Executive Action Items: The customer acquisition tactics proving successful for Dagne Dover, Knix and Oats Overnight

Focus group members 

Deepa Gandhi, co-founder and COO of Dagne Dover, a performance bag brand that sells everything from backpacks to diaper bags to luggage. In addition to its own website and store, Dagne Dover’s products are found in Equinox, Nordstrom and Dick’s House of Sport, among other wholesale partners. 

Brian Tate, founder and CEO of Oats Overnight, a company that sells a spoon-free, high-protein oatmeal. Roughly 70% of the company’s sales come from its DTC business; Oats Overnight is also in more than 9,000 doors at retailers like Target, Walmart and Costco.

Nicole Tapscott, chief commercial officer of Knix, known for its leakproof period underwear. Over the years, Knix has expanded into other products like swimsuits, activewear and bras. Based in Canada, Knix’s products are found in retailers like Holt Renfrew and Ontario Sporting Life. Knix also has upward of 10 stores, between pop-ups and its own permanent locations. 

The role of the DTC website, and how to make the most of a brand’s owned channels 

Tapscott: “The majority of Knix’s revenue is actually still done through e-commerce, but we do have retail and owned retail, and we also have wholesale. And so we’re super proud of the performance and the success that we received through our e-commerce site. But what we also saw is that Knix is predominantly a community-focused, community-centric brand. And when we would host events — we do most of our casting through our own community, and when we would invite people to participate in our photo shoots, we had huge, mass[-level] consumer engagement. And so we thought, ‘Let’s try a store.’ We are dealing with an intimate space, right? There are certain women, certain people who don’t know their bra size. They want to be fit and measured. … So, we see our stores, one, as a way to engage and kind of penetrate into a community where we’re actively involved. And, two, as product introduction, product verification, validation and social proof. And then, three, [as a place for] fit and customer service.”

Gandhi: “I think we’ve always viewed our ecom channels as where we own the customer experience, right? So the ultimate goal of any touch point we have with the customer, with a potential customer, is that eventually they’re going to come to our site and we’re going to own their experience there. Having said that, wholesale partnerships, and partnerships as a whole, are really great to get you in front of where your target customer is already [going]. … For example, I always love to talk about Equinox. We launched with them years ago now. And from a revenue perspective, it’s not the largest business because there’s only so much volume you do out of the Equinox store. But the amount of people that I even personally meet that say that they first learned about the brand because they saw it or purchased it at their local Equinox, as they were going in or out from a workout, is amazing. … And what we’re currently really thinking through is as we expand and as we grow [is that] in- person touch points are what really generates the best, highest ROI acquisition for us. Forty-seven percent of our customer acquisition is done through word of mouth.”

Tate: “[With] food, it’s hard to scale [DTC] because the key part to that acquisition side is the retention side, right? If you’re acquiring customers at a good clip, but it’s low AOV — unlike athleisure, or other higher price-point type options — you need to have high retention. And so our product focus is key. We’ve really focused on product, and we use DTC to get that feedback. We really use DTC to signal what product changes do for retention, and we’re tracking swaps in and out of the flavors after first purchase, in response to formula changes. And so, we’ve stack-ranked all of our flavors, all 60 flavors. And when we toggle sweeteners, sugar or sodium, we see what happens to the retention. And so we’re using [DTC] as a kind of iterative engine for product development, whereas most CPG sees it very much as: Set it, and forget it.”

The customer acquisition tactics that are and aren’t working 

Tate: “We don’t have a lot of success with manually managed influencer marketing. We may be a little different here, in that we’re a low AOV food product, so this doesn’t speak for everyone. But we don’t do as many influencer programs. We used to do a bit of that, but we stopped.”

Gandhi: “We’ve encountered the opposite; for us, your paid traditional channels, like that duopoly of Meta and Google, it’s becoming less and less important. There’s just a lot of noise, and it’s still very important for us to show up in people’s feeds — but the larger part of the conversation, for us, is how do we show up in that feed? … When [influencers] are posting and when they are talking about you, it does convert, and it’s amazing. Our repeat partners are the ones that still do insanely well. And so, for us, it’s more about: How do we build that roster of repeat partners, rather than just, like, spray and pray? … Whenever we’re thinking about an acquisition channel, we always think about; How does this get a product into the hands of somebody that others trust, so that it can drive that word of mouth vehicle?

There’s a dad influencer we partnered with recently, and we gifted him a while ago, we reached out, and literally, his agent was like, ‘Oh, man, it’s all he uses when he travels.’ And if you actually watch [his posts], he was just in Disney, and guess what backpack he’s carrying? So, it’s true. Now we’re gonna do our first paid engagement with him, and I feel really good about it, because what he’s going to say is real. It’s true, and he can back it up.”

Tapscott: “I think we have all lived through the years of cheap, cheap CPMs and powerful targeting that made using digital platforms super effective. And those days are over. … Really, the way I define it is: The fight for authentic relationships and the fight for attention is where you play. … We’ve really heavily invested in content, and I really agree with Deepa, which is that it’s all about the nature of the story the person tells.

Then I think the other piece is … kind of moving away, maybe, from the traditional digital streams into more interesting, validated, long-form storytelling, which we found to be really effective. That could be via a podcast host read or just integrating into the podcast community and bringing our products and stories to life in ways where it can do so much more than a single two-second view of a still ad could ever do.”

Tate: “We actually have been shifting our storytelling — our organic social is very behind the scenes. We own our manufacturing, and so it’s stories about our employees and our team. We actually have a five-minute Meta ad that is doing extremely well.

Tapscott: “Five minutes!?”

Tate: “It’s crazy [laughs]. DTC Twitter had a couple of posts on it, which was funny to see. But, yeah, five-minute storytelling about the brand. … I do love the long-form storytelling. I think it’s also harder for some of these brands that don’t have authentic stories to fake.”