McCormick & BuzzFeed’s DTC Team Up; Casper Seeking an IPO

McCormick BuzzFeed DTC

DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: McCormick & BuzzFeed’s DTC team up; Casper seeking an IPO; Diversity & inclusion drive DTC engagement.

McCormick & BuzzFeed’s DTC team up

Seasoning manufacturer McCormick has partnered with BuzzFeed’s food publication, Tasty, to co-develop Tasty-branded seasonings.

For BuzzFeed, selling co-branded products is a revenue opportunity that supplements its ad business. For McCormick, which usually sells in supermarkets, it’s an opportunity to reach millennial chefs and to directly get both customer data and distribution – usually the privilege of DTC companies. The spices will sell online after their launch late March, followed by a global retail rollout in April.

Going direct yields data around engagement, conversion and sales, which McCormick hopes will support its future retail and DTC projects. Before the product launched, McCormick used BuzzFeed’s knowledge of what recipes and types of flavours its young cooks prefer.

BuzzFeed will also target messaging based on the preferences of its Tasty audience. Someone who watched videos of spicy recipes, for instance, will get different messaging or content from someone who likes tangy recipes.

The direct-to-consumer aspect of the launch also allows BuzzFeed to use e-commerce tools – like the Instagram “buy” buttons – and measure audience responses to the product. The data won’t be used to tweak the blends themselves, which are market-ready.

Casper seeking an IPO

Direct-to-consumer mattress business Casper  has secured a USD$100m Series D investment, as it looks for underwriters to pen a potential IPO. The New York-based startup neared unicorn status with a USD$920m valuation set during its 2017 Series C.

The fresh infusion of capital values Casper at USD$1.1bn. Founded in 2014, the New York business will use the latest investment to expand overseas and open additional brick-and-mortar stores. Competing with other well-funded startups in the business of sleep, Casper has taken to physical retail to augment its following.

Casper are operating in a booming space. Crunchbase reported back in July that, of the USD$15bn mattress market, online sales of mattresses reportedly doubled from 5% in 2016 to 10% in 2017.

Casper’s revenue topped USD$400m in 2018, however, the company isn’t yet profitable, with losses reaching USD$64m last year, though it expects to become profitable in 2019, with revenue expected to reach USD$556m this year.

Diversity & inclusion drive DTC engagement

Diversity and inclusion are driving women in the UK and US to engage with direct-to-consumer beauty brands, according to research by Yotpo.

More than 7 in 10 women say diversity impacts buying decision. Women prefer to buy from brands whose ads feature a variety of ethnicities (75%) and show women of different body types (84%).

When it comes to influencing women to shop from a specific beauty brand, 45% say customer reviews are most influential, with referrals from friends a close second at 45%. Both outpace TV commercials (18%), digital and social media ads (10%), and offline ads (7%), combined.

The research also shows that a brand’s email campaigns (17%), social media accounts (14%), and product packaging (15%) have more influence on a woman’s decision to buy, than endorsements from influencers and celebrities (12%).

More UK millennials (52%) buy directly from a beauty brand than their U.S. counterparts (39%) because the prices are better. Three-fifths (60%) of millennials in the UK prefer buying from a brand’s eCommerce site, while 61% of Americans prefer to buy from a physical location or pop-up shop.