One Direct-to-Consumer Company's Secrets to Success
In early 2012, Melissa Mash, Jessy Dover and Deepa Gandhi asked more than 1,000 people for input on designing a practical luxury handbag. The following year, during a three-month campaign on their website, the Dagne Dover founders presold nearly $40,000 worth of their high-end totes (featuring multiple enclosures to keep laptops, tablets, phones, water bottles, wallets and keys in place) and clutch wallets. Prices range from $125 to $500.
Since launching, the company has seen more than $1 million in direct-to-consumer sales through its online store. Last year the New York-based startup bagged $1.25 million from angel investors with ties to leading brands such as Coach, Warby Parker and Bonobos.
CEO Mash expects 2015 sales to increase by 250 to 300 percent over last year. “Our average order value is high, at $222,” she explains, adding that 15 percent of customers are repeats, accounting for 27 percent of the company’s sales.
We talked to Mash about building a customer base online and other strategies for finding direct-to-consumer success.
What’s the best way to market physical products online?
It’s really important that you have content on social media, whether it’s videos or images or text. When you’re creating something online, people don’t have the opportunity to touch and feel the product in real time. So you have to give them lots of great content to understand exactly what they’re buying.
In the beginning, we showed our customers a lot of user-generated content. They saw our bags on real people, in real situations, in a real environment. People love seeing the authentic stuff. They love knowing how big the tote is vs. the mini tote. They want to see what the drop length of the handle is on each and how many pockets each bag has.
Does this mean you haven’t done any paid marketing?
We didn’t spend any money on marketing until very recently, because unpaid social media was really working for us. We just started testing and launched some SEO keywords this past fall. We needed to make sure that our supply chain and our production were really stable before we put any investment in it. You can’t be out of stock.
How do you handle customer service?
When you’re a direct-to-consumer brand, you have to provide an exceptional customer experience. We do free shipping and free returns. We have an incredible response time; it’s usually within 24 hours. We try to be as communicative and as flexible as possible. If people pick out the wrong color, if they realize the bag is too big and they want the mini instead, we are incredibly flexible because we want everyone to be excited about the product.
Customer service is based here in our New York office. People call, and we help them with style advice. They email. They tweet at us. They write on our Facebook wall. You need to have a real human answering in real time. You can’t have someone answering two days later.
Do you plan to expand to physical stores?
For us, quality is No. 1. We work with fantastic suppliers who work with luxury brands that lead the market. Even though our materials are quite expensive, we’re able to afford to give our customers a very reasonable price because we sell online.
As we bring in department stores and such, we’re either going to have to create an exclusive collection for them with pricing built into the margins, or we’ll have to modify the product. But that’s not something we’re focused on at the moment. There’s a ton of opportunity online, and we’re just starting to turn on digital marketing now. We’re trying to create a brand that lasts forever. That takes time.
Michelle Goodman is a Seattle-based freelance journalist and author of The Anti 9-to-5 Guide.