🥗 Why Going Retail Wasn't What We Expected

Hey there,

Welcome back for another bite to chew on.

By now, I’m sure you’ve heard us talk about Obvi going nationwide into Walmart.

(don’t worry, it’s not that same story over again)

Getting into retail is an amazing goal for any DTC brand, but what do you actually do when you get there?

What’s it like being in a nationwide retailer? 

How should we prepare or what should we be doing if we’re about to make that leap?

That’s exactly what we’re going to be talking about today.

Time to jump into it.

Hurry Up and Wait

The entire process from finding a broker to the initial pitch to acceptance took about a year. 

Yes, an entire year.

We knew we had a solid shot at actually getting in when we got invited to talk to the team in person at Walmart headquarters in Bentonville, AR.

They usually do these meetings over the phone, zoom, meet, etc., so we figured we actually had a decent shot here.

Ron put this whole ordeal on his back and said, ‘You know what? I'm just going to go knock this out and whatever happens, happens.”

Our previous appointments were always around 30 minutes.

Ron met with them for almost an hour…

Big retailers are so focused on what's moving on the shelves.

Legacy brands typically own the show here, but when Walmart sees new brands come in with new branding, new packaging, new ways of doing business, it becomes exciting for them.

It felt like they wanted the small businesses to win over these huge corporations, like they wanted to give us a chance. 

The biggest milestone was the fact that they were so receptive to Obvi.

Honestly, it was such a cool thing to be a part of.

We’re IN! Now What..?

Here’s where the work truly started.

So Obvi is going nationwide. What does that mean for us? Where do we go from here?

The short answer is we have A LOT to do.

Going nationwide requires a lot of cash upfront.

Think: inventory, deposits, hiring, and marketing budget.

We also had to find a manufacturer that would give us terms and could/would develop a tasty product. 

We couldn't use just anybody. It had to be perfect for Walmart.

We wanted to work with someone that has experience with retailers. 

If this doesn’t outline why you need quality investors with connections, I don’t know what will convince you:

One of our investors has helped multiple businesses get into retail and exit.

They recommended a manufacturer that not made great products, but also had:

• an incredible flavor house that would make the product taste amazing

• marketing/design teams who we could consult with on packaging and launch plans

• operations and shipping covered—we could rely on them to get the product to Walmart on time

• the best terms possible that wouldn’t constrain the business of too much cash

If you’re not on time and delivered in full, Walmart monitors this.

If you fall below a certain threshold of delays, you’re docked.

Manufacturers are 90% of the reason whether you make it in time or you don't. 

Obviously there's delays and things like that, but, luckily we've been good. 

The most stressful part comes from following up with the manufacturer because you're literally giving someone other than yourself the reins to make or break you.

What’s Changed Since Joining Walmart? (A Lot)

Obvi has already changed quite a bit. 

We viewed getting into Walmart as a chance to cement retail as a staple of the brand.

In order to succeed in retail, we still had a lot of work to do coming from the DTC side.

Packaging, pricing, and product obviously need to be intact.

Going into Walmart, we thought our marketing had to completely change.

(it turns out that was a horrible idea)

We went all in and sent all of our customers to Walmart. 

Our mentality was “Let's support them. Show Walmart that we're ready to market for them.”

We started running ads towards Walmart. 

We included it on our store locator, our main homepage, in our emails, everywhere. 

We thought all of that was needed to make Walmart happy. 

If you divert all of your attention to one aspect of your business, what happens?

Everything else suffers. The DTC side of Obvi tanked.

We went from acquiring customers profitably to losing money. 

All of our existing customers went to shop in Walmart.

We had our worst Black Friday in five years. 

The strategy had to change.

If we couldn’t market online, where was the awareness going to come from?

We couldn't go all in on Walmart just yet because what if that kills the online business and they don’t want to re-up with us? We're kind of stuck, right? 

We calmed the panic and said, “Walmart is kind of coasting by itself. Let's figure out a way to make DTC work again.”

So, we changed the strategy AGAIN. 

We removed all the Walmart messaging, launched new products online that you couldn’t buy in store, and turned things around.

Things finally changed in the right direction.

By marketing more efficiently, we saw a halo effect of people going into stores and buying.

This approach has done a lot better for us.

Balancing retail velocity and online velocity became a little easier, even though it’s still a tough battle. 

Having the right people in place is very crucial for that.

We brought in the best of the best.

This included 2 advisors who already have successful brands in retail across many different big box retailers, another great introduction from our manufacturer.

(a huge shout out to the Obvi team here)

I (Ash) personally know I need X amount of inventory for online, and Walmart has a decent forecasting model, so there’s not too many surprises anymore.

We were surprised on how our products performed though.

A Tale of Two Products

If you know Obvi, you know Burn, our collagenic fat burner.

If you don’t, it tackles two things: weight loss and beauty. 

It’s aimed at tackling both slower metabolism and collagen production as you age.

Burn has always done really well online, so naturally it did really well in Walmart.

Our goal was 0.5 units per store per week. 

We're at 1.74.

We're a category leader.

If you search for weight loss or fat burner on Walmart, we are the number one bestseller. 

So that's doing really well. 

On the flip side, our collagen protein powders are doing terrible. 

We went in priced at $26.99 while the top competitor, Vital Proteins, was priced at $23.99.

We weren't selling anything because you're naturally going to go with the industry leader because you don't trust us yet. 

We did a roll back down to $23.99 to compete with Vital, and at the same time, they dropped their price to $19.99.

Even though we started to see a little increase in sales, it wasn't enough to get Walmart excited and it wasn't enough to beat Vital. 

We said, “You know what? F*ck it. Let's drop the price to $18.98.”

We're going to lose money, but at least we'll understand if price point is the biggest factor. 

We increased velocity by around 400%. 

The problem is that we came in with two flavors.

Collectively, they’re above a 0.5, which is what was needed. 

Individually, they move 0.3. So, Walmart isn't too excited about it. 

We're spreading ourselves too thin across two products.

You're only going to pick up one flavor. You're not gonna pick up both. 

Walmart wants us to consolidate to only launch one flavor.

We’re still relatively new, and to introduce people to the brand, we decided to pitch an unflavored collagen protein to Walmart.

Include all the ingredients that a lot of protein doesn't have, at a price point that's better than the competitors, and see if we can do it profitably. 

Walmart agreed and we’re giving it a shot!

If it works, great, if it doesn't, we may want to remove it. 

If we continue to be leaders in that weight loss category, we’d love to push even harder.

We’ve already started the conversation with Walmart about a pre-workout.

What the ideal price point is, the voids in the market, etc. 

We're trying to adapt with how Obvi is changing and give Walmart what they need to be successful.

If You Want to Be in Our Shoes

Working with retailers is not about putting out what you want, but putting out what they think makes sense and doing it together. 

The top 3 things to keep in mind when going into retail:

1. Above all else, make sure you have a plan to support BOTH retail and DTC.

If you're trying to do the same thing online and in store, one of them is going to suffer and it's typically DTC.

That's the biggest thing. Have a plan for both.

2.  It is a very cash intensive business. 

You need to make sure that your business can survive, if anything goes wrong. 

Doing a raise, getting investors, whatever it is.

Just have enough cash to do it.

3. The third thing is to build a team of people who've already done it. 

Our wheelhouse is DTC. We know less about retail. 

Build a team to rely and lean on.

Get somebody on your board and who you can consult with. 

Hire killers in this space because it's a way different animal than DTC.

Tool of the Week

Be completely honest.. Have you even thought of how your subscription model could improve? 

Or did you just make it once and haven’t touched it since?

Feels like a missed opportunity doesn’t it?

There’s so many options to take advantage of with your subscriptions, but if no one shows you what you’re missing, 

it’s not like you’re going to make any progress doing things randomly.

That’s where we turned to Stay AI to show us exactly what to do on a platform that makes these changes easy to implement.

You need to see what they can do so your subscriptions can stop collecting dust and help you collect more profit.

Learn more about what you don’t know from Stay AI HERE.

The Latest Soundbite

Much like our journey with Walmart, navigating the digital marketplace requires insight and strategy.

In the latest episode of Chew on CRO, Ned breaks down the essentials: 

• analyzing user models

• mastering attribution

• and tackling declining conversion rates

If you're eager to refine your marketing tactics and boost your growth, this episode packs the punch you need.

Tune in for actionable insights and learn how strategic pricing and content adjustments can skyrocket your conversions.

Hungry for More?

We want this retail conversation to keep going!

That's why Chew On This is thrilled to announce our Founders / Operators Dinner in Denver on Apr 10th @ 6:00 pm MST. 

This event is an opportunity to dive into the world of e-commerce and retail alongside founders who've scaled their brands to 8 & 9 figures, all in a setting that promises great food, drinks, and invaluable networking. 

It’s more than a dinner—it's a chance to learn, share, and grow together. 

Can't wait to see you there and continue the conversation!

Thanks for Reading Along

If you’re stepping into retail soon, first of all, congratulations. 

Not many brands even get to have this chance. Don’t forget to recognize that and celebrate it.

At the same time, get ready to adapt and learn like you never have before.

Surviving and thriving in retail is about the ability to pivot, understanding what your market needs, and balancing the online and offline relationship of your business.

Entering retail has taught us the power of flexibility and that we really know a whole lot less than we thought we did, but we never backed down from the challenge.

We hope going through our journey with Walmart so far inspires you to do the same.

All the best,

Ron & Ash