The Marketplace Boom   //   May 16, 2023

Inside Brooklinen’s curated marketplace expansion strategy

Brooklinen is looking to sell its products through more marketplaces to get in front of new customers, with a particular focus on wedding registries.

The direct-to-consumer brand known, best for its luxury bedding, has partnered with two new registry sites: Zola and The Knot, in response to requests from customers to list their products as preferred wedding gifts. These channels, the brand said, have grown 150% year-over-year in the last two years. Brooklinen also has a small but growing partnership with Bespoke Post, a niche subscription box for men that has more than 300,000 subscribers.

For Brooklinen, the marketplace expansion is part of the company’s broader omnichannel strategy, part of which is selling through physical stores in addition to its new wholesale store built on Shopify. Nicolas Lukac, director of emerging channels at Brooklinen told Modern Retail that “marketplaces is the way to get in front of new customers” because of how the fees compares to other marketing expenses. Lukac said, for instance, the percentage of fee its pays The Knot can sometimes be lower than referral fees and other types of marketing expenses the brand would normally undertake to acquire new customers.

“A lot of the time, you don’t make multiple purchases on The Knot or Zola, you get your products, then you come back to us. For us, it’s finding unique marketplaces where the first purchase might be on that marketplace. But the second purchase would be from us, because they love the product so much,” Lukac explained.

“The wedding business for us, in particular, has just shown to resonate really well with our customers knowing that our AOV [average order value] can sometimes be on the higher side. So, when you add it to your registry, you actually invite people that you love and that you know who are invited to your wedding to purchase that for you at a new stage in life, and that makes it really valuable channel for us,” he said.

Part of what’s driving Brooklinen’s decision to expand its availability through marketplaces are the results it has seen through Bespoke Post. Brooklinen has seen a 70% increase in the number of orders placed through the channel in the last two years, albeit from a modest base. Now, the company said it is figuring out ways to expand that, and sell through the Bespoke Post boxes. In the past, Brooklinen sold its goods directly from the Bespoke Post website.

DTC brands often have differing marketplace strategies. Some sell on big platforms like Amazon, and other have opted for more curated options. Brooklinen has also been selling through Amazon for the last four years, in addition to the curated marketplaces the company works with.

There’s also been an increase in the number of startups looking to launch new marketplaces that cater to DTC startups. However, they have run into challenges in the past year, and many of them are pivoting their models. For instance, The Verticale recently rebranded as a social commerce channel from being a pure marketplace, due to the lack of sufficient demand from customers to use it as a platform for transactions. Hive Brands, last week, said it has a new added focus to operate as a DTC brand accelerator. Former DTC marketplace The Folklore shifted to online wholesale last year.

According to Dave Marcotte, senior vice president of global retail at Kantar, selling on a DTC platform is typically the initial step for brands, but it’s not a long-term strategy. A successful marketplace would be one that has DTC brands, but also bigger, well-known brands, because that’s what anchors a mixture of customers, said Marcotte.

At a high level, most brands have changed their retail and commerce strategies to find new ways to acquire customers and convert them. Most brands can’t stay afloat online only; relying on Facebook ads for growth is no longer sustainable. As such, a commerce toolkit has come to the forefront, with brands and retailers making measured experiments about the best way to find new customers and convert them. 

According to Brooklinen’s exit survey findings, more and more customers mention online stores like Zola, The Knot and Amazon as the source of how they heard about the brand. “We have some type of data to know that they might have purchased there once, or that’s where they heard about us and got their first order, but their second, third fourth order is on Brooklinen. And it happened because of where they first purchased us,” explained Lukac.

While Zola and The Knot cater to a very specific wedding-focused customer, Bespoke Post presented a new opportunity. Lukac said Brooklinen felt the platform has a “unique customer” that is exploring new brands, is willing to spend a certain amount to explore new products. “We view this like a place where customers can discover our brand, and then make true purchases on us, you know, after the fact,” he added.

“And we haven’t been featured in any of their boxes necessarily yet. We’re just sold on their site. But I think that’s where we wanted to test how their customers reacted to us, before we had a conversation around sending it out to their larger customer base,” he added.

In the case of a downturn, Brooklinen said it could explore potential opportunities with big-box retailers like Walmart and Target. “It will depend on reevaluating where customers shop then. But I think that’s a natural next step for an omnichannel brand to look at these other very large channels,” said Lukac.

Correction: Bespoke Post now has more than 300,000 subscribers, not the 150,000 that was originally stated in the story.