When P&G acquired the all-natural deodorant brand Native in 2017, the startup was but a few years old. Obviously, the conglomerate saw more here than a hip, pricey deodorant for the tree-hugger demo.
As CEO Vineet Kumar tells Brand Insider, important factors included Native's D2C customer acquisition tactics and customer service. But Native also seems to be a place where P&G can explore how cause-based marketing and sustainability can become engines for growth in CPG. Kumar discusses his plans for taking an incremental approach to sustainability — making sure that perfect is not the enemy of the good.
MediaPost: What is your core customer base?
Kumar: The primary audiences that we have now is at least 80% female and about 20% male. One source is women who are pregnant or had a baby recently or have young kids. They tend to switch to natural deodorants because they're thinking a lot about the safety aspect. Either they're breastfeeding or they're like, "I really want to know what I'm putting into my body if I'm having a kid."
We get a lot of reviews and emails from people who have had a health scare and require products that are sensitive but also provide effective odor protection. They want to avoid all kinds of [things] like aluminum.
And then there are people who are looking for a product with ethical standards that match their own. There's been some Gen Z and millennials, all the way to 55, 65 who want a product or a brand that gives back to the community in some way.
MP: That raises the question of how you target and what acquisition tactics you use.
Kumar: We started off hyper-targeting on Facebook and Google and Pinterest, and then we realized that the Facebook and Google algorithms [are so well optimized] you don't need to do [that]. As you start to scale, it’s better to go broad, and then the algorithm automatically targets the right cohorts on Facebook and Google.
However, we continue to be focused on these audiences, targeting them using other ways on podcasts or influencers.
MP: What happened when the COVID-19 crisis hits?
Kumar: We started seeing a massive surge in sales both across retail and on D2C. And the big challenge was, how do we fulfill those orders in time?
So I think that was challenging. On retail, it collapsed. Overall, I think we are back to where we were pre-COVID in terms of sales.
In terms of consumer behavior, there are some changes that happen. People are becoming a lot more conscious about the health and safety of their family. There's a lot more research going on into, okay, what am I putting in my body -- is it safe for me, is it safe for my family? However, the overall usage has gone down a little bit, only because people are not going out as much.
MP: What happened to your media plan? Turn anything off?
Kumar: We didn't stop any media. In fact, we invested more during this time because it was actually a period where it was great for customer acquisition. Your costs drop dramatically. There's lots of inventory. People are spending time on Facebook. There are marketing costs that dropped by half.
We just changed the creative to be more sensitive to the situation. We didn't feature
influencers standing outdoors and saying, "Hey, I'm loving the sun." We made a lot of creative that was serving rather than selling, which is talking about why it is healthier for you or your family.
MP: Tell me about this brand identity and how you differentiate it among other natural products.
Kumar: We have to keep evolving in terms of our safety and in terms of the effectiveness, because people aren’t going to buy you just because it's natural. And in terms of safety, how do we make sure that we are updating our standards? We are being radically transparent about are they natural fragrances, synthetic fragrances, essential oils. But beyond that, what's going to differentiate us is things we are going to do for the planet.
MP: You're coming at this issue of using less plastic. How is that becoming part of the brand proposition?
Kumar: Two years back, we started looking at a more environment-friendly or sustainable way to deliver the deodorant. And there's nothing that's perfect that's available.
The biggest challenge with a lot of the sustainability initiatives is that they are targeted toward 2030 or 2040. The reality is the steep climb to get a perfect product.
The pandemic helped accelerate my thinking: Now ,let's put a stake in the ground. It's fine if it's not perfect. Let's start with some kind of progress, so I can get this whole chain moving.
So right now we're looking at plastic-free. The next year we will have slightly better ones from a user experience. You will hopefully be getting an even better solution. We look at the way we transport them in trucks, which are completely battery-operated.
MP: You see this as a customer acquisition tactic, not just a brand and loyalty builder?
Kumar: What we found in our research is actually more and more, when consumers have to choose between two brands that are alike, after a certain point in time we reach that plateau in terms of how awesome your product can get.
And I think that's when they will definitely look at the ethos of the company. They are giving their money to a brand which actually stands for a higher purpose. And that can be a fantastic way to acquire customers.
The second thing I think about is that this should be a way to generate the cost savings that would be refueled into the business. We need to find a way to make it in a way that the unit economics actually pay out. So when you are acquiring customers, then it becomes a self-funding funnel where you can reinvest in acquiring customers and then it's going to be profitable.
MP: This raises the bar for the brand. You have to walk the walk and not just make this change with a given product as an interesting brand modification or evolution. How is the company and the brand representing those values that you're expressing, at least within the product?
Kumar: The good thing is, P&G has had a history of having very high-purpose, values and principles. So I think it will be a balance of taking some of that plus tying it into some of the stuff that we are leading as Native. So, for example, what kind of workspace are we having for our people? That's something that actually, surprisingly, a lot of consumers care about. Are you having fair representation of different kinds of races in your office? Do you stand for certain causes? And not just being silent when certain incidents happen.
There will be times when we make mistakes. But I think the key is that we learned from it, and then we just keep moving forward. But I don't think the higher bar is something that we are afraid of.
MP: P&G had bought this company at a very early stage. Not just because it liked the deodorant, but because of the D2C channel and infrastructure that it wanted to use. What is P&G learning from you now?
Kumar: The key learnings continue to be D2C as now, because the corporate marketing has not been proven yet. It's something that we are embarking on as a mission right now for the next two, three years: the D2C chassis and how it runs.
That's the first key learning that P&G's taking from that. In terms of how do we do prospecting? How do we do retargeting? So it's a lot of looking under the hood.
A lot of P&G brands are now getting on the D2C bandwagon because they see the advantage of reaching consumers directly: the feedback that they get, the brand experience. But there are also downsides, like for example cost. Customer service, which you need to be really good at. You can’t just throw up a site and just expect to sell.
We have folks from Native sharing those learnings, including myself, back to P&G and seeing how can we can accelerate the path to D2C. I think they're all eyes to see if the plastic free and our cause marketing can be a powerful engine for growth in the future.
MP: Brands have always talked about their “relationship” to consumers. But a lot of D2C brands show that they should be careful what they wish for. A real relationship means you have a responsibility to those users. You're going to hear from them about everything. Plus, you're going to need customer service that really is up to this, and can scale if you want to bring this beyond the usual D2C route.
Kumar: Absolutely. And you don't see it from the outside, because it's just a site that people go and play on and buy from. It's a lot more than that, as you look under the hood. If you don't have great customer service, that's it. You're in trouble.