In our second edition of the Growth Marketing Clinic, we had the Startup Lyfa from Basel as our guest. Lyfa offers home delivery for Zero Waste groceries – this means they deliver food and household items to customers in reusable packaging and take care of reverse logistics after the consumption. In our online meetup we discussed what tactics they could use to grow out of their niche and cross the “chasm” to reach the mainstream market.
The “Zero Waste” movement in Switzerland started to get noticeable in 2015, when the association Zero Waste Switzerland was founded. Since then, the topic has gained momentum with several packaging-free grocery stores that were launched and just recently, the first Zero Waste Restaurant of Switzerland opened its doors. The two founders of Lyfa, Michael May and Lewys Thomas, started their quest to eliminate packaging waste in 2019. Since then, they successfully launched their operations in Basel and built up a base of loyal customers. With the growing awareness of the “Zero Waste” trend in Switzerland and the growing numbers of transactions being made in online stores, the timing seems perfect to launch such a delivery service. But the ecommerce delivery arena is challenging, and expanding the customer base beyond the early adopters can be difficult, especially for a startup. For that reason, we compiled some tactics from our meetup on how ecommerce startups like Lyfa can grow their business.
If you want to grow, the “bad news” is that at some point, you will have to invest in online advertising. The “good news” is that you can do so with a very small budget. For a case like Lyfa we recommend starting with Google search ads, since they allow to capture traffic with a high intention to buy. Additionally, Facebook & Instagram Ads can be very effective, provided that they are well tailored for the target group.
COMMUNITY & CONTENT
When it comes to topics like waste reduction, veganism or sustainability, early adopters are often driven by moral motives. While these communities may be small in size, especially with relatively new trends such as zero-waste, they allow you to build a community around the purpose that you share with your customers. Often times, consumers who shop in these niches will also be well connected with others who share their convictions, and they may be more vocal about their choices than your average consumer. These niche dynamics can be leveraged by business trying to sell to these audiences. Try to start a dialog with your customers on social media, encourage them to comment and share your posts, give them a reason to connect with you or start a community challenge. Another approach could be to create engaging content in the form of live events, videos, blog or newsletter, where you can recycle the content for all the different formats. This gives you the opportunity to position your brand as a thought-leader in your industry.
Collaborations with partners can be a great source of brand awareness and new customers. Such marketing partnerships allow you and your partner to tap into each other’s communities. One example are the suppliers. They have a huge product know-how, they have reach within and beyond their own customer base and your interests are very much aligned. A joint product promotion is only one idea worth exploring.
For topics like Zero Waste, there exist initiatives from non-profit associations and public institutions. Participating in such platforms, for example by contributing know-how, is highly recommended since they are well embedded within the ecosystem of all relevant players. Partnerships can also be entered with other businesses that sell complementary products. By mutually promoting each other’s product, you can multiply your reach.
BROADEN THE ADDRESSABLE MARKET
As we stated earlier in the article, early adopters are often a very narrow group of people, driven by idealistic or even moral motives, and they normally have enough disposable income. To make a product appealing for people on the other side of the “chasm”, in the mainstream market, it might be necessary to make adjustment to the product or its communication. In the case of Lyfa, this could mean to broaden the product offering by including “minimal waste” products in the shop – as a downside this could increase logistical complexity. Another approach would be to shift the focus in the communication by highlighting other aspects of the value proposition that address broader consumer needs, such as “convenience” or “price”. To find the right combination, firms should conduct market research with customers of the mainstream market.
For e-commerce businesses, optimizing the conversion rate translates directly into more revenue. Therefore, you should take a detailed look at the traffic flow on your website with tools like Google Analytics and HotJar. Where do people navigate to? Where do they best convert? Where do they drop out? Try to identify patterns, use them to optimize the website and observe how the traffic changes after the optimizations. For example, a bigger and more prominent checkout button might reduce the number of abandoned carts – Google Optimize is a great tool for such A/B Tests.
Another impactful measure is retargeting ads: prospects that visited your website without buying anything can be targeted with your ads on social media. With the right setup this can even be done on the level of the individual products a user looked at. Cost-per-Acquisition of such ads are often relatively modest.
Acquiring a new customer is expensive, therefore it is important to increase the number of reorders. Try to remove all hurdles in the reordering process. FYou could, for example, add a reordering button, were the last delivery is triggered again with one click. Or you can reward customers for repeat orders with some kind of loyalty program. One of the most effective tools to initiate reorders, according to our experience, are newsletters, especially when combined with an incentive.
You can create awareness for your brand and drive traffic to your website for a limited budget by engaging more actively with your community, creating insightful content, launching marketing partnerships, and focussing on the right kind of online advertising.
By taking a close look at your website analytics and conducting A/B-Tests, you can increase your conversion rates, whichwill translate directly into more revenue. Last but not least, you should make sure to incentivise reordering for existing clients, with measures like a newsletter or a loyalty program.