This is how you do it. Lick's ambitious plan for launching a DTC business in the year 2020
“When a strong brand is combined with being able to get everything you need and an unbelievable customer experience, we think we can create something special”
In my post about Cornerstone, I mentioned the rules of a DTC business had changed a lot in the last few years. The days of cheap advertising on Facebook and other digital platforms have had an extinction event. The environment has become more competitive with technology like Shopify significantly lowering the barriers of entry for entrants and ideas. The traditional bricks and mortar brands have also entered into the DTC space as they look to try and recover market share they had previously lost to this brave new digital world.
If you are about to start up a DTC business all this competition and higher barriers to entry mean that you need a spot on entry plan and the resources to execute it. What you need to do and what you need to do it, is what I wanted to find out from Lucas London, the CEO and co-founder of Lick. Lick, which is a Home Decor business, launched in 2020 by Lucas and his co-founder Sam Bradley.
I met with Lucas a few months after the official launch of Lick. His story and approach opened my eyes about to how you might go about launching a DTC business today. My previous interviews with the likes of Huel, Graze, Bloom & Wild and Tails have been a goldmine of advice on topics like data management, customer service, knowing your customer and using DTC to give you an advantage over the bricks and mortar brands. Where they differ from Lick is that they were all established five or more years ago. Meeting with Lucas answered the question about how you need to do things in 2020.
Left to Right: Sam Bradley and Lucas London, the founders of Lick
The first thing I learnt from Lucas was, nowadays, a brand needs to quickly connect with their customers without solely relying on cheap Facebook ads to find their audience. As Lucas London told me "you have to get your brand, product and service spot on and if you still have to rely on paid-for acquisition, you are going to run into problems". The high cost of acquiring customers is why companies like Casper have gone from heroes to zeros in the last few years. The shifting sands of DTC mean that tomorrow’s market leaders now have to go about things very differently to the pioneers who came before. To find out what exactly, is why I spoke to one of the most ambitious and well funded DTC companies to emerge in recent times, Lick.
On first glance, you might get the impression that Lick is a DTC paint business. If it launched five years ago, it might have been just that. Not so today. Lucas told me "It was important to us we don't just create a DTC paint brand. There are now a number of DTC paint brands out there across the US and Europe, and they have to raise lots of money to spend on Google Adwords and Facebook. They are playing the mattress game again. We plan to create barriers by having a large product range [beyond paint] and making something which has traditionally been frustrating, enjoyable. We want to support the decorator, inspire them and give confidence."
For Lick, paint is only one part of the offer. Despite Lick being only a few months old, it already sells paint, wallpaper, a host of decorating accessories and has just launched a range of blinds. They also give advice, inspiration and online tools on their website.
So much more than a DTC paint company.
It may seem they have their work cut out with multiple products and services, However, Lucas was also keen to point out by their very nature they are also trying to simplify things "Currently when it comes to paint there is way too much choice. The traditional brands pride themselves on having all these different shades, but they are essentially asking you to choose a perfect blue from 50 slightly different blues. You wouldn't choose clothes like that. Our approach is to curate a small set of colour palettes which work for both the homeowner and for trade professionals." As well as limiting colours, they have also removed all the different paint types by creating a paint which can be used on multiple surfaces.
While they have a beautiful website full of pictures of idyllic looking rooms, Lucas is determined that the brand should appeal and be used by the mainstream consumer. "There is a common misconception that you can now buy paint cheaply. The problem is that often its poor quality, meaning you need twice as much, it gets marked easily and does not carry the depth of colour. And if that's the case you are getting poor value for money". He continued "We have positioned ourselves for the mass market to make sure we are both affordable and good value."
The affordability of the products is also critical for Lick's service to professional decorators and builders called Lick Pro. Lick Pro customers receive trade discounts (mainly due to the volume they buy), and shortly they will also be able to enjoy same-day delivery and order via an SMS service.
Lick has been set up for Business to Business, as well as DTC, via it’s Lick Pro service.
Having a great looking brand might lead to the odd misconception of premium prices; however, the brand image has always been at the heart of everything they do. "Right from the beginning, we realised to succeed we would need to build a really strong consumer brand with multiple touch-points. When you have some people who only decorate a room every 5-7 years, it's going to be exceptionally hard to build a strong enough brand that people will keep coming back. Our way around this, as well as selling multiple products, is to build a community and create content to make sure that people are consistently engaging with the brand, even if they are not purchasing the product. The other great thing we are finding is that the younger demographic are decorating their homes much more frequently. They are also looking to personalise more than ever before. We want to try to inspire our customers weekly so that when they are ready to make a change, we are their first thought. When a strong brand is combined with being able to get everything you need and an unbelievable customer experience, we think we can create something special."
Slick Lick. Without a strong brand Lucas does not believe they have any chance to disrupt the current market.
As well as having a dynamite brand, the other thing which stands Lick apart is the scale of their ambition. It's not just multiple products they also aim to be both omnichannel and international as quickly as possible. Omnichannel makes sense not only in access to a broader customer base but also in its importance to building the brand. Their first steps into retail will be in a partnership with the online retailer MADE. "We have been approached by a number of retailers, but we believed MADE was the best fit and are excited to have recently launched in partnership on their store. It is a great opportunity to build trust with the product and brand. They have strong exposure across Europe which can also unlock a lot of value". Given MADEs success in shaking up the furniture industry, they look like a great fit for Lick’s ambitions.
Explaining their international objectives, Lucas went on. "At the moment we only have fulfilment from the UK, which means the shipping is expensive and slow to get to mainland Europe. We want the customer experience to be the same for an international customer as a domestic one. To enable this, we will be creating fulfilment hubs in local markets from next year to make sure we can offer the same user experience in multiple markets. We have also built the platform to incorporate multi-language and multi-currency. We are ready for this to be turned on tomorrow. The key step, before we flip the switch, is establishing the fulfilment centres".
Lick’s content marketing is to both inspire it’s customers and to give them a reason to interact with the brand even when decorating is not on the to do list
The Lick vision is a comprehensive illustration of what building a modern DTC company is now about. It is one which is is multi-product, multi-channel, multi-region, caters for individual households as well as trade customers, with it all wrapped up in a super slick brand to do the selling. Unsurprisingly, to have all this it has required some serious Venture Capital backing (they have recently raised £3 Million in addition to a sizeable seed round). Without the scale of their ambition, it is unlikely Lucas and Sam would have been able to secure the funds needed to establish the business. Lucas explains, "The VC world now has the scars of too many unprofitable DTC companies. While they appreciate the direct relationship, to get their backing, we had to show them this was not just about the old model of a DTC which required lots of money to be spent on customer acquisition. It was the execution on the brand, the multiple vertical and omnichannel approach, which made them realise we had much better foundations than the older iterations of DTC businesses. The thing we did well was to raise a good amount of seed capital to establish our brand and verticals, which in turn has allowed us to do further successful raises".
When it comes to the VC investment, it could be a case of the tail wagging the dog with the VCs forcing Lick to shoot for the stars. If Lucas and Sam were not able to demonstrate it had a hugely ambitious plan for Lick, they would not have been able to get access to funding. But for Lucas, it was the only way to go, "If you create a consumer brand without capital, it’s a really hard slog. If you go down that path, you are at risk from competitors coming in with more resources. It is also much harder to change the dynamics of the existing market."
For Lucas, Sam and the Lick team having the right brand and service is everything. This means they have required significant amounts of capital to create the brand and to establish the operational set up to deliver on their promises. I wish Lucas and Sam every success and am left thinking that when it comes to building your DTC company today, it is more complicated than ever and the stakes are a lot higher. Fingers crossed that the rewards are also even larger if you can pull it off.