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“We would never do that,” he says.

Instead, the online merchant of cleaning and household products has about four box sizes and two envelope sizes to appropriately fit each size order into the correct box. And for orders with a few products — the average order size on Grove.co is eight to 10 products — its warehouse workers “Tetris” or puzzle together the fulfillment box so all the products fit inside, Landesberg says.

Packing in the Grove warehouse

Stuart Landesberg, CEO and co-founder, Grove Collaborative

This packer position at the Grove warehouse is not entry level. It requires more training and comes with a promotion. Packers receive a week of hands-on training, then a month of guided supervision as they learn how to pack the boxes and their expected goals.

“The training process at Grove is longer than most ecommerce packer training programs because the nature of our product and packaging expectations requires a level of detail that isn’t always necessary in a traditional packing role,” Landesberg says. “Our team members understand the importance of optimizing products and packaging materials in such a way that does not contribute to a higher carbon footprint.”

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Landesberg describes the role as a “pressure seat.” The employee receives the touts with the products picked for the order and the appropriately sized box. Then, they have to quickly fit it all in, as employees have a units per hour goal.

“In addition to specific quality and safety goals, packers at Grove have an incremental units per hour goal to meet based on how long they’ve been in the job function,” a Grove spokesperson says. “The quality goals focus on ensuring that packed items arrive to our customers safely and in good condition.”

Other warehouses might use a robot to perform this task. Grove is willing to pay a bit more to have this step of the fulfillment process done right to be a more sustainable merchant. Landesberg declined to share its warehouse employee wages.

“I haven’t seen anything robots can do as good as a human,” Landesberg says about this box packing step. Grove weekly tracks customer satisfaction and feedback as the primary success metrics for Grove packers.

A sustainable Grove

Grove launched in 2012 as ePantry, and in 2016 rebranded to Grove Collaborative, an online-only brand with sustainability as its core mission. About 13% of the products sold on Grove.co are its own brand. The remaining 87% are from other brands it sells, such as Mrs. Meyer’s, Method and Rooted Beauty. Today, Grove is publicly traded, a certified B. Corp., and sells a selection of its branded products at Walmart, Target and Amazon. Grove Collaborative generated $321.5 million in net revenue in 2022. This was down 16% year over year, the merchant reported, and it is operating at a loss.

Grove is plastic-neutral, meaning for every pound of plastic sold, it collects and recycles that same amount in nature through rePurpose Global. Its goal is to be plastic-free by 2025. And that means Grove Collaborative has routinely iterated on its product and fulfillment packaging.

Packaging: lighter, smaller and less

To achieve the lowest carbon footprint on a fulfillment box, it’s all about lower weight, smaller size and less package, Landesberg says.

Grove focuses on only selling products that are smaller in size — or changing them to fit this mission. For example, instead of selling a full-size mop, which is bulky to ship, it made its broom stick collapsible to fit into a much smaller box. That brings Landesberg to a tip for merchants striving to be more sustainable: Invest in multiple box sizes.

“The best solution is well-trained labor and enough box sizes that you can match products to appropriately,” he says.

At one point, Grove had 30 box sizes. Now, it has settled on its four boxes and two mailers, which can appropriately fit its all of its orders.

Fewer boxes per order

Another shipping practice that Landesberg claims Grove “would never do” is splitting up an order of eight to 10 products into eight to 10 shipments. The carbon footprint is much larger for multiple boxes instead of a slightly larger box that can hold a few more objects, he says.

While orders arriving in multiple boxes sometimes happens, especially for larger orders, Landesberg says split shipments are less than 5% of all of its orders. This is below the industry standard, in which 21% of orders from an online retailer arrived in more than one shipment, according to data from fulfillment vendor Narvar Inc. collected October-December 2021.

Because Grove launched as a vertically integrated online brand, it purposely designed its products to ship directly to consumers, not for a store shelf, Landesberg says. For example, it’s laundry detergent is sold in a 1-ounce concentrated glass bottle that shoppers can mix with water at home, unlike the large bottles sold in stores. Its candles are packaged in a box with a thinner glass, unlike the freestanding, thick-glass candles at stores.

These modifications to the product package allow Grove to ship orders to consumers in a way that weighs less, takes up less space and uses less interior packaging in the box.

And after the packages are snuggly fit in the box, Grove uses a recycled paper to pad the products during the shipping journey. In May 2019, Grove went through its supply chain and eliminated single-use plastic and switched to paper materials.

Grove.co’s paid members are its more frequent purchasers

These initiatives resonate with a certain cohort of shoppers who strive to live a sustainable lifestyle. Grove is No. 301 in the 2022 Digital Commerce 360 Top 1000.

About half of Grove.co’s sales are from shoppers making one-time purchases priced 5-20% above the discount it gives consumers who sign up for a subscription to products.

The other half of Grove.co’s sales are from consumers who signed up to receive auto-replenishments of  products or paid $19.99 for an annual VIP program membership. Members receive seven free gifts a year, exclusive sales, early access to new products and free samples. Landesberg says “hundreds of thousands” of customers are paid members, but declined to share the exact number.

Nearly 50% of paying members renew memberships annually, Landesberg says.

Landesberg says he is pleased with this membership retention rate. He points to the value of the program, the strong brand and engaged community as reasons for this retention rate. For example, members can join its private Facebook group, which is “incredibly engaged,” Landesberg says.

The average order value for traditional shoppers compared with members or subscribers is about the same, Landesberg says. He did not reveal that figure. The frequency of purchasing, however, is much higher for members and subscribers, from six to 12 times per year. That compares with traditional shoppers, which is about four times per year.

Grove expands its retail presence

But even with such high engagement rates on its own site, Grove Collaborative knows many shoppers still do not recognize its brand.

To that end, since 2021, Grove has sold a selection of its products with national mass merchants including Target Corp. and Amazon.com Inc. In 2022, Grove expanded to sell its products in CVS Caremark Corp., Harris Teeter Supermarkets LLC, H-E-B Grocery Company, Meijer Inc. and Giant Eagle Inc. Today, Grove products are sold at thousands of retail locations, including at mass merchant Walmart Inc.

“To change the category, we need to play in the channels where the majority of people are buying these products,” Landesberg says.

But the goal, Landesberg says, is not to introduce them to Grove on Target and then get them to buy that product on Grove Collaborative.

“It’s my goal to get them to come back and get them to buy that product again,” Landesberg says.

“Economically, yes, we make more money when they buy their entire regimen from Grove,” he adds.

He knows the majority of shoppers don’t buy their household cleaning and personal care products directly from a brand’s website. They buy these products from a mass merchant. Grove declined to share what percent of its sales are from its direct-to-consumer site or from other merchants.

Kathy Kimple, executive director, digital strategy, at ecommerce consulting firm OSF Digital, says it’s interesting to see subscription-based companies expand into retail. Shoppers save on shipping and get the product immediately. Meanwhile, the brand gets more exposure.

“As access to their products grows, there will be less need for subscription,” Kimple says. “Depending on the company’s goal, lower subscriptions may be offset by brand awareness if retailers start to carry more Grove products.”

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Cleancult sells nontoxic cleaning products, such as soap and laundry detergent, in a cardboard carton. Shoppers then transfer the product into a glass bottle, which the brand also sells. Cleancult’s mission is to reduce plastic consumption, and it has 15 patents on the machines it uses to create its cartons.

Cleancult is not the first brand to tackle reducing plastic packaging in the cleaning industry, as other brand manufacturers sell cleaning products in 1-ounce concentrated glass bottles or sell products in powder form. This appeals to eco-conscience shoppers, but many consumers are not ready for this step, Lupberger says. While concentrated products are lighter, require less packaging and are more sustainable to ship than traditional products, it requires effort for customers at home to create the final product, which is a barrier, Lupberger says. Although Cleancult customers need to purchase a glass bottle in addition to its cleaning products, Lupberger says this is not a barrier to purchase.

Cleancult’s products are packaged and shipped without plastic.

“We want to go after the 99%,” Lupberger says. “We have to meet them where they are with ready-to-use formulas and ready-to-use bottles.”

“How do we change the category, but not change consumer behavior?” he adds about its goal to make choosing its plastic-free products easy for shoppers.

Cleancult.com launches and then pivots to physical retail

Cleancult launched in 2019 with its direct-to-consumer website Cleancult.com.

“I really hoped D2C would work long term,” Lupberger says.

But things quickly changed. As online sales skyrocketed during the pandemic — especially for cleaning products — so did costs. Digital marketing costs to acquire customers and shipping carriers raising their rates were the largest increases, he says. Digital marketing costs increased roughly 50% from 2019 to 2021, Cleancut says. Plus, what once cost the brand $6-$7 to ship now costs it $17-$18.

Plus, post-pandemic, many consumers resumed their normal shopping habits, including buying their cleaning products in stores. And so, Cleancult shifted priorities to get its products in more physical stores instead of working to acquire digital customers. In 2021, Cleancult debuted in a handful of regional grocers. In 2022, it expanded to Walgreens, CVS, and Bed Bath & Beyond, and this year is Cleancult’s Walmart debut. Cleancult also sells on the Walmart and Amazon.com Inc. marketplaces.

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. Walmart is No. 2. Amazon is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces. Walmart is No. 9.

Ryan Lupberger, co-founder and CEO of Cleancult.

“A lot of categories shouldn’t live online,” Lupberger says. “Fundamentally, the cost of shipping big, bulky, low-price items, doesn’t work very well.”

Subsequently, its sales shifted from 100% via its direct-to-consumer website, to 90% its own website in 2020, 70% in 2021, 65% in 2022 to likely 20% in 2023, Lupberger says. Cleancult includes sales made on the Amazon marketplaces in its direct-to-consumer sales figures.

Even though sales are growing 50% year over year for its total business, sales are flat on Cleancut.com.

This shift in sales is fine with Lupberger, as its ecommerce site and Amazon business do not make money.

“It’s break even at best,” he says.

But its ecommerce site still serves a purpose, including building a community and testing new products and scents, he says.

“If they find us in store and believe in the Cleancult brand, join the website. But if they need a quick shipment, buy on Amazon. And if they are grocery shopping, they can pause their subscription and buy from the grocer,” Lupberger says.

Plastic-free shipping packaging

For shoppers who do buy direct from Cleancult.com, the brand works to ensure the products are shipped in the most sustainable way, such as by offsetting the carbon from the freight and by using paper instead of plastic.

“We can’t use plastic. It can’t ruin our value proposition,” Lupberger says.

Cleancult uses corrugated paper to pad its products, which is typically two to three times more expensive than a plastic polybag filler. It also pads its glass bottles with carboard beds to ensure the products are not touching anything and there is space for crushing.

The brand uses Forest Stewardship Council certified paper for its product cartons and shipping boxes. FSC is a nonprofit organization that ensures the paper is from a forest that is responsibly managed for environmental, economic and social benefits. 

Cleancult has four box sizes, and 99% of its orders arrive in one box. This means an order with multiple products is not split up into multiple shipments.

The last person who packs the box is the last quality control to ensure it is packed correctly, with none of its products touching. While this is important to its plastic-free ethos, it’s often thankless.

“[Shoppers] don’t notice it when it arrives,” Lupberger says.

But shoppers do notice when there is plastic in the shipping box by mistake. This can happen for some of its Amazon.com orders, which is shipped via Fulfilled By Amazon. Cleancult provides Amazon with its own carboard boxes to use to ship directly to shoppers. Sometimes, however, a warehouse employee may put that box inside another box with a polybag in it, or its box is added to another part of a larger order and plastic is added. Then, shoppers contact Cleancult with negative comments, even though this is outside of its control, Lupberger says. 

Cleancult is No. 1963 in the 2022 Digital Commerce 360 Next 1000.

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Jill Pavlovich, senior vice president of digital customer experience at Albertsons, says adding product reviews will help customers. They’ll be able to make better buying decisions, and it will encourage them to try unfamiliar products. It also will provide the retailer with valuable consumer data.

“Industry research tells us shoppers are more likely to purchase a new grocery item online if it has been reviewed by other customers,” Pavlovich says.

She adds that the online feedback helps Albertsons understand better “what delights our customers and where we can improve.” Pavlovich says customer feedback helps inform decisions, including which kinds of private-label products to offer customers.

To add the reviews and rating capability, Albertsons chose PowerReviews, a vendor specializing in user-generated content (UGC) technology. Examples of UGG include text, videos, images, reviews, or other content that shoppers created.

Besides Albertsons, PowerReviews’ clients include footwear brand Skechers, whiskey maker Heaven Hill and candy maker Jelly Belly.

“We really like how PowerReviews makes the user experience simple and easy for shoppers to read or write reviews on our grocery products. We are excited to partner with the company to continue to fine-tune and improve the way we offer ratings and reviews on our banner store websites and apps,” Pavlovich says.

Albertsons ranks No. 26 in the 2022 Digital Commerce 360 Top 1000.

The case for ratings and reviews

Grocery retailers have added online ratings and reviews for the same reason as other kinds of retailers: customers read them.

In March 2022 PowerReviews surveyed 11,162 U.S. consumers about online grocery shopping. Among online grocery shoppers, 90% of online grocery shoppers read ratings and reviews at least occasionally, the survey found. Also, 83% of those surveyed said they are more likely to buy something they’ve never tried if online reviews are good.

“Product reviews are tremendously influential,” says Andrew Smith, vice president of marketing at PowerReviews.

He says grocery retailers’ ratings and reviews can boost sales when supply chain problems make familiar brands unavailable

“Over the past two years, grocers have been faced with stockouts, often having to source new brands, many of which have less consumer brand recognition. Focusing on reviews for these products can improve sell-through, consumer consideration, and adoption of these new brands,” he says.

Strategic alternatives

Early in 2022, Albertsons hired investment firms Goldman Sachs and Credit Suisse to serve as financial advisors to a board-led “review of potential strategic alternatives.” Albertsons went public in June 2020. Before that, private equity firm Cerberus Capital Management controlled the retailer for about 14 years.

Albertsons operates almost 2,300 across 34 states and the District of Columbia. It operates under 24 banners, including Albertsons, Safeway, Vons, Jewel-Osco and Shaw’s.

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The move to Walmart.com is part of a larger effort to expand into new channels, including “third-party sales platforms that bring significant new audiences to Blue Apron,” the retailer said in a statement. Blue Apron says it expects to announce more offerings of this kind in 2022 but was not specific about potential distribution partners. Blue Apron ranks No. 178 in the 2022 Digital Commerce 360 Top 1000. Walmart Inc. ranks No. 2.

Blue Apron will pack and ship the meal-kit boxes ordered via Walmart.com. The meal-kit company says handling fulfillment itself will maintain “the efficiency and scale of the company’s direct-to-consumer model and strong supply chain.”

On its own website, the retailer sells meal kits using a subscription model. Consumers select how many servings they want every week and can make specific requests, including asking for kid-friendly options or meals intended to assist weight loss. But, on Walmart.com, consumers can buy the kits without a subscription.

Blue Apron says it is the first — and so far, only — meal kit company selling on Walmart.com.

Reaching new customers

“Our partnership with Walmart.com gives us the chance to reach new consumers that are currently using Walmart.com, as well as introduce an entirely new audience of customers that may not have considered purchasing a meal kit before or were hesitant to try Blue Apron because of its subscription model,” a Blue Apron spokesperson tells Digital Commerce 360.

Blue Apron offers Walmart.com shoppers four options that serve up to 12 people, with plans to expand the options in the coming months. The spokesperson says the meals available from Walmart.com are a curated selection of recipes also available on BlueApron.com. In addition to meal kits, the offerings will include a selection of Blue Apron’s Heat & Eat line of prepared, single-serving meals that consumers can heat up in five minutes or less.

Blue Apron is one of just three meal-kit companies in the Digital Commerce 360 Top 1000. The other two are Sun Basket (No. 174) and Goodfood Market Corp. (No. 265).

Moving beyond subscriptions

Company officials have said Blue Apron wants to “build an ecosystem” of partners to help it expand beyond its subscription model. During a May 9 earnings conference call, CEO Linda Findley said Blue Apron was “implementing additional technology to allow us to simplify integration with a larger number of partners at scale.”

Blue Apron says it is the first — and so far, only — meal kit company selling on Walmart.com. The spokesperson said the retailer has no plans to sell its meal kits or prepared meals in Walmart stores but doesn’t rule it out.

“While we currently do not have plans to expand the offering beyond online sales, we can say that this is just the beginning, and we look forward to iterating on and expanding our offerings throughout the year,” the spokesperson says.

Blue Apron’s search for new customers makes sense. According to a May survey of 1,000 online shoppers by Digital Commerce 360 and Bizrate Insights, just 13% of those surveyed ordered meal kits for delivery during the preceding six months.

In addition to seeking distribution partners, Blue Apron also recently freshened its menu. Last month the retailer expanded its food and wine offerings, adding new four-serving recipes, premium sparkling wines and increasing the number of “add-on” items available. Add-ons, which the retailer introduced last year, include breakfasts, appetizers, salads, desserts and à-la-carte proteins. Blue Apron now has 58 weekly food options, more than tripling the variety of choices on its menu since 2019.

Blue Apron financial results

For its first quarter, ended March 31, Blue Apron reported that net revenue decreased approximately 9% year-over-year to $117.8 million. That’s down from $129.7 million a year earlier. Its net loss more than doubled, reaching $38.4 million, compared with a loss of $15.7 million a year earlier.

For the full year, the retailer says it expects top-line net revenue growth to be in the mid-teens percentage range compared with the full-year 2021 revenue. The retailer says it will get there by returning to positive year-over-year net revenue growth starting in the second quarter of 2022 and for the rest of 2022.

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The increase in subscriptions has accelerated over the past couple of years, said Elan Lieber, the brand’s senior performance marketing manager. The pandemic “fast-forwarded” what subscriptions Equator Coffees could offer. It began working with Ordergroove, a subscription-management vendor, in April 2021. Subscriptions now account for more than half of Equator Coffees’ online revenue, and that percentage continues to grow, Lieber said. The lifetime value of a subscription customer is three times higher than for customers who buy individual products, he added. 

“The subscription is the big loyalty component for us,” Lieber said. “When someone comes to Equator and starts a subscription, that’s where we see a really strong, long-term relationship versus just a one-off purchase.” 

Equator Coffees uses Shopify as an ecommerce platform, and Ordergroove powers Equator Coffees’ subscription through a Shopify plug-in application. Ordergroove’s content appears on Equator Coffees’ website as an offer for subscriptions on the product details page. When customers buy a subscription-eligible bag of coffee from Equator Coffees, the subscription offer will appear beside the one-time purchase option for the same product. 

Subscription adjustments

Ordergroove offers a technology called Instant Upsell, said Casey Burt, director of client services at Ordergroove. That’s the ability to add products to an upcoming subscription order either as a net new subscription if it is a replenishable or subscription-eligible product or as a one-time purchase. 

Burt said it is beneficial to the retailer for building average order value. Equator Coffees’ gross merchandise value, including the charge for starting a subscription and recurring revenue, also increased 372% in its first seven months using Ordergroove.

The roaster offers incentives for buying products with a subscription, including 15% off the first bag. Equator Coffees also offers free shipping for all subscription customers, from the first time they order to the end of their subscription, Lieber said. Subscribers can pause and change their subscription at any time. 

“There’s no penalty or ‘you’re committed for X period,’” Lieber said. “It’s very transparent, full control to the customer.”

Ongoing customer communication

That personalized customer experience helps Equator Coffees reach out to new and existing customers differently. 

“You know that they’re getting a specific product on a specific date, and that allows you to do a lot of really interesting things from a post-purchase perspective,” Burt said.

Each subscription delivery comes with its own pre- and post-delivery transactional emails, allowing Equator Coffees to connect several times with each subscriber customer. Equator Coffees can suggest products based on the customer’s subscription. Subscribers get an email confirming their order’s scheduled delivery date, and those emails remind them they can make changes.  

A-B testing helped Equator Coffees determine what type of messaging to use with customers, Lieber said. That could include how much information customers want from the retailer, and how specific they want the information to be. Some customers preferred to learn about the brand’s sustainable supply chain, and others focused on product quality or collaborations. Another segment just wanted information about the retail cafes. 

“Everybody has a very specific palate and flavor profile that they like, so we really focus on meeting them where they are,” Lieber said. “People who buy blends from us, we really only communicate to them about blends. People who are big fans of single-origin coffees, we’re always talking to them about single-origin coffees. A lot of it comes down to meeting our consumers where they’re at so they feel they’re getting relevant information from us.”

Subscribers also get early and first access to any new coffees the brand releases, Lieber said. Equator Coffees also gave them a first look into a cafe it launched in southern California, he added.

B Corp. status

Equator Coffees, a certified B Corp, meets certain environmentally friendly and sustainability standards. It also means meeting certain standards for how it treats its employees and how its suppliers treat theirs. That supply chain experience is part of the selling point for Equator Coffees, Lieber said.

“We really strive for sustainability throughout our entire business,” Lieber said. “We utilize World Centric No Tree cups in our retail cafes, and then we use BioTre 2.0 bags, which are made from 99% renewable resources. Across the board with our supply chain, we really work hard at making sure we can be as sustainable as possible.”

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Greg Alvo, founder and CEO, Ordergroove Inc.

If you were to take a snapshot of the average American family in 2020, you’d likely find a family of four stuck at home trying to manage the new normal of work, school and play, from a single isolated location.

That meant managing work from home for mom and dad while also keeping their family happy, healthy, and safe. Meanwhile, the kids adapted to their first remote school lessons. And don’t forget the new furry friend that an estimated 11.38 million U.S. households welcomed home during the pandemic.

With this new normal came a slew of new needs, including a monthly supply of pet products, an increased necessity for household essentials, and perhaps most important to everyone’s well-being, a self-care routine. At the same time, consumers looked for safe, reliable ways to source these products on an ongoing basis.

In searching for ways to consistently receive these products from the safety of their own homes, many consumers turned to ecommerce – specifically subscription offerings. As a result, subscription programs saw massive growth during COVID-19. According to eMarketer, subscription commerce sales saw 41% growth in 2020, and it expects the market to reach $27.67 billion this year. Our merchant data found that the pet supply, household product and beauty categories draw the biggest demand for subscriptions.

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Pet supplies are essential for keeping new four-legged friends happy

Pet parents often go to great lengths to ensure their four-legged children are well taken care of. For many, online subscriptions served as a reliable and convenient method to receive regular supplies such as cat litter or dog treats. In fact, in 2020, subscriptions for pet supplies increased by 340% YoY for our merchants.

 When it comes to the pet supplies you regularly order—like that 25-pound bag of specialty, grain-free dog food your vet insists your dog needs—subscription programs can offer a sense of predictability and convenience. With subscriptions, pet parents don’t have to worry about reaching for a scoop of dog food, only to realize they’re at the bottom of the bag and the local pet store doesn’t carry that all-important specialty food your dog eats. Subscriptions eliminate this friction – consumers no longer need to remember to buy more pet food before it runs out. And just as important, no one must schlep that bulky bag of food home because it’s automatically delivered to your door exactly when needed.

Household product demand increased as remote life took hold

With consumers spending most of their time at home, subscriptions for household products soared. From everyday goods like hand soap or disinfectant wipes to comfort items such as candles, subscriptions became a safe and convenient way to shop. According to our data, subscription enrollment for these types of products increased 288% in 2020 versus 2019.

 The household product category saw increased growth due to the flexibility and control subscriptions provide consumers. Not only are items delivered at a regular cadence, but a consumer can easily pause orders instead of canceling a subscription altogether. That way, if fragrance fanatics find their apartments overflowing with candles they haven’t had time to burn, they can take a short break from receiving any new orders.

In addition, consumers can easily modify the delivery dates of their orders. For example, if a family is going out of town and won’t be home, they can request a new delivery date and receive the order once they’ve returned. As their needs continue to change – even monthly – merchants can demonstrate their value by offering these customizable subscriptions.

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Beauty gained popularity as consumers turned to new self-care and wellness routines

Last year’s stay-at-home orders disrupted daily routines, causing consumers to turn to self-care to maintain some sense of normalcy. As a result, shoppers sought out beauty and wellness products, from cleansing serums to cures for “maskne” our beauty merchants saw a 117% increase in subscriptions in 2020 compared to the prior year.

Providing a tailored online experience can be challenging for beauty merchants, as needs are hyper-personal according to ingredients, skin tone, scent and more. For example, the daily routine of a dad growing a pandemic beard and a teenager with acne-prone skin looks very different. Given that every shopper’s unique needs vary, merchants have found success in offering a personalized experience by pairing subscriptions with guided selling and loyalty programs. 

Guided selling, for example, is often executed through a chat box or a question-and-answer experience, which helps customers quickly find the best products for their needs. By either speaking to a consultant online or narrowing down products through a series of questions, shoppers receive personalized recommendations for their subscriptions that can help them feel confident in their purchase decision and their new routine. Once complete, shoppers now have a regular, recurring order that satisfies their needs—and a package in the mail to look forward to. What’s more, loyalty programs that are points-based or tiered can incentivize a shopper to continue a relationship with a brand.

Subscriptions create continuing opportunities for customer loyalty and growth

The average American family’s needs continue to change, as many parents are returning to the office and most kids are now attending school in person. However, consumers formed new shopping habits in 2020. They will still expect subscriptions to deliver on these needs, creating ongoing opportunities for merchants to build loyalty and grow their customer base.

Regardless of the vertical, subscription programs are a tool for merchants to establish an essential role in a customer’s life. Merchants must move beyond the fundamentals of a simple subscription offering to improve relationships and better serve their customers. Customers are not one-size-fits-all, and their ecommerce experiences should reflect that. By offering reliable, convenient and customizable subscription programs that customers can control, merchants will ultimately drive loyalty within their brand.

Ordergroove Inc. provides software that powers subscription programs for D2C brands and retailers.

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McCormick conscientiously used refillable shampoo and conditioner bottles for her work trips, but the answer to the toothpaste quandary eluded her. She searched for alternatives, but everything on the market was packaged in plastic. Although she stumbled upon some toothpaste tablet options, the ingredients were lacking and reliant on harsh chemicals. And so McCormick started taking online chemistry courses on nights and weekends and talking to dentists and hygienists to formulate her own substitute.

It was a hobby—not a business. She simply wanted an effective toothpaste to combat her vegan lifestyle, as a high-carb diet tends to cause more cavities, and to reduce her own environmental footprint. At first, McCormick tried piping powders mixed with coconut oil to make hardened little balls like the candy dots that come on strips of paper, but that was a bust. Eventually, she landed on the right combination of ingredients, bought a $1,000 hand-press tableting machine and figured out how to package the toothpaste in a glass jar.

Lindsay McCormick, founder/CEO of oral care brand Bite

“I saw this solution, and I thought it would have an incredibly niche appeal. I assumed it would be me, some of my hippie friends, my parents—who are just always going to be supportive—and maybe some of my TV producer colleagues wanting this stuff,” McCormick says. “I figured it would be an Etsy shop, and I’d also sell it on Shopify with the goal of just making my money back from the equipment I bought.”

McCormick, now the founder and CEO of an oral care brand called Bite, was wrong. Case in point: “Shark Tank” investor Mark Cuban wanted a sizable stake in her fast-growing company and offered to finance it.

Like an increasing number of executives, McCormick discovered that consumers are increasingly gravitating toward purpose-driven businesses. In fact, shoppers are even demanding accountability on social, political and environmental topics—with sustainability being a particularly hot-button issue. This consumer cry for action is leading merchants like Bite to highlight ecologically responsible products or practices. There is “clear and strong” evidence that consumers assess companies through the lens of their own belief systems—a trend that has been growing over the last decade, according to Anjali Lai, senior analyst at research firm Forrester Inc.

“A company’s approach to moral, social and political values increasingly matters to its success,” she says. “[This is] giving rise to ‘values-based consumers:’ consumers who evaluate their purchases not just in terms of the direct benefits they’ll receive but also in context of the product’s [or] brand’s values around employment and manufacturing practices, political and social stances and commitment to other causes or beliefs.”

Bite moves on up from small vegan blogs to score a ‘Shark Tank’ spot

Retailers that have resonated with consumers on this front report benefitting in a number of ways: more social media mentions, lower customer acquisition costs, higher conversion rates, increased customer loyalty, upticks in revenue and more. And with consumers rallying around retailers that align with their personal values, analysts say it’s crucial that companies authentically communicate their brand identity and initiatives to shoppers.

Yet it can take some time for merchants to perfect their tone and pinpoint the best channel to convey their messaging before reaping the benefits of a values-oriented business model. For Bite, it was a small cult following in the blogosphere that paved the way for the company’s later, more mainstream success.

Some of McCormick’s friends with vegan blogs started featuring the refillable toothpaste tablets in 2017. This was during the early stages of the zero-waste movement, or the eco-friendly set of principles centered on waste prevention to encourage reuse of products and prevent trash from being sent to landfills. Bite is subscription-based and sends customers a jar filled with four months’ worth of non-toxic tablets while subsequent refill orders arrive in a compostable pouch, making it a fit for writers seeking to highlight new, sustainably minded products.

Soon, Bite—which markets itself as an all-natural, 100% vegan, gluten-free, cruelty-free, zero-waste company—attracted the attention of “Women’s Health.” The magazine was spotlighting short videos of women-owned businesses in the health space and asked McCormick to submit a featurette of her making tablets in her living room and talking about the genesis of the company. The video went “insanely viral,” McCormick says, despite the fact that her boyfriend quickly shot the video at 6 a.m. before she left for a work shoot. It had almost a million views in the first two hours after the magazine posted it without giving her a heads-up in August 2018.

McCormick’s Shopify app was “going berserk” that night, she says, and the entrepreneur was certain she had gotten hacked because there were more orders coming in than she had received in the entire life of the brand. Turns out, “Women’s Health” linked Bite’s profile directly to its ecommerce site. In the first four days after the video was posted, the brand generated $200,000 in sales—more than 30 times the $6,000 she sold in the entire prior year. At the time, McCormick was still making tablets by hand—one by one—and she scrambled to get business insurance and find a manufacturer after running out of stock.

“It was like, ‘Wait, what just happened?’ All of a sudden, it dawned on us that this is a real thing,” McCormick says.

As the zero-waste movement gained traction, many of Bite’s early influencer devotees grew their followers to 150,000 from around 1,000, propelling the brand into a coveted spot on the investor-run, startup incubator “Shark Tank” on ABC. Mogul Cuban and businessman Kevin O’Leary both wanted to invest in the brand after hearing her pitch, but McCormick says she turned down the offers because they wanted too much control of the company. While the thought of raising funds can be tempting and she frequently gets solicited by would-be investors, McCormick says she’s not interested in selling the business and hasn’t needed an influx of capital.

Bite has also since scored deals to get its toothpaste tablets sold on Kourtney Kardashian’s Poosh site and VioletGrey.com, a discovery hub for beauty editors, as well as in several trendy Erewhon Market stores in Los Angeles. The brand currently boasts 100,000 active subscriptions and doubled its product offerings in the past year, including a plastic-free teeth whitening gel system, a company spokesperson says.

While McCormick declined to disclose Bite’s revenue, which Digital Commerce 360 estimates reached $10.3 million last year, she says the brand more than doubled its sales over 2019 and has been profitable since 2018. The brand raked in more than $3 million in 2019 and has since hit eight figures annually, the spokesperson adds. With a Digital Commerce 360-estimated 175.0% growth in online sales in 2020, Bite is the fifth fastest-grower in the 2021 Next 1000 rankings of mid-market online players, where the company holds the No. 1549 spot.

Storytelling in marketing helps brand connect on sustainability

McCormick attributes a large part of the company’s success to solid, educational content, which she says has always been the cornerstone of Bite’s marketing efforts.

“The content we create has to effectively describe our product. It’s a weird product. The tablets use different ingredients that are more expensive, and we have to explain why,” McCormick adds. “If we weren’t good at communicating our message, we wouldn’t be getting anywhere.”

BiteToothpasteBits.com features cautionary statistics to spur shoppers to buy green products like, “More than 1 billion plastic toothpaste tubes are thrown out each year with harsh chemical residues” and, “Every year, more than 50 Empire State Buildings’ worth of toothpaste tubes end up in landfills or oceans.” But McCormick says consumers demand more than that to buy into her sustainability proposition. Shoppers now heavily research brands and expect them to be transparent about their sourcing, packaging, hiring, ongoing improvement efforts and more.

“I write these lengthy blog posts about why we choose the ingredients we choose, why we choose the packaging we choose—we weigh the pros and the cons for our audience to engage them in the conversation,” she adds. “We never try to come off perfect because there’s no perfect way to achieve sustainability. Instead, we articulate our reasoning for everything and the why behind our decisions, and once we give hard answers to consumers’ hard questions, they in turn become gigantic advocates for the company.”

Word of mouth is huge for Bite. The brand’s consumers are mostly 24-35 years old with a strong showing in the 18-and-under crowd. And these younger and often mission-driven shoppers get on board because they believe in what Bite is doing and feel comfortable vouching for the company to their friends and family, which McCormick says creates a natural referral program. Bite’s customer acquisition cost is $4.50 per customer, which she says is low compared with other brands, which she says averages double digits. McCormick attributes her low costs to messaging and storytelling that has laid the foundation and primed shoppers to think positively about the brand.

Bite has more than 15,000 five-star reviews across all products, and McCormick says she watches the brand’s conversion rate climb with every new review, which she calls “social proof.”

In 2021, storytelling will remain a focus for the brand’s team, which recently grew to six employees and still operates out of the founder’s living room. One of McCormick’s three bedrooms now also has been converted into an in-house studio stocked with photo and video equipment to aid Bite in doubling down on content production this year, and the brand will devote full-time staff and freelancers to these projects.

McCormick has dreams of using her TV background to produce environmentally conscious documentaries about the world’s plastic problem and potential solutions. The conservation narrative is what’s so effective and stays with consumers long after statistics have been forgotten, she says. Outdoor apparel and activist brand Patagonia (No. 206 in the 2021 Top 1000) does this especially well, with its documentaries on protecting national parks, adds McCormick, who hopes to have a similar impact without the same huge budget. IPhone videos can work just as well if the content connects with the audience and makes them understand and care about the cause, McCormick says.

The work it takes Bite and other value-focused retailers to tell their stories can be worth it, data suggests. 32% of consumers would pay more for a product from a brand they believe is committed to sustainability, according to an online survey of 2,000 shoppers commissioned by personalization platform Nosto in 2019. Additionally, 11% of consumers who shopped online during the five-day period last year from Thanksgiving to Cyber Monday selected a retailer because of its sustainable business practices, according to a Digital Commerce 360 and Bizrate Insights survey of 1,113 consumers in December.

Bite pushes shipping carriers to use more sustainable packaging

Yet, for McCormick, it’s the small things that are indicative of Bite’s real success. The brand, which went carbon neutral in 2020, was “incredibly strict” about its packaging materials from Day 1 because packaging is such a big part of an ecommerce business’s environmental footprint. Boxes are cardboard, and tape is paper instead of the default plastic.

“When we were small, it was such a hard fight. We had to pay so much extra to get those fulfillment companies to use paper tape because it’s not normal,” McCormick says. “Then suddenly there’s a fulfillment company that’s courting us because we are doing a significant number of orders per month, and they’re asking ‘What can we do to get your business?’”

She answered without pause: Don’t charge Bite extra for substituting packing tape. And the first time McCormick toured the facility, the fulfillment company directed her attention to the paper tape dispensers that were recently purchased and installed on her behalf, showing off three new stations to accommodate brands like Bite.

“It’s really exciting,” McCormick says. “We were the ones who kind of kicked in the door. That’s so awesome that we established the demand and paved the way for these other small brands who won’t have to fight the same way we did to be good to the planet.”

And then it’s just a matter of time before the big companies start taking notice. McCormick’s hope is larger toothpaste companies—which may previously have been hesitant to shake things up with a legacy brand—will see what Bite has accomplished and realize that it could be worthwhile to manufacture a more sustainable toothpaste with ethical and clean ingredients that costs a little more.

“I’m really finding my place for our business in this world. I want to be the thorn on the side of the industry or the outlier—the company that is doing these really audacious and bold, sustainable thing and proving that there is a gigantic market for it,” McCormick says. “We can’t do it alone, but if we’re continually raising the bar on our end and coming out with more and more sustainable products that solve these important problems and push the big guys, that’s where the real change is made.”

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Jon Moeller, vice chairman and chief operating and financial officer, P&G

“We’ve had a strong year-to-date outcome with ecommerce growing 50%, now above 14% of the business globally,” Jon Moeller, vice chairman, chief operating officer and chief financial officer, said on a conference call with investment analysts last month for the fiscal second quarter and first half ended Dec. 31, according to a transcript from Seeking Alpha.

More than $5 billion in first-half ecommerce sales

Figuring that 14% figure, P&G worldwide ecommerce sales amounted to about $5.5 billion for the six months ended Dec. 31.

By comparison, P&G said total net sales for the fiscal second quarter increased by 8.3% year over year to $19.75 billion. For the six months ended Dec. 31, P&G reported an 8.4% year-over-year increase in net sales to $39.06 billion.

Moeller, responding to a question regarding his expectation that ecommerce will reach 20% of total sales, noted that ecommerce was “not far from closing in on that 20% level, particularly with those kinds of growth rates.”

P&G’s market share in ecommerce, though different by product category and by country market, he said, is “slightly higher” than the company’s market share in “brick-and-mortar shares.”

Crucial to perform well in ecommerce

Moeller went on to say that it’s crucial for P&G to perform well in ecommerce, and he noted that P&G’s position as a big supplier of established brands provided it with a “conducive situation for growth.”

“We need to perform in this channel against all the vectors of superiority just as we do in the others,” he said.

Along with the increasing strength in ecommerce sales, P&G benefitted in 2020 from a 6% year-over-year increase in pre-COVID organic sales during the calendar year 2019. “Building on that strong momentum, we accelerated organic top-line growth in calendar year 2020, which we just completed to nearly 8%.” Moeller added that P&G overcame “significant challenges,” including drops in sales to dental offices and to hotels and restaurants experiencing a downturn in professional business travel.

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