How three sustainable startups achieved growth amid a pandemic:
- Non-toxic cleaning products business Branch Basics tapped micro-influencers to drive product buzz and woo customers, then Instagram helped it retain those customers.
- Sustainable marketplace SISTAIN turned to consumers to crowdsource its product mix and tapped a holistic marketing strategy, from rewards and referral programs to pop-up markets and events, to drive business.
- Eco-friendly water-filtration brand Hydros invested heavily in product innovation as millennials sought out newness in home goods, driving up the average order value of customer purchases.
During the pandemic, consumer interest in sustainable and purpose-led brands increased. In fact, there has been a 71% rise in online searches for sustainable goods over the past five years, according to a global report by The Economist Intelligence Unit and the WWF.
Forward-thinking startups in the sustainable space have been well-positioned for growth as a result, revealed interviews with a trio of startup founders.
Branch Basics, a non-toxic cleaning product company, garnered 22,000 subscribers and an estimated 225 new customers daily; sales at sustainable online marketplace SISTAIN, which launched in a pandemic, soared 874% from January to October 2021; and water filtration startup Hydros scored a product hit along with a steady rise in the average order value (AOV) — what customers spend — on its website.
Below, the CEOs from these sustainable startups share with CO— their strategies for post-pandemic growth, in their own words.
Micro-influencers fuel organic growth and Instagram ‘increases customer retention rate’
Tim Murphy, CEO, Branch Basics
We often say we ‘built our business on Instagram — and we're not exaggerating! We retail exclusively online on our own website, so where another brand may be able to rely on brick-and-mortar shelf space for exposure, we rely on our network of influencers to attract new audiences to the brand.
Instagram was a natural extension to our digitally native brand from the get-go and has only increased in relevancy year over year. We find the platform extremely effective for communicating what our brand is all about, how our products work and who we are — which further helps build affinity and increases customer retention rate.
We started by organically developing authentic relationships with micro-influencers and just gifting them products in exchange for posts. From there, we began paying influencers with wide audiences on more robust campaigns to ensure that our messaging was clear. It's not typical for people to get hyped about cleaning products, so it's been incredible to see so much authentic excitement online about our products. Influencer marketing is our primary lever for new customer acquisition. It's helped us more than double revenue for the last few years, and the ROI [return on investment] is anywhere from two to five times [the cost].
During the pandemic lockdown, people shopped online more than ever, so we've seen an exponential increase in opportunity both on social platforms and through Google search. To add, customers are becoming more and more discerning. What's accessible and on the shelf at the store nearby is no longer the first choice, as people are instead being more conscious with their dollars and shopping brands whose values align with their own.
[Read: The Zero-Waste Movement Is Creating Opportunities for Businesses Large and Small]
A ‘holistic’ marketing strategy — whereby its ‘community’ determines product assortment — fuels ‘significant growth’
Jaclyn Tracy, founder and CEO, SISTAIN
I founded SISTAIN because I was intimidated by the zero-waste movement. We are a DTC marketplace that curates sustainable products and provides tools to educate consumers about how to live more sustainably one small step at a time across the categories of lifestyle, fashion, home, beauty and wellness.
The impact we make is only as strong as the community we build. Our community drives our buying strategy. The categories and brands that resonate the most greatly influences our product curation. We capture community feedback in real time so that we are offering products consumers want and need, and nothing they don’t.
I don't believe there is one single winning strategy that you can take to building a brand, and so we’ve taken a holistic lens to marketing that includes email, brand ambassador programs, educational content, organic social, pop-up markets, exclusive events, rewards and referral programs.
It has been this holistic approach to marketing plus listening to our community's wants and needs that has really aided our overall growth. We've created a robust digital ecosystem and strategy. At the end of the day, your brand is only as strong as the sum of your customers’ interactions with your company, on and offline. And consistency is key.
We decided to launch as a digital-first company because shopping continues to shift online, which was significantly expedited by the pandemic. Since the launch [of the e-commerce channel] in November 2020, the community has quadrupled in size, and has been a significant growth driver for us. I can say our growth from the start is absolutely attributed to our strong brand identity and omnichannel marketing approach as well as our focus and understanding of our target customer.
[Read: How Slow Fashion Is Creating Opportunities for Startups and Legacy Brands Alike]
Amid millennials seeking ‘fresh new brands,’ investment in product innovation drives up average order value of customer purchases
Winston Ibrahim, founder and CEO, Hydros
Our most
significant growth driver to date has been the launch of our new glass slim
pitcher. It has been a product that our customers have frequently requested
from us for years, and we were delighted to finally be able to offer it and to
find that we were able to do so faster than anticipated.
We have a terrific product development partner, Nottingham Spirk Design, that was
able to execute this project for us quickly. Nottingham Spirk is an underground
secret in consumer goods with an incredible track record. They have helped
create over $50 billion worth of successful consumer products over the years,
including the Swiffer, Dirt Devil and Spinbrush. Because of their expertise in
design, engineering and sourcing, we went from concept to a fully launched
product in six months. This product already accounts for 60% of [our] incoming
brand traffic on Google. It is No. 1 of the six SKUs we offer in sales and comprised 20% of last year’s total annual revenue.
[At the same time], we are seeing a steady rise in average order value (AOV) and a reduction in customer acquisition cost (CAC). Modern customers, particularly millennials in the early stages of home-buying and household formation, are looking for new, fresh brands that reflect their values. We were very conscious of designing around these desires from day one, but the glass pitcher has taken our brand appeal to another level.
In addition to e-commerce, we are finding a very warm reception [at in-store] retail. Because of our innovative technology and sourcing efficiencies, our margins are on par with major competitors with hundreds of times our revenue, even at early production runs. There is a huge amount of potential scale here.
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