Podcast: DTC to Retail: Strategies for Scaling Profitably
Episode Summary
In this episode of the Free to Grow CFO podcast, host Jon Blair, founder of Free to Grow CFO, engages in a deep dive into the world of retail expansion for direct-to-consumer (DTC) brands with a profit-focused mindset alongside guest Renee Hartmann, co-founder of CLA. Renee shares her entrepreneurial and consulting journey, offering insight into market expansion, particularly into China, and the significance of understanding consumer behavior and demand planning in retail. During their conversation, Jon and Renee explore the nuances of navigating the retail sector, offering insights into the challenges and strategies for DTC brands looking to grow beyond their online presence. From understanding the different aspects of retail contracts and payment terms to devising effective marketing strategies and the role of events, this episode provides a comprehensive overview of what brands need to consider for successful retail integration. It’s packed with actionable advice for brand founders considering an omni-channel approach and emphasizes the significance of maintaining a profit-focused mindset throughout the scaling process.
Meet Renee Hartmann
Renee is the Co-Author of best-selling book Next Generation Retail: How to Use Technology to Innovate for the Future which takes a deep dive into the technologies impacting retail and e-commerce today, including AI, retail media, social commerce, Web3, sustainability, supply chain, loyalty and more. She was named one of the Top 100 Retail Experts in the world by ReThink Retail in 2024.
Renee is based in Portugal and is an Advisor to start-ups in the consumer, retail & technology sectors. She also conducts executive education and training for brands and retailers seeking to infuse a culture of innovation throughout the organization.
Renee has worked as a brand owner, retail operator, and branding and market entry strategist for the last 25 years. Renee was previously COO of the Shanghai-based streetwear brand, Eno, which was named one of the ten Most Innovative Companies by Fast Company. She was a Director at Ogilvy & Mather, and was an equity research associate at Putnam Investments covering the consumer and retail sector.
Renee holds a BBA from Emory University’s Goizueta School of Business, and an MBA from Duke University’s Fuqua School of Business. She holds the Chartered Financial Analyst designation, and was named one of CNN’s “Top 20 People to Watch in Shanghai” in 2010. Renee serves on the Asia Pacific Board of Advisors for Duke University, is a board member of the Dual Immersion Foundation and a Member of the Virtual Advisory Board.
See more about Renee at www.renee-hartmann.com.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Renee Hartmann - www.renee-hartmann.com.
Free to Grow CFO - www/freetogrowcfo.com
Episode Transcript
00:00 Introduction to the Free to Grow CFO Podcast
00:28 The Importance of Retail for DTC Brands
02:21 Renee Hartman's Entrepreneurial Journey and Retail Insights
05:33 Expanding into the China Retail Market: Opportunities and Challenges
07:46 Strategies for DTC Brands Considering Retail Expansion
11:01 Navigating Retail Expansion: Inventory and Demand Planning
25:01 Leveraging Retail for Brand Growth and the Challenges of Omni-Channel Pricing
29:05 Navigating the Challenges of Retail Expansion
29:59 The Complexities of Direct-to-Consumer vs. Retail Dynamics
31:10 Setting Strategic Goals for Business Growth
31:50 Exploring the Potential and Pitfalls of Scaling Beyond DTC
38:44 Adapting Marketing Strategies for Retail Success
45:28 The Importance of Understanding Retail Contracts and Financing
50:29 Closing Thoughts
[00:00:00] Jon Blair: Hey, what's going on everyone. Welcome back to another episode of the Free to Grow CFO podcast, where we dive deep into conversations with brand founders and industry experts about scaling a DTC brand with a profit focused mindset, I'm your host, Jon Blair, founder of Free to Grow CFO. We're an outsource finance firm that specializes in fractional CFO and bookkeeping services for growing DTC brands.
All right. So why the heck should you care about today's episode? It's because we're talking about retail. On our last episode, we, we dove into the nuances of expanding into grocery retail, but there's a lot more in the retail world outside of grocery. And so I've invited my friend Renee Hartmann of CLA on today because she has.
Just a world of knowledge in the retail side of the world, some really incredible experience on her, in her own entrepreneurial journey. But I think she just positioned really well to help us talk through what are some of the tips, the tricks, the hacks, the do's, the don'ts of expanding from DTC into retail, because at the end of the day, it is a different game.
But. If you listen to the episode with Ryan Rouse several weeks ago, he brought up something very important, which is what, depending on your goals and how big you're trying to grow your DTC brand, you may not have a big enough TAM to hit your revenue goals in DTC only, right? Being a DTC only brand, there's nothing wrong with, but you may be limiting how big you can grow.
So if you've got big goals, you do need to consider retail at some point. And that's why I brought my friend Renee on today. So Renee, thanks for joining. I'm looking forward to chatting about this with you.
[00:01:41] Renee Hartmann: Thanks for having me. I've been wanting to have this conversation with you for a while. So I appreciate the opportunity.
[00:01:46] Jon Blair: Awesome. Awesome. By the way, before I dive into my first question, where in the world are you right now? Because I know that you could be several
[00:01:53] Renee Hartmann: places. Yeah. I'm in Portugal. So I'm a American as you can hear from my accent, but based in Portugal.
[00:01:59] Jon Blair: Awesome. Awesome. And I actually met Renee, funny enough, not in Portugal, not in America, in Ireland at an e com event that we were both invited to.
And so that's why I had to ask her, where, what, what country are you in right now?
[00:02:11] Renee Hartmann: Yeah, it's, it's never a bad thing to meet in Dublin. That's always a good, that's always a good start.
[00:02:15] Jon Blair: Yeah, that was a blast. I need to go back again when I have a little bit more time to actually explore the country. So what I want to dive into first, honestly, is your background, your entrepreneurial journey.
I think it's really important for the audience to know where you come from because I'm a big believer in, you know, Renee's a consultant. Part of what she does is a consultant. She helps a lot of brands with, with their retail strategy, but she's actually an operator and an entrepreneur first. And so I'd love for you to just walk everyone through your story and how you kind of ended up where you're at today.
[00:02:51] Renee Hartmann: Sure. Yeah. I've actually started out my journey in finance. So similar to to a lot of the people who kind of, I think who you guys work with. I started out in equity research on the buy side, covering the consumer retail sector. So I've always been a, I've always been a fan of retail. I, back in the day was fascinated with Nike and all of those companies.
So. So started out really kind of helping the, the buy side, understand retail and kind of cover the retail sector. I switched over from then into more of an investor relations role. So I worked with Ogilvy and Mather with their investor relations kind of late stage late stage sort of pre I-P-O-I-P-O and beyond.
So worked with a lot of, kind of fast growing startups, and then ended up moving to China with them. So I, I moved to China helping a lot of actually Chinese companies go public in the us. And then, you know, from there, I kind of had been working with so many entrepreneurs, I kind of caught the entrepreneurship bug myself and just decided that that was really, you know, something that I wanted to be doing.
So when I went back to business school I got really involved in the entrepreneurship club at Duke university. I did a lot of work. I did internships in BC and private equity. So working with like sustainable BC I went down to Alabama working with a fabrics company and industrial fabrics company and their, their factory down there.
So. Got a lot of experience from the investor side of things and then decided to dive into the entrepreneurship side myself. So after business school I moved back to China And I, teamed up with former nike china executives and we started up a retail company in the consumer brand So it's sort of a a trial by fire you know, learn as you go type thing.
So you know, we had started out actually trying to make shoes. We made shoes. Then we also branched into apparel. So we did streetwear apparel. So we did t shirts and hoodies and fashion. And I think one of the things that I really learned from that journey is we didn't have much of a wholesale market there in China.
It's really a single brand driven. It was actually like, you know, almost pre e commerce then we were 2005. So it was just like the early stages of e commerce. And we started up our own retail brand. We expanded out to about 25 stores raise funding through the process. And really kind of just, you know, learned a lot, I would say everything from production and supply chain to HR, to marketing, to online, offline expansion and looking at kind of, you know, how we expand in the retail sector, both multi brand and single brand.
So I learned a lot of lessons. I think the hard way of just kind of, you know, getting thrown in there, which I think is what, you know, every entrepreneur does. So that's been part of, you know, the excitement I think I had. And then since then I've been working with a lot of big and small brands to help them kind of expand.
So that's everything from like the large big brands that everybody knows to smaller up and coming a lot of cross border e commerce and a lot of retail and online expansion.
[00:05:33] Jon Blair: Yeah, so I mean, obviously a super robust background starting in on kind of like the investor lens, then becoming a founder and operator yourself, you know, I, I'm, I'm curious because I did a lot of research when I was at guardian bikes.
We did a lot of research into expanding into the Chinese market and Just what are some of the things well, so let me set the stage a little bit here You know as I start thinking about expansion outside of the U. S.. Ecom or DTC You know addressable market a lot of brands start researching Europe and they're like man The TAM is pretty small there and it turns out every European brands actually trying to come to the US, right?
And so China is an interesting market because it's huge, right? And it's evolving really, really fast. And it's, it's been evolving into a consumer led market for a while now. It wasn't that way, you know, 10 plus years ago, but what are like some of the opportunities that you see there in terms of expanding into the China retail market at some point?
[00:06:37] Renee Hartmann: Yeah. I mean, China is a, China is a challenging market. It's always been that way to a certain extent. I mean, it's a, it's. It was very fast growing. I tend to last year or two, the growth is really decelerated. But there are still a lot of opportunities to go into the market. It's, I think it's about finding the right consumer fit.
So there's a lot of cross border e commerce opportunities. I've done everything from like Douyin, which is the TikTok in China, to Tmall, to WeChat stores, to Little Red Book. So there are a lot of opportunities for that. And I think cross border e commerce is one. That works really well for the market because you don't have to completely enter the market when you don't have to start an entity.
You don't put an inventory in China, which can all be kind of challenging things. So I do see that working. The key is just having the right consumer demand because it's so expensive to drive. You know, it's customer acquisition is tough in every market. China is getting more and more difficult, high cost a lot of activities, social commerce you influencer work.
So it is, I think about kind of finding the right. Sort of niche of consumer demand. That's going to work because I think the days of just going in
[00:07:36]
[00:07:36] Renee Hartmann: and kind of building it yourself from the ground up, it's really expensive to do that. So I'm seeing people where there is these pockets, it makes a lot of sense, but otherwise it is getting more and more challenging.
[00:07:46] Jon Blair: So, you know, we work primarily with profit focused brands, not, not brands that have a bunch of, you know, Like venture back you know, equity sitting on the balance sheet. Like they have to be really strategic about expanding into retail. Right. And so if you've got a brand that let's say they've reached healthy, eight figures in revenue, let's call it 25, 30 million a year in revenue DTC.
And they're like, Hey, we think we're trying to, we're starting to hit the ceiling of the addressable market DTC, and we neeDTConsider retail, but Essentially bootstrapped, right? We don't have super deep pockets. How do you begin to advise a company on the things they need to think about? If that's kind of their.
Constraints as they're, as they're thinking through a retail expansion strategy.
[00:08:36] Renee Hartmann: Yeah. I mean, I think the, the key is really, you know, are there, are there multi brand retailers that are a good fit for the brand, right? So that's the, that's the number one thing is, you know, who, who could potentially sell you and whether that's, you know, like one of the challenges we have in China is there weren't many of those, those companies, but if there are those in any market, it could be international, it could be local market you know, finding these retailers who are, you know, Interested, you'll set them apart.
I mean, I think the retailers are to a certain extent, they're a little bit risk averse, but they are looking for new things to drive excitement. And I think one of the areas for brands that, that is super interesting now is the growth of marketplaces for these multi brand retailers. So you've got, for sure, just launched there, you've got Macy's, you've got, and that's allowing them, I think, to really expand their offering and bring in new brands, get more excitement.
But they don't have to hold the inventory themselves. So basically it becomes like a drop ship model. And it's, I think that's kind of a win win for smaller brands to reach out to these retailers and kind of find some ways to help them expand, but not requiring more financial burden on the, on the retailer side as well.
[00:09:35] Jon Blair: That's actually, those marketplaces are the primary, like kind of stepping stone that I'm seeing across our clients that are expanding into retail is like, start there. And yeah, I mean, from the retailer's perspective, the retailer's like, hey, We're drawing off of your inventory and it's a drop ship model.
So they're not taking on the inventory risk and they're also capturing some data and like, what does the sell through look like? And probably able to capture some data on their end too, of like who's buying from you guys. Right. And so it's a nice little test on both sides. It can be challenging on the brand side because You had these inventory stock levels that you were using to feed a DTC demand signal, which demand planning for DTC is like, it's still really hard, but it's at least.
You feel like you have a lot more control over it because you're at least doing it based on the data that first, firsthand data that you have on hand. Whereas when you're working with a retailer and this is what I want to ask you about next is like kind of tee this up for you is when you're working with a retailer, whether it's a drop ship model or you're shipping direct to one of their, their DCs.
You're going off of this anticipated demand, literally based on either conversations with a buyer or depending on the retailer, they may have a platform that I'm going to put this in quotes forecasts for you. Cause like it's always very misleading when you think about the demand planning challenges of expanding into retail.
What are kind of some tips or advice that you have there?
[00:11:04] Renee Hartmann: Yeah. I mean, I think that's a super big challenge to your point, right? It's like, how do you, how do you have the right inventory? And I think to a certain extent, the marketplaces do allow a little bit of, because you're pulling out of your own inventory, you're not having to allocate specifically for another retailer.
So that does allow you like, obviously you've got to plan for it, but it does allow a little bit of wiggle room. I think from you know, when you're drop shipping to the retailer, obviously, I mean, if they're pre paying for the, Inventory then, you know, you're incentivized, I think, to sell as much as you can to them, but I think it really comes down to demand, right?
You know, it goes down to, you know, can you, especially from a DTC perspective, I think one of the things that traditional retailers are really struggling with is they're finding online sales and e commerce actually like value detracting for them these days, they're having a really hard time with returns cost of, you know, the cost of acquiring customers really high and getting higher.
So I think for a lot of these more traditional retailers, e commerce is. Challenging for them. So I think a lot of what I do see brand actually brings a whole audience group and a whole sort of understanding of the market that maybe some of these traditional retailers don't have actually. And I think that's something that you know, I heard somebody saying, you know, e commerce for retailers used to be a value additive.
Now it's value detracting. Right. So I think they're, they're really kind of looking at it. They can't ignore it. But the same extent, it is challenging to, to, to, to really kind of operate successfully. And I think that's where some of these D and C brands, especially the ones you're working with, who have really focused on profitability, have learned how to do that.
And they can actually add that and can, you know, bring demand in there and almost probably know it better than the retailer, to be honest.
[00:12:32] Jon Blair: Totally. Yeah. It's funny that you mentioned that because one of the bigger brands that we work with who they recently expanded into Target. Target is like target and best buy, but target is really kind of like the, the primary place they're trying to push volume from a retail expansion perspective.
And, you know, they successfully, they're spending two to 3 million a month on Facebook, right. In advertising spends top of funnel. And so, you know, even though they have, they've reached very healthy eight figures revenue, When they went to target to pitch them, it's like, Hey, listen, you're going to benefit from the halo effect of, I mean, we're spending 25 million a year on Facebook.
Certainly that is going to drive some traffic into target for people who are not going to buy this on our website or not going to buy this on Amazon. Right. And so there is definitely now. That's not, you, you can't really pitch that if you're a brand that's maybe half that size potentially. Right. But, there are definitely, I have definitely seen that actually play out in practice with conversations with buyers.
Like, Hey, listen, we spend aggressively on e commerce advertising. We know how to do it. You're going to get some purchases from that. Right. And so it is, it becomes kind of like a partnership. Like we need as the brand, we need another bottom of funnel. Place for someone to check out. Right. And, and also to hope that we're going to get more eyes on the product that we wouldn't get on our, on our, our e comm advertising, but you guys can hopefully get some people coming and buying something at Target when they realize they find out about that product on Facebook and are like, Oh, now available at Target.
[00:14:17] Renee Hartmann: Yeah, I mean, I think that's where the DTC brands can really have an advantage with the retailers is they're bringing the energy and the excitement and the new diversity and what they're offering, which a lot of these retailers don't. Right? And I think that the flip side is, you know, how do you use that as a DTC brand to get the offline distribution?
Right? So, you know, using the online energy to kind of expand out. From an offline perspective with multi with multibrand retailers. And then I think I do see a lot of DTC brands to open up their own store, single brand as well. Right. So I think that's something you know, I've seen some of the malls that will say, you know, when they have a DTC brand, we'll open up a store in the mall.
They usually will see the mall store go up. And then also the online business go up as well. So I think it's this idea of like the, the blending between the offline and the online can create something that's, that's bigger than adding the two together, right? The, some of the parts work together and they're kind of additive on both sides.
[00:15:05] Jon Blair: Yeah, that's really interesting because we talked so Guardian bikes the company that I was on the founding team of before starting Free to Grow, we had, we had a short stint in retail. Once one through You know, kind of a quasi retail through Amazon vendor central. So selling direct to Amazon.
And then we also had sold an independent bike shops. And what we found is our biggest challenge is that like we had what we called the safest kids bike. Right. And it was powered by our brake that prevents you from flipping over the handlebars. In retail, it's so hard to tell that story, especially when you're sitting in a lineup next to a bunch of bikes that don't have your brake and there's not a person there.
To explain why this bike is safer and why you should care about this break. We tried all this PDP and like, you just couldn't get people to understand it. It required a human. And so that's why we felt forced to go DTC so we could tell the story, but we also didn't know that we were capping our addressable market.
And at some point we would need to figure out how to go retail. And we kind of landed on the, you know, the Apple store kind of like Tesla, you know, Model of like, we probably need to open our own retail stores so that you can have someone walking you through why a guardian bike matters. And so I do think it also, it depends on what you're selling and what is needed to get your value prop across, across to the consumer, right?
[00:16:38] Renee Hartmann: Yeah, absolutely. And I think that's to your point is like, you know, how do you really get that story across? And ideally, You know, I've seen lots of retail, retail stores and brands. Like once you get them into the store environment, people convert really at a, at a much higher level because they get it.
Like you don't, you don't understand it. You got the brand, you can have that experience. And then the question becomes, how do you bring that experience online? How do you bring it into a multi brand? How do you bring it across different channels? And that's, you know, I've seen people do that through social selling, like even doing lives from multi brands, single brands.
I've seen people pop ups that way. I've also seen people kind of take store staff and then do one to one lives. So I think this idea of like, how do you make the two work together is really important because I think that the challenge is like, you know, to your point, like when you, when you open up your own store, it's of course, it's going to be a better experience.
And of course, it's going to be something that you're going to be able to kind of really get that sales process through, but it's risky. You know, those are the good retail locations are. Really expensive. And I can get in, especially when you look in the U S you know, the top malls in the U S are doing better than they've ever done before.
Oh, you know, during COVID, I think everybody thought like the mall's dead, retail's dead, but actually when you talk to the top retailers and the top malls, they have actually higher demand they did pre COVID. And they're there, the store rent is higher. The demand, they've got people lined up to get into these retail locations.
So to get a good retail location, it's expensive. So you've really got to be able to drive that, you know, the really high sales per square meter, but at the same extent, you know, if you go to something that's if you put the wrong location, you can be paying even a small amount of rent. But if you don't have that traffic, so you gotta have a good location at a good price.
That you can support and that those are challenging. If you make a mistake, even one mistake for a small brand that's just starting their retail footprint out, those mistakes can be really costly and difficult.
[00:18:17] Jon Blair: Yeah, for sure. It's it's interesting because I think that for whatever reason, when I talk to brand operators and they're thinking about going into retail, They feel like they need to go big really fast into retail.
But if you think about just strategy, just like general strategy, best practices in any area of your business, right? Like it's like, what is the smallest move we can make towards what we think is going to work that has minimal investment and minimal and we're limiting our downside and to get a test going so we can figure out if we should invest heavier here, like, Dave Ramsey fan.
He talks about firing musket balls before firing a cannon ball. Cause like back in the day, you only had a few cannon balls. And if you didn't calibrate how much gun powder to put into that cannon with smaller musket balls, you could potentially waste that cannon ball and shoot it over or, or miss your enemy.
And so I think about that same thing with retails, like. So, like, my question to you is what are some of the musket balls or tests that you can fire off that are lower risk, which I think plays hand in hand with being a profit focused brand, right? Like, how can we test to figure out if doubling down and really investing in retail is worth your effort?
[00:19:34] Renee Hartmann: Yeah, I mean, I think the, the best case scenarios with that are probably either, either a shop and shop, which are lower costs where you can partner with, whether it's existing. Department store, whether it's maybe a retailer that kind of is synergistic with your brand, right? Where you can do kind of a small area, it doesn't cost a lot of money, but can bring your brand to life.
Like that's, you know, you take the example of like Red Bull putting the coolers in every single, you know, bar, like you're able to kind of have this branded experience. GoPro did this in a lot of places where you can have kind of like a little small area, or you do something temporary, like a pop up, right?
So I think if you're doing something, which is seen as a test, it's short. It doesn't require a lot of investment in the buildout. So something you can do that's kind of creative and interesting, but doesn't, isn't super costly. I've seen those work really well, even in traditional malls, doing a two to three month pop up just to kind of take a look at it and see, is this the right mall for us?
Is this the right area? I think those can be really good good ways to kind of test things as well. And doing this, like you said, like, Low cost tests, but but also getting in places that have enough traffic that you can actually give it a real shot. I think if you if you hold back too much and you try to do something that's too low cost and it's too conservative, you might get yourself a situation where you just don't have the retail traffic, right?
You need the traffic in order to make sure that to really see if it's going to work. If nobody comes through, it doesn't matter if you have the best thing in the world, you're still not going to be able to get to where you want to be. So it's finding that right balance of like, How can I take a little bit of risk, but not too much risk that's going to give me a real understanding of what actually is possible?
Is this a place I actually would put retail in? Is it actually the right location? That's super important because with retail locations, everything, right? So if you do a test in one location, that's not the same as where you're going to expand. That could be a huge problem too. Cause I think that's one of the things people have to think about is, you know, are you doing this for replication where you're really trying to scale and open up many, many stores, or are you doing it as a one time thing to kind of create some engagement and do some kind of offline activation?
[00:21:20] Jon Blair: Well, you're coming back to something there, which is like, what is your strategy? What are your goals? I think it's not just what you want to avoid doing is trying to expand into retail because you feel desperate from a sales volume perspective or profitability is drying up. And like, the thing is, Retail buying cycles are long, right?
It is like so much different than DTC where you're doing direct response marketing and you're putting a dollar in and you're getting 3 out. It's almost kind of like an immediate dopamine hit. Like you're, this ad's working and we're, and we're like retail buying cycles. You have to wait for catalog reviews and you have to wait for your line reviews.
You have to wait for, you know, seasons. And so talk a little bit about, you know, If you're talking to a D2C brand founder, they've never been in retail before, and they're used to like, being able to, to Kind of toy with demand signals on like, you know, on a daily basis and direct response marketing. What, how do they neeDTChange their mindset and prepare for this difference in how the, the, the buyers work and, and those cycle times?
[00:22:31] Renee Hartmann: Yeah, I mean, I think it really depends on what sector you're in. So fashion, for instance, I mean, fashion is usually buying 9 months out, right? You know, and some of them are even like producing over a year. So I've, I've, I've worked in DTC brands that have tried to go into multibrand and they're like, we just can't, can't catch up with the cycles.
Like we're not planning nine months out. We're not there yet. We're more planning for today. Right. So I think depending on the type of company that you are, there's going to be different ways of structuring that. And that's where even some of like the marketplaces are better because they are for demand for today.
And we're not buying in nine, nine months cycles and going to markets and things like that. So I do think it is, some of it is dependent a little bit on the, the industry that you're in. And I think it's really just about learning the way they buy. How does your retailer buy? How far in advance are they looking?
You know, are there ways that you can help them? I think drive demand for tomorrow. Like they're trying to predict demand as well, right? They have the same problems. They don't know It's either. So I think that there is this ongoing, I think, you know, need for retailers to be closer to the consumer. And I think, you know, you've got companies like Sheehan that are doing this really, really well, and I think have been very successful.
So I think it's creating this kind of want for the retailers to do this. Now, whether they can catch up with it or not is totally different story. So I think that's That's something when you think about, you know, how do you get closer to their buying cycle and just really understanding how that's working.
That's one area for sure.
[00:23:46] Jon Blair: Yeah. And I think when I think about this from a finance perspective, like you've got to be profitable enough that your, your business is sustainable, right. Without retail. And you, you have the ability financially to wait through those, those cycles because and the reality is you don't even know how it's going to go the first time around.
If you get a commitment to a hundred stores for a retailer, like, you know, you might get all the POs for that. And. There's going to be a line review at some point, you know, later in the year or year. And they make say, Hey, this didn't go all that well. Right. And so like, you've got to be, this comes, this is why we are so adamant about, about challenging brands to, to run their business with a profit focused mindset.
It's about optionality in many ways, right? That like when we're profitable and we know, and we're managing our cashflow well, We have options. We don't have to go any specific route, you know? And so, so I want to talk a little bit about like risks and challenges. We we've already touched on several of them, but like when a brand goes omni channel and has DTC and now has some wholesale and, and, and selling through retailers, like.
What are some of the other risks and challenges we haven't touched on that a CPG brand needs to think through?
[00:25:08] Renee Hartmann: Yeah. I mean, I think there's, there's a couple other risks. One is you could risk that you underestimate demand and things go really well, right? So there's the risk of that too, which can, which sounds like a good problem to have, but I've also seen brands have problems the other way where it's like, okay, you come off, you come off the bat like really well.
Everybody starts putting in orders and you either can't keep up that same growth. It's kind of a one hit wonder type thing and you can't keep up with it or you're not able to fulfill it. So I think there's the risk of expanding too quickly. So I think you want to kind of, you know, there's also the risk of diluting your brand, right?
You get into too many places that aren't the right place. So I think those are some, some of the risks that sound like good things, but you still have to be careful in that standpoint to make sure that you're really in the right place. So I think that's one of the things that can go wrong. On the flip side, I think, you know, to your extent of your, you make too much inventory, you know, you're basically over investing in inventory and you don't see the sales come out of it either.
Right. So I think it's like, it's. It's really all about, you know, keeping the inventory level in line with demand, which is super hard. And I think, but that's where, you know, so many B2C brands and so many brands in general, it's so much cash tied up in inventory. The other thing I've seen, which I know I, I had this issue at my company back in the day is like, you get, you're hesitant to clear the inventory too quickly, you know, you wait too long to clear the inventory.
And I think, you know, I'm sure you talk about this with your clients all the time, but all that money tied up in cash, you know, all the cash tied up in inventory. So being able to kind of. Quickly make those decisions and either discounting or getting rid of, or doing something that you kind of, when you have those times that things aren't exactly matched up, being able to quickly correct is always hard.
[00:26:38] Jon Blair: Yeah, for sure. And I mean, there's, from a finance perspective too, you have to realize that there's alongside some of these challenges you're talking about. There are some advantages of moving to retails that if you start, if you start selling direct to a retailer, you've got these POs and you have a contract alongside it, right?
You can start financing receivables, which you couldn't do when you're ready to see brand, you can, there's PO financing out there where like, if you don't have the cash to get a big PO made but you have a contract and a PO in hand, there are lenders who will come alongside you and they'll finance the building of that, of that purchase order, and then they'll allow you to take that loan out with receivables financing.
And so like the cash conversion cycle changes and. Especially at the beginning when you're trying to kind of get your legs under you, like your retail legs under you, like getting better at at inventory planning and managing receivables, some of these financing tools that are available to a brand that has wholesale, but, but not to DTC brands can help while you're getting over that learning curve.
There's also this, I mean, this is probably one of the most common things that I see brands complain about when they expand into retail, omnichannel pricing. Right. And challenges of like, you're laughing because it's like, it is, it's like this thing that is, and when you talk about profitability, like it can cause huge issues, like walk the audience through some of the challenges that happen with maintaining pricing across channels.
[00:28:12] Renee Hartmann: Yeah, I mean, I think channel conflict is a huge thing that can happen, right? And just being able to kind of, you know, look at, you know, how are you managing across retail as well as online, both your own, you know, because you, you obviously, when you're coming from B2C, you've got full control over your own pricing, but, you know, being able to kind of add a, at a multi brand and wholesale, you don't have that control.
And also, They may not always tell you about it. So you may have sold it to them in a wholesale price. And then at the end of the day, they're, they're changing as they could be below you, above you. So I think, you know, just staying in constant contact with the retailer and really being able to understand, you know, what are the parameters and, and just also being aware that you don't have control and giving up part of that control as part of the difficult piece of that as well.
So, you know, on the, on the, on the one hand, like you said, you're getting, you're getting cash up front. You're getting a lot more certainty, you're getting distribution, you're getting, you know, to a certain extent, you're getting, it's a traffic generator itself, right? Offline is also a traffic generator, just like it is online.
So I think there's a lot of pluses that come from that. But there are some negatives to a new with, with all of that, you lose control, you lose control of the way things are merchandise. I think, you know, making sure you've got mystery shoppers going in all the time and seeing what's happening and really just keeping track of it, because I think there's a potential for things to kind of get out of control.
And that is. Is the hard part of it is from a, both a brand standpoint, a pricing standpoint, and just also getting that understanding of who your customers are, right? Once you're going to the retail side of things, you lose your one step removed again, right? You don't know who your customer is anymore.
You don't know who's buying your stuff. The data you get from the retailer is a, it's not always timely. And it's also not always as, as particularly when you compare it to what you're getting DTC, you don't have nearly as much data, nearly as much information of like, who actually is your end consumer?
How much time do they consider or do they. Did they want to buy something they didn't have it in your size? Like you don't have any of that information. So I think the more you can kind of, you know, figure out how to track that and to be more comfortable with that loss of control, it does change the dynamic a lot.
[00:29:58] Jon Blair: Yeah, for sure. One other, so there's, when we were selling direct to Amazon through Amazon vendor central and they were the retailer, you know we had this, I mean, handshake like map pricing agreement. Right. And They kept dropping the price on these SKUs, and we couldn't get a hold of our buyer.
When we finally did, he was like, hey man, I'm not doing that. Like, our algorithm just, it analyzes demand and stock levels, and it'll just drop the price if it thinks it needs to drop the price to just move through. And he's like, I can overwrite it, but I'm like, I'm managing so many different SKUs. I'm not like checking on the pricing of all of these all day long.
So like in that case, they didn't even really know what was going on. And going back to like the demand planning challenges, we, we decided to pull out and go strictlDTC C because of the pricing issue. And then ultimately, like we just couldn't get them to demand plan. In a way that made sense, they were buying overbuying SKUs that we were telling them to buy less of and underbuying SKUs that they should have bought more of based on the data that we had.
But it's just, it's harDTCommunicate, but what this really comes back to is goals, right? And is that we had a goal that at the beginning we're selling the safest kids bike, we. It was a premium safe kids bike. And we had to monetize our patent because that was the bread and butter. And it really did make these bikes more valuable.
Right. And so we decided for the season that the business was in, we haDTControl our pricing and we haDTControl the story. And so we decided to go to DTC for that season. And that was part of our goals, right? To like really break into the market and make sure that people valued our bikes and understood the value prop.
Now. My buddy, Ryan Rouse, who I mentioned earlier in this episode, he's like, look, most brands, generally speaking, can get up to 50 million max DTC. And there are very few brands who break through 50 million in revenue. There are, there are some exceptions, but you're probably not the exception.
You're probably the rule. And so I'm saying all this. Because this does come back to goals. Is there a reason you want to be a brand that's bigger than 50 million? Is there a reason you want to get into retail? What are some of the things that you kind of help your clients think through as it relates to goals and making sure that retail like aligns with their goals?
[00:32:30] Renee Hartmann: Yeah, I mean, I think, I think it goes back to, you know, one of your points of what's your end goal, right? Are you trying to scale? Do you think there's, and this goes back, I think, to your discussion around TAM, right? Are there new clients, new customers that you couldn't get from online? And I think we see that a lot, you know, if a brand is doing that, you know, if you're up to 50 million.
You're able to open up some single brand stores as long as you're doing it in the right place in the right area. So I think then it comes down to if your goal is to scale, if that's your goal, right, then your goal is to look at let's, let's open up multiple single brand stores and let's expand outside of there.
And then I think it's more about, you know, really kind of coming up with the right strategy. Can you franchise, can you, you know, do shop and shops? Are you going to be opening them all yourselves? Are you doing them in areas where you can easily replicate them? Right. So for instance, like. You know, one place that's cool to open up single brand stores is like Abbot Kinney in Venice, right?
It's like it's a cool place, but there's not that many of those in the, in the country, right? So that's a one time thing. So you open something on Fifth Avenue. That's not replicatable. So going into malls that you can go and you say like, hey, I've seen how you're doing in this area, then I can bring you into other locations as well.
And that works both for a multi brand as well as a single brand, which is, how do you create something that's replicatable that someone can look at and say, oh, yeah, I can scale that. I know in this mall, I know people do this. If you're doing this, then I know I can take you some. So I think it's kind of, you know, creating that, that path for how you're going to scale offline as well as online.
Right. And to the extent that you can get, you know, areas where they're, they're working together, right. Where you're able to kind of build both pies out of it. So I think that's it. That's a big piece of it. And obviously one of the big reasons is going to be acquisitions. It's going to be one growing the top line, but I think to your point, You know you know, I think you're, you've seen this and I've seen this with the VC market and the private equity market is, you know, they're looking for profitable businesses too, right?
So you can't let go of that goal of being, of being profitable because just going out and trying to get top line growth in, in retail, either, it's the same problem as DTC. That's not where people are investing. It's not where people are looking. So certainly you want a large brand that's additive to a brand portfolio for sure.
But we still are not seeing that, that old ways of like, Hey, let's just get, get growth at any, at any price. So it is that profitable growth, whether that's in retail, whether that's in DTC.
[00:34:35] Jon Blair: It's funny. Cause I talk about this a lot of my content that businesses exist to be profitable. Right. And the thing is, even in asset bubbles, where there's like a product category, that's getting VC and private equity money.
I would say, and I would even venture to say primarily VC because even private equity, by the time, by the time, like a venture capital bubble moves to private equity, they're requiring you to be profitable at that point, right? So it's like, venture dollars are coming into, you know, some, some category, like right now, probably AI, if I can be honest with you, right?
Like, that's, that's a bubble right now. The thing is that even those venture dollars. Are expecting profitability at some point, even if you're growing it at whatever costs unprofitably in the meantime, they're expecting to either be able to sell that thing for a profit or eventually that business to become profitable.
And so like, I think, unfortunately, a lot of early stage, there's just this thing that happens. I I've been a part of it earlier in my career where it's like. You think that like the sexy startup entrepreneur thing is to like get into that really sexy category right now. Like I said, at AI as an example, and just raise a bunch of money and like grow, grow, grow, grow, grow.
And then like, someone's going to buy you for more. Right. And it's a binary outcome that like it either happens or it doesn't, and you really have to time things right. And it's harder to do than people realize it is. And the longer that you wait in that, but in that cycle, The, the, the more that it's going to be demanded that you can like demonstrate that there's a path to profitability.
And I'm saying all these things because if you just start from day one, even if your business is not profitable on day one, and you say like, I'm hell bent on figuring out how to make this thing profitable and, and on every decision to consider how this is going to impact profitability, just having that mindset will put you a cut above the people that are out there raising money and just hoping that they, they time that boom.
Right. Which is like, in my opinion, it's not real business strategy, right? That is not real business. No, it's,
[00:36:41] Renee Hartmann: it's, I mean, it's all luck, right? I mean, that timing is all luck, right? right place at the right time. Even, you know, the other thing about brands is it's, you know, it's not always linear the way that things expand, right?
And you might, you might hit it one time and that's what kind of gets your growth up. So it's very, very difficult to predict. And I've seen a lot of companies that. Have raised during that boom time and then they weren't able to kind of hit their milestones coming out of it and they've got to do a down round and they've got to like work on, you know, and I know that I've heard this from a lot of the VCs out there is they've got a lot of DTC companies that, you know, they've, they've done down rounds and they don't have a place for them to go.
So they want bad businesses and 20, 30 million businesses, but they weren't even profitable fast enough. They raise it too high of a valuation. So I think there's a huge down as well. That can really come. Bite you, and then you end up losing all of your motivation, all of your incentive stuff, you know, investors, everybody.
So, I think that, you know, even and if you, hey, you know what, if you're profitable and you time it just right, then, hey, you get a better valuation along the way, right? But at least you're doing the multiple on EBITDA. So you still need something to start with. And Brandon, if you can make your multiple higher, it's awesome.
But you still need, you still need a profit to start. So I think that people go into it that with that mentality, they're going to be much better off, even though it is tempting to take that, you know, and I think this is one of the lessons I have too is. I think when you have VC money, there's a lot of pressure to scale quickly.
And you know, one of, one of my friends told me back in the day, it was with that, I don't know if you remember this one, it was like this it was the, one of the original, like quick commerce, like online. And they were saying, you know, one of the challenges they had is like, how do you, you, when you're scaling something, that's not totally working, it's not profitable.
And then you're, you're scaling it fast and fast and fast, like you're just multiplying your problems basically. Right. You didn't have it worked out in a short time. So I think that. That, you know, forcing you to kind of scale quickly, which is what a VC does. It doesn't always work well, especially on a retail side and you've got inventory and you've got real costs that are doing this, it's not just advertising costs, you can turn it on and off, you know, you've really got to look through that.
So I think there is potential to scaling, like potential downside of scaling too fast when you're not ready.
[00:38:43] Jon Blair: Totally. Totally. I want to talk about marketing a little bit because. You know, we've kind of danced around this several times in this conversation so far, but like you got a DTC brand, they've reached healthy eight figures.
They're probably really good at direct response marketing, right. In a, in a, in digital advertising channels. And so they're used to that. Like that direct response, put a dollar in, I get 3 out, right. Understanding first order acquisition versus how LTV grows over time. You get into the retail side of the world.
And you don't necessarily stop that you, you, if that's still working and it's driving profitable DTC revenue, you keep doing that, but what are some of the other things that a DTC brand, what are some of the mindset set shifts or some of the kind of new strategies that they're not having to do in the DTC world that they need to start thinking about from a marketing perspective as they launch in retail.
[00:39:39] Renee Hartmann: Yeah, I mean one of the things that I think retail marketing really involves is a lot of events, you know you're doing like a lot of like in person whether it's a tasting in a grocery store or whether it's a fashion show or whether it's Like this kind of local active like the local activation local outreach partnership.
It's kind of this like grassroots type Type local marketing, but I think from a DTC brand, you haven't done that as much. And it really does take a lot of, you know, just hard work at the retail side. Just get people to show up in your store. You know, it's not easy and it takes a lot of time. It takes you know, it takes clienteling.
It takes having store staff that understand you. It takes a lot of training. And I think that's a whole area that is not really done in the DTC, you know, world. It's so something that is, I think, a different. Type of marketing that is a little bit more, I guess, I don't know if it's old school or just off offline, but this, and again, it depends on what kind of you know, brand you have, what kind of product you have, but you know, if it's grocery or even say it's like, you know, beer or anything like that, like a lot of events, you know, it's being showing up in the store, going to beer tastings, you know, doing all that kind of stuff.
And if it's in the fashion side, it's, it's really. Talking to personal shoppers, you know, it's really like a more of a old school kind of marketing. So I think that's something that is totally new for people and they've got to adapt to that. But on the flip side, I think, you know, DTC does understand that online marketing better than retail.
I think the retail world's been a little bit slow to understand it. That's one of the reasons they struggle with being profitable online.
And I think, you know, you bring up AI, I mean, it's really, Causing a lot of challenges with email marketing is day. The email market is getting harder and harder to do.
And that's something that used to be easier for grants to do, but it's really not easy. Any,
[00:41:16] Jon Blair: it's just for sure. Yeah, yeah, for sure. It's interesting. I think where my mind starts going, actually, as you're talking through that just now is that one thing that I see these DTC brands need as they expand into retail is they really need to bring on.
At least one person, probably one to start. And oftentimes I see it being a consultant that just really understands retail, right? You don't, you by no means, I've by no means seen that these brands have to come in and gut their staff because they know DTC like their inventory and supply chain people, they're totally able to adapt their finance people able to adapt.
So are a lot of their marketing people, but they need someone to point out these things, like point out how demand planning is going to change, point out how the buying cycles are really long, point out how marketing needs to change. Like what, what I know you do some of that walk me through a little bit about how you play that kind of like point person when a brand is looking to expand into retail.
[00:42:17] Renee Hartmann: Yeah, I mean, I think it really comes down to kind of, like, coming at it from, you know, all angles. Right? So if it's, you know, if it's if it's something in, say, grocery, you know, you look at everything from retail media to you know, in store type marketing. And I think if it's something around a single brand, it's really looking at incentives for 1 thing.
Right? So, how are you incentivizing your sales staff? Are you giving them the opportunity to be doing client telling? Do you have technology in place that's allowing that? Are there local thought leaders that you can bring in? So take even taking the idea of kind of influence or marketing offline, right?
You know, do you have you know, advocates that are coming and bringing people into your story doing small events? Are you having influencers come in and doing live stream? So I think it's really just kind of. Looking at the type of brand that you are and who your customer is, then what are all the touch points that you can, that you can bring to life?
Because I think it's different for every brand, every product. Like there's no, that's the unfortunate part about it. You know, I wish there was like one like playbook you can do for everybody, but it just doesn't work that way. And I think it's a, it's really a matter of understanding the customer and the local, you know, environment there of like, who, who are the right customers?
Are there. You know, are there pockets of demographics that are there? Are there, you know, use cases? Are they coming through other partners where other people have them? So it's, it's really just kind of taking a holistic look at the customer and really, really understanding the customer and getting a good sense of that.
I have seen, you know, more and more of these like AI tools now that are saying, you know, how can you understand your offline customer as well as your online customer? Because like I said before, like the DTC brands, I think they're so used to really understanding their customer. Retailers are not that used to understanding their customers, especially brands who are a couple of steps removed.
So I think. To the extent you can really understand who that person is and then work backwards from there, then you're able to, you know, kind of come up with strategies around that. But it really all starts with knowing who your customer
[00:43:57] Jon Blair: is. Yeah, I think, didn't we both sit down and have a conversation with a guy in Ireland who they developed some sort of an AI tool that actually like tracks through, tracks movement around stores and like it basically gathers, it gathers information through AI on, on.
Information that's seeking to understand the people that are in retail. And like, I think that's really more and more of that's going to. Be popping up left and right so that, so that you can get some sort of Intel on the people that are walking into physical retail and purchasing.
[00:44:34] Renee Hartmann: Absolutely. And that's even more so for the suppliers, right?
So say you're like, you know, you're at a, like, I was talking to those guys that are called vision R and they were saying like, one of the examples they gave is, you know, if you're, if you're a retailer, if you're like a food retailer in Ireland, And if three out of every 10 men who walk up to your shot to your counter and not buying Guinness, something's wrong, right?
Like, what's wrong? Is it? Are you out of stock or something off on it? Do you not have the right product there? But they're like, we can tell you immediately if they're not buying 30 percent of them aren't buying Guinness, something is wrong with your store, right? So that and that's the kind of level of understanding you need to get.
But if you're Guinness and you don't have that, you don't know what's happening at the store level. And there are lots of things that could be happening. And I've even seen people do AI for it. Visual merchandising, like, Oh, you're supposed to have this new signage up, but it's not up yet in every place.
And, you know, how do you, you know, you're looking at it versus the end cap versus in the aisle. You know, there's all these different ways you can bring it to life, but I think it's a, having the visibility to know what's happening in it and then being able to kind of like quickly make those changes.
[00:45:28] Jon Blair: So what, one thing I want to talk about really quick here when I, when I chat with my buddy, Adam, about grocery retail on our last episode, we talked about the contracts that you're going to sign with retailers and like being aware of the fact, like, you know, the example I use is like as a DTC brand, you're not like getting every Every one of your customers to sign a contract, you have like terms and conditions on your website and stuff.
Right. But like, they're not going to charge you back out of nowhere for things and whatever. Right. And so what are some of the things that you think brand founders who are looking, who've never seen a contract with a retailer before, what do they need to know before they sit down and sign that contract about like what kind of protections and things these retailers typically have?
[00:46:16] Renee Hartmann: Yeah, I mean, I think again, it goes back to, I think, different different ones for different types of retailers, but definitely having some good legal advice on, you know, what are the different things that could go wrong? You know, what are the what are the could they could they giving them? Could they returns?
You know, could they returns a lot of times there are negotiation ways that you can kind of handle things like. Like for instance, in fashion, one of the things that we see is sometimes, and sometimes you want to give some of these, you know sort of contract negotiation points. So for instance, one thing might be, you know, say for instance, you have a fashion line and you sell them for one season and you don't have as strong of a sell through as you wanted.
Like one way you can do that is you can have a return policy where you let them return it and then send something back. So you're not really getting screwed, but you're basically providing an opportunity to give them new inventory so they don't cut you off basically. So there's some things that seem like, is this good for me?
Is this bad for me? But I think you have to look at it on a holistic standpoint of what is the, if the end goal is to create a longterm business with this person, you want to have some flexibility in your contract for them. It's not all about having everything completely structured to a sense that they can never return anything or they can never send anything back because then you're kind of stepping on yourself for something in the future.
So I think it's kind of. You know, making a good balance between what's good for you today and then what's good for you over the longterm. So you don't want to be too tight with it, but then you also don't want to get it so loose that you're never getting paid. And I think the other one that comes up a lot is payment terms.
For sure. So I think that's why when you think about cashflow it was specially the bigger, the retailer, the longer it takes them to pay. And so I think that's one that's, that's a difficult thing. Let you talk a little bit about financing. But I, I certainly see that with the big companies that's gets harder and harder to get paid by them.
[00:47:47] Jon Blair: Yeah. On time. Jen, they all pay generally speaking, right? They're, they're credit worthy, retailers, but yeah. And you also have to realize like, let's say it's, you have net 90 with target, right? They don't pay on day 90. They do weekly. Payables runs, right? And they have a cutoff usually that's midweek. So if day 90 is on their cutoff day, you're probably getting paid on day 97 a week later.
Right. And so you gotta be, you know, if you have someone in finance on your team, who's worked in retail before they know, like net 90, like target really pays like more like in a hundred days. Right. And the other thing is too, generally speaking, depending if you ramp into retail fast and you don't have like a big equity cushion sitting on your balance sheet.
You probably are going to need some amount of receivables financing, or you at least want the option to be there. And so knowing the lenders, that's what, that's what a good CFO can do is connect you with the right lenders. So you have the option to finance those receivables in the event that you need to.
You know, the thing I always say is like debt is neither good nor, nor bad. It's a tool. Right. And like, yeah, you can use it as a tool wisely. You can use it as a tool unwisely too. Right. But like it exists, a lot of omni channel brands do have receivables financing because like it really is needed. You can't just.
You can't pay your vendors when the goods ship to you and then sell them and be out the cash for a hundred days while you're waiting to collect and finance it all with your own cash flow, right? So
[00:49:21] Renee Hartmann: especially when you're growing, it's even harder when you're growing, right? I mean, then that's where the cash flow gets even worse.
And I think there, you know, the other thing that some of these retailers can help is negotiation with your suppliers as well. Your, your vendors and your suppliers too, because to a certain extent, you If they know you're selling in target, they know, again, they also know they're going to get paid. Right.
So eventually, so, you know, there are ways that as you grow, you know, being able to kind of negotiate with the suppliers and your factories to see, you know, can you get better terms with them? That's obviously highly negotiable and highly depends on your relationship with them. But to the certain, you know, you can, you can really help your financial situation a lot if you can get better terms with your supplier as well.
So to the extent that this allows you to do that and adds credibility with them, certainly that's a great way to do it as well.
[00:50:01] Jon Blair: Absolutely. Absolutely. So I, we got to land the plane here and I want to, I always like to say for at Free to Grow a big part of our business is that is the personal impact that we have on our employees and on our clients.
That's really the heart behind us. Like I got into the, I'm a brand operator heart, but got into consulting. Cause I'm like, I want to make an impact on a lot of different people. And so everyone that comes on this podcast, I always ask them about their personal life because it's super, super important. You, you actually, like I mentioned at the beginning of the episode, you have, you have kids and you move them to another country and you guys are in Portugal right now in this season, like walk me through a little bit, like the personal what is it inside you that like caused you to do something that a lot of people would think is adventurous.
Right. And move your kids to another country. Talk to me a little bit about like the, you know, Renee Hartmann, what that experience has been like, and what you think that's doing for your family.
[00:50:59] Renee Hartmann: Yeah, I mean, I think it was you know, my husband and I, we've lived in China for about 10 years, but our kids had never really lived outside of the outside of the country.
They remember that much. Our son was, I think, one, one and a half removed from China. So they'd spend most of their time growing up in Southern California. So for them, this was a huge move, you know, so I think one of the reasons we did the move at this time, I think part of it was COVID of sort of this You can work from anywhere.
Then the other one is my son was going into eighth grade. And we kind of got to the point of like, if we're going to do this, we've always wanted to live in Europe. We've always had this, you know, desire for them to be international. But if we don't do it soon, we're going to run out of time, basically.
He's just getting too old. So I think for, for them, it was, you know, finding the right school that we liked here. So we found the international school that we liked. And I think it was a big adjustment for the kids to kind of learn to, you know, that they're, they're my son's in ninth grade now. And I think there's 26 different nationalities in this class.
You know, it's a really diverse group of people. It's like learning to adapt, you know, to being this kid who's grown up his whole life in Southern California and knows that lifestyle to kind of all of a sudden coming and being international and talking about football, which used to mean soccer and learning all the teams and learning all the players.
So I think it was a big adjustment for them, but you know, I think it's been, it was a little bit of a rough first year, but I think they're kind of getting the point where they're really understanding the benefit of it and just kind of trying to see, looking at things from different perspectives, I think, understanding how to, you know, interact with people from all different cultures learning different languages.
So I think that's hopefully widening their worldview is kind of the goal. I mean, that was our goal is to get them to be a little bit more international and just a little bit looking at things from different perspectives. So I think that has helped them you know, really understand kind of how we can do that.
[00:52:33] Jon Blair: I think it's really cool. Like I'll give a micro example. That's probably not as cool as moving your family to another country, but like we moved, I moved my family outside of the city of Austin a year ago. And we live near this about a 10 minute walk away from this local private airport. And I walk my kids up there several times a week and it's private.
You can just walk up onto the runway and just watch airplanes take off. And my three year old son. Is obsessed with airplanes now and he wants to be a pilot and I was talking with my wife and I said, you know He wouldn't be saying these things if he didn't get exposed to this, right? So and it makes me realize as a parent how important it is for me to take the time to intentionally expose my kids to things and certainly like, you know, there are things my parents didn't expose me to That I got into later on in life.
So it's not like they're doomed to not learn anything new about the world, but this is a precious time in their lives. And as parents were, we can really expose them to new things. And you never know what that may do to their future in a positive light. And so I think what you guys are doing is really, really cool in that regard.
Super, super cool. So before we close here, I'd love If you could just let everyone know a little bit about what do you do at CLA? How do you help brands in, in, when it comes to their retail strategy and where can people find some more information about you?
[00:54:00] Renee Hartmann: Yeah, so I've got I'll, I'll drop it in the notes, but you can go to www.
renee Hartmann. com. And what we do is we've been working with a lot of companies, you know, just particularly in international expansion has been one area, you know, a lot of work in the China market. I'm seeing a lot of European companies that want to expand into the U. S. right now actually is a big area.
I think one thing that we see with European companies quite a bit is that they can kind of find a market niche here, but then it's really about kind of expanding globally. So I think that's one area. And then also kind of your point of, you know, offline, online, online, offline. So you know, so happy to connect with people as they go that way.
You know, one of my personal passions is working with entrepreneurs. That's an area that I've always really appreciated. It's something that I just think is fun working with kind of being able to make an impact. So I, I enjoy that as well, just like you do. So it's it's, it's, and I think from, from me you know, I've always been very international.
So kind of being, being able to build these bridges as well.
[00:54:57] Jon Blair: Awesome. Yeah. Listen everyone who's listening to this episode, if you need any help or insights or, you know, someone to help you think through international expansion, expansion into retail in the U S and outside of the U S Renee's your, your go to.
So hope you enjoyed the episode. This was chocked full of a ton of super useful tips. Renee, I appreciate you joining me and look if you want more helpful tips on scaling a DTC brand, consider following me, Jon Blair on LinkedIn. And if you're interested in learning more about how Free to Grow's e commerce accountants and fractional CFOs can help your brand scale alongside healthy profit and cashflow, check us out at freetogrowcfo.com. Until next time, scale on.
