New DTC toolkit   //   March 11, 2020

High-end home DTC brands are seeing a coronavirus lift

If you walk into a Costco today, it will likely be difficult to get your hands on a roll of toilet paper — let alone a case of it. Online, however, there are numerous choices of high-end DTC bathroom tissue brands, many of which are seeing a huge sales influx.

The brand Who Gives A Crap sold out of product last week; No.2, another online toilet paper business, saw sales jump 225% since March 1st. And Peach, which makes high-end, more eco-friendly bath tissue saw new customers increase by 279% over the last two weeks compared to the two weeks prior. Peach, in fact, has seen a big shift in big orders, with 24-packs of its toilet papers increasing from 22% of its sales mix to nearly 50%.

The message is clear: People are trying to stock up on supplies. “I’m happy people are turning to Peach as a solution to get [these products] deliver to their door,” said CEO Aaron Doades. “From a new customer acquisition standpoint,” he went on, “nearly all of that is coming from organic search.”

As COVID-19’s rise and spread continues to dominate headlines and mindshare, household essential items have been flying off the shelves. The DTC hand sanitizer brand Touchland, for example, is sold out of its product and has amassed a waitlist exceeding 10,000 orders; one popular online cleaning product brand sold on Amazon, which wished to remain anonymous, also sold out of its products and has decided to use this opportunity to boost sales on its own website.

But these aren’t the only products seeing a boost. Many brands in the DTC space offering higher-end products related to household essentials or health are also seeing increased sales and interest over the last few weeks. The natural remedy brand Hilma, for example, has seen a boost in customer interest for its immune support products. The product has been around for a little more than month; at first, people mostly bought starter packs to test out Hilma’s offerings. Now, according to co-founder and chief brand officer Lily Galef, “we have seen that really shift towards stock up behavior — particularly with the immune support product.”

Much of what’s leading to this boost in sales, said Galef, is a widespread and recent shift toward health-related content. “We’ve seen a lot of content creators and influencers, who we seeded the product to, really talking about it,” she said. “They are probably trying to talk about what’s relevant.”

The online vitamin company Wellpath has also observed a change in sales velocity. “Broadly defined, we are seeing a lift across the portfolio,” said founder Colin Darretta. Like Hilma, Wellpath’s biggest winners are the ones aimed at immune health, as well as gummy vitamins. Darretta added that sales of multiple bottles “are up somewhat.”

All of these brands, faced with an influx of interest from curious — potentially vulnerable — customers, must adeptly figure out how to ride this wave. Marketing could be both a firehose and a landmine. Platforms like Amazon, for example, are banning any keyword tagging related to the coronavirus — are banning advertisers that make any claims about the growing illness. But since these companies are seeing more sales, it means more customers are potentially interested.

According to Galef, the plan is to invest in educational marketing content. “We are really just trying to educate our audience, and emerge as a clear voice that they can rely on for information.” This means publishing blog posts on Hilma’s website, as well as posting to social channels like Instagram while seeding product to more influencers.

Wellpath, conversely, isn’t stepping on the gas pedal for fear that it will run out of stock. “We are being pretty judicious with how we plan our supply chain,” said Darretta. “We might have put more marketing dollars into it if we had more inventory at hand,” he went on, “but we don’t want to sell out too fast.”

Peach’s Doades sees the marketing conundrum as almost philosophical. “We haven’t changed our advertising strategy as a result of coronavirus,” he said. “I don’t want to say it’s a moral or ethical decision, but we don’t want to stoke fear about this,” he went on. “It feels almost wrong… to capitalize on it.” That said, the company may be spending slightly more, since Facebook and Instagram ads seem to have gone up by about 10%.

While these brands are seeing boosts now, they are all generally preparing for things to change once again. “Our thinking,” said Darretta, is that “this great short-term boost will continue for a little while.” But, in a few months, there will likely be “a return to normalcy.”

For a subscription service like Peach, that will mean higher churn once people feel comfortable to go back to Costco. “We’ll probably see a higher rate of cancellation with folks who are customers in the last two weeks,” said Doades. He then, of course, added, “I hope that’s not the case.”