James Clawson 💭

Got the following text from a CDP vendor: “Just wanted to give you guys a shout-out again. Officially received the [$3B retailer] RFP today and got a note from [$10B retailer] a minute ago letting us know we’re officially in on that one as well.” Here’s how he got there… // STAGE ONE: Discovery 1. He joined Alium 2. Got access to our database of interviews 3. Learned the marketing director’s [for $10B retailer] strategic priorities were: - Creating deeply personalized customer journeys - Securing a new CDP to meet that goal // STAGE TWO: Outreach 4. He reached out to the marketing director via email 5. And used intel from the Alium interview to get their attention… Words like: - “Time-saving” - “Personalization” - “Cross-channel orchestration” 6. They emailed back and forth for over a year 7. And he built a real relationship with the prospect // STAGE THREE: Scale 8. He found more prospects (from Alium) looking for a CDP 9. Repeated the outreach stage with the same success 10. Got invited to [$3B retailer] & [$10B retailer] RFPs — Bottom Line: The key to getting invited to RFPs is building relationships with prospects. But to do that… You need to: - Leverage insider intel - Catch the buyer’s attention …and get a response. What’s your approach?

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Hims & Hers just reported Q2 earnings - and this company is on fire 🔥 Quick look (YoY): Revenue: +52% Free Cash Flow: + 377% HIMS continues to be the perfect application of the DTC business model, expanding margins at a bonkers rate - let’s dive into the report👇👇 1) Revenue Revenue was up 43% YoY to ~$316MM in 2Q24. This was driven by an increase of active subscribers of 43% to 1.864M - a crazy number. On average these subscribers are spending $57 per month on Hims - up 8% from $53 a year ago. AOV was up to $121 from $95, or +27% YoY The key call out here is that Hims' 52% YoY revenue growth is not only driven by increases in customer acquisition. but they are actually EXPANDING revenue per customer. It literally looks like a SaaS company 2) Gross Margin GM has always been a strength of Hims' - in many ways, its what's responsible for most of their successes. It was interesting to see a 4th consecutive quarter of flat to down GM. The company called out GM compression due to the cost structure of new offerings. 3) Marketing MER was 2.17, up from 1.96 a year ago Contribution margin of $145M represents a ratio of 35%, up from 30% last year 5 full points of contribution expansion while growing over 50%: 4) Unit economics The unit economics of Hims are what every DTC operator should be striving for: AOV: 121 COGS/Order: 18 Marketing/Order: 23 Contribution Margin/Order: 5) Cash flow This combination of unit economics + growth is why investors LOVE software - hims is doing it in a HUGE consumer market. 2Q23 Cash Flow: $16.8m 2Q24 Cash Flow: $53.6m Good unit economics + strong growth = massive operating leverage. It's like 1+1=6 As far as valuation goes - I think $HIMS is officially priced perfectly. Im more than happy to Approximately 20x FCF (3x sales) for this high of growth and upside. The stock ran up a ton, and grew into its valuation perfectly after the GLP-1 announcement. This Friday, we will be diving deeper into the $HIMS earnings report in my newsletter. You will also gain access to the spreadsheets used to create my analysis, as always! link to subscribe pinned on my profile!

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Step 1 for premium brand success at Walmart: THE RIGHT ASSORTMENT. Lol. No kidding. What's that mean? Stay on the shelf and prove value to Walmart. Four pointers: 1. NOT YOUR ENTIRE CATALOG. Could be 2-3 items, depending on aisle/segment. Walmart doesn't proliferate and your brand ain't the exception. 2. WIN INITIAL CONVERSIONS FROM: a) your brand's core, *and* b) Walmart's goal core. If Walmart needs price-sensitives and your #1 and #2 are both super-premium, dig deeper. 3. SIMPLIFY THE ROAD TO PURCHASE. Choice theory suggests a sweet spot in 2-4 items. 4. SUPPLY CHAIN MATTERS, MATTER. Maybe an extra item lets you ship FTL. Or maybe 3 of your 4 hero skus ship from the same origin. Be transparent and pass along the savings to win a plus-one. Above all, you're trying to stay on the shelf long enough to prove your brand's value. Each unnecessary sku dilutes that. NEXT POST: How will customers KNOW it's at Walmart? Please follow or connect so we can stay in touch.

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Sam’s Club had a deal on Gen Z baloney last week. And CNBC was buying. The warehouse club CEO took to the air to tout its “68% growth in Gen Z members” over the past two years, citing Sam’s Club digital engagement as the primary driver. Of course, he didn’t mention the real reason for the Gen Z growth (which everyone seems to ignore these days): Gen Z has grown up. Two years ago, the eldest members were wrapping up college, and since then, become adults with all of the fun trappings of adulthood like leases, insurance, and, of course, warehouse club memberships. They were going to see explosive Gen Z growth no matter what because Gen Z aged into the buyer demo--and they love values. A big percentage spike was guaranteed because they were essentially starting at zero two years ago. (That isn’t to say Sam’s digital engagement is not enjoyed by its young members, however, it's in no way driving membership. If anything, it's increasing merchandise sales and retention.) You’ve heard me say it before and you’ll hear me say it again: 💡 Lifestage is FAR more insightful and actionable than generation. Always be sure you’re factoring it into to any youth marketing decisions. -- Also, as an avowed Costco and data stan, I did get a little ruffled when he inferred that Sam’s Club was becoming a Gen Z favorite over Costco. YPulse data pegs Costco’s total mindshare nearly 2x as high as Sam’s Club — and Gen Z thinks its 3x cooler (yes, we track coolness). Why? Costco’s public perception is far more in-line with Gen Z’s values than Sam’s (re: Walmart). Additionally, whether intentional or not, Costco crossed into youth cultural zeitgeist years ago. Young people have embraced the Costco memes, dupes, TikToks, and more from passionate fans. Just a simple hashtag search reveals TikTok’s # costco content is 4x higher than # samsclub. BRB - Craving that $1.50 hot dog rn. -- (H/T Joel Ponce for sharing the interview. You should check out his original post on it for great ideas on expanding on the club's digital efforts -- Roblox, anyone?)

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eCommerce & CPG: The Role of Amazon 🎯 Great write up by the EMARKETER team. Fun Fact: (1) 🎉 40% & ~$500b — “Amazon will account for 40.4% of US retail ecommerce sales for a total of $491.65 billion this year, according to our February 2024 forecast.” Key Themes: (3) 🔐 7% — “Despite its ecommerce dominance, Amazon will make up just 6.6% of US retail sales, per our forecast. Amazon’s retail share will grow to 7.0% in 2025 as more spending goes to ecommerce.” 🔐 8 of 10 — “Over the next two years, Amazon’s market share will increase in 8 out of 10 product categories, per our forecast. Those two remaining categories are home improvement (due to established home-improvement retailers) and auto (due to Tesla and Carvana).” 🔐 14% vs 11% — “Among major US retailers, only Walmart is growing its ecommerce sales faster than Amazon at 13.6% compared with Amazon’s 10.5%. Walmart has Amazon outpaced in digital grocery specifically, which could pose an increasing threat to Amazon as the category matures.” #ecommerce #digital #omnichannel #strategy #cmo #cdo #ceo #cro #leadership #retailecommerceclub #cpg #privateequity #playtowin

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"Demand can drop by 70-75% in a search channel without direct mail." The direct mail halo effect is real, and I've seen it ALL my brands, too. Steen and I chatted with Tim, CEO of CohereOne, arguably the leading catalog agency, about direct mail on the latest Nerd Marketing Podcast. Tim shared some incredible data around the power of direct mail, and it further confirms everything we see at PostPilot. Direct mail doesn't just crush it by itself, it makes everything else crushier. Check out the latest NerdPod to learn more from Tim and watch 3 direct mail nerds nerd out, link in the comments👇

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James and I are interviewing Rachel Peters (Clean Age) this Friday for our pod, BrandBusters. CleanAge has been laser-focused on serving Gen Z, and they bucked the traditional 2010s CPG launch by going RETAIL FIRST instead of DTC FIRST. They have an awesome brand aesthetic and make products with better ingredients (and sustainable packaging). What should we ask Rachel? #CPG #podcasts #brandbusters

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Why do some brands that are BIG on Amazon end up FAILING at brick & mortar retail... while others end up SUCCEEDING? I'll tell you what I believe is the best way to tell whether a brand is likely to work on shelf or not... BRANDED SEARCH. First of all... what is branded search? Branded search is how many people are searching for a brand on a platform by name—e.g., searching on Amazon/Google/etc. for "Cheers pills" as opposed to "DHM pills". "Cheers pills", "Cheers restore", etc. = branded search "DHM pills", "hangover cure", etc. = non-branded search Non-branded search represents people who already know a brand they want to buy and are specifically searching for that brand so they can make a purchase. I was just at an Amazon seller conference and one of the presenters showed a chart of how "Magic Moo" (a colostrum supplement going viral on TikTok) is getting more branded searches than the entirety of "colostrum"-related keyword searches on Amazon. In other words, more people want to buy the brand than the entire category combined! Who do you think is driving all the awareness for the category? Clearly Magic Moo! They are almost single-handedly building the colostrum supplement market. They are the rising tide lifting all boats. You see this in history with people calling all bandages, "bandaids"... or internet searches, "googling"... or all sodas, "coke". Eventually other brands get into the category—but it's clear to who made the category in the first place. Branded search is the most representative proxy metric for understanding the awareness/demand of a brand that exists in the consumer consciousness prior to walking into a store. So you may see demand for a category growing... but then as a merchant/investor/etc. you need to pick which brands in that category to partner with. I would argue that the MOST IMPORTANT metric to look at is branded search. Packaging, price, etc. all matters too... but in context of demand. Many merchants have seen brands with TONS of Amazon sales fail on retail shelves. Why is this? Well, it's because some brands have become EXCELLENT leaches on Amazon. They exist to steal share of a growing category pie... but do not do anything to grow the pie themselves. So they may have half the sales of another brand on Amazon, but drive 1/10the the branded search. Or... if it's a big category. They could be the BIGGEST brand on Amazon, but they could actually have LESS branded search on Amazon than smaller competitors. In other words, they so effectively steal demand generated by others that they have become the biggest brand without even having to drive demand themselves. Branded search represents OFF-AMAZON demand. It's the key to understanding why some brands that do on Amazon fail at brick & mortar and vice versa. If you're looking to build a category on your shelves. Or if you're looking for traffic drivers. Then you need to look at branded search of the brands in the categories that you're considering!

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Key EMARKETER stat: 27% of UK and US adults plan to start buying holiday gifts as early as October, according to an April 2024 survey from Salsify.  Beyond the chart: Amazon has encouraged early holiday shopping behavior with the launch of Prime Big Deal Days, formerly known as the Prime Early Access sale. In October 2023, consumers spent $5.90 billion during the sales event. Cyber Five is still a draw for shoppers looking for seasonal deals, with 62% planning to shop on Black Friday, per Salsify. Cyber Five’s share of total ecommerce sales has dipped from the 20.0% peak it hit in 2019. This year, we forecast Cyber Five to make up 15.7% of holiday ecommerce sales, bringing in a total of $42.66 billion in the US. US holiday retail and ecommerce sales will total $1.372 trillion this year, according to our February 2024 forecast. #holiday2024 #consumerinsights #retailsales

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🎄 The holiday season is almost here, and if you're in store ops, you know what that means — it’s go time! 🎄   If you’re feeling the pressure to get your stores fully prepped (and who isn’t?), join us tomorrow for a quick, practical webinar designed just for you and your team.   Our amazing Chief Customer Officer Gareth Johns will dig into what we've found from our survey of 100,000+ consumers. We'll look at when people are shopping this holiday season and what they’re expecting in-store. And we'll be sharing a few simple, effective strategies to help your team make the most of every customer interaction.   Here’s what we’ll chat about: 🔎 What customers are looking for (and not just in terms of products—they want real help, real warmth) 🙌 How to set up for peak days, no matter where you are in your planning 🔀 Quick, last-minute adjustments that can make a big difference It's a great chance to get together and talk about how store ops can make this season better for both our teams and our customers. Hope you can join us! Link to join in the comments 🔗

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🛒 🛒 🛒 - Hot off the presses! - - - > Q1 2024 Ecommerce Industry Recap: * Comment below for full 85 page report with all the supporting data. 📈 Consumer Demand Drove Growth: Ordered units increased 10.4% YoY while ASP declined 0.9%, indicating stronger consumer demand amid inflationary pressures. 📉 Profit Margins Compressed: Gross margins fell 7.4% as higher costs and discounts impacted profitability. ROAS also declined $0.40, further squeezing ad efficiency. 💡 Key Opportunities: - Reduce COGS through smarter supply chain, product mix, and input innovations - Shift ad strategies to optimize for incrementality vs. pure topline growth - Monitor inventory closely and run SKU-level simulations to prevent stockouts 🌡 Category Trends: Beauty, Pet, Grocery saw higher ad spend but improved ROAS, signaling better spend efficiency. Home, Furniture remain highly competitive with falling margins. As we head into Q2, brands must prioritize cost discipline and strategic ad investment to drive profitable growth in a challenging environment. Comment below or send a DM and I'll get you the full report.

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How do you increase your store revenue, AOV, and CR quickly? Find an offer that works. And don't stop testing new ones. Offer testing is an underrated DTC strategy. Most brands stuck with the same offer month after month, year after year. Same Black Friday deals, same Welcome offer, same Cart abandonment offer. Nor there's any logic to the process. Most copy their competition. Or reverse engineer their margin. With Q3 starting, you need to start testing offers for Q4. Without a tested offer, you are leaving a lot to chance. Here's how we offer testing - --> Create 4-5 unique offers - Percentage discounts: 10%, 20%, etc. - Dollar amount discounts: $5 off, $10 off - Tiered Offers: $10 Off $100, $15 Off 150, etc. - Value-added offers: Buy one, get one free; free gift with purchase - Shipping offers: Free shipping, discounted expedited shipping - Loyalty offers: Points, VIP early access to new products Create at least 4-5 offers to start with. --> Run email campaigns or on-site pop-ups to test offers You need quick data to test offers, so it's best to run it as a campaign or on-site pop-up. The goal is to collect data over 3-4 days for each offer. Run small targeted campaigns to test different offers. --> Monitor key metrics An offer will have an impact over - Direct metrics -  - Conversion rate - Average order value Indirect metrics -  - Customer Acquisition Costs (CAC) - Store Revenue - Customer lifetime value Focus on direct metrics for testing the metrics. --> Dump non-performing one. For every good offer, you will have 2 bad offers. Keep on separating good from bad. Don't run bad offers again. Instead, try to find variations of good offers. The goal is to get 3-4 good offers, which you can rotate all through the year. Don't wait till Q4 to test your offer. #dtc #ecommerce

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👇 Reminder to all my DTC marketers out there: Static ads are still crushing it. … And they are WAY easier to create and test. I've talked about this before And I'm going to keep talking about until it stops being true (Bonus points: your creative team will also thank you for "easier" briefings 😜 ) Just because everybody is talking about UGC, whitelisting etc etc., never stop testing the fundamental image ads. It's also just good practice to have a healthy creative mix in your account. You don't want to become (over) reliant on one ad type ❌ The more winners you can create, the better the performance. And the quicker you can scale 💶 And something I've been playing with recently... Midjourney. Prompting skills need a little more work to take these ads to the next level, but it's fun playing with new techniques. Do you agree? LMK 👇 #FacebookAds #CreativeStrategy #MediaBuying

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👇 Reminder to all my DTC marketers out there: Static ads are still crushing it. … And they are WAY easier to create and test. I've talked about this before And I'm going to keep talking about until it stops being true. (Bonus points: your creative team will also thank you for "easier" briefings 😜 ) Just because everybody is talking about UGC videos, never stop testing the fundamental image ads. It's also just good practice to have a healthy creative mix in your account. You don't want to become reliant on one ad type ❌ The more winners you can create, the better the performance. And the quicker you can scale 💶 Do you agree? LMK 👇 #FacebookAds #CreativeStrategy #MediaBuying

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You don’t need to discount your entire inventory to make an impact this Black Friday. Think strategically: 👉 Offer a limited-time 50% off on select items — create urgency and excitement with a time-sensitive deal! 👉 Try “Flash Sales”: 50% off for just one hour or “While Supplies Last.” It’s all about exclusivity. Set aside some inventory at regular pricing, and focus your discounts on a select portion of your stock. This way, you’re driving hype without devaluing your brand. The key? Disrupt and surprise. You’re not flooding the market — you're making a statement. Gaining 30 - 50 new customers that buy at steep discounts that you nurture into full price purchasers is highly effective.

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Change in business is inevitable. Here's my story of change at Cincy Brands... We started Cincy Brands with the intent of acquiring profitable, small DTC/Amazon/retail brands doing less than $10MM in revenue. We built an awesome team to do just that. The challenge with that model was well-funded aggregators drove up valuations to numbers that didn't make any sense (even for them), and many brands under $10MM in revenue are still struggling to find profitability. So we pivoted our business (and team) to focus on three core areas: 1. Online Distribution - We buy and resell products from large CPG companies (often custom multi-packs or non-1P SKUS), and we resell smaller brands exclusively through our Vitabox company. 2.) 3PL Services - focused on DTC fulfillment, Amazon FBA Prep, and Wholesale fulfillment. We separate ourselves with excellent customer service, quick lead times, and minimal errors. We treat our 3PL businesses as our own, unlike Big 3PLs, where you put in tickets and don't have a human to talk to. 3.) Retail Distribution—We have a close partner who helps brands with retail distribution (they buy and resell to retailers). This way, we can offer our brand partners all the services they need to run the fulfillment and distribution side of their supply chain. We are still looking for high-margin beauty, personal care, and supplement brands that we can acquire and plug into our infrastructure, but it's not our main focus. Delivering the best d*mn distribution and 3PL services for brands is our main focus. It's funny how you pivot to where the growth is in business, but that's what I love about leading a growth-stage company. If you could benefit. Shoot me a DM or drop me a comment. #founders #Cpg #change #leadership

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