We know you’re busy. But we also know that you like to stay up-to-date on what’s hot in the CPG industry. As the holiday cheer rises and emails slow, take a few moments to check out all the articles we’ve published this year and beyond. E-commerce trends by category In 2017, we focused on e-commerce trends and how selling online has impacted nearly every sector of retail. We even compiled our findings into a matrix with predicted growth and insights based on extensive research. If you missed it, you can find all the blog posts here and the matrix here. Direct-to-consumer trends Have you noticed a spike in D2C companies? Startups are selling everything from mattresses to prescription eyeglasses to makeup to razors directly to the consumer. We wanted to know more about this model and analyze the pros and cons of a manufacturer selling this way. Here are some of our findings:

• Direct-to-consumer is on the rise: Here’s why
• All the channels a brand can use to sell directly to the consumer
• How this company sells produce D2C and combats food waste at the same time
• How subscription boxes are winning the D2C retail game

More industry insights This past year saw more store closings. We looked into the real reason so many brick-and-mortar stores have shuttered and we specifically focused on the closing of Toys “R” Us. Finally, we know that everyone is trying to compete with Amazon. It may seem like a lost cause, but check out this post before you give up. It’s the story of how QVC is putting up a fight to compete with the shopping giant. What do you want to read in 2019? We’ve enjoyed digging into e-commerce and D2C to bring you relevant industry insights. What do you want to know more about? What information would help you grow in 2019? Drop us a line and let us know. Your idea may just show up in a future blog post! Written by Kim Kelly Consulting

Millennials are known for their fondness of e-commerce, quick and free delivery, and extreme customization. While Millennials are in part to blame for the success of e-commerce sites, they have also had another staggering effect on retail: they’ve helped grow the subscription service segment. According to research conducted by Vantiv and Socratic Technologies, 92 percent of millennials pay for one or more subscriptions. While gyms, magazines and streaming TV services rank high on the list, many D2C companies are also winning the hearts of millennials. But not every company can experience the success of Dollar Shave Club. In fact, dozens of subscription companies have folded in recent years. Here are three reasons that subscriptions are popular (and successful) amongst millennials:

1. Ease of fulfillment Most millennials are young professionals and just hitting stride in their careers. This means they’re busy but also have more disposable income than generation Z. Combine these factors with the ease of online shopping and you have a generation that’s eager to purchase subscriptions. That being said, subscription companies must allow the consumer some control. In a study conducted by Fluent, researchers found that while millennials were more likely to have subscription boxes, they also prefered an option to skip a month. "Many men and women do not want a recurring subscription; allowing customers to skip months is a great way to help people feel in control and not inundated with products they might not have time to use,” the authors wrote.
2. Reduced Prices A main advantage to the consumer is reduced prices for subscription boxes. Just like traditional direct-to-consumer companies, most subscription boxes can offer lower prices because they aren’t using a middle man to reach the customer. Furthermore, sample boxes such as Ipsy (beauty products) are able to offer $10 boxes that contain a value of $50 in products. One way Ipsy has done this is to establish themselves as trendsetters in the beauty industry. Through a program that supports and promotes beauty bloggers, Ipsy is at the forefront of what’s hot in cosmetics. Brands actually pay Ipsy to put samples in their “glam bags.” This acts as a form of advertising for the brand and also ensures further exposure from the beauty bloggers. Consumers win by paying a reduced price for premium samples as well as full-sized products.
3. Customization Possibly the most important aspect of subscription boxes is customization. Many of the companies that have folded were unable to keep up with individualized demands. Millennials want the ease of subscriptions, but they also want something suited to their unique needs. Companies such as Stitch Fix offer completely custom and curated boxes. Again, Ipsy excels at this by collecting customer data and using it to customize boxes each month. Speaking of their customization, Marcelo Caberos tells Fast Company: “From the very beginning, we wanted Ipsy to be a personalized beauty service.” He adds, “but this proved much harder than we expected. It’s a difficult mathematical challenge, but also one that involves knowing about each individual beauty product.” The way that Ipsy solved this challenge was to hire a former Netflix researcher to head a team on personalization. This team takes all the data Ipsy collects on their 2.5 million customers and matches it to products. The result is that Ipsy leads the pack in number of subscribers.

While you may not have 2.5 million customers just yet, using your data to create value for consumers is key to compete in today’s retail environment. Whether you’re offering a subscription or just a really great product, you need to find the right formula to deliver a personalized experience and relevant content to your customers. This will take a lot of research and data analysis, but your bottom line will thank you. If you’re ready to speak with someone about how Ironbridge can help you make sense of your customer data, click here. Written by Kim Kelly Consulting

Selling directly to the consumer has been a boon to industries such as beauty, food storage and even mattresses. But food is particularly difficult to sell using a D2C model. Consumers buy a variety of foods at a market and are unlikely to start purchasing cases of their favorite chips directly from a manufacturer. Furthermore, shipping just one bag of chips is cost prohibitive. Finally, food is perishable and difficult to keep stocked for long periods of time, awaiting a consumer to click “buy” on their phone. These reasons add up to a slightly antiquated business model for the grocery industry. Read more about this in a blog post we published last year. One startup plans to change the grocery industry and tap into a pseudo D2C business model as well. Imperfect Produce buys the “ugly” or surplus produce that farmers would have otherwise left in their fields. The company then ships subscription boxes of the produce to consumers looking for cheap alternatives to the reddest apples at their local supermarket. "We work directly with the farms and we're buying directly from farms," said Reilly Brock, a content manager at Imperfect Produce. According to Brock, Imperfect focuses on “the ugly and surplus produce because there isn't a market for a lot of it. Despite the fact that appearance doesn't impact flavor or taste or nutrition at all, most grocery stores won't buy ‘ugly’ produce." Imperfect Produce’s primary focus is curbing food waste. Founder and CEO Ben Simon has been concerned about food waste since his college days. While at the University of Maryland he started the Food Recovery Network, a nonprofit focused on reducing food waste in college cafeterias. According to the company’s website, “More than 20% of the fruits and vegetables grown in America never make it off the farm because they aren’t perfect enough for grocery store standards.” Imperfect Produce’s strategy is novel, but not everyone agrees that it’s perfect. Some worry that this national startup will cut into the profits by farms and co-ops who offer community supported agriculture (CSA) programs. In an article published on newfoodeconomy.org, a nonprofit called Phat Beets Produce writes, “Three years later and with a 30-percent drop in customers at our Beet Box CSA, we realized that we were being out-competed by a startup with a glitzy marketing campaign and venture-capital funding.” The article complains that this decline in business has led to cutting back on charitable outreach such as a free farmstand run by the non-profit in an underserved area. It goes on to criticize, “The company has helped to create a market for the “waste” created by industrial agribusiness, selling it to conscious (rather than needy) buyers by branding it as a form of environmental activism.” When Ironbridge spoke with Imperfect Produce, they acknowledged that they’ve created a market for previously unsellable produce, but that doesn’t mean they’re now competing with food banks. Brock also acknowledged that farms need to be large enough to sell to Imperfect Produce. “Even after food bank donations, there's billions of pounds of produce that they can't move,” Brock said of the farms they work with. He continued, “They also don't have a lot of incentive to pick a lot of this stuff…it's cheaper to leave it in the field. So we offer an outlet for farmers.” Imperfect Produce can’t work with every small farm due to logistics. Moving produce is extremely time-sensitive and more about logistics than anything else, Brock explained. As for food banks, California’s food banks can only accept so much produce each year. With the majority of U.S. farms operating in California, that still leaves a huge surplus that would otherwise rot in the fields. Citing the NRDC, Brock says that the U.S. generates about 6 billion pounds of food waste each year. “It's a multi-billion pound problem and right now we have a million-pound solution,” Brock says. Imperfect Produce’s goals revolve around chipping away at the food waste problem in the U.S. True, a traditional CSA program is a purer form of D2C selling. But no CSA could achieve the scale that Imperfect Produce has in just three years. They currently operate in eight cities and have plans for expansion. In those three years, they’ve moved 30 million pounds of ugly or surplus produce. “We want to be a voice for change and positive reform in our food system,” Brock says, adding, “but we realize that we’re not the only solution.” In the history of the grocery industry, no other company has made such strides in delivering a perishable commodity to consumers. Between the popularity of subscription boxes and the technology available, the market is ripe for opportunity in this area. Stay tuned for more on D2C sales. Written by Kim Kelly Consulting