Handled With Care: How One Lifestyle Accessories Entrepreneur Pivoted From Wholesale and Grew Her D2C Business 600%

Looking at retail sales data since March, it’s clear that the coronavirus has impacted nearly every retail brand in some way or another. Some businesses experienced an unexpected surge of growth, some saw declines, and some were faced with the unfortunate consequence of shuttering down.

All these businesses were required to pivot unlike ever before. I (virtually) sat down with Sherry Lee, the owner of Esselle SF, a San Francisco Bay Area-based home decor and accessories brand, to talk about her pivot. 

Prior to the pandemic, seventy percent of Sherry’s monthly revenue was in wholesale orders with retail stores and boutiques across the nation. Margins were thin and she was already beginning to realize that she needed to diversify her brand into direct-to-consumer (DTC) sales, so she joined Klaviyo as a first step in building relationships directly with consumers. 

Then the coronavirus hit and she no longer had the luxury of planning to pivot slowly, so she moved immediately into action. 

In two months, Sherry grew her DTC business 600 percent by using email segmentation and advertising to grow personal relationships with her customers. 

By growing direct relationships with her customers, she was able to understand their needs better, take customer data into consideration, and launch new products to make staying at home more comfortable and stylish for her customers. 

 

Leslie Wong: Tell us a bit about Esselle SF, how you started it, and where it is today. How have things changed since the coronavirus? 

Sherry Lee: I started Esselle SF in 2013 when I was in grad school for user experience and web design. I realized that I hated coding and didn’t think it was something I’d do as a career. 

I started Esselle SF as a side project while in school because I got to utilize my creativity and what I learned in school in terms of website development and design. I launched the store with a friend of mine and we were first selling hostess boxes for at-home dinner parties. 

We were before our time with that idea and had the most traction with stylish, custom name cards for weddings. We leaned into name cards and eventually extended our product line into other goods like home decor accessories. 

I was fully immersed in wholesale and then I started to realize how there was a lot of opportunity in selling directly to consumers. I knew I needed to slowly wean down our wholesale business and then the coronavirus happened. 

It really forced me to grow ecommerce because boutiques were closed and our wholesale orders suddenly stopped. Wholesale orders accounted for seventy percent of the business, so I knew I had to act fast and grow the retail business at a much faster timeline than I thought. 

 

Leslie: What was the first thing you did to start growing your direct-to-consumer business? 

Sherry: A friend told me about Klaviyo. She showed me how she used automations and flows to connect with her customers; this was a whole new world for me. 

Prior to Klaviyo, I was sending out very sad, basic emails once in a blue moon without any strategy behind them. Once the pandemic hit, I started building out email flows and investing in social media more. I hunkered down and started learning about DTC marketing through ecommerce influencers like Andrew Foxwell, Shopify, and Klaviyo’s tutorials.

I started creating segments and lists so I could speak to my customer based on their interests instead of just shouting into the void like I was doing before. 

"I started creating segments and lists so I could speak to my customer based on their interests instead of just shouting into the void like I was doing before. "

Sherry Lee, owner, Esselle SF

Leslie: I imagine it might’ve been tough to build an audience when so much of your business was in wholesale. How’d you grow that audience? 

Sherry: I decided that I needed my audience to get to know Esselle SF as a small business brand and also get to know me better in order to build a relationship and create brand loyalty. 

I changed my tone from ‘we’ to ‘me.’ I started sending out more heartfelt newsletters addressing the pandemic and how we were helping the community during that time. Customers would actually reply back to my emails with words of encouragement and appreciation or questions. We were having a dialogue where that never happened before. 

I also began to use Facebook advertising to attract broad audiences to the website, which worked really well. Once more visitors came to the site, I started building more lists and segments in Klaviyo based on actions like initiated checkout and add to cart so I could retarget audiences. 

Eventually, targeting broad audiences became ineffective for me, so I used Klaviyo’s Facebook integration to target one percent of lookalikes who added to cart. That’s been performing really well and has helped me with budgeting as a small business because I don’t have to compete with large companies that are running broad audience advertising.  

With Klaviyo and that growth in traffic, I was able to segment customers more and avoid redundant messaging based on their actions, like whether they opened an email or not. I created segments like brand enthusiasts and window shoppers so I could reach them with the right messaging or even remove them from my list if they showed very low intent or interest in the brand.

Through segmentation, I’ve also grown my repeat purchase rate by 27 percent over last year. I send exclusive deals to my engaged email list that I don’t promote on Instagram or other channels. 

These are the people who have been with us through thick and thin. I want to reward them and get them to share the love with their friends.

"With Klaviyo and that growth in traffic, I was able to segment customers more and avoid redundant messaging based on their actions, like whether they opened an email or not."

Sherry Lee, owner, Esselle SF

Leslie: Not only did you get new users on your site, but you also launched new products during the coronavirus. Tell us about those and how they impacted your retail growth? 

Sherry: In March, I took some of the items we already had in stock and started creating care packages with them. People were more emotional during that time and also wanted to support small businesses, so the care packages addressed a need for showing love and human connection.

There was a shortage of hand sanitizer at the time. I was able to order it in bulk so that I could give away sanitizer with every purchase. The care packages and free hand sanitizer attracted a lot of attention and made up for 25 percent of our total monthly sales in March, which wasn’t bad for a newly launched product.

In May, as we saw that much of the world was not returning to work in offices, we launched technology accessories like AirPods cases and laptop sleeves. 

When people weren’t going out, tech accessories were one of the easiest things for people to switch out and mix and match besides clothing. It’s a small thing that makes people feel good and it made a big difference in our monthly revenue. Launching tech accessories in May increased our monthly sales 62 percent. 

Also, I found that this product broadened our age audience. Before, we were attracting customers aged 25 – 35 and this product began to attract customers aged 20 and up. 

 

Leslie: To recap, you pivoted your business model in a matter of months, launched new products, and developed a new demographic. Share what overall results you saw and what are you looking forward to?

Sherry: After a short decline in revenue due to our wholesale business coming to a halt, we’re back to generating the same revenue but directly from consumers instead of boutiques or resale platforms. 

By engaging with our audience, listening to their needs, and responding to these changing times with authenticity, we grew our DTC revenue 600 percent

We look forward to growing our DTC side with new products that speak to this younger demographic throughout different stages in their lives and continuing some wholesale but with a focus on quality relationships over quantity. 

"By engaging with our audience, listening to their needs, and responding to these changing times with authenticity, we grew our DTC revenue 600 percent. "

Sherry Lee, owner, Esselle SF

Want to hear more from brands who have shifted their marketing strategy to outlast the coronavirus pandemic? Find out how an immersive game brand grew 547 percent more email revenue.

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