Creating ‘High Barriers To Entry’ – A game-changing strategy to adopt this Halloween and BFCM.
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Have you heard of the Blue Ocean strategy? Or have you ever thought of creating a monopoly in your market arena? If not, this festive season and the coming ones will only give you a hard-selling experience with bare-minimum profits and marketing struggles throughout. What can be done then? Well, the answer is here, ‘CREATING HIGH BARRIERS TO ENTRY’ in your business area. To be recognizable in the vast eCommerce platform, you will have to reduce your number of competitors by creating entry barriers that are difficult to break.
Halloween, Black Friday, Cyber Monday, Thanksgiving, Christmas are all here, and like you, your competitors are also looking forward to the best strategies. But trust the fact, no strategies can help you take the market lion’s share with an ordinary approach. Undoubtedly, it is only by creating unbreakable and exclusive barriers to entry that can actually help you build your business empire, one of its kind.
What are Barriers to Entry in eCommerce?
Barriers to entry in eCommerce refer to those factors that do not allow new entrants or weak contestants to enter or stay in the market. Big eCommerce giants bring some of the unbelievable factors that are difficult to overcome. For instance, they are often Brand equity, distribution network, light asset strategy, low-cost production, and distribution or license or copyrights.
Creating such high standards or barriers raises the bar for new start-ups or businesses to think of competing with them. Furthermore, creating such common and high barriers to entry has perpetual benefits.
Why is it important to set High Barriers to Entry for bringing down your competitors?
Firstly, entry barriers enable the strongest businesses to build a monopoly in the market. What it means is that no other startup can enter into the competition. In other words, that market area is ruled by a few conglomerates that are in a strategic partnership to fence market prospects from newcomers.
Prevents and Restricts competition
Secondly, entry barriers actually keep out the newcomers from eating into the market share. These barriers are of a different intent. Either an unprecedented cost, price, or customer experience is brought into the picture or a completely new market is created or an uncontested market is targeted. It needs a lot of R&D and constant market evaluation.
Provides Large Market Share
Thirdly, the monopoly market aims at devouring the largest market share by raising the bars so high that nobody else except an equally powerful competitor can think of entering into the competition. Some of the tactics like ‘Economies of scale’ or ‘heavy capital investment’ or ‘proprietary technology’ are unbeatable and costly barriers to cross-over even by established brands.
Retained Customer Base
Fourthly, strong entry barriers target some specific target audience. In other words, their target audience is well defined. They know why, where, and whom to target. With fewer options to choose from, the customer sticks to just one service provider. Customer retention in this case is an outcome of a lack of options to explore than service quality.
Emerging as market leaders
In addition, centralized control over the market share makes some brands the leaders of their area. The eCommerce industry too has many such examples of food outlets that have emerged as market leaders catering to its customer base without much competition to tackle with. However, the key point is to know your consumer trend.
Makes the existing market irrelevant
Last but not the least, entry barriers sometimes prove to be a game-changer for the existing market. They are trendsetters that have never been thought of. A new technology or new product with exclusive rights shifts the entire consumer base to one brand and makes the existing ones irrelevant or less suitable for consumers.
Prominent Types of Barriers to Entry prevalent in the eCommerce Industry
There are 3 significant Entry barriers that are generally invested in for reducing the existing competition threat.
Natural/ Financial Barriers
Legal barriers are those which have permission and protection under the acts and regulations of a state. Intellectual property rights are legally approved and are shielded against any fraud or infringement act by competitors.
Many business industries have already gained control over good resources, distribution partners, high-end technology, and machinery at their end. The total production cost, sales, and marketing costs have already been mastered by the existing leaders, this makes them invincible.
These are the marketing strategies like advertising, social media campaigns, polls, paid ads, brand awareness, etc that create a great barrier for upcoming competitors. Internet is all over the place and omnichannel experience takes a good share of consumer attention and thereafter converting them into loyal ones.
Brand Loyalty is beyond logic. It is all about creating trust and credibility in the minds of potential consumers. A great brand loyalty strategy once built, is irreplaceable. Brand Loyalty overlaps even other factors. Once people invest their trust in your brand and product, you might lose a battle but have won the war.
Now the question here is how can you gravitate with these entry barriers and secure your position in the festive season. Below are some best ‘Entry barriers’ that you too can create and get an edge over your competitors.
Top strategies for Barriers to Entry to beat the competition this Holiday Rush
Creating a game-changing market barrier is not a child’s play is obviously not when every competitor is equally potent and capable to lead the market. Selling on marketplaces like Amazon, eBay, Etsy, Walmart, and many more, is a monopolistic competition, and to make it a monopoly is a hard nut to crack. However, with a prolonged and deep analysis, you can for sure come up with that one factor that will give wings to your business to fly ahead of others.
Here is the list of some of them:
Intellectual Property Protection
Intellectual property right is necessary to make you a recognized and dependable brand with consumer-friendly products. Copyright, Patent, or Trademarks are your exclusive property that no one else can sell or create without your permission. It is your innovation, your idea, and the hard work that you own exclusively.
To sum up, this can be one way to set your standards high amongst your competitors. Any product which you think has your innovation attached to it must be legally protected against any future fraud copyright infringement. Not just this, such recognitions add value to what you sell, giving your target audience an extra reason to choose you over others.
License is the legal permission to sell, trade, or import/export anything. Cross-border selling is in trend but for online sellers what is important here to know is that you have to follow CBT regulations and legal criteria to enter into the marketplace of other countries. Obtaining a license is a battle in itself but once take, you are all set to go ahead of your competitors who might still take time to get a license or government approvals.
Chiefly, having a selling or Trade license shouts your credibility and reliability factor. eCommerce platform, where everything is virtual and less secure, this can be added advantage.
Fast and Efficient Distribution Network
Distribution network plays an important role in positioning your brand and product in the market. It directly impacts your demand and supply chain. A fast and efficient distribution network ensures easy accessibility, affordability, and availability of products in the market.
During peak festive season, you need to be on good terms with your Logistics and distribution partner for fast and safe delivery to your customers wherever they want. Current consumer trends have shifted to a fast, free, and one-day delivery craze amongst customers. To cater to these demands distribution networks can act as a great entry barrier for year fellow competitors.
This entry barrier is unique and interesting to explore. Allies and partnerships can be of a great strategic move. As sellers, you can grab some exclusive rights to sell a particular type and quality of product from your partners who can be a manufacturer.
Exclusive rights give you an edge over others to sell a unique product that nobody else has to offer. Your product pages and Landing pages can be a great source for you to boast about your achievements and exclusive rights that only you can cater to your buyers.
Economies of Scale
This market barrier takes time to bring on the ground. Economies of scale in simple terms means ‘ A significant point where production of a company increases without an increase in the production cost. High production with a low per-unit cost is Economies of scale.
To put in other words, established online sellers can create a high entry barrier by producing and manufacturing products in large quantities with low production costs and selling the products at the lowest price possible. Thus, throwing a highly competitive price for your competitors to break. It is needless to say that consumers are attracted towards good products and lowest deals.
Proprietary Technology and Tools
If you are a seller who sells technology or software or other scientific items either on marketplaces ( should not be prohibited) or on your own e-store, this one is for YOU!
A tool, software, or system can be safeguarded under proprietary papers so that only you and limited people have the access to its secret codes. If you are a potential businessman selling any such smart technology, you must shield it before a copy of it competes with you and take away your market share.
The other idea is selling with Integration solutions. Not directly but indirectly it acts as your secret proprietary tool. You get the best-automated features and tailored solutions just suitable for your business. Be it any marketplace or framework, these integrations help you pave an easy, hassle-free, sure-shot way to hit your goals, especially during the festive season.
Great Customer Service
Customer experience is the KING! This includes both pre and post-sales services. Personalized content, omnichannel shopping experience, best checkout ad delivery services, customer-centric return policies, and delighting them with offers and discounts generate Recall Value to your brand.
To help you fasten up your customer service in a short period of time, CedCommerce provides the best check-out solutions, shipping solutions, AI features, marketing, and digital solutions that gravitate your customers towards a great customer experience in your e-store.
Building Brand Equity
This is not just a commendable entry barrier but an achievement in itself. Brand equity surpasses the name of the product or service with the Brand name itself.
To begin with, you can aim at branding your product and positioning it in a way that your consumers identify the product with your name. Let your craft, tools, recipes, merchandise, etc, be names after your brand. Sounds difficult to achieve? With a great team, focused approach, and constant evaluation things are possible.
CedCommerce can help you build brand equity in a short period of time. Right from setting -up an e-store for you to digitally marketing it to boost your brand awareness amongst your target audience, CedCommerce is handholding your dreams throughout, during festive peak season and beyond.
Establishing Brand Loyalty
A loyal customer is what you have actually earned for life. Profits and popularity come and go but your loyal customers will not choose anybody else but just YOU! Numerous brands and start-ups fail because people are not willing to give up their trust in their old brands. This is where another prominent entry barrier comes into play.
By hooking your customers through emotional and psychological pain points you can succeed to address their issues and win their hearts.
High Capital Investment
The focus point here is ‘Investment’. Money is power if channelized in the right direction at right time. The high capital investment shows the best result when invested in modern technologies, advanced software, and the latest trend.
High Capital investment generates a capital barrier because; with the advanced and latest technology, the production increases at low costs. As a result, the rivals are pushed down from eating up the market share.
How CedCommerce can help you build great technical barriers to leave behind your competitors?
In addition, with all automated and AI features, your manual effort becomes almost zero. As a result, it allows you to shift your focus to marketing and strategy building more intensively. A budget-friendly solution tailored as per your business needs enables smooth selling in the eCommerce arena.
To know more about CedCommerce and the right solution for your business, you can contact the experts anytime anywhere. The customer support team is available 24*7 to help and guide you at every step of your eCommerce selling journey.
We wish you a very smooth and profitable selling journey!
When you think of selling online, what initially comes to mind? Probably physical products like printed t-shirts, handmade jewellery, or pet supplies, right? Creating or curating tangible goods to sell online is a common business model, after all—one that defines many who use Shopify today.
But when we say “product,” we’re talking about more than just thingsyou can touch and feel. Many founders are using Shopify in creative ways to sell pretty much anything and everything else. Experiences, online courses, rentals, and digital products are just a few business ideas off the well-trampled path of selling physical goods.
The global pandemic hurt many service- and experience-based businesses, but the ones who survived were those who pivoted to virtual alternatives. Consumer trends tell us that online experiences are here to stay, making it easier to start a low-budget business from home—without having to manage inventory. What will you sell on Shopify?
What to sell on Shopify: 12 ideas (other than physical products)
If you’re embarking on a new entrepreneurial journey, or you’re looking for a change, expand your brainstorming beyond tangible goods. Here, we’ll explore what you can sell on Shopify, including real store examples, app suggestions, and advice to get started.
Classes and workshops
Quotes, estimates, and assessments
Digital gift cards
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1. Service appointments
In-person and virtual businesses alike can make appointments more seamless for customers (and staff) by offering self-serve online bookings. Salons, contractors, and music schools can sell virtual consultation time slots and in-person services through an online store.
Stores that typically sell physical products can also benefit from adding services (free or paid) to their websites. Toufie, an online footwear brand that sells handcrafted custom shoes, uses appointments to help nail the fit. “Appointment bookings are one of the integral components to a risk-free customer shopping experience,” says co-founder Meliza Salim. “And thanks to an app, booking a 30-minute fitting appointment is hassle free for us and our customers.”
💡 How to make it work: Appointment booking apps offer a dynamic calendar, letting customers book preferred time slots with real-time availability. An app like Appointly syncs with Google Calendar and automatically sends confirmation emails to you and the customer.
Many non-profit organizations rely on paid memberships as a way to secure ongoing financial support. Memberships can also be used by creators to sell access to exclusive content for their most avid fans. Golf courses, fan clubs, galleries, and educational content producers are more great candidates for selling memberships online, securing long-term commitment from customers rather than selling one-off services.
The Buffalo Botanical Gardens sells single visit tickets but encourages visitors to buy memberships that allow year-round access and member-only perks.
All of these business types can sell memberships on Shopify using a simple app. Memberships work much like subscription businesses, relying on recurring payment functionality and customer account management tools.
💡How to make it work: An app like Bold Memberships allows merchants to sell one-time or recurring memberships online, and can be used for physical businesses (say, a yoga studio) or to manage member-only access to content on a website.
Why not sell your expertise online? Everyone from interior designers to fitness trainers can use an online store to book and sell online or in-person consultations.
Brands that sell physical products can also benefit from adding consultations to the mix—especially if you’re an expert in the field. Healthy Habits Living sells nutritional supplements via its online store, and owner Carly Neubert offers personalized nutritional assessments also for purchase on the site.
Brands that specialize in customization or made-to-order products may sell consultations to help customers create the perfect product. Kaikini founder Taryn Rodighiero runs her custom bikini business with the help of online consultations to guide customers through the measuring and ordering process.
💡 How to make it work: An app like BookedUp lets customers book consultations with you on your website, syncing with Calendly to avoid double-booking. Also, try Shopify’s invoice generator tool for billing custom services that you sell through consultation.
4. Digital products
Digital products can refer to anything you sell that you deliver in a virtual format—course content, music files, fonts, or other design elements are a few examples. (Note: Later in this article we’ll dive deeper into selling courses, specifically.)
While Thread Theory founders Matt and Morgan Meredith sell physical products like scissors and paper patterns, they also offer a lower-cost option: PDF sewing patterns delivered virtually. Other businesses selling printed materials like magazines or journals may opt to offer digital versions that customers can print at home.
💡How to make it work: Apps like Sky Pilot and Easy Digital Products can instantly deliver files to customers after a purchase, or send a link to where the files can be downloaded.
Experience-based businesses can range from travel and adventure providers to winery tastings to kids’ camps. These businesses can improve the customer experience by offering advance ticket purchases and scheduling options online.
Aspen Expeditions Worldwide sells rock climbing adventures, international guided trips, and camping expeditions through its ecommerce store. Since the product pages for each adventure do a lot of heavy lifting to inform, educate, and persuade potential customers to make big-ticket purchases, Aspen Expeditions organizes the information by adding tabs to the product description. The company also leverages video content to draw customers into the experience before they buy.
💡How to make it work: Travel- or experience-based businesses may need to collect additional customer information, like medical concerns and emergency contacts. Use Powr’s Form Builder to create robust and customizable forms. And use video to your advantage: Shopify’s free online video maker can help you create marketing videos using footage from real experiences.
6. Classes and workshops
Independent fitness businesses took a big hit during the pandemic as many were forced to close physical studios and shut down programming. But courses proved to be easily portable to a virtual format. Yoga studios and boxing gyms alike moved to an online model, letting participants buy class passes and attend online.
If I Made creates original creative course content with industry professionals and delivers programming digitally to students—but it didn’t start that way. “Wedding Styling 101 was an in-person workshop curriculum,” says founder Emily Newman. “We then took that content and brought it all online to make it more portable and accessible. Our courses are a combination of worksheets, PDFs, and video.”
Across the world, in Italy, Nonna Nerinamade the same move, responding to the dip in tourism in 2020 by converting her pasta-making classes into an online format delivered globally through her Nonna Live website. Other businesses can sell passes to in-person or virtual classes through a Shopify store, too—think art, music, coding, languages, and more.
💡How to make it work: An app like Courses can turn your Shopify store into a course platform, allowing you to create lessons to sell online. Create course content using Shopify’s free online video maker and sell it over and over. Bold Memberships is a great option for gyms and fitness studios who want to grant access to a suite of courses.
Rental businesses are services that make physical products available to customers for a predetermined amount of time. Customers pay for the advantage of using an item for a brief period without the associated long-term costs like storage and maintenance.
Mannequin Madness sells retail props to other shops through its online store, but also rents them temporarily. “I saw a mannequin on Craigslist and was going to buy it for an art project,” says owner and accidental entrepreneur Judi Henderson-Townsen. “When I discovered that the seller operated the only mannequin rental company in town and was leaving the state, I bought his entire inventory.” While its rental catalog is available online, Mannequin Madness uses a contact form to assess customer needs before processing the rental.
Dress rental business The Fitzroy, however, takes a diffself-serve approach by asking customers to select a rental period using a date selector variant available on its product page to “check out” the item. It relies on a simple app and a clear FAQ page to make the rental and return processes smooth for customers and relatively hands-off for its staff.
💡How to make it work: IzyRent: Rentals & Bookings is an app designed specifically for stores offering rentals. It allows for one-click rentals on your website. Rentals may require extra information to be collected from customers, and an app like Powr’s Form Builder will help you do just that. You can also use a tool like Shopify’s free QR code generator to create QR codes that customers present at pickup.
8. Quotes, estimates, and assessments
GoGreenSolar.com sells and installs solar energy solutions for homeowners. Due to the custom nature of the product and the additional work involved in installation, customers can request quotes and expert advice through the contact forms available on the company’s site. Self-serve quote requests save time and staff resources for businesses that provide highly technical services and products. In most cases, quotes are free and used as a sales tool.
Estimates or assessments that are more involved or require an in-person visit may be provided to potential customers at a cost. This is a great marketing tool for the business’ other services. For example, a business that provides home energy upgrades may sell energy audits through a website. The final report would then inform customers how they can recoup the audit cost through energy savings—by buying the business’ upgrades.
💡How to make it work: An app like Globo Request a Quote can help you gather customer quote requests from your store and convert that quote into a real order.
Many charities use Shopify as the merchandise arm of their organization, selling branded goods with profits supporting the cause. But charities and non-profits can also use an online store to “sell” one-time and recurring donations.
An Act of Dog is a registered charity that sells pet paintings, with proceeds supporting various animal rescue organizations. The company also lets customers donate directly to causes through the same website.
Event tickets can be sold easily online using apps designed for this purpose. Online ticketing can be employed by a number of businesses from event spaces to independent theatres to pop-up haunted houses.
Ticketing site Undertow works with select artists to sell tickets online for music events throughout the US. It uses a paperless delivery method, sending downloadable tickets to customers.
Run Across America uses ticketing in a different way, selling access to virtual run challenges that participants complete on their own schedule. Purchases include access to a tracking app and a sweatshirt.
💡 How to make it work: Design, sell, and scan event tickets with the Event Ticketing app that syncs with your Shopify store. Also, you may find Shopify’s free QR code generator helpful to create unique QR codes that customers can present at live events.
11. Digital gift cards
The simplest of non-tangible goods to add to any website is gift cards. From Shopify, you can enable gift cards for most stores. They’re perfect for any business, allowing recipients to redeem codes online for products or services sold through your website.
Home decor brand Apt2B sells branded gift cards in multiple denominations, redeemable for furniture and decor goods through its online store.
💡How to make it work: Customize your gift card design using Shopify’s free template.
12. Live streams
While there are a number of ways to monetize online content through ads and tips directly on social platforms, creators can protect their independence by owning the process end to end.
Streaming site Fans Live sells tickets to livestream events that customers can access by logging into the site’s portal. The benefit of selling and hosting livestreams through your site is that the content and customer information is owned by you—not a third party.
💡How to make it work: Integrate an app like Single with your Shopify store to monetize video content and streams, and get access to robust reporting.
Sell (almost) anything on Shopify
What’s interesting about services and other intangible products is that while they may be the heart of your online business, they can also serve as a valuable add-on to a physical products business. Both categories can be sold side by side on the same Shopify store, as many of the examples above show.
If you’re looking for a business idea and aren’t sure what to sell on Shopify, the answer is: almost anything. And for business owners already selling physical products, you’re now set to add services and other virtual products to increase order value and offer convenient options for your customers’ evolving needs.
Frequently asked questions about things to sell on Shopify
What can I sell on Shopify?
You can sell both products (digital and physical) and services (virtual and in-person) on Shopify. Intangible things to sell on Shopify include memberships, consultations, font, installations, event tickets, and digital gift cards. But don’t stop there! Keep looking for your niche—the possibilities are infinite.
What do you need to start selling on Shopify?
Can you sell your own items on Shopify?
Yes, you can make and sell crafts and other handmade items on Shopify. If you’re a maker, you can set up a store to sell your goods directly to your fans. Also consider selling across multiple sales channels, like online craft marketplaces, to extend your reach. You can also sell vintage finds, secondhand items, digital creations, and more.
Is Shopify good for beginners?
Shopify is an excellent platform for beginners. With affordable pricing plans for all budgets and an easy-to-use back end, you can build and customize your store in minutes. Plus, Shopify has an entire ecosystem of business tools that grow with you.
One fateful dinner party led Cristina Ros Blankfein and Jennifer Ross to ideate the zero sugar beverage products behind Swoon. The ladies got to chat about Jennifer’s type one diabetes diagnosis, and the two of them wanted to create sweet beverages without the health impacts of sugar. In this episode of Shopify Masters, Cristina shares with us their approach to finding and working with flavor scientists, manufacturers, and trade shows.
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How one dinner party led to a multi-product beverage business
Felix: Tell us about the evolution of the business. Where did it all begin?
Cristina: We came up with this because my partner Jen is type one diabetic. We’re very mission driven in wanting to decrease sugar consumption, but also realistic in knowing that we have to create a product that still gives you that taste and feel–that super celebratory happiness of sugar. It feels great, and that’s why people turn to sugar all the time, but we all obviously know the negative health impact. So we wanted to replicate that feeling. We got started because we were in business school and Jen came over to a dinner party that I was hosting. I love to host. I’m Cuban. I was making a mojito, and as I’m sitting there looking at my diabetic friend, I’m pouring in a cup full of white table sugar to boil it down to make the simple syrup. I realized, “Oh my goodness.” It made me realize how bad a lot of the things that we drink are for us.
Then we hopped in the car, rushed over to Whole Foods, thinking, “Whole Foods, great ingredients, great products, it’s healthy enough,” right? We couldn’t find anything that made sense for her, other than, quite literally, soda water. That really set us on our journey. Our first question was, “Do things like this not exist because they can’t be made?” From the beginning, we were super hyper focused on the taste profile. We have a line that includes simple syrups, cocktail mixers, and then most recently we’ve launched iced teas and lemonades.
Felix: Were you in business school with your partner?
Cristina: We were. We were classmates and we were actually seatmates, which struck up our friendship. A little bit of happenstance got us here.
Felix: Were you both interested in entrepreneurship specifically?
Cristina: Honestly, no. We were both open to it, but we weren’t like white-boarding, like, “Let’s just come up with an idea.” We really came at this as consumers.
The highs and lows of a two year research and development phase
Felix: You discovered that there was a need here, and that there currently wasn’t any solution. The next question was “why hasn’t anyone invented this yet”? Where did you go from there?
Cristina: We started off by trying to create all the flavor profiles that we wanted to make with kitchen ingredients, including sugar, obviously. Then we took it to flavor scientists to help us understand how to make it, but without sugar. We used monk fruit. We did a whole battery of tests knowing that our true north was that we are going to have a zero grams sugar product. What are all the different alternatives? We very much wanted to be plant-based. We didn’t want to replace one thing that’s not great with something else that’s not great, like aspartame.
So we really looked at the world of what makes things sweet, that’s plant-based, that has no glycemic impact. We did so many trials and testing around different alternative sweeteners, and landed on monk fruit as the ingredient that we felt blended the best and created the smoothest flavor. Making the simple syrup was a two year R&D process, because it is so challenging. Sugar is a pretty powerful ingredient, and it’s so challenging to hit the rounded taste profile of sugar. We really worked closely with bartenders and baristas–all the places that simple syrup is used. We were lucky enough to get to go to the Bon App test kitchen, and really do so many blind taste tests to understand how to replicate that full mouth feel of sugar.
Felix: You mentioned you started in your home kitchen and then took the idea to the chemists. How do you find a flavor scientist to work with?
Cristina: When we started this, we were like, “A what? How do we even go about that?” We were in business school, so we were lucky enough to have access to what was called the iLab. It was an innovation lab that brought together entrepreneurs, and operators in many different industries to help students out. We were in Boston, which has a really interesting tech scene, but also an interesting food tech scene. Through that, we connected with somebody who put us in touch with the first flavor lab we worked with.
Felix: It took two years to create the simple syrup. What did that process look like?
Cristina: It took the flavor scientists and a bunch of other trade specialists to hit the flavor because monk fruit is 200 times sweeter than sugar. You’re using small, precise amounts. We use things to make it sticky, a little bit tacky, to give you that lingering sweetness. A lot of high-intensity sweeteners have this “bam,” peak. I’m sure all of us have experienced it. It’s not fulfilling in the same way. That’s what we really wanted to achieve. It was a lot of tinkering, a lot of measuring, and tweaking.
It’s an art as much as a science, with precision. The other thing we’ve learned–and I’m sure any chef, bartender, or barista would also say–is ingredients and taste all come together differently. When you reduce the sweetness a little bit, all of a sudden, the impact is that it’s actually sweeter, because in changing that balance, you shifted the citrus–the acids and bitters. All of these things come together. It’s a really complex process.
The other part of commercializing food and beverage products is that you can get something to taste great and be extremely balanced in a lab setting, but taking that and making large quantities of it can also change the flavor, because of the way we heat the product in order to not use artificial ingredients as preservatives. We have to create a vacuum, and so we heat it and create a vacuum, but the way that’s done on a small scale versus a large scale alters the product.
Felix: There are lots of considerations to make as you scale. You’ve now developed the product line to multiple products. What was that development process like, introducing new products?
Cristina: We ended up introducing the simple syrup in 2019. We took the approach of focusing on the food service world. We had developed some great relationships. We’re also based in New York where the food scene is amazing. We worked with some top bartenders and baristas to really help us out. That’s where we introduced the product initially–through the trade–and for customers to be able to interact with it. Things drastically changed for the trade-in 2020 when COVID hit, especially in New York, where we had a lot of shutdowns. We ended up launching our mixers under the Swoon name, in March 2020. That ended up being pretty online. Later on, in August 2020, we launched our line of lemonades and ready-to-drinks.
A lot of it was just following the consumer. We got to the simple syrup because we were making mixers, but our trade partners kept saying, “I’d love to use a monk fruit simple syrup instead of the full blended mixer,” because that gives them much more flexibility. We launched the simple syrup. In working with the simple syrup, we would often tease people at trade shows and sampling events with a lemonade because it was the easiest way for us to show how smooth and well-balanced the simple syrup was. We’d put one part Swoon simple syrup with one part fresh lemon juice, and then dilute it with water. It couldn’t hide behind the bitterness of a coffee or a tea or the complexity of a cocktail. When we would make that, everyone would say, “Wait, I want that outcome. I want to bottle this lemonade.” That took us to the lemonades.
How Swoon won over baristas and bartenders
Felix: You mentioned that you started out working with bartenders and baristas. What are the pros and cons of introducing a product to the world through the service sector?
Cristina: There’s a few things. One is that you have to develop your partners, not only as your buyer, but also as your sales team. When you go to a bar, the bartender really is the gatekeeper. When you go to a coffee shop, of course people often have their order, but they still ask for advice and opinions. It’s this layered relationship where you both are looking to these gatekeepers to bring in your product, but then ultimately sell it in a slightly different way than is the case when you’re talking about a CPG product at retail. Obviously online, some of those gatekeepers don’t exist.
Felix: I can imagine there needs to be some sort of incentive for a barista or bartender to introduce a new product to their customers. What was your approach to that?
Cristina: It really comes down to relationships. At least that’s how we’ve conducted our business. At the end of the day, people want to do business with people that they like and trust. The majority of our focus was in developing those relationships, more than anything. You’re absolutely right. A lot of selling and sales strategy is understanding your customer.
One of the hard things, when you’re at a bar, a coffee shop, or a restaurant is that they have so many demands coming at them from so many different angles. They’re on a tight timeline, and really streamlining operations is super important. Adding new products and new steps is really hard, and pretty unappealing. We need to understand their pain points and figure out, how to create a solution instead of adding another step? That was important for us in terms of the bottle shape and size and just making sure that it worked with their operations and what they were trying to deliver to their customer.
Felix: You mentioned your initial vision or intentions to launch were cut short pretty early on. When did you realize it was time to think about pivoting?
Cristina: We had been working on those relationships for about a year, and selling for about a year. It was less of a pivot and more of a shutting down. There were these moments in the summer where we started to get reorders again and hear from our food service partners. Going back to those relationships is super valuable. It was kind of needing to change all of us together. Those tracks that we laid are obviously going to continue to work through.
Managing B2B and B2C relationships in one business
Felix: What have you learned from your experience with the food service world? In a sense, you’re running a B2B and a B2C company. How do those relationships differ?
Cristina: The operational piece was really valuable to hear and understand. You can’t have a product that goes bad once you open it. Or how to store it. There are a lot of components that impose different considerations when positioning toward the end consumer versus the service sector, because they have so much going on and they’re so hectic.
The food service space has tight margins. I didn’t realize how down to the fraction of a penny each bar thinks about when considering the cost of their drink and the different ingredients that they’re putting into it. They work off very narrow margins, and so they’re pretty precise about understanding how to create an offering that the customer wants and at a good enough price, but is not so expensive for them to make.
Felix: Is it typically the bartenders and baristas that decide whether to order your product?
Cristina: Sometimes. It really depends on the restaurant group and how things are run, in terms of who does the ordering. You’re right, there’s oftentimes a general manager that does all of the ordering at these shops. There’s several different parties to speak to.
Felix: What did the transition look like, when COVID hit and you had to start pivoting toward focusing on a B2C model?
Cristina: We already had our own DTC presence on Amazon and also in some retailers. We weren’t caught totally off guard. It was mostly just refocusing on those pieces. One of the hard things was, like many people early on, we just didn’t know how long it was going to last. We did a lot of reshuffling of our team. We had people who are core infield sales team members who liked social media running a whole influencer program for us, and really being flexible and dynamic.
That was a really wonderful outcome within our team to see, just so many different people stepping up and challenging themselves in different ways. And having the mindset of, get it done and do what it takes. One of our lessons learned was the value of diversity in your business. Oftentimes you hear, don’t have just one big customer that you rely on. I think we also learned, don’t have just one sales channel that you rely on.
Boiling beverage sampling down to a science
Felix: You mentioned that a lot of your product development was guided by consumers. How were you gathering that feedback?
Cristina: This was a real challenge in COVID. We love sampling our product. We really stand by the taste and flavor of our product. We believe that the best way to market our product is to have people try it. Especially because it is a zero-sugar product. People hear that and they think, “Oh, gross, it doesn’t taste good.” Or, “Is it actually good for me?” Being able to express–in this experiential way, “Hey, it’s delicious,” is super valuable to us. A lot of the feedback that we get is in sampling. In normal times, we run sampling programs, whether they be with our retail partners or in and around the cities that we are in and have a presence.
That’s where we get the majority of our feedback. We also have our own site, and so we do reach out to our customers. We take customer calls. We survey our customers–trying to keep it always short and sweet. We email customers to develop those conversations. We also have a VIP Facebook group for some of our super fans, where we can dip in to ask questions and understand what problems that we can help with.
Felix: In order to do the sampling–do you just reach out to the venue to set up a sampling event?
Cristina: Yeah, that’s right. Some of it is understanding what events are already happening and reaching out to see if they want a beverage partner. Some of it is partnering with other brands and being on their shortlist for when there’s a need. Some of it is working directly with our retailers to set up sampling events.
Felix: When you’re doing these sampling events, do you ask any specific questions to prompt feedback, or are you just trying to get their immediate reactions?
Cristina: We mostly just want people to taste it and to have exposure to the product. To be able to introduce our product on our terms, to give a little bit of the education behind it, a couple talking points. Having a nice branded experience is obviously also important. But really it’s just about having people taste it.
Felix: Were you able to develop marketing or educational content around the feedback you received? Did that go on to inform your marketing strategy?
Cristina: Yes, absolutely. One of the things we learned early on in the lemonades and iced teas–which we launched in the middle of August last year–was that one of our products wasn’t sweet enough to people and didn’t deliver on the full flavor promise. The feedback was pretty immediate and based on that, we made it sweeter.
The key to surveys: Keep them short and sweet
Felix: What kind of questions are you asking in your surveys to optimize the business?
Cristina: We really try to be short and sweet. We understand people are busy and we want to be able to get statistically significant responses, so we try to keep it short. We will survey differently based on a very clear set of criteria. We’ll have a survey around, “What flavors do you want to see next?” And that’ll be the extent of the survey. Then we’ll have surveys around, “How’d you hear about us?” So we can understand what marketing channels are working. We have a survey around, “Where do you want to see us in terms of shopping? What is the best way for you to get our products?” We try to segment it so people have clarity on what we’re asking/ trying to get out of it. Don’t ask too many questions all at once. We see drop-offs sometimes when we have longer surveys.
Felix: Has there been any feedback in these surveys that have surprised or enlightened you?
Cristina: One thing that is always extremely encouraging is the number of people that hear about us through word of mouth. Early on that is always a surprising metric to have. To have any word of mouth, let alone a significant amount of it, is surprising. We’d love to see that grow over time. The most important thing for us is to develop people who fold our product into their lives. That really helps us accomplish our goal of decreasing sugar consumption. When they’re using our products, they’re not having a sugary beverage. Seeing those word-of-mouth numbers are always the most encouraging, and still sometimes a little bit surprising, because you’re like, “Oh yes, it is working!”
Felix: You also mentioned a Facebook group for super fans. How did that come about?
Cristina: It’s a trend to talk about communities. For us, it really was about creating a group, because of our product. We wanted to understand the different ways people are using it, the different recipes, what brought them to it, what keeps them with us. We can have those conversations in our Facebook community. The other piece is not just having conversations between us and the customers, but between customers. Recipe sharing was one of the reasons that we originally started it.
Felix: You just built it up with an email blast?
Judge your production partners by how they handle mistakes
Felix: You mentioned the product line took two years of research and development, and that you’ve now expanded with three or four new products. What have you learned along the way that has helped streamline that process?
Cristina: So much. There’s so much that you learn after you do it once. A piece of advice that we got very early on that we stuck to is quality and having really strict quality control guidelines. That’s something that eventually becomes second nature. What that means is when you go to a factory, what are the right questions to ask a manufacturing facility. What does their storage look like? All of those pieces you learn along the way. Over time we’ve gotten so much better at vetting our partners by knowing what to look for. That holds true across everything. The relationship piece as well. It’s so much easier to be able to pitch a new product line extension–or even a new product line–to people who believe in our mission and see the value of our products.
Felix: What are some of the most important kinds of questions to ask when you’re vetting new partners?
Cristina: A lot of it comes down to what happens when there is an issue and how do they spot the issue. Early on, we were at all of our runs, but at the end of the day, you want to get to a place with your partners where they’re running it without you. You want to understand what their processes are, and their checks and balances throughout the process, to make sure that everything is going well. Understanding their internal processes is extremely important. Understanding how they react to finding something wrong. One of our early partners, and we’ll always have so much respect for them because of this, but they caught an issue one time where basically they were taking an ingredient that was for one of our SKUs and putting it in the other SKU. They flagged that to us and they reran it on their dime. That level of integrity, of issue spotting, was extremely important to us.
Felix: You mentioned quality control guidelines. What are the most important things to pay attention to or talk to your potential partners about when creating a food or beverage product?
Cristina: A lot of this can be very product specific, but to keep it more general, we have very strict recipe instructions around the product to make sure that it creates that vacuum seal that I had mentioned. It’s not really a vacuum seal, it’s more just to make sure that there’s no air in the product so it doesn’t spoil. Again, we don’t use artificial ingredients. We need to make sure that they have tight boundaries on understanding the temperature that they’re running our product at, what’s acceptable in terms of receiving product, and how they store product. All of those go into their quality control guidelines.
Felix: How do you enforce these guidelines and make sure they’re being followed?
Cristina: We still do go visit. We try the products and inspect all the products off the line. Obviously what matters to us the most is the integrity of the product. We care about the whole brand experience. This goes right down to labeling and having a slim margin of what’s acceptable of proper labeling onto the cans and bottles, too.
How email automation and organic media help with retention
Felix: Now, I know you had an online presence before COVID. What are some of the ways you’ve been able to drive that direct-to-consumer traffic?
Cristina: We do a whole spectrum of organic and paid. We also really focus on the retention piece. We have loyalty programs. We’re really excited about our loyalty programs, even though no one uses it this way. I’m so excited for someone some day to use it. Our loyalty program actually counts purchases that are made both online and in-store. We were excited about that piece. We built it out almost entirely with our email list and SMS.
Felix: How do you keep track of both online and in-store?
Cristina: With the receipt.
Felix: You have a big emphasis on retention. What are some of the ways you’ve brought customers back?
Cristina: We review them all the time. We have design in-house, which helps to create that fast-switch ability to do a lot of segmentation and automation on email which has helped us with retention. Being clever and testing out different calls to action to bring people to site, really understanding the reorder cadence of the different SKUs. Then also making it a very specific reminder based on that, are all ways that we have reminded people to come back into the funnel.
The other part of it, too, is social media, right? The organic side does support, as does retail presence. Some of it is just reminding people of things like, “Oh yeah, I liked that. I should order that again.” If they see a beautiful photo, an influencer posting about it, or they see it in-store, all of those for us are different touch points, even if they don’t seem like they’re as integrated with the direct call to action for retention.
Felix: Repeat customers are a bit initiative for you. Do you have an email flow for when you think they might be getting low on products?
Cristina: Exactly. We’ll say things like, “Hey, you’re probably running low at this point.”
Felix: You must have a great email drip campaign. Are there certain things you’ve found work really well for encouraging repeat purchases?
Cristina: Giving people occasions and reasons has been helpful. We do pay attention to the holiday calendars, and create other use cases and occasions for people to purchase. Being mindful of why the customer would come back, and trying to answer that question, then marketing it in that way.
Felix: What platform does your team invest the most in for organic?
Cristina: Instagram has been the platform that we’ve invested most in for organic. We can really showcase beautiful photography by nature of some of our products, the ingredients. We design in-house, which also allows us to focus on a channel that has a lot of visual appeal. One of the things that we have always wanted to do is to make people feel the sugar without actually drinking the sugar. Using a lot of visuals to cue “celebration” has been important for us.
We are also enjoying dipping our toes into TikTok. It’s a really fun information exchange channel. One of the things that’s interesting about TikTok in a way, as compared to Instagram, is that people actually learn stuff from it, and use it for educational purposes. Of course, there’s all the silly dances and other content on TikTok. But again, just by the way that they’re stitched together, there’s a lot of blurbs and call outs as well. The speed of information makes it a really strong education channel. We’re playing around by telling our take sugar down story and more humorous sort of zippy ways on TikTok.
Outsourcing content creation to the professionals–the influencers
Felix: What is your content creation process like for Instagram and TikTok? How do you ensure you’re churning out high quality content?
Cristina: It’s honestly a real challenge. Content creation is extremely labor-intensive, and takes a ton of creative time to have a point of view on it. Even just posting it. We really value content creators and the work that goes into it. We currently create in-house, but are increasingly reaching out to do gifting and influencers with content creators so that we can repost a lot of their work.
Felix: How do you identify influencers to work with?
Cristina: We consider a combination of things. We have influencers who’ve been wonderful partners of ours that we’ve built up over time who we go back to often. Really starting to develop and focus on those relationships is important. I’ll be honest, I think this is an area that we can definitely do more work on, and want to do more work on over time. It’s a work in progress. We’ve worked with a great influencer agency to help us build out that roster. But some of it’s as simple as getting on social and reaching out to people ourselves, as well as having inbounds from people who want to work with us.
Felix: How do you ensure that the influencer is emphasizing the health aspect of your product, and not just the fact that it’s a tasty new drink?
Cristina: The reality is, you have to think about the influencers as really knowing their audiences and having their own brands, too. We don’t ask for that much control. Because what will work and resonate with their fans, they know best, not us. When it comes to the mixers and the simple syrup, we have a bright line rule, which is, if you’re making something with our products, please don’t make it with things that add sugar. That’s our one request, because of why we started this and what we’re trying to accomplish. We want to be able to show and showcase recipes that don’t have sugar in them. Otherwise we really leave it to the content creators to create.
Felix: Speaking of the imagery, I really love the packaging. Talk to us about the development process behind designing the packaging.
Cristina: That is more art than science, for sure. I know I’ve said this a few different times–we design in-house. We have two women on our team, Hannah and Brittany. And Hannah has really led all of the creative for all of our packaging. And it’s so powerful to have somebody who is so steeped in the brand, really believes in the brand to do packaging. Because at the end of the day, we think our liquid and our packaging are actually kind of, one and two, our best marketing tools. Right? If it tastes great, people would just buy it. And if it looks great, that really helps to pull it off the shelf and communicates what it is.
And so going back to your question of having some experience. I think we’ve been able to develop tighter and tighter briefs over time of exactly what the call outs are and what matters for shelf appeal. And knowing that customers have like nanoseconds of time to glaze over the shelves. And making sure that our key points come through. Some of it is in language, but a lot of it is just overall look and feel impact.
How to differentiate SMS from other marketing channels
Felix: What did the creation of the website look like?
Cristina: We actually haven’t done that much on our website since we launched in 2019. We’ve done some iterations to add SKUs, and a little bit of merch. The reality is, in terms of our DTC business, we do have specialized landing pages. We’ve iterated on those. That’s been helpful, because that is something that we do keep refreshing based on feedback and conversion metrics. The overall website has stood the test of time, which goes back to the importance of building a powerful brand visually. If you have a strong point of view of what the brand is and how it looks, then it lasts.
Felix: Are there certain apps or tools that you rely on to help you run the business?
Cristina: Yeah. We use email capture apps, which helps with privy. We use Klaviyo. We think email is such a powerful tool for us for retention and communicating our brand, values, and products, so we use Klaviyo for email. We use LoyaltyLion for our loyalty program. We have reviews with Yotpo. We definitely use a lot of different apps.
Felix: Talk to us about the messaging you send through email versus SMS.
Cristina: Yeah. SMS right now is the wild west when it comes to marketing. It’s just not super developed in the US right now. Any customer whose phone number we have, we feel a responsibility and like we really have to take care of that. We use SMS sparingly, and mainly for something that is of value to our customers. For example, we use SMS when we have a new product launch. We have exclusivity for our SMS list and our super fan customers to get the product first and have early access to it. We use SMS for deals. Again, something that’s a real value to the customer. We don’t use SMS as abandoned cart reminders or other things like that, just because we don’t want to overload people on that channel.
Felix: One thing I love on the website is you have a section dedicated to recipes. When did you introduce that into the website? Have you found that it increases conversions?
Cristina: We did it really early on. It comes down to being an ingredient. We wanted to give people ways to use it. It’s definitely been a help for us throughout, and we see increased conversion rates with users who visit that page first. We’ve solicited recipes from our customers, from different trade partners, and really do like our recipe page a lot.
Felix: What do you think is going to be the biggest challenge for you and the business that you’re focused on tackling this coming year?
Cristina: The reality is that we sort of are at this inflection point where we have historically had a strong online presence for sales. We’re shifting to have our retail be larger than our online presence, just by nature of getting more distribution and bringing on new retailers. This year, one of our challenges is shifting a little bit the center of gravity for the whole team to think more about retail and the retail customer journey, retaining and talking to that retail customer. Digital is a very great tool to market to and to have communication with our retail customers, but it definitely creates a more arms-length relationship than when it is direct on our site, or even on Amazon. That’ll be our big challenge–shifting the team, the culture, and the marketing to take care of and grow the retail channel.