4 lessons from QVC retailer Saltopia on transitioning to a direct-to-consumer business.
2020 took many business owners by surprise. Since March, when the coronavirus pandemic began in the United States, the share of consumers who have switched from shopping in stores to online has increased 28%1. That means sellers have had to rethink their business models and find new, innovative ways to connect with customers online.
One founder who successfully navigated the transition from wholesale to D2C e-commerce is Kimarie Santiago, owner and CEO of Saltopia Infused Sea Salts. Below, she shares more about her path and the lessons you can apply to your own business to build trust and boost sales.
Based in Hackettstown, New Jersey, Saltopia Infused Sea Salts offers more than 170 flavors of naturally harvested sea salts from all over the world. Their range includes everything from chocolate salt to French mustard salt, giving consumers a fun, high-end, and healthy way to enjoy recipes. The company was founded ten years ago when Santiago began selling flavor-infused sea salts as hostess gifts at a local farmers market. And within a year, Saltopia's products were in three states and over a dozen farmers markets.
Up until COVID-19 hit, Santiago focused on a wholesale business model, selling her products through mail-order catalogs, boutique gourmet stores, and gift shops, as well as farmers markets. The company did have an e-commerce website, but it wasn't the driver of the business.
In Santiago's fifth year of business, Saltopia formed a partnership with QVC, America's most popular television shopping channel. "It was like business bootcamp," says Santiago. "Being on QVC really teaches you how to run numbers and drive your margins." But while the company was on pace to hit five million dollars in sales annually, selling via QVC and wholesale meant Saltopia had no insight into their buyers because they had no data.
That had to change when the coronavirus pandemic hit in March of 2020.
When the coronavirus pandemic hit, Saltopia suddenly lost their key distribution channels. Shops shuttered, markets closed, and QVC was no longer hosting on-air guests. Instead of panicking, Santiago saw it as an opportunity to build her own audience and to make changes that would drive the company forward. Here were the four steps she took in transitioning to a direct-to-consumer, e-commerce business model successfully.
From wholesale to e-commerce: How the pandemic forced Saltopia to rethink their business model.
1. Find your peer community and tap into the (publicity) resources they provide.Running an e-commerce company can be a challenging journey of good days and bad days. That's why creating bonds with other business owners is crucial, says Santiago. She found community through the Tory Burch Foundation Fellows program, which gave her access to a network of peer founders across the United States. The program provided much-needed inspiration, camaraderie, and support, including introductions and strategic connections.
In fact, it was through the Tory Burch Foundation that Santiago heard about an opportunity to be on Good Morning America's Steal and Deals segment. "I thought to myself, 'this is our audience – people at home in quarantine looking for things to cook, looking for a great deal.' Plus we'll own the database of sales that come through our website, unlike other channels we had sold through like wholesale and QVC."
2. Get your website – especially your merchant services technology – ready for online sales.Santiago knew that being on the national morning show was a make-or-break-it opportunity and that she had one chance with customers. If they weren't happy with the buying experience, she would lose sales. So she devoted time to getting PayPal Checkout in place on the company's e-commerce site before airing. And she was happy she did.
Saltopia did 10,202 total orders within their first seven minutes of appearing on Good Morning America. "My team called me and I thought something went wrong, like our website crashing. But they actually called to let me know me sold out of inventory! It would have been a very different story if we didn't have the right merchant-service technology in place."
Santiago also notes the value of working with a trusted payments provider. "A customer is more likely to utilize their PayPal account versus one made on the Saltopia website, especially if it's their first purchase and they don't know the brand well. More than 60% of our purchases are made through PayPal because people already have accounts there. It makes their shopping experience that much easier."
3. Identify your niche markets and use your customer data to tailor your marketing.
Saltopia's customer base increased by 1,000% after the Good Morning America segment and was incredibly responsive, averaging a 38% open rate, 42% click-through rate, and 88% conversion rate on emails. Santiago was even better equipped to take advantage of her active customer base by customizing her marketing approach.
"We were able to really mine the data provided through PayPal in a way that I've never experienced in ten years of business," she says. Understanding her customers gave Santiago the power to identify her niche markets and tailor her marketing. For example, she created email blasts to target specific customer interests, which boosted sales.
"I was like, 'Wow. Southern California people love these five top flavors that we sell. Why do they love it? And I looked into what time of day my customers shopped and found that it was between the hours of 3:00 AM and 5:00 AM. We'd then send them an email blast at that time since that's when most of their transactions were taking place. That kind of data is really critical and it's so easy to pull and just quickly, in an Excel spreadsheet, put it all together."
Specifically, the data points she focuses on are:
- The time of day shoppers shop
- Zip codes shoppers are buying from
- States shoppers are based
- Top things customers are buying
To build greater customer loyalty and delight, Santiago adds free samples to orders based on the most popular products from the buyer's location. "You're giving your customer exactly what they're looking for and it really doesn't take anything," she says.
Making the transition from wholesale to e-commerce ultimately helped Santiago run her entire business more efficiently and effectively. "Figuring out how to look into my own customer base means I can make the best of my time investment. I can understand who my buyers are and what they want instead of throwing stuff against the wall and hoping it sticks," she said.
Want more stories like Saltopia's? Tune in to our Adaptables podcast series featuring small business owners who have not only adapted to survive, but to thrive.
More recommended resources:
How four savvy service-based businesses pivoted when physically meeting wasn't possible.
Shifting a brick-and-mortar business online: Strategies from popular NYC bakery Sweetly Brooklyn.
From offline to online overnight: 7 lessons from high-end design studio Jak W.
1–2. Report: How We Shop – Measuring the Rapid Digital Shift, PYMNTS.com and PayPal study of 2,163 U.S. consumers, September 2020.