Behind Pattern Brands’ marketplace expansion strategy
Pattern Brands is working to remain true to its direct-to-consumer roots while also expanding to marketplaces like Amazon, Target Plus and Walmart.
The home goods roll-up company, which launched in 2019 as an extension of the branding agency Gin Lane, started out with the online-only brands Equal Parts, which carries pots and pans, and Open Spaces, which sells home organization tools. Over the years, Pattern Brands has changed its strategy from launching brands to acquiring them. Adding more brands meant working to grow them as much as possible and exploring all avenues, including omnichannel expansion.
Today, Pattern Brands has seven companies in its portfolio: Miracle, Onsen, Poketo, Gir, Open Spaces, Letterfolk and Yield. The brands cover a variety of home goods areas, from cooking utensils to bedding and towels to glassware. Most of its portfolio remains DTC-heavy, with “20% max” coming from Amazon, co-founder and chief business officer Suze Dowling said at Digiday Media’s Retail Media Strategies Summit held last Thursday in New York City. Gir, however, is an exception and has a “pretty significant” business on Amazon, per Dowling.
At last week’s event, Dowling spoke about the portfolio company’s approach to marketplace expansion, brand identity and customer acquisition.
Pattern Brands has traditionally focused on its DTC channel because it “really believes in the power of owning customer data,” Dowling explained. At the same time, she said, consumers don’t always turn to DTC to buy single units like a $12 spatula. They may want the option to shop on Amazon or at another retailer where they’re already placing an existing order. “Our role is to meet them, not for them to have to come and find us,” Dowling said.
Now, Pattern is rethinking its assortment and marketing to better fit digital marketplaces. With that in mind, Pattern Brands recently launched a collection called “Gir Essentials” on Amazon. Its five-piece set, which includes a ladle and spatula, retails for $24.99, the price of two to three individual products. Pattern Brands spent the last year re-engineering the Gir products to allow them to cost less. “For Amazon, there’s a subset of customers that I [wasn’t] meeting, purely based on my price point, and I want[ed] to be able to meet them,” Dowling said.
Pattern Brands also brought the Gir “Essentials” to Costco Canada. But expanding to other marketplaces didn’t mean giving up on DTC. Pattern Brands has instead found ways to differentiate between the two. For example, Gir keeps certain colors and sets exclusive to DTC. On Amazon, it has a “much tighter assortment,” Dowling said.
“This is not necessarily something where I want to be optimizing [Amazon] listings to get down to the basting brush,” she explained. “I really want to be looking at what 20% of my SKUs that I know are going to drive 80% of the volume in my sales.”
Pattern Brands is also bringing its brands to Walmart Marketplace and Target Plus, albeit more slowly. Target already sells 12 Poketo products, including notebooks and wall planners, as well as Letterfolk’s tile mat and tile set.
This comes as more DTC-native brands are expanding to marketplaces to reach new customers. Harry’s, the razor brand, now operates an Amazon storefront, as does the cooking brand Caraway. Ruggable, a DTC machine-washable rug company, is featured on Target Plus, which is invite-only. In June, Target Plus teamed up with Shopify to bring Shopify brands onto the platform.
Ultimately, there are three questions that brands should ask themselves when deciding whether to join a marketplace, Dowling said: “Is this what my customer needs? What is the assortment? And can I operationally do this?”
“You don’t need to be everywhere all at once,” she added. “Keep with the basics.”