The D2C Multiverse: Personalization & Growth- Lessons from Bajo Foods

Cutting Through the Noise: How Bajo Differentiates Itself

Sara

That's really amazing that an in-house product could grow to be one of Amazon's top choices.

You must be so proud of your business and your team, so congratulations on doing that.

What strategy or tactic do you think helped you stand out most against your competitors in the marketplace?

Sudarshan

I think the only way to crack the Amazon's choice is to have an absolutely fantastic product.

I mean, there's really no bypass to that. Because choice is not just a function of volume, it's a function of ratings, reviews, repeat purchases—I mean, nobody knows the algorithm, but that's our sense. Which is why I think a great product is the most important starting point for this.

And then in the end, great product in the food industry is characterized typically by taste and texture. As much as you may deliver any kind of health benefits, it boils down to taste, especially when you're talking about the snacking category. So that's something which we are very, very particular about, that it has to be taste great.

I mean, you may build the greatest, most functional and most nutritious product, but if our ambitions is to go at scale—a hundred million people—you can't do that without a great tasting product.

Sara

For sure. And just to touch on that a little bit more, you said taste and texture are often big touch points for identifying a great product. What else makes a great product in your mind, in general, across any category?

Sudarshan

So then when you come down to sales, right? Packaging is your first touchpoint with for all customers.

In fact, it's probably going to be the only way people interact with you because you know, B2C brands, especially startups, don't have a kind of money to spend big on television and other mass media.

So in the end, it's packaging that speaks first. And probably the only piece that speaks. So, a great product, as great as it may be, how you present the product is also just as important.

And that's how you see all big companies spend a lot of effort in terms of the experience of the product. Also, in terms of how it's opened or how it's consumed. And I think the product experience is often missed out beyond just the taste and texture.

Those are absolutely non negotiables. But the experience of presenting the product (packaging being a large part of it is) is.

And even small, small things like—what kind of Ziploc do you use—And the minor, minor things. Those add to the product experience as well.

The Battle for Personalization: A Look at Marketplaces vs D2C

Sara

We were just talking about what makes a great product, how do you build a relationship with customers via the D2C business model?

How has this relationship building and personalization helped you gain traction and achieve your growth targets?

Sudarshan

Two parts to this.

One is the marketplaces, which often for D2C brands take up a large part of their business. The platform takes care of everything: The personalization in terms of what product lines to show, who to show.

And, not exactly personalization, but one level that we try to do is based on where the revenue comes from. We look at the geographical distribution. And we try to ensure those specific products are at least enough inventories there by geography in the warehouses that are closer to the customers.

So that's one thing that plays into the marketplace algorithm. And then of course you have the keyboards and all the other optimization that needs to be done.

On our own website, it's a very different ballgame because we control the personalization. So on marketplaces, there's only that much you can control. But on our website, that's where we control everything.

There are obviously ways to surface what you show as related products. That's the most common form of personalization. We do not have website personalization in terms of homepage and other selections. But mostly it is a related products where we bring in personalization.

We also bring in personalization in terms of the the communication with the consumers. And that's really where I think most of the personalization can be brought in, in terms of the product selection that they're shown or the kind of offers that are sent to them. Those are the places where one can bring in personalization more from for repeat customers or customers who have already visited our website.

Sara

Definitely. And in terms of that, speaking to marketplaces and D2C, what would you say are the advantages and the disadvantages to both?

Should an early stage D2C go on Amazon as well as their own website?

Should they stick to their own website?

What's your guidance there?

Sudarshan

I think it's a function of the category you're in and also what timeline and horizon you're looking at.

I mean, building your own brand is obviously important, but it takes time. And what I have noticed is: You have to work with what is least friction for the customer.

And the least friction for the customer is on Amazon. And you know, the initial customers are all Amazon Prime customers who just want to buy it quickly. They have a trust built in. They have a next-day delivery built in. So you have to work with where the customer finds trust in.

And that's something which inevitably ends up being some marketplaces.

But, having said that, building your own website traffic takes a lot of time. Otherwise you have to keep going back to them, giving more and more discounts that come back and shop with us, not with the marketplace.

You can do that through having a certain selection that's specifically your website. But like I said, it takes time to build that base and that understanding in the consumer. There's a very unique proposition and a unique set of products that's available only on their website.

So it takes time. So I think from a quick win perspective, a marketplace helps because you immediately get access to millions of customers coming on the platform. But from a long-term perspective, it's always good to build on your brand and your own website.

Selling Smarter: How F&B Leverages Quick Commerce to Increase Sales

Sara

And on that, do you think there are certain industry specific nuances?

So for example, the food and beverage industry that distinguish your selling tactics on your website versus on Amazon?

Sudarshan

Yeah, so I think “food snacking staples,” are probably the most e-commerce unfriendly products.

That's because the logistics cost-to-value ratio is the poorest. What you have in terms of the weight of the product and the consequent logistics cost—even if you have a premium food product, you can't go beyond a certain point.

You can have probably a 10 gram beauty product that will sell for a very high premium. But you can't have a 10 gram food product. I mean, a regular snacking food product that you're selling. You can't sell it beyond a few cents, and that makes it extremely un e-commerce unfriendly.

So you end up having to sell large packs or multiple packs, combo packs. And for a new brand, which a consumer hasn't experienced, that becomes a chicken and egg situation because you want to start with a small pack to get a sense of the brand, but then you're forced to sell at a high price because otherwise the logistics cost just won't work out.

So it's a chicken and egg, and I think that's where the food industry is different from the other e-commerce industries like fashion or beauty or personal care. In that, the value to the logistics ratio cost ratio is extremely skewed. That's where quick commerce, really helps. That's where grocery commerce helps. Those are channels where you get delivery in 10 minutes—they're not focused on the size of the product. They are just focused on one run of delivery. So they could carry a 50 gram product or a 500 gram product doesn't make a difference.

So those are, those are really the commerce formats that work best for food industry, not the traditionally commerce marketplace like Amazon. Having said that, Amazon has a bulk of the consumers, so you have to play the balancing game.

Sara

For sure, and I love that you spoke about omnichannel retailing because especially in food and beverage, you wanna be everywhere where customers are, right?

So that does involve going into grocery commerce and more in-person retail, physical locations. But. Unfortunately, when you go into retail, you don't get those opportunities to personalize or really empathize with the customer.

So how would you approach personalization and empathy via non-digital channels?

Sudarshan

So you just have to go for approximations in terms of the kind of stores you would select.

Personalization means you're seeing a set of products that are most relevant to you, right?

So you have a choice of locations, the choice of stores that you have is an approximation of the same.

I mean, that's closest approximation you can have. And after that, the next approximation is the particular aisle or the particular brand along which you're stacked. Because if you have a product and you go to any store, you have the full range. If you're selling cookies, for example, you could have have a mass-market low-price cookie, or you could have an extremely premium cookie as well.

So, where do you stack yourself within the store? That's the next level of personalization because in the end, it's the same logic as what you see on the website. It's related products. And what are those related products, based on your market basket and market basket analysis on the digital front.

The equivalent of that is available within the store. If you work with offline stores, you can get some sense of what the market basket is when you look at a bill and you know what the related products are.

I mean, those are not accurate, but close approximations of what you would do in an offline store.

Data-Driven Success: How Zero Party Data and Analytics Fuel Growth

Sara

I really like that cart estimation online versus offline and bundling and where you appear. I think it makes so much sense to take those lessons that we learn from e-commerce and apply them to retail and vice versa.

So going back to the e-commerce piece, can you talk a bit about the importance of customer data, zero party data and analytics in running successful brands like Bajo Foods?

Sudarshan

So customer data is something that everyone wants so that they can run all kinds of personalization and retention programs. But often that becomes tricky in terms of the software they have that captures the data.

Obviously, whatever is on your website is yours, but if it's in the marketplace, then you always get cohorts and approximations. You don't get the actual data. It makes it extremely difficult for you to work with that. And that's where your own website really helps you in a big manner to drive retention and repeat purchases.

We use a number of softwares and we work on Shopify, so Shopify has a bunch of plug-ins and a bunch of softwares that offer some bit of personalization and some bit of data capture that can be used for the communication.

But really, each brand journey is different.

So just having the product selection or just the standard metrics doesn't apply. You have to eventually build workflows that are specific to you. So, for example, we are in the diabetic space. We have a product line. So your journey in terms of what you surface as your product or the way you personalize has some level of customization. You, you have pre-diabetics, you have early diabetics, and you have severely diabetics.

So that's where no software will be able to solve for that.

So you have to bring in the human element in terms of understanding who your segment is and what would make sense.

Sara

Awesome. And on that. So in terms of segmentation and not always knowing based on the data, like you gave the example of the different types of diabetes conditions, what roles do reviews and customer feedback play in influencing conversion rates for Bajo Foods?

And how do you leverage this feedback to improve the product and online experience for others?

Sudarshan

It makes a huge difference. I think that for new brands, trust is the only way and trust comes primely from the ratings on the marketplaces.

A big reason why our products are Amazon's choices are: We are the top rated products across thousands of ratings in the category, in every category that we play in. And that's because of the quality of our product. And that reflects automatically in terms of the conversion rates and how quickly the consumer converts.

But ratings absolutely is something we track very closely.

Reviews are something that we track on a weekly basis. There's a weekly quality review meeting that we have. We start off by playing verbatim feedbacks from customers that we've recorded. That's a starting point for any quality review meeting.

So people understand what the consumer is saying. And then we run through ratings, and then we run through reviews. And in all these meetings you have the production team also sitting in, the logistics team also sitting in, along with the business teams. Because often the product quality is determined by production of course, but often also logistics plays a part because, your product could have been poorly transported and that's where the quality went down.

So we have common meetings. Everyone's together and that's how we review it. It's that crucial to answer. For sure.

Sara

And would you recommend that from the get-go? Early stage D2C brands establish a quality assurance piece as well as start reviewing reviews and ratings and incorporating that into their product?

Sudarshan

Yes. I did not invest in it early enough and I see the value of that.

We got a dedicated quality person about a year back—pure quality controller. What you see in that industry. And that's really a key part of why we moved to Amazon's choice in the last year, because consistency is absolutely essential.

I mean, that's a core definition of a brand. A brand fundamentally is a consistent experience that gets delivered to customers. That's really the starting point of any brand. That's what a brand means: You know what to expect.

You know what you're going to get and you know that's really consistency of experience and that only happens when you have strong quality control built in. So to deliver consistency of experience, that's absolutely crucial for any brand to be get.

Consistency Matters: How Meeting Customer Expectations for Consistency Drives Brand Loyalty

Sara

In what areas can customers expect consistency and where does consistency impact them the most?

So I guess. Taste would probably be one of them. Making sure that every time you buy the product it tastes the same. The packaging is easy to use and open. Are there other areas that you've seen where consistency and quality have impacted customer loyalty and brand affinity?

Sudarshan

Yeah, I think time of deliveries, especially when you have your own website.

The time of delivery because, in the end, you're competing with the marketplace. So if they see two-day delivery, one-day delivery options also available on your website, that makes a big difference because they get to experience a product quicker because a lot of these are impulse buys also.

You are far more in control and you are a professional company that delivers in one to two days. So there is a signalling effect that also comes in there. So I think time of delivery, surprisingly, we've seen makes a lot of difference in terms of the experience of the consumer.

Beyond that, I think in food products, this is the core of what we see: Packaging, taste, texture of the food product. Obviously you have the the expiry and the test results. For example, you're running a health brand and a functional food brand, the quality control in terms of production is one part, but in terms of what went into building the product, that's extremely important.

And it's important that you publish those test results, builds a lot of trust and credibility in the minds of consumers. So quality in terms of product design or building the product is also just as important.

Sara

I like that answer a lot and it makes a lot of sense. Going back to what you were talking about, about shipping getting everything quickly.

Everyone wants things in their hands as fast as they can, and I'm sure when it comes to food, you see something tasty online and you want it immediately, right? So one to two days. Makes sense. And then talking about building that trust, publishing those studies, sharing what's in your food is definitely a huge trust builder.

And I agree with you there. I'm gonna pivot a little bit back to personalization. So personalization has a lot of benefits, especially in commerce from increasing AOV to improving inventory performance, to driving customer satisfaction and loyalty.

From Click to Connection: How D2C Brands Can Ensure a Consistent and Personalized Experience

Sara

How does your brand ensure a seamless and personalized customer experience through its D2C channels?

Sudarshan

So, when you run ads, you are targeting consumers in a certain manner and presenting them a certain communication and for our client, and then obviously your data, directing them to your own website with.

Instead of driving them to the homepage, you're driving them to very specific product pages, which is in line with the communication that drove them to your website in the first place.

So that's the first level of personalization starting outside your platform. And then, like I said, you talk about the product and what are the related products that you show. That's the next level in terms of where you can bring in personalization.

And subsequently, once they purchase, or even if they haven't purchased and they have an abandoned cart, if they just come and drop off,  you have remarketing where you can bring in a lot of personalization. In terms of what products they see and what products they are pushed to them to come back and buy and remind them to purchase.

Post that, once they bought a product, it is about first communication personalization in the sense that you need to track when the product reaches them, right? And post that, give it a certain period of time, and then go back to them for feedback. They've had that time to use the product and then come back to you with some kind of constructive feedback.

And post it becomes the entire retention in repeat purchases. So you have multiple metrics. You have the standard metrics, but apart from that you have metrics around what products they buy, what else can you cross sell to them. Like I said, in our case, it becomes very important because if they bought samples and you want to cross sell snacking to them, if they bought snacking you want to cross sell indulgence to them and then so on and so forth.

So you have three broad categories: Desserts, which is indulgence. You have snacking, which is an impulse buy. And you have staples, which is consistent products. So, they spend on different meal locations. The way we look at it, one is a center of plate main meals. One is a post main meals. And then one is typically dinner. So we personalize based on that, which is occasions of food and how they're buying.

And consequently, if they've covered one occasion, can we push them the other occasion to eat as well.

Sara

Awesome.

Staying Ahead of the Curve: Sudarshan’s Advice for Future-Proofing Your Business in an Evolving Market

Sara

So we're talking about personalization, we're talking about the snack category, what's in their basket for cross selling, upselling, putting them in stores that are close to them. If I'm an early stage D2C brand, where is the most important place to start to get that ball rolling, to establish myself in the marketplace?

Sudarshan

I think it's to get initial consumer feedback, you need your first hundred customers feedback.

You get that online quickly. Any offline activation through which you get your customers doesn't matter, but getting the first hundred consumers and the founders speaking to them as much as possible, getting a sense of what's really happening. It's absolutely, absolutely crucial.

There's no other way around it.

Today, even any of the new products that we launch I directly track those products we send out to consumers. We have the brand and the category managers themselves call up customers, get feedback, and put together what is happening with the product. Because what you hypothesized and built for isn't necessarily what the consumer is understanding.

So it's important that we have a good sense of what the consumer understands, rather than what you have been communicating. Absolutely that's where I would start. It has to be absolutely neutral customers and one hundred customers that you directly take qualitative feedback from, and at least find customers from which you can get a sense of the ratings of the products.

Nothing substitutes that. Then rework the product, the packaging positioning, and then go big.

We've done this multiple times where we think we've figured it out. We think we have a great product. We have the greatest proposition gone all out, and then realize that we've missed quite a few things.

It's a three month cycle. But as much as people say, “go out there, it's go big or go home,” you have to go big. But after you've set your foundations a little more strongly. I mean, in the tech world you have the MVP concept. All of those are fundamentally the same things—which is you need to get your first product and get your first hundred customers, get their feedback and see whether they're buying it back again or not.

Sara

For sure.

And we're wrapping up our session, so I'm gonna leave you with one more question, and this is kind of the future of the food and beverage space and commerce in general. If I'm a new, early-stage D2C brand and I'm just entering the market today, what's the best piece of advice you can give me to future proof my business with all these new trends, new channels, different ways of selling, et cetera.

Sudarshan

Have someone with a very objective view, not just friends and family. Second is be clear in terms of what your ambitions are and scale, because If you're looking to build a very large category and brand, then you need to understand how big is the category in the first place.

And you have to be absolutely brutal and honest to yourself in terms of is the category—is it large enough or not? If the category is large enough, you're convinced about it, then you can always build out a large enough brand there.

But if the category is not large enough, you may have the greatest product. You may just get out-priced or, you know, it's just too niche a product. It may be a great product, there's no doubt about it.

But I look at category sizing as extremely important crucial before you start going down this path and you have to be absolutely brutal and honest, which is where I think, as founders, we tend to be more emotional because we tend to get very passionate that this we have to do. So we find reasons to convince ourselves, but I think it's important that we have an objective and an absolutely honest view on the size of the category.

Sara

That's wonderful and such a nice thought to end on. Being passionate, but having that objective view. Being honest with yourself about what you're doing and what you wanna do and your ambitions there.

And I think that's a great way to future proof your brand and to make sure that you're developing for the right reasons and not just for your passion. So thank you so much, Sudarshan, for joining us today. It was so wonderful to have this conversation. We touched on a bunch of different points, but I think a lot of it is really great fundamental knowledge for early-stage D2C brands.

Great conversation around Amazon, around personalization, around owning your customer data and building that trust. Again, thank you so much for joining us. Everyone who's on the livestream today, give Bajo Foods a follow, give Lo! Foods and ProteinChef a follow. Make sure that you're keeping up to date with what they're doing because it's really, really cool in the space.

And definitely give mason a follow on Twitter and LinkedIn. Again, thank you so much Sudarshan, for joining us and I hope everyone has a great Wednesday. Thank you.

Sudarshan

Thank you. Thank you for having me as well. Great talking to you.