Mightylicious tripled its direct-to-consumer (DTC) sales in the last 12 months, but it hasn’t been easy, founder Carolyn Haeler said.
Haeler launched the gluten-free cookie company in 2017. Today, the majority of its sales are through retailers including Whole Foods, Walmart, Costco, and Mightylicious stores.
Walmart ranks No. 2 in Digital Commerce 360’s ranking of the Top 1000 ecommerce retailers. Costco ranks No. 6. Amazon, No. 1 in the Top 1000, owns Whole Foods. Amazon is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.
Mightylicious CEO and founder Carolyn Haeler
Shipping directly to consumers is essential
Growing DTC sales is a top priority right now, Haeler told Digital Commerce 360. Mightylicious recently raised $5 million in investor funding toward that goal.
Adding a DTC aspect “created a lot of volatility,” Haeler said. “I realized that direct to consumer is sort of the future; it’s not going away.”
She said she realized having a strong customer base from DTC sales will help meet her goal of getting on more retailers’ shelves.
“Those two things are cyclical, and they’re going to drive each other,” she said.
So far, DTC sales are “not a significant portion” of revenue, Haeler said. That’s due to the high volume of sales in grocery stores. DTC sales are less than 10% of total sales, as of May 2023. She expects that number to be much higher next year because she’s putting up to $20,000 per month into marketing her DTC business this year.
“Direct to consumer isn’t growing as much as I would have hoped,” in the past year, she said, so she recently brought on a new marketing firm to speed up growth.
DTC comes with new challenges
Shipping Mightylicious cookies is more trouble than she expected, Haeler said.
“For me, the biggest challenge with direct to consumer is that … there’s a tracking system and there’s a tracking number across all of the providers. They don’t scan it.”
She said problems equally plague all the shipping providers Mightylicious works with, which she attributes to overburdened staff and high turnover.
In other words, customers get access to tracking information through shipping companies that is often inaccurate. For example, customers regularly report receiving notifications that their orders were delivered, only to not receive them for another two days. Haeler spends hours each week sending emails to customers explaining issues with the tracking systems, and assuring them their orders are on the way.
Mightylicious sends customers notifications when their orders are placed, shipped and delivered, Haeler said. In practice, though, those notifications don’t necessarily line up with those events happening in real time, leading to angry customers reaching out to Mightylicious.
“If something doesn’t get scanned into the system, customers get upset,” Haeler said. “I send so many emails to customers like, FedEx says it was delivered, which means they have it in their system, and it is going to show up in two days.”
Minimizing late orders is a priority
As of May 2023, late orders or incorrect notifications impact about 10% of DTC Mightylicious orders, Haeler said. That means 90% are getting orders as expected, but she said late orders should ideally be fewer than 2% of shipments.
“When the order is placed, they get a notification. Once the order has shipped, they [customers] should get another notification when the order is delivered. They don’t get a notification saying this is a clusterf***,” Haeler said.
Mightylicious has no plans to change its communications strategy to warn customers about potential problems that could come up. The cookie retailer is switching its DTC sales system to work with Amazon, so Fulfillment By Amazon will handle these logistics. It’s a tradeoff, Haeler says, because Amazon has more expertise in shipping and fulfillment than Mightylicious, but she will lose direct visibility and control over the process.
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