From its funny viral videos to its quirky logo featuring a pipe-smoking, tie-wearing Sasquatch, the personal care brand Dr. Squatch has broad appeal. That’s why over the past decade it has grown into a $100 million subscription company and is now turning an eye to global growth.
But as a digital-first brand with a very narrow focus — men’s all-natural soap, deodorant and hair care — Dr. Squatch has had to ensure its approach to growth is efficient and effective. That’s why the shipping experience has become core to the brand’s investment priorities, especially as it becomes a full-blown omnichannel business.
“Our goals for growth in 2023 will look similar to the ones from 2022, with a major focus on meeting customers where they are: online, in-store, marketplaces, internationally, etc.,” said Andrew Sutton, Director of Fulfillment at Dr. Squatch, in an interview with Retail TouchPoints. “We’re also looking to elevate the overall customer experience (CX) regardless of the channel, while keeping costs in control.”
Thanks to a growing partnership with OSM Worldwide, Dr. Squatch has successfully evolved its fulfillment strategy so it can not only deliver packages faster but cheaper for consumers and the business.
For DTC brands especially, capacity constraints and forecasting have become significant challenges. “It can be challenging to determine the best shipping strategy for the company’s package if they ship various size shipments, yet customers expect an easy, frictionless shipping experience,” said James Kelley, President of OSM Worldwide, in an interview with Retail TouchPoints. To combat this, companies should “look beyond a single-carrier and utilize multi-carrier shipping experiences. Multi-carrier shipping options help expand delivery and last-mile services, and customers like to have options.”
By implementing a regional node and line haul approach with OSM, Dr. Squatch has been able to bring shipping costs down to 2019 levels and reduce overall time in transit. “This is made possible because of the way OSM zones and rates shipments, which can reduce average zoning by anywhere from half up to two or more zones when compared to our other carriers,” Sutton explained.
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Dr. Squatch also uses OSM’s Premium Network to support its growing subscription business. Because it taps into the USPS infrastructure, subscribers’ orders are always delivered in a fast and affordable way.
In Q4 2021, Dr. Squatch initially piloted OSM with a fraction of its DTC volume. The brand quickly expanded to full usage once it realized time-in-transit and shipping cost savings, and has continued to realize the benefits. Overall time in transit was 22% faster in 2022 over 2021 — and 42% faster than in 2020. However, shipping costs for the brand were only slightly above 2019 levels. Sutton noted that this has “yielded happier customers (our NPS was up slightly in 2022), while protecting our margins.”
Sutton added: “We’re navigating cost increases in virtually every aspect of our business, so it’s nice to have a partner like OSM in our corner who has proven to be capable of helping us mitigate cost increases in shipping. This is especially impactful when outbound shipping is almost 30% of our operational budget.”
Balancing Fast, Free and Flexible Fulfillment
While many DTC brands are navigating rocky financial waters, 2022 was an “exciting year” for Dr. Squatch, according to Sutton. On the DTC side, the brand hit several milestones, including its highest number of orders in a single day, total number of orders in a week, and the number of outbound shipments in a day, a week and a month. To help kickstart its global goals, the brand opened its first international third-party logistics (3PL) location in Toronto, Canada.
Over the past year, the brand also has made strides in wholesale. After launching its products in Walmart stores, Dr. Squatch quickly became one of the top-selling brands in their men’s personal care and natural brand categories, Sutton shared. Over the next year, Dr. Squatch plans to expand the number of 3PL nodes it has in the U.S. and internationally. The goal, according to Sutton, is to have an infrastructure that can cater to the ever-changing needs of consumers, whether they want fast or cost-efficient delivery options.
“We’ve noticed a trend where customers aren’t as concerned with 1- to 2-day shipping as they were pre-pandemic,” Sutton explained. “However, they are extremely cost-sensitive when it comes to shipping. By expanding our 3PL fulfillment footprint, we’ll control shipping costs that will ultimately benefit customers via cheaper shipping prices and lower free shipping thresholds.”
More than three-quarters (76%) of consumers report that an “unacceptable delivery experience” would strongly or somewhat affect their decision to order from a brand again, Kelley reported. “The twists and turns on the consumer’s road from purchase to parcel can influence ecommerce retailers’ bottom lines in a direct relationship to customer experience, and last-mile delivery is a huge component.” That’s why he believes shipper and carrier satisfaction will only become a more sizable component of CX strategies moving forward.
