxury” malls but neither are as luxurious as Dubai’s mall.

But can a DNVB be a luxury brand?

The notion of luxury is often applied to tech fashion brands. I partially agree with Om Malik’s statement here.

[Lean Luxe] is again confusing smoke / mirrors marketing and what is really luxury. All I know is that AllBirds and Brandless and Casper are not luxury, And no amount of your linguistic gymnastics will convince me of what is luxury, FWIW, LV is not luxury either. Too common.

AllBirds, Brandless, and Casper do not make luxury products but Munford isn’t suggesting that their products-alone are what classifies them within the modern luxury space.

Louis Vuitton was first hired as a personal box maker and packaging expert for the Empress of France. He was charged with “packing the most beautiful clothes in an exquisite way.” It was the practice that helped him to gain influence among the elite and royals, catapulting Louis Vuitton’s namesake to luxury status.

Louis Vuitton began with an early product and the two advantages commonly seen in the DNVB space:

  • Packaging
  • Maniacal focus on customers

The definition of a DNVB: a brand born online with a “maniacal” focus on the customer experience. A DNVB may start online but it often extends to a brick-and-mortar manifestation. Digitally native vertical brands control their own distribution.

Luxury brands don’t always begin as purveyors of luxury products. And due to a macroeconomic consumer shift from materialism to investing in luxury experiences, there are a large number of consumers who prefer DNVB’s luxury-experience over traditional luxury products. For many in the business and wealth classes, it’s a symbol that their money is better spent on even finer things than goods. The definition of luxury is changing.

Here are two relevant passages from 1994’s The Idea of Luxury:

Page 18


Page 35

Page 34

Buying experiences over buying consumer goods is a trend being adopted by the luxury-set. The interpretation of the word luxury means something altogether different for the types of customers who have the means and awareness to shop with DNVB brands. Skift’s latest research shows a clear shift in demand for more transformative travel experiences among upscale travelers (Skift / May 2, 2017). Whereas expensive products used to be the consumer desire: products, community, and service now play the role of enabling experience economy.


Many DNVB products (see the database here) are marketed to enable this type of consumer: Mizzen+Main (No. 86) is for the traveling business class male. Ministry (No. 91) is for the well-educated, urban millennial. AllBirds (No. 56) is worn by the business casual, aspiring member of the investor-class. Rogue (No. 8) turned a garage into a coveted space in a home.

Digitally vertical native brands are founded with these basic questions:

(1) How do we make a great product?

(2) How do we build a community around it?

(3) How do we provide an elegant solution for commerce?

(4) How do we enable customers to save time and focus on what matters?

“One fundamental trap that people run into when assessing the merits of a modern luxury brand is the tendency to judge that brand using the ‘best-in-class’ framework,” says Lean Luxe’s Paul Munford. Lean Luxe’s definition is mostly right. Munford discusses packaging as part of the bundle: “[These brands] offer a better bundle to offset [traditional definitions of luxury] — more convenience, transparency, connection, better messaging, pricing, etc.”

But a selection of modern luxury brands are also marketing time as part of the proverbial “bundle” and that’s the only place where Munford and my thoughts differ.

It’s no longer sufficient to define luxury products by how difficult they are to attain. Time is the scarcest resource and the ultimate luxury. Being a modern luxury brand is about being self-aware. These brands sell time as a scarcity and then build products around it.

There may be no greater example of the community / product / service paradigm than Peloton, a DNVB that Malik’s True Ventures joined back in 2015.

Peloton is now shifting gears with a new financing program ($97 per month for 39 months for both the bike and subscription service), an ad campaign that’s more relatable to a diverse consumer base and an NBC Olympics sponsorship. Peloton counts NBCUniversal among its investors, and has raised nearly $450 million in total funding to date.

“We had this idea of a very affluent rider who many of our early adopters were,” she said. “We realized, through conversations with our community, that there was a huge opportunity with people who thought $2,000 was a huge investment but were [buying] it over and over again because the product is so important to them.”

How Peloton is Marketing Beyond the Rich

Peloton is not a traditional luxury product, but it shares consumers with traditional luxury brands. Think about the type of living arrangement necessary to house a wi-fi enabled bicycle or a $4,000 VR treadmill. It’s a brilliant piece of hardware that blends community with product and service. The brand’s proposition explicitly states that the purpose is to free the owner to focus more on experiences.

Peloton’s value proposition is as much about what you can accomplish away from the treadmill. Why take the time to travel to a gym? That time could be better spent elsewhere. This is the mark of a modern luxury brand.

Read more of the issue here.

By Web Smith and Meghan Terwilliger | About 2PM