Latest / Leaders on Shopify with John Readman / How Smol scaled to £45M and why they left Shopify to do it

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How Smol scaled to £45M and why they left Shopify to do it · Leaders on Shopify with John Readman

• In-person participant 1: So, welcome back to Leaders on Shopify. I'm Readman the host of Leaders on and I'm really pleased to say we've got Campbell, Chief Growth Officer of Smol. Thank you for joining us, Neil. John Readman: back to leaders on Shopify. I'm John Readman the host of leaders on Shopify and I'm really pleased to we've got Neil Campbell Chief Growth Officer of Smol. Thank you for joining us now Yeah, good to see you so For those who don't know you and don't know Smol could you do a quick introduction of yourself a bit about your background? Neil Campbell: Thanks John, good to see you again. In-person participant 1: Yeah, good to see you. for those who don't know you and don't know Smol, could you do a quick introduction of yourself, a bit about your background and then get into who are Smol and how big Smol John Readman: get into who are Smol and how big Smol. Neil Campbell: so I the chief growth officer at Smol which means that I Look after all things to do with sort of acquisition. So getting new customers in the door ⁓ anything do with sort customer engagement So once have kind of customers How they interact us and how we make them kind of more valuable and that is all kind of underpinned by ⁓ Data function a analysis function that sort of really brings customer insight about you know, what behaviors do we actually want to encourage and therefore a little bit of the sort of product design process of, what do we actually commercially want the offers on the site be and the kind of product management to be. For the last few years, I've sort of always worked in direct consumer subscription sort of style businesses. So I've been at Smol for the last four years. Prior to that, I worked at Moneybox, who are sort of a fintech kind of wealth management app. Very kind of similar in the kind of customer dynamics in that you're signing up a customer and then you're kind of managing that relationship with them over time. Prior to Moneybox, I worked at Naked Wines. And again, Naked Wines are very much a pioneer in the world of D to T subscription. Obviously a very specialist service, but again, you are contributing money and then you're running down that balance to buy wine from independent producers. And so yeah, for the last few years, I've always worked in that series B, series C size business direct to consumer subscription. If you go further back, I've done various other startups and things. I worked at Amazon for four years in the UK. I used to run software and then small consumer electronics for Amazon. John Readman: yeah, you're ideally placed to help with DTC brand scale. I'm a happy customer of Naked Wine In-person participant 1: yeah, so you're ideally placed to help with DTC brand scale. I'm a happy customer of Naked Wine been for a long time, great brand, great product. And for those who don't really know Smol how would you describe Smol in like a couple of sentences and why should they sign up? John Readman: And for those who don't really know SMOL, how would you describe SMOL in like a couple of sentences and why should they sign up? Neil Campbell: Yeah, so Smol is a disruptive ⁓ consumer home cleaning brand. So we supply cleaning products to people directly to their homes. So you're bypassing supermarkets, post it out directly. And those products are designed to disrupt the cleaning industry and make it a lot more planet friendly, make it a lot more convenient, ⁓ and kind provide those kind of products in a way that is having to make the trade-off. So when we entered the market, there was a lot of eco-friendly products which cost double or three times as much. And the real thinking behind Smol is that that should be a very easy switch to that. And so the products ⁓ firstly we're on... ⁓ laundry capsules and dishwasher tabs, but then a whole range of products beyond that, so cleaning sprays and fabric conditioner and stain gels and washing up liquid. The product range has really expanded over the years. within that, we're to be more sustainable by being... a lot less plastic, a lot less unnecessary chemicals, a lot less water being shipped around the country, which obviously leads to lots of CO2 savings, and then lot more support of communities. So we run lots of schemes where you can donate a wash and help support hygiene property initiatives. John Readman: So it's not just a highly growing successful business, it's also doing some good for the planet, which is great. In-person participant 1: So it's not just a highly growing successful business, it's also doing some good for the planet, which is great. Neil Campbell: Yes, planet and communities and for people's kind of personal health as well. It's really a kind of company that's designed with a kind of impact at the core of its mission. And that sort of shapes a lot of what we do and how we develop the products. John Readman: Excellent. what we're here to talk about today is your journey on Shopify and then off Shopify and sort of how D2C brands face challenges, especially I think with the subscription models, because you're purely a subscription model. So it'd be really useful if we go back to the sort of early days. Where did Shopify fit in? How did it sort of work? And I suppose also linking in there what In-person participant 1: Yeah, no. Excellent. you what we're here to talk about today is your journey on Shopify and then off Shopify and sort of how D2C brands face challenges, especially I think with the subscription models because you're purely a subscription model. So it'd be really useful if we go back to the sort of early days. Where did Shopify fit in? How did it sort of work? And I suppose also linking in there what other apps were essential for you to build your John Readman: essential for you to build your business. In-person participant 1: business. Neil Campbell: Yeah. And so, you know, I've been at Smol for four years. itself has been running for about eight years. And some of the early journeys started before I was there. But ⁓ essentially, a lot of companies trying to start up sort of e-commerce kind of businesses, Shopify is very obvious choice. ⁓ It's just absolutely kind of brilliant kind of platform. It's so easy to get started. It's very customizable. ⁓ If you any kind of special use cases, the App Store is amazing in terms of, you know, pulling out those use cases. and giving the kind of functionality that you want. and it's a real community. know, obviously, in terms of developers and expertise and everything, it's a really kind of great platform. For Smol, we are 100 % subscription focused. And so every kind of product that we sell is designed to get customers on subscription because the entire idea of it is your cleaning products and your home cleaning needs, they're very regular usage. you know, might put my kind of dishwasher on once a day because I've got loads of kids and someone else might be different to that. But within our own usage, it's very regular. And therefore it's very naturally kind of In-person participant 1: Yeah, yeah. Neil Campbell: you a product which suits subscription. And that, in our of development of the kind of product, we use Shopify initially because it's an e-commerce engine all those things that I said. ⁓ core for us was actually the recharge app. So recharge being a sort of Shopify kind of plugin that subscriptions very well. it comes with all that functionality. allows you, firstly, to set up a subscription, ⁓ secondly, to sort of move the dates and ⁓ the cadence and skip a delivery and things like that. And so for ⁓ we very much, yes, we're on Shopify as a platform, but the key app for us from the start ⁓ was recharge. And one of the reasons that we are very, very kind of subscishion part of it is the natural cadence of the product that I kind of talked about and usage of the product. but also it allows us to kind of run a business where we can really think about the acquisition costs of the customer and then how that kind of turns into a lifetime value. And if you're on subscription for these products, then that lifetime value becomes a lot more predictable and a lot more kind of certain. And so, you know, for us, it actually, and everything's kind of related because for example, In-person participant 1: Yeah. Neil Campbell: we acquire customers and one of our great things that we built a lot of the kind of business on was this idea of a free trial. So essentially if you come to us and you want to try our laundry capsules, a lot of people don't know how do they smell, that's very kind of personal to people, do they actually clean, you're saying it's planet friendly, I've had lots of experiences with stuff that cleans in the past but it doesn't clean very well and so the cornerstone of our business was free trial and essentially what it is is that our laundry capsules and we do this across lots of products but I'll talk about laundry capsules. come in a 24 pack, but we do a nine capsule pack that you can get for free and all you do is pay the postage. And so it's a very kind of compelling offer for that. But obviously, as you can imagine, that is something where if we just give that out with no commitment, then the economics of that would be very hard to kind of maintain. But in a world in which everyone who takes that free trial, unless they decide to cancel and decide that the products aren't for them is moved on a subscription, then we can make those sort of economics work. And because that was the sort of acquisition offer and because that's how we kind of wanted to run the business and it suited the products, it really meant for us 100 % subscription and therefore when we designed the e-commerce platform, meant Shopify but also Recharge as a kind of key partner for that. In-person participant 1: Yeah, I'm that you only put your dishwasher on once a day with children. ⁓ That's biggest takeout I've got from ⁓ that. like, wow, you must have a very big dishwasher or very organised at stacking it. but if we sort of, how big did you sort of get ⁓ on Shopify recharge? ⁓ And what the sort of telltale signs where you thought, hang on. John Readman: And I'm that you only put your dishwasher on once a day with children ⁓ That's biggest takeout I've got from that. It's just like wow You must have a very big dishwasher or very organized at stacking it. But if sort of how big did you sort of get ⁓ on Shopify and recharge and what were the of telltale signs where you thought hang on Neil Campbell: Hahaha You In-person participant 1: And were these sort of commercial decisions from platforms, were these technical decisions, were they, what was the sort of points and size where you sort of thought, hang on, this might not get us to 100 million. John Readman: And were these sort of commercial decisions from platforms, were these technical decisions, were they, what was the sort of point and size where you sort of thought, hang on, this might not get us to 100 million? Neil Campbell: Yeah, let's talk about the evolution of that because you're sitting there with your sign behind you that says leaders on Shopify and I'm like we're not on Shopify. In-person participant 1: Yeah. John Readman: interesting for people going through these journeys ⁓ and I suppose yours is bit of a unique use case is your subscription only, you're not selling individuals. So ⁓ this will be ⁓ super to other subscription but also ⁓ there might be commonalities of at what point does an out of box solution, there's an e-commerce product not fit my business. But yeah, if you share your sort of evolution of how it all. ⁓ In-person participant 1: interesting for people going through these journeys ⁓ and I suppose yours a bit of a unique use case is your subscription only you're not selling individuals so ⁓ this will be ⁓ interesting to other only but also there might be commonalities of like at what point does an out-of-the-box solution there's an e-commerce product not fit my business but yeah if you share your sort of evolution of how it all evolved and Neil Campbell: Yeah, absolutely. And if you had to start with where we are now, which is that we're essentially a headless kind of website that we've kind of developed ourselves. But we still use recharge. So we still use recharge almost independently of Shopify as our kind of subscription engine. And the kind of questions, well, how did we kind of get there? And so for us, it was really a case of the development of the product. the first thing you got to remember is that sell about 15 I think it is, of different sort of products and you know, but the really core of what we do are laundry capsules, dishwasher tabs. surface sprays, they probably count for about 80 % of our kind of revenue and a large proportion of our kind of customer sign ups. And the reason why those products are really important to us is that they are very regular usage. you know, people use them very kind of consistently. They're using them every day and therefore they're great subscription products because they build up a habit. You know, if I take something different, one of our products is stain gel, for example, we do do it on the subscription, but it's not a great acquisition. product because I send you bottle of Stain gel and you think, well, it's going to take me six months to get through that and therefore it's not ⁓ And why that's important is ⁓ when we sign up customers and we're trying to acquire them onto the site, It's a case of, well, I want to get them hooked on a product, which is a habit forming kind of product. And so unlike a lot of websites, and Shopify is set up to support this, obviously, obviously the front of the site has every single product that you can possibly buy from that website, in the case of Amazon, millions, it has every single product that you can buy, and you build a basket, and then you check out, and then maybe as part of that checkout process, you sort of say, ⁓ maybe I will subscribe to some of these things. Ours is actually designed differently. It's really designed to say, let's get you onto a core subscription. And on the product pages, on the product detail pages, there's no option to buy one off. is purely, you're taking this as a trial or as a starter kit. Some of our products, for example, the sprays, we need to send you a bottle and a spray because that's the bottle that you keep for life. So it's really a starter one that then becomes a subscription and the subscription is the tabs. so what that means is for us, the site is a little bit upside down in the sense that the front end of the website, so the one that a new customer who's never been to Smol before, only sees five or six products. those are the ones that we believe are, yes, I would subscribe to those, are key habit kind of products, and they're ones that I think I can ⁓ offer very compelling offer on to start off with. ⁓ Once a then becomes a subscriber and has sort of used the product for a while, the actual... main shopping portal is in the of back end, is in the sort of my account section where you're gonna go, oh, here's all these other subscriptions that you can get from Smol. And so that sort of setup of the website, so because we're subscription focused, because we're trying to form habits, it kind of means that we were sort of against the grain a little bit in terms of how we were using Shopify, because as you kind of know, out of the box, Shopify is list your products, here's your kind of search box, here's how you kind of manage your catalog, and we were sort of saying, John Readman: Yeah. Neil Campbell: we only want the full catalog over here behind my account and actually we want sort of highly merchandise convinced people to kind of subscribe and so what we sort of discovered as we were you know going through that kind of journey and sort of building it is that we were building more and more kind of custom development on and so we were using kind of you know Shopify kind of less and less and so ⁓ the my account section had to have a lot of shopping stuff that came out of Shopify first. We were still running the new customer aspect of the website on Shopify. then increasingly, we were developing things on the front end as well. ⁓ ⁓ what led us down the route of going, ⁓ point, we've got to make the change in that. The other thing that changed for us as well was ⁓ As a business, in the early days we only offered laundry capsules and dishwasher tabs and so the average customer had sort one slash two subscriptions. As the range of products increased we have more and more customers who have three, four, five subscriptions. And in that world the actual subscription economics become a lot more... important because for example if I'm sending you let's say you've got four subscriptions with us the laundry capsules might come every 24 days the dishwasher tabs might come every 40 days ⁓ the might come every six months because they're the very compact kind of thing with six sprays and then the washing up liquid might come every two months ⁓ those individual subscriptions, because you've got four of them, it starts to make sense for us to kind of group those into one box and sort of say, look John, every month and a half, because of the amount of stuff you're getting, we're going to send you all this stuff. And it might have two laundry packs, one sort of period, one dishwasher pack and one sprayers and then the next month you might get washing up liquid or something. It's slightly different. What that meant is that we were doing a lot of custom development with Recharge in order to kind of work out that kind of grouping. And so it was a lot of stuff that was just getting beyond what could support. John Readman: And I suppose that's great as well from your point of view, because that potentially reduces a bit of storage costs, because now I'm storing a lot of the stuff at home, and also reduces distribution, also reduces CO2. There's loads of great reasons why you're doing that. And I suppose how helpful and involved of Recharge being with this, because you must be, don't know if you're the only people doing this, or if you're one of the leading people doing this, ⁓ ⁓ for them, they're looking at you going, hang on, there's a whole separate business in there. In-person participant 1: And I suppose that's great as well from your point of view because that potentially reduces a bit of storage costs because now I'm storing a lot of the stuff at home and also reduces distribution, also reduces CO2. There's loads of great reasons why you're doing that. And I suppose... How helpful and involved of Recharge being with this, because you must be, I don't know if you're the only people doing this or if you're one of the leading people doing this, but surely for them they're looking at you going, hang on, there's a whole separate business in here and there's a whole thing is rather than just being a Shopify app, should we be plugging into other people's headlaces? John Readman: And there's a whole thing is rather than just being a Shopify app, should we be plugging into other people's headlaces. Neil Campbell: Exactly, and I think that's, you should definitely get the recharge guys onto the podcast as well to talk about that because that is very much where we kind of went. And so what we discovered, I think we were recharge's second biggest customer in Europe. I don't know if that's in terms of revenue or volume or whatever, but we were that sort of level. And so because we were at that level and they were trying to build out their kind of... business, we did a lot of custom development with them and they were very happy to do that in terms of, okay, how do you want this grouping to work and how do you want that to ⁓ the underlying subscriptions? Because when we, ⁓ I take your orders and go, well, you've got your laundry capsules coming and I'm to bring all these other orders forward, in the background I have to change all those underlying subscriptions and sort of say, well, John hasn't skipped that one, he's brought it forward, but I've got to move the date of it back so he doesn't get it ⁓ two weeks' time or something. ⁓ They were doing all that kind of custom development us and yeah I ⁓ they have definitely gone down a path of trying to sort of build a bit of a sort of sort of business that's like the end of the John Readman: I'm now getting my head around, where do you recognise the revenue? In which month? If I'm getting a box every two months but it has all these different products that last different months, that's like a real interesting challenge for you and the finance team to go out which month is which revenue. In-person participant 1: I'm now getting my head around, where do you recognise the revenue? In which month? If I'm getting a box every two months but it has all these different products that last different months, that's like a real interesting challenge for you and the finance team to go out which month is which revenue. Neil Campbell: We recognize revenue like most businesses when we the customer. And so we're obviously, we're going to take any credit risk on whether you get your laundry capsules early and then don't pay us John. So ⁓ we charge you early, ⁓ that becomes a customer challenge because you're sort of saying to the customer, look, this is a great service because you get one delivery because it's in one box. Firstly, we're having more impact receiving CO2 in delivery. ⁓ We can also offer as a track delivery service. given, you know, we were using Royal Mail to a large letter a lot and it's become very unreliable so having a track delivery service was much better for the customer as well and so it is a customer experience challenge of saying look we're gonna we're gonna bring this stuff forward but it's okay you can still trust us because subscriptions at their heart are very much about trust it's like saying you can build me anytime so In-person participant 1: Yeah, and do you incentivise them to pull it all together or is that just what's happening? John Readman: Yeah, and do you incentivise them to pull it all together or is that just what's happening? Neil Campbell: ⁓ built the mechanics of it first, i.e. the ability to kind of group the orders and kind of bring them all forward. And we had kind of customers doing it on a manual basis ⁓ and it worked very well. ⁓ we have now essentially incentivized them because we got to the point where Royal Mail charges were going up so much that we had to start charging delivery fees. And we've gone for a very simple introduction to delivery fees, which is basically it's 1.99 per delivery, which means that if you group them together, you save all these kind of charge. and if it goes over £20, then we just ship it you for free. And so essentially we're saying, look, there's delivery fees, we really hate raising prices, but the reality of it is these orders really need to be tracked and the underlying costs are going up. But actually we've given you a great way to resolve and not have to those delivery fees by saying, click this setting and we will automatically group these orders together for you. John Readman: that's interesting. And we're definitely gonna get the guys from RetailJob, ⁓ we can hear their of evolution and story. But what would be really because I suppose you're constantly, your world is acquiring new customers, ⁓ so it'd be really interesting understand ⁓ what's been working in the what's like the go-to always on, ⁓ what ⁓ we can sort get sort of. ⁓ In-person participant 1: that's interesting. And yeah, we're definitely gonna get the guys from Recharge on, we can hear their sort of evolution and story. But what would be interesting, because I suppose you're constantly, your world is acquiring new customers. So it'd be really interesting to understand. ⁓ what's been working in the past, what's like the go-to always on, we can sort of get into sort of what's always worked, what's becoming harder, what are you looking at in the future. so talk about some acquisition channels, and because that's your sort of bread and butter. John Readman: what's always worked, what's becoming harder, what are you looking at in the future? so talk about some acquisition channels, that's your sort of bread and butter. ⁓ Neil Campbell: Yeah, And ⁓ ⁓ acquisition for us, we are very reliant on Meta, so Facebook and kind of Instagram. And reason that is is that if think about it, no one is sitting there thinking, how do I make my, you know. kind of laundry capsule buying or my home cleaning buying more planet friendly and more, convenient. You know, it's just something that they go to supermarkets, it's part of their kind of weekly shop. ⁓ They know that there's a sort of different solution and actually they don't know some of the sort of impact that they're, ⁓ you that that industry is having. ⁓ And so the great thing about Meta is that you can get into people's consciousness and you can drop in with a sort of little problem, unaware ad that sort of just highlights the sort of problem to them and gets it in that sort of awareness. If people were actively searching for it, then we would be obviously in kind of Google search and doing a lot more there. The fact of the matter is that 98 % of the traffic that we take from Google, they mention the brand Smol. So they already kind of are aware of us. In-person participant 1: ⁓ And what's the split Meta without sharing numbers, but what's maybe as a percentage Meta versus Google, what would your split be? John Readman: subject. And what's the sort of split Meta without sharing numbers but what's as a maybe as a percentage sort of Meta versus Google what would your sort of split be? Neil Campbell: very roughly probably about 70 % and about 15 % and then about 15 % other stuff so 70 % Meta, 15 % Google, 15 % other things that we kind of do and that's even within that Google it's kind of interesting if you think of the awareness funnel so from customer who comes from totally unaware to desperate to buy your product I'm going to convert right now Google operates right at the very top via YouTube, because I can get into your consciousness and say, yeah, by the way, watching this video, have you thought about this? Meta then operates in the middle part, which is ⁓ me show you repeated ads, and here's a solution, and eventually here's an offer. And then Google operates right down at the bottom, which is I heard of that thing Smol. I've decided to buy. I'm going to go search for it, and I'm going to convert, because I'm a highly converting customer. ⁓ so just nature of our product is, you know, we are kind of sitting in that sort of middle chunk quite a lot. But off the 15 % that we do spend on Meta, quite a lot of it goes on YouTube as well, because it's more of the kind of top of the funnel stuff. John Readman: Yeah, yeah, yeah. And in terms of, and do you distribute Smol anywhere else apart from your website? In-person participant 1: Yeah, yeah, yeah. And in terms of, and do you distribute Smol anywhere else apart from your website? Neil Campbell: No, pretty much just on the website at the minute. We still operate in France and Germany as well, so we do bit of international stuff. And we have done tests in the past on retail. So we were in Sainsbury's for a couple of years. We're actually going back into retail, so we're redoing the strategy and that and working out. Learned a lot the first time around, and now we're going back, which I think is a much better proposition, having tested the waters before. John Readman: And is the idea get, I suppose how do the retailers feel about this? Because if the idea is I go into ⁓ or Tesco's or whatever, ⁓ pick up my Smol ⁓ then I Google Smol ⁓ I want to find out more about it and then I'm thinking, ⁓ just get a subscription. In-person participant 1: And is the idea get, and I suppose how do the retailers feel about this? Because if the idea is I go into Sainsbury's or Tesco's or whatever, I pick up my Smol and then I Google Smol because I want to find out more about it. And then I'm thinking, ⁓ I'll just get a subscription. Neil Campbell: Yeah, it's a really interesting dynamic on a number of levels and this is some of learnings that we kind of took from our kind of first adventures in retail. The fact of the matter though is that we are in a category, this is tech laundry detergent, and sort of say that, that is 95 % bought in a supermarket. Now. In-person participant 1: in Supermery, yeah, yeah. So you're missing, you're only getting 5 % of the profitability potentially. Or you're trying to convert me who gets it in my Asda home shop to get it as a separate thing. John Readman: in Super Mario, so you're missing, you're only getting 5 % of the profitability potentially. Or you're trying to convert me who gets it in my Asda Home Shop to get it as a separate thing. Neil Campbell: Yeah. Yeah. Yeah. And so fact of the matter for us is that ⁓ we want to be credible and if we want to have an impact and sort of change this as a kind of category, it's really important for us to be in retail and to sort of make that happen. ⁓ ⁓ will always be customers who it is more convenient for them to pick it up off a supermarket shelf than it is to work out a and... that and things like that. So it really depends on how busy they are, what they're used to and things like that. And so ⁓ what sort of find is that ⁓ you that kind of relationship with the retailers. I would really kind categorize as ⁓ every retail the country sells Amazon gift cards. And that's the of like there's some occasions where you want to shop online and there's some occasions where you want to be in a supermarket. And I think ⁓ there's a real of that. In-person participant 1: Yeah, yeah, yeah. John Readman: Yeah back. ⁓ And then in terms of, so we're all getting bombarded the moment with AI ⁓ this, AI that. ⁓ It'd be really interesting to understand, certainly around acquisition, I don't want to put words into your mouth, but it's like creative. A lot of people, so if you'd asked me ⁓ six months ago, ⁓ is AI creative good I'd have probably said no, it's a bit average. ⁓ In-person participant 1: And then in terms of, so we're all getting bombarded at the moment with like AI this, AI that. It'd be really interesting to understand certainly around acquisition and I don't wanna put words into your mouth, but it's like creative. A lot of people, so if you'd asked me, Neil, six months ago, is the AI creative good enough? I'd have probably said, no, it's a bit average. John Readman: I've been playing with, well there's a big footwear retailer we work with. In-person participant 1: I've been playing with, well there's a big footwear retailer we work with We managed to prove that putting legs in shoes sells more shoes. As if you put legs in shoes and put it in a natural environment, you will sell more shoes. They can't necessarily afford to do the photo shoot for every single pair of shoes with legs in. So we managed to demonstrate not just with a split test to prove that, but then we managed to build something and help them to roll this out and then selling more shoes. So I suppose where in your mind does AI fit in? Doesn't it fit in? What if you're happy to share? John Readman: to prove that putting legs in shoes sells more shoes. If you put legs in shoes and put in a natural environment you will sell more shoes. They can't necessarily afford to do the photo shoot for every single pair of shoes with legs in. So we managed to demonstrate not just with a split test to prove that but then we managed to build something and help them to roll this out and then selling more shoes. So suppose wearing your AI fit in? Doesn't it fit in? What if you're happy to share? Have you tried? That worked? And where do you see the future of sort of... And particularly the one I'm excited about and nervous about is YouTube or video, video AI. In-person participant 1: tried that worked and where do see the future of sort of and particularly the one I'm excited about and nervous about is YouTube or video video AI because I think a lot of the retailers face is the cost to advertise on YouTube isn't necessarily the cost of the media because you can prove the media is working. It's the cost of producing the asset. So do we sit with all that AI creative? John Readman: because I think a lot of the retailers face is the cost to advertise on YouTube isn't necessarily the cost of the media because you can prove the media is working. It's the cost of producing the asset. So do we sit with all that AI created? ⁓ Neil Campbell: Yeah, but let's break it down. think I'll answer the question, but I think you've got to put it in a bit of context, which is, is the ad production process the minute? ⁓ And what bits can AI help with? And what bits is it going to help with a lot more often in the future? ⁓ And we've been this ⁓ really a by the last three years of ⁓ advertising, specifically advertising, We went from a world where you didn't need that many ads, but you had to really work on your targeting. So you're doing loads of like for like audiences and you're kind of working out your exclusions and your bidding strategies and you're manually adding and removing ads and sort of targeting. ⁓ all the targeting was happening sort of in the of account management. Then obviously iOS 14 came along, the ability to kind of target got a lot ⁓ Everyone thought that Meta is really going to struggle with this. Apple's really kind of struck a blow. ⁓ you know, but Meta have really sort of invested heavily in the sort of machine learning part of that ⁓ and sort of, remember when we used to call AI machine learning? ⁓ In-person participant 1: Yeah, my date scientists still do. John Readman: Yeah, my date signs are still there. Neil Campbell: Yeah, and so, but the real background of Meta is that what it's saying is that you don't have to load lookalike audiences. What we'll do is that we will show your ad to a very small amount of people, and then when we get a response, we'll work out what people are responding, we'll show it to more people, we'll very kind of quickly find out who's going to respond to this ad. And that led to a sort of world where we went, OK, you just need lots of creative. So we just need to kind of put lots of creative out there, get loads of influencers or kind of content creators to do is a creative, we'll throw it all at the wall, we'll find which ones kind of stick. And then that world has sort of evolved and kind of gone, yeah, but in an AI world, you can get lots of slop, you can get lots of just very generic kind of things. And so Meta's then acting on that and sort of saying, well, you give me all these ads, but they're not really different and they're not in any way. And almost what you have to do is go back to first principles and sort of say, look, What is the customer persona that you are trying to target? And by persona, I'm not talking about demographic. I'm not talking about, sort of 25 year old people who go to the gym who are buying training shoes from your client, it is, what is the problem that I'm trying to solve? And what is the kind of core for us? For us, for example, we have customers who are very concerned about personal health. So gut health, is the residue left on my kind of dishwasher plates? Does that affect my gut? How does that affect my kids? Microplastic, et cetera. And so... We have to make ads which really talk to them in that sort of situation. And so it's really about the problem that they're kind of solving, not the fact, because you could have someone who's 25 who has that sort of concern, and you could have someone who's 37 with three kids who has that concern. The problem is the thing that's the same. And so you've really got to anchor the ads in that sort of persona. In-person participant 1: Yep. Neil Campbell: But then you have to really talk them up. Firstly, where are they in the decision cycle? So problem unaware, problem aware, solution aware, ready to convert. But you also have to talk to them as to who they are. So they are the mom, and here's my kids, and I've got to feature them in the ad, and they've got to resonate. Versus I'm 25, I've just left university, I'm thinking about my own personal health and some of the choices that I'm making for the first time that aren't being made by someone else. And so what you sort of find is that you start from these personas and you'll have several of them across any kind of business. I then have to think about the variety across, where they are in that kind of problem. I have to talk about the variety in terms of who's featured in that ad and does that resonate with the person. And then I've got to think about how do I deliver that message to them? Am I stopping people in the street? Am I doing a podcast style interview with a founder? Am I featuring just the product? Am I doing UGC, testimonials, all that kind of stuff? And if you work that out, from what I've sort of said there, I've kind of gone, you've got lots of personas, you've got lots of stages of funnel, I've got lots of different people who are featured in them, and I've got lots of formats for the ad. Suddenly I've just described about, 300 different variations that you could have. Exactly. Yeah. Yeah. In-person participant 1: You almost need like your own media agency inside your business who are just churning out content and ads and yeah, yeah, obviously huge ask. John Readman: You almost need like your own media agency inside your business who are just churning out content and ads and yeah, obviously huge ask. Neil Campbell: And that's really where the AI bit comes in. So if you go, well, that is the system now, and that's what you've got to do in order to find the customers and find the resident and find the audiences. What that means is that there's a hell of a lot of production going on there. And so there's a lot that AI can do to help with that kind of production process. So generate me ideas, generate me scripts, give me different wordings, take all this customer feedback that I'm giving and write stuff that's in their language, that sort of stuff that's along the kind of process. Then obviously when you produce the ad, it's one where you kind of go clearly, It depends if it's static, visuals, photography. If it's photography, what angles do I want, all that kind of stuff. If it's video, do I want to do variations on the video? And so clearly there's a rule for AI in doing the variations that might talk in different ways. And so it's involved in that kind of production process, and it's involved in the sort of, kind of the actual creation of the ad as well. So how do I get to the point of having a script and something I'm ready to shoot, but then also once I have lots of stuff, how do I do it? But it's a really interesting question for us as a sustainable brand. that process, we are very, very early in the kind of journey. And one of reasons why is that we're very cautious about it, because we're all about saving CO2. ⁓ as everyone knows, AI is very computationally expensive. In-person participant 1: Well, I was talking at an event yesterday and I think the elephant in the room is AI going to fix the climate crisis and unlimited energy or is it just going to accelerate the end? And that's the big and the big debate is and I think nobody really knows for every query you ask how much energy is or isn't that using I suppose you could flip that on his head saying, well, we didn't need X number of people to go to this location and we didn't need to use this many vans. John Readman: Well, we are. talking at an event yesterday and I think the elephant in the room is AI going to fix the climate crisis and unlimited energy or is it just going to accelerate the end? that's the big and the big debate is and I think nobody really knows for every query you ask how much energy is or isn't that using I suppose you could flip that his head saying well we didn't need X number of people to go to this location and we didn't need to use this many vans and this much electricity In-person participant 1: and this much electricity and post edit and I think smart people, Neil, could probably argue it both ways I imagine. John Readman: and post edit and I think smart people, Neil, could probably argue it both ways. Neil Campbell: Exactly and those are the kind of things that we've got to work out and before we kind of dive headlong into it, clearly it's not a simple answer. It's not AI bad, you know, lots of carbon. As you say, if I don't have to, if I can cut out one of my shoots a month where I'm not driving 20 people to Bristol to find a nice house to kind of do a shoot in, then yeah, there's clearly a kind of trade-off there and that's one of the things that we've got to work out. But clearly there's a kind of process for it to be prepared. And obviously there's also a community angle as well, because we use actors in shoots, we pay our production people as well and just kind of cutting them out isn't an obvious choice. In-person participant 1: Yeah, yeah. I think the... John Readman: I an interesting compromise that I've seen from a big, well the fashion retailer but they're famous for their handbags and they taking this all baby step is they still do the shoot but they do the shoot, they still do all the model shots but they're now just doing photography shots rather than also video and then they're using the photography to generate video and actually I was, if you'd have asked me six, seven months ago I'd have been very nervous about that because I'd have thought it would destroy the product In-person participant 1: An interesting compromise that I've seen from a big, well they're fashion retailer but they're famous for their handbags and they taking us all baby step is they still do the shoot but they do the shoot, they still do all the model shots but they're now just doing photography shots rather than also video and then they're using the photography to generate video and actually I was, if you'd have asked me six, seven months ago I'd have been very nervous about that because I'd have thought it would destroy the product but actually it's really good now and it's getting to that point. John Readman: but actually it's really good now and it's getting to that point. So again, they're still keeping the model employed and they're still having an element, but they're reducing a bit of the friction in the process and the cost in the process to then get an extra asset. So I think we're all learning, aren't we? In-person participant 1: So again, they're still keeping the model employed and they're still having an element, but they're just reducing a bit of the friction in the process and the cost in the process to then get an extra asset. So I think we're all learning, aren't we? Neil Campbell: Yeah, and it's one of those things that, and you'll know this, I'm sure you've done enough of that, I don't know what this is. AI gets very, very useful when you give it lot of very specific inputs, and that could be from the level of a very, very long kind of prompt that you're doing to kind of develop a document or something, but also in the creative space, if I give it lots and lots of my current images and how I think about stuff and how I do it, ⁓ then do get the sort of outputs which are A, high quality and B, very flexible. So, take that very simple example of a product shot, ⁓ Don't just shoot it for the one image that you're going to put on your website. Shoot it from like six different angles because once I have that, the AI can give you any angle that you want. ⁓ you want the bottle to now spin end over end? ⁓ great. Because you've got six shots, we can do that. Yeah. In-person participant 1: Yeah, yeah. Well, I've got nine shots, I can do that. Yeah, yeah, yeah. Yeah. Now that's really good advice and tips for that. And what do you do? Could you do, obviously, a huge amount on Meta, Google, probably a bit of TikTok or the other online channels. What do you do out of home? So ⁓ you do anything offline, either TV, magazines, billboards, that sort of stuff? John Readman: Well, I've got nine shots, I can do that, yeah, yeah, yeah. No, no, so that's really good advice and tips for that. And what do you do, because you do obviously a amount on Meta, Google, ⁓ a bit of TikTok or the other online channels. What do you do out of home? So ⁓ you do anything ⁓ ⁓ TV, magazines, ⁓ billboards, that of stuff? Neil Campbell: Yeah, it is the kind of continual question for someone in kind of growth and marketing is like, okay, at what point do I go on to these other channels? And we've done stuff in the past. We've done, you know, a bit of out of home. We've done a bit of TV stuff. We're always testing. Part of the kind of growth mentality is, can do this stuff, but just make sure you're setting up as a proper experiment that you can learn from, not just, ⁓ we should do TV, spend the money. ⁓ In general though, we've sort of concluded that there's actually a hell of a lot of runway already in kind of Meta. Like there's a lot more that we could do on our kind of current setup and we're much better off getting that creative process really working well before we then sort of go out and get distracted because one of the things... John Readman: Well if you've got the machine working, just put more fuel in the machine rather than going trying to build a different machine. In-person participant 1: Well if you've got the machine working, just put more fuel in the machine rather than going trying to build a different machine. Neil Campbell: Exactly, And before that, you really work out when you've properly saturated that. And I would say we've been on a bit of a journey of this. Two years ago, I would have said, oh yeah, we're very accrued to saturating Meta. The CPAs are going up and everything else, it's getting harder and harder. We've got to diversify. We've got to do top of funnel. We've got to do unilever, Procter and Gamble as well, brand advertising. But actually, having really studied it, we've gone, actually there's a lot more runway, and there's a lot of successful DTC companies who are breaking through that 100 million barrier. And they're actually not going massively diverse. They're still making it work within their core channels. Obviously, there's a development within that. And maybe they're doing a lot more on YouTube, and they're doing that sort of stuff. It's very easy in marketing to get distracted by the new shiny thing that you hope will sort bring growth rather than sort of saying, this engine, how we 100 % kind of tuned it and is there more in it essentially. John Readman: And do you ever, and this is me just thinking out loud now, but my kids are really into Wild right? And yeah, so do you ever think, well, hang on, they're sort of in a similar space, in the world. Do you ever sort of partner with people who are selling a similar concept of a product better for the planet, that, and the other similar sort of personas, ⁓ where you go, we'll pollinate between us, do something together, because we're non-competing, but we're targeting the same people. ⁓ In-person participant 1: And do you ever, and this is me just thinking out loud now, but my kids are really into wild, right? And yeah, so do you ever think, well, hang on, they're sort of in a similar space, similar world. Do you ever sort of partner with people who are selling a similar concept of a product better for the planet, this, that, and the other similar sort of personas, and where you go, we'll cross-pollinate between us, do something together, because we're non-competing, but we're targeting the same people. Neil Campbell: Yep. Yeah, so we do a lot of kind partnership stuff. Wild have an absolutely kind brilliant business what we really about their business is that they have really anchored it in kind of sense, and so... and scent is a real personal thing for people and it's something that they get really excited about. You realise in we set out compete with Persil. There's skew, it's ⁓ well priced. It's on same price as Persil or Fairy and it's much better for the planet and much more convenient. ⁓ So what we've realised since is that fragrance is really personal to people and it's really interesting. that's something that we're really looking into. Now with Wild and a brand like that, we absolutely love them. think they're an absolutely brilliant brand. We study brands like that all the time. We peer to peer. We swap notes with them, all the other of DTC brands. There's actually a really good community around DTC of people just sharing those kind of ideas. When you get into the partnership world though, you kind of go, okay, what's the right way for us to kind of partner? And there's kind of a real scale that kind of goes from, at one end, very simple, quick integrations, do you want to appear in our newsletter? Do we want to run a competition where we give away your stuff and you give our ours? Do we want to do a sort of, there's various services like Savendus and Tyviso that'll do a sort of gift with purchase. So as you check out on Wild, you get offered from Smol. you check out in Smol, they get to offer something Wild You do those sort of levels of sort of partnerships. And they're really good for kind of like testing the water and sort of building up those kind of connections. Where you get into the collab world, where you're going, OK, how do we really partner this together and make it really tight? That's obviously a lot harder, because at that point, you're starting to change packaging. You're trying to do limited edition runs. You're adding products to the website that are only going to be there for a couple of months, that sort of stuff. And so that world is generally more reserved for the kind of stuff that is Yeah, this really makes sense. The fit is really tight and it really makes sense. The one I really loved actually, you and I both know Stu McDonald at ManiLife the amazing kind of peanut butter. They have had so much traction out of their collab with chocolate peanut butter with, I think it's Knoops, the kind of chocolate brand. And so that's the sort of stuff that's like, okay, it's really flavor focused. It's two very premium brands coming together. It's a limited edition that gets their core customers excited. John Readman: Yeah, yeah, yeah, yeah. In-person participant 1: Yeah, yeah, yeah, yeah. John Readman: Yeah, noose, yeah, yeah, yeah. In-person participant 1: Yeah, noobs, yeah, yeah. Neil Campbell: that's really cool, you know, that's when the co lab stuff makes sense. John Readman: So do you almost need to find an ethical sort of perfume brand that can, suddenly my clothes just smell of my favorite aftershave? That would be quite cool. I don't know, are there sort of ethical green friendly perfume brands out there? In-person participant 1: So do you almost need to find an ethical sort of perfume brand that can, suddenly my clothes just smell of my favorite aftershave? That would be quite cool. I don't know, are there sort of ethical green-friendly perfume brands out there? And probably, but. Neil Campbell: Don't know, that's the kind of thing that would make sense for us. I think there's a lot of stuff in the food space that makes a lot of sense because there's just two quality kind of flavors kind of coming together. I think in a world in laundry, it's a bit harder because we're a bit more commodity focused, but we are moving in a kind of fragrance kind of led way. But yeah, it's really interesting and we do work with them. John Readman: Yeah. In-person participant 1: Yeah. John Readman: What about, because you often see either hardware manufacturers recommending, so like, I don't know, Bosch recommends, or even clothing recommending, wash your Patagonia with this, or is that just too hard and you've got enough to be going after anyway? In-person participant 1: What about, because you often see either hardware manufacturers recommending, so like, I don't know, Bosch recommends, or even clothing recommending, wash your Patagonia with this, or is that just too hard and you've got enough to be going after anyway? Neil Campbell: Yeah, it's all stuff that we can look at. We do partnerships with retailers or manufacturers washing machines and things like that. One of the main areas we do that in is we have a thing called Suds in Schools, which is where we put washing machines into essentially primary schools, such that parents who don't have access to either laundry detergent or laundry machines or just the costs of running those machines have a way to do it because hygiene property is a very important thing. where kids are kind of turning up in the same school uniform months on end and they're getting bullied and sort of withdrawing school life because of it. ⁓ So we partner with manufacturers for that as to, we've got to put these machines in, we want to buy your machines and we want to partner in that while we supply the detergent. ⁓ But it's something that we're always kind of looking at and obviously there's a long lead time on them because it just takes time to kind of put them together and make sure it works for everyone because it's going to be a long-term relationship. In-person participant 1: Yeah, Well, that's what a cool idea that is. I've got loads of stuff. amazing. And I suppose you mentioned you respect and look up to lots of other brands. Who's sort of like who are the people you're like ⁓ when we get there, we're going to be as good as them. John Readman: Yeah. that's amazing. And then I suppose you mentioned you respect and look up to lots of other brands. ⁓ Who's sort of like, who are the people like, ⁓ when we get there, we're gonna be as as them. Neil Campbell: ⁓ good question. You got to be careful of that because everyone's got a different business model. Everyone understands their... John Readman: Yeah, yeah, well, suppose either personally or for Smol who are the brands you look up to who are doing it really? In-person participant 1: Yeah, suppose either personally or for Smol, who are the brands you look up to who are doing it really well? Neil Campbell: I think Wild who you mentioned, we really like because we just think they have a really good relationship with their customers via the different scents and everything that they've gone for. Actually, they do both the scents and then the cases as well, so the fact that it's quite personalized. We really like the fact that they've taken their time over their product development, so they've built an amazing business on stick. deodorant I've recently kind of got into things like their hand wash or their ⁓ shower refills and the kind of roll-on deodorant and things like that. So I really like them. I think also look to sort of people in space who have sort been there a while and have built very sort of you know long-term businesses so... ⁓ Gusto, for example, think are a very good example of that about how do I keep customers live and things like that. Now for us, Gusto, they have a lot of packaging and therefore like, ⁓ OK, maybe not quite our kind of vibe. But we really like the fact that they have ⁓ got down really well. They've got referrals down really well. So we definitely have lots of chats to them about that. One actually which I turned on to on a kind of podcast who I thought were really good was ⁓ Spacegoods So Spacegoods ⁓ there are so kind of brands out there at the minute ⁓ and ⁓ there's so kind doing amazing stuff. ⁓ Spacegoods is essentially a supplement brand but it's kind of... ⁓ anchored in this idea of sort of additives from kind of mushrooms and cordyceps mushrooms and all these other additives. The one thing I really like about them, firstly I think they're doing about 20 million in sales selling mushroom powder and I'm like we're doing like 45 million selling like home cleaning detergent. These guys are doing really well and the thing I really liked about it is that their onboarding flow was just a real inspiration because Once you've signed up and you're taking one of the products from them, they don't send you anything that's to do with here's how you manage your account or here's how you, when your next order is coming and that kind of stuff. They are very, very focused on making you see the benefits of the product. So the emails and the follow-ups that they're showing you are really saying, here's how you're going to feel on day one. Here's how you're going to feel after five days. In-person participant 1: Yeah, the sort of messaging and brand promises continuing even though you're already a customer. So they're reaffirming all of this. So whereas I think a lot of brands, right, you're now a customer, when are you going to order your next one? Or refer a friend or do whatever. Yeah, yeah. John Readman: Yeah, then this sort of messaging and brand promises continuing even though you're already a customer. they're reaffirming all of this. Whereas I think a lot of brands, right, you're now a customer, when are you going to order your next one? Or refer a friend or do whatever. Neil Campbell: Exactly. And that's exactly it. It's that realization that the selling process hasn't stopped purely because I've gotten your credit card details and I've got your email and now I can email you all the time. It's like, no, no, I've still got to convince you and get you into a kind of habit. And there we're sort of really, really interesting. In-person participant 1: Yeah, good. Neil Campbell: Yeah, the other one I'd add, given that you're based up in Leeds, and I like these guys lots, Pure Pet Food, who are a kind of Leeds-based kind pet subscription brand, do very well as well. We've kind of learned a lot from them about how they kind of run their advertising, it's obviously, Pet Foods is a very personalized kind of service, and so you're really, the sales process there is really talking you about you and your dog and what you kind of want your, outcome to be or what the kind of problem you're trying to solve is. So yeah, they're very, In-person participant 1: Yeah, yeah. John Readman: Yeah. Neil Campbell: strong as well and are doing very well and yeah they're just running a really tight ship as well, like them. John Readman: So we'll come into the end of the and at the end... In-person participant 1: So we're coming to the end of podcast and at the end, I'm not gonna do the traditional here's 10 quickfire questions, don't worry. ⁓ But suppose, where's the Where's the future? When are you gonna get to your 100 million? ⁓ I'm not share this with the board, don't worry, we're not gonna hold you to account. And I suppose. ⁓ John Readman: traditional here's 10th quickfire questions don't worry ⁓ but I suppose the vision where's where's the future when are going to get to your hundred million ⁓ not going to share this with the board don't worry we're not going to hold you to account and I suppose how much is left in the UK or are you going to have to go ⁓ international faster In-person participant 1: how much is left in the UK or are you going to have to go international faster? Neil Campbell: so I'll answer the second question first. There's a lot of growth left in the UK. ⁓ I say, ⁓ much of this category is bought in supermarkets, so there's both growth from us from being present in supermarkets, ⁓ also growth from convincing people that something regular as their home cleaning supplies doesn't need to be something that they're picking up in their weekly shop, but it is something that you can... can sort of move into kind of subscription world. Where does that kind of growth come from? think pretty much as we've talked through in this sort of discussion is people, you we've got more and more customers who it's not just about, oh, I want to try a new different type of laundry detergent. It's more about I want to make a fundamental change in my life, whereby I'm removing all that kind of plastic from my life. So as I empty my bin, on the... night before bin when you look in your bin how many big plastic bottles are there, be they hand wash bottles or spray bottles or shampoo or shower gel all that kind of stuff, you kind of look at it and kind of go, there's got to be a better way of doing this. I sometimes describe to people as like, how could we be the gusto for kind of non-food? So how could it be one regular delivery that really kind of knows what your preferences are, but it's supplying across all those kind of products, really with kind of home cleaning. So there's loads more kind of home cleaning categories that we're not in at the minute that we can sort of expand to. And in that world that we've got people taking lots of subscriptions, they're getting one box on a kind of regular basis as opposed to all the subscriptions coming individually. ⁓ then essentially once you're sending them that box, it's a lot easier to get them to take another subscription or something else and sort of change their habits and have an impact on another product that they're sort of having. And so yeah, that's kind of where we sort of see it going. So I think there's a lot of growth in the UK before we think about going back into international. In-person participant 1: Okay if people want to sign up and buy some Smol where do they need to go? ⁓ John Readman: if people want to sign up and buy some Smol, where do they need to go? ⁓ Neil Campbell: just go to Smol.com. As said, the free trial offer is a good one. It's available for anyone kind of on the website. There's no need to go anywhere else on it. ⁓ We also do kind of bundle of ⁓ four products, which, essentially going to five pounds plus £1.99 shipping, so sort £6.99 total. That allows you to kind of try for the four of the products and of get that kind of moving as a subscription, and that's a really great way to get involved as well. In-person participant 1: So well, I've really enjoyed our conversation Neil still hugely impressed. You only put your dishwasher on once a day. That's amazing. So thank you very much for your time and yeah, we'll see you soon John Readman: So well, I've really enjoyed our conversation, Neil. I'm still hugely impressed you only put your dishwasher on once a day. That's amazing. So thank you very much for your time and yeah, we'll see you soon. Neil Campbell: Hahaha