How KiwiCo is leaning on retail expansion to grow holiday sales

“We’re really excited about our retail efforts,” KiwiCo founder and CEO Sandra Oh Lin said on this week’s Modern Retail Podcast.

Lin launched the children’s education product company in 2011. KiwiCo sells themed packages — what it calls crates — to kids every month based on certain subjects. There are science crates, geography crates, art crates and more. It recently launched a revamped version of its subscription service, called Clubs, that is now more on interests.

Over the years, the company has expanded its product lines to encompass more ages and topics. In 2014, it expanded beyond preschool-aged crates into three additional age bands. “You can really draw a line to our first month of profitability from that particular set of initiatives that we launched,” Lin said.

Now, KiwiCo offers products for kids age between the ages of 0 and 16, has sold over 50 million products and is profitable.

Lin spoke about why subscription was right for her type of product. “I think the key thing for us is that we have been very thoughtful about what makes sense for those customers,” she said. “And the subscription model happens to have worked really well.”

Now, the company is focused on expanding beyond that. Earlier this year it launched in both Target and Barnes & Noble. “I think there’s a lot of different opportunities that are coming up thanks to the partnership with these with these retailers,” Lin said.

Specifically, she sees these retailers helping grow holiday sales. “it’s been really great because we’ve seen a real willingness from these retailers to work with us and to partner with us during the holidays,” she said.

Here are a few highlights from the conversation, which have been lightly edited for clarity.

Why subscriptions work for KiwiCo
“I really do think it comes down to what makes sense for the consumer. And so we have the young consumer, our little consumers, and we have our big consumers, who we also call the grownup assistants. So the parents or the caretakers. And I think the key thing for us is that we have been very thoughtful about what makes sense for those customers. And the subscription model happens to have worked really well. I think if you come at it as: I want to shoehorn this model into this particular product or industry, I think that’s where it becomes really tricky. Because inherently, does it make sense for that consumer?”

Retail helping boost holiday sales
“We’re really excited about our retail efforts. I don’t think we talked about them very much yet, but we entered into a partnership with Target and with Barnes & Noble this past summer… and we’re super excited about what that means for the customer… And when we think about what we’ve done so far as a direct-to-consumer business — and we think about the different use cases that our community is looking for, let’s say it’s a last-minute gift or a weekend project — as much as they might love kiwico.com, there’s only so much that we can do there. And so it really opens up additional use cases. And, additionally for us, it opens up the opportunity to increase brand awareness. And so we’ve been really excited about that. And with the holidays coming up, it’s been really great because we’ve seen a real willingness from these retailers to work with us and to partner with us during the holidays.”

On marketing to new Gen Z parents
“One of the things that we certainly have noticed is that [while] I think authenticity is always important as a brand, I would say it is heightened. I think, especially with Gen Z, they can tell if something is authentic or not. You almost don’t want too much polish, right? It needs to be direct, be very very true and authentic to the brand. And I think that’s something that we’ve really noticed like, in terms of: ‘Gosh, what kind of creative will actually resonate with that audience?’ It really needs to be that. The other thing is that we are looking at channels where we can actually cultivate that audience and that customer. And so we’ve started to invest more in content, for example, even organic content, on TikTok and those types of channels as well.”