Funny Story: Building Sheets & Giggles into a DTC Success Story
Building high-conversion email lists, using humor in advertising, and the pros and cons of partnering with Amazon
They say that laughter is the best medicine. For Colin McIntosh, it’s also been a pretty good business strategy. After a couple of fits and starts in business, McIntosh found himself with no job but quite a few domains in his name, all of which were pun-based. So he cycled through what he owned with a plan to form a company in a disruptable industry where he could make a splash and earn some market share.
What he landed on was Sheets & Giggles.
“I wanted a physical product that was sustainably made in a massive commodities market that had zero brand differentiation or loyalty, that was highly fragmented, so I didn’t have to chip away at a market leader, and that was largely traditionally physical retail, so I could bring it online with a direct-to-consumer model and beat the retailers’ price so you’re not giving retailers any margin,” McIntosh said. “I thought, ‘Does bedding fit my criteria?’ And it fit perfectly. It’s a $12 billion U.S. market growing 10% year over year, highly fragmented, the top five players only own about 27% of the market, and it wasn’t fully online at that point. It was still mostly physical retail. So I just put my head down and I fell in love with this brand.”
Sheets & Giggles is a DTC bedsheets company with a social good component that became the most successful bedsheets company to launch on the crowd-funding site, Indiegogo. In order to achieve that, McIntosh explained that he had to work backward from his goal of raising $100,000, by building an email list with enough people who would actually convert.
“Always assume a 3% conversion rate with anything, even your friends and family,” McIntosh said of his strategy. “If you have 1,000 people that you think you can count on, you’re talking about 30 people that are actually going to pull the trigger and give you their credit card information when you end up buying. You don’t want to rely on the friends-and-family model for crowdfunding. It’s just not a good way to do it. What you want to rely on is an email list. I get asked all the time, ‘Where do you find your email list? Do you buy it? Do you build it?’ The answer is, ‘You build it.’ You want to build it and get people to give you their emails who are interested, qualified leads, who are interested in buying into the brand that you’re building.”
Since then, Sheets & Giggles has grown to millions in sales. And while McIntosh said that the company still relies heavily on an email marketing strategy, there is much less emphasis there than in the past.
“In terms of email strategy nowadays, we actually don’t email people nearly as often as we used to,” he said, “In the very beginning, when we launched on Indiegogo, we’d email people maybe once a week. Now we’re probably emailing people once a quarter, which is really crazy for a direct to consumer brand….so we email people only when we want them to take a very specific action. And that leads to open rates of high forties on emails.”
Instead, McIntosh said that Sheet & Giggles relies on branded channels, such as Facebook, as well as advertising on new media like podcasts. He also discussed how Sheets & Giggles partners with Amazon, which he looks at as both the best and worst thing a DTC company can do.
According to McIntosh, there are numerous pros to selling on Amazon, including the fact that Amazon has become the №1 destination for product searches on the web. As such, it can be used to bring people to your product much easier than other channels. However, McIntosh noted that there are downsides as well. The expense involved in selling on Amazon is something that needs to be considered, as well as the impersonal nature of working with such a large platform.
Ultimately, though, it comes down to whether the pros outweigh the cons. And at the end of the day, the product you sell has to be worth it for the customer regardless of where they are purchasing from.
For Sheets & Giggles, the product has been an undeniable success. Positive reviews abound across channels, and the humorous tone of the brand has hooked customers. And making that connection as a brand is a strategy that McIntosh believes in fully.
“When you’re building a brand, you want 20% of people to really viscerally resonate with it and 80% of people to either be mad or react poorly to it,” he said. “You just don’t want indifference. That’s the biggest thing is I see so many direct to consumer brands that are the next shiny thing like, oh, the best apparel you’ll ever buy or the best makeup or the best food or… They’re all the same exact brand and it bores me.”
To hear more of the Sheets & Giggles story, tune into Up Next in Commerce.
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