We talked to Thingtesting founder Jenny Gyllander at an important turning point for her project. Thingtesting started as an Instagram profile where Jenny shared her product reviews and investor views on emerging direct-to-consumer brands. One year in, as her hobby turned into a 27.000 people community, she’s leaving her full-time job as an investor with Backed VC to focus on Thingtesting.
The growth of Thingtesting is significant not only for Jenny and her fascinating professional journey, but also for the future of consumer brands. Today, companies have more control over how they build, market, sell, and ship their products. Consumers have more control over how they find new products and decide which brands to trust. The result is a closer, more direct relationship between brands and users, with a stronger focus on participation on both sides. In this dynamic, initiatives like Thingtesting become a springboard for positive founder stories and brands that stand for something.
First things first. What is a direct-to-consumer brand and what makes it special?
Jenny: Direct-to-consumer is a bit of a hyped concept right now. What’s happening is that retail and CPG (Consumer Packaged Goods) brands are experiencing the same type of change that all other industries are going through: digitalization. A result of this change is the emergence of direct-to-consumer brands.
One reason D2C brands are on such fertile ground right now is that launching a consumer brand is a lot easier than before. Hundreds of new brands launch every month, all around the world, because both manufacturing and distribution have gotten much easier than, let's say, 15 years ago. Through social media, performance marketing, third-party logistics providers, you can launch a brand with a very small budget and grow a lot faster. As an example, Away–the luggage brand–reached $10 million in revenue in their first year.
The second reason D2C brands are growing in popularity is the increased focus on customer relationship. Instead of products being sold through retailers, D2C brands keep the whole relationship and control around the customers, including customer service, after sales support and all. This means higher margins, better feedback loops, and overall more customer-centered design decisions. A good example of this would be Public Goods–a personal care brand in the US. They realized that their customers wanted white, minimalistic bottles in their bathrooms, instead of these crazy colorful bottles that we see in grocery stores. So the packaging is designed not to stand out among competitor products in the grocery store and fight for the buyer’s attention, but to just look good in their homes.
The third thing that makes the whole consumer economy special today is that, in order to compete in this jungle of new brands, companies need to stand for something. To launch a new brand, you now need to have a strong value propositions nailed down, and decide on either communicating convenience and low prices and transparency, or–at the top–quality and meaning. By communicating your mission loud and clear, you become some sort of hybrid of brand, retailer and media company. Consumers just have access to so much more information, so it’s now harder to survice as a company if you don’t align your financial performance with your impact in the world. On that note, The Upright Project is worth checking out, they are building a model for measuring the net impact of companies.
Do you have any specific brands in mind that are nailing the customer relationship and value alignment well?
Jenny: What Away is doing with their travel magazine, Here, is a good example. Outdoor Voices organizes a bunch of sport events around the world. The data that D2C brands have at hand make these initiatives more efficient, because it allows brands to choose who to target and activate for these kinds of events or content. But creating a meaningful consumer relationship is not exclusive to new brands. Patagonia, a 50yo brand, is a great example of doing brand investments in this sense. billie razors–their whole mission and brand idea is to bring razors to women without the pink tax. Organic Basics, Oatly are also great examples for sustainability.
Picture shared by Tyler Haney, founder and CEO of Outdoor Voices, of her with friends and followers of the brand. Outdoor Voices Joggers Club organizes regular running events in Austin, TX, the brand’s headquarters.