S17 E9: Why Routine Beats Discounts This Q4 (with Jen Gray)

side of e-commerce, digital marketing, and building consumer brands.

I'm your host Nick Sharma, I've spent the last nine years building, scaling, and investing in brands, and through this show in my weekly newsletter at nip.co/email, I'm here to share everything I've learned. The wins, the losses, the experiments, the tactics, and the insights, also you can unlock your next $100,000 in revenue.

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That's TRIP LEWHALE.com/limitedSupply. Welcome back to another episode of Limited Supply. I'm your host Nick Sharma, and today, well, you know, last week's episode with Harley got so much praise. I got a lot of messages asking if there were any other really good talks from this event

because, again, everything feels so repeatable year after year with the FCM. Same type of stuff works year after year, and it only gets bigger. So, there was one more talk, which was the most praise talk that we had there was by Jen Gray, who at the time was the SVP at Recharge, and she came and shared just a ton of insights.

In fact, if you're listening to this, you're going to want to probably watch this one on YouTube, make sure you're on YouTube watching this search limited supply, and Jen

basically broke down subscription, promos, and Black Friday for every single product category

with all the data.

“So it's a really good, insightful episode, and I think you're going to have, I think you're”

just going to enjoy it. If you have any questions, feel free to reach out to Jen directly, or reach out to myself on Twitter, and I'll see you at the end of the episode. Hi, everyone. I am so grateful to be here.

My name is Jen Gray, and I'm the SVP of Marketing for Recharge, and today we're going to talk about the psychology of routine. If you aren't leveraging routine for your Q4 plans, you're missing out, routine is the new thing for consumer buying behavior today. So earlier this summer, I was talking to a brand who had just come off of these rounds of

investor calls, and you know, the number one question they were asked was, who is your ideal customer profile? Now, I love this question. I come from Big Tech. I come from like Qualtricks and Adobe, and this is the question that you're asked

in these investor calls, because they want to know how high your ceiling is and how low your floor is. They want to understand your TAM investors get so much out of this question.

“They get a sense of how efficient your go-to-market motion is, right?”

How well do you know your customer will dictate how efficient you can sell to them, how you can advertise to them, how quickly you can get them into your funnel, and how quickly you can convert them. They get a sense of your TAM, right? How many people can you sell to?

And how long can you sell to them, right?

Is it going to be sort of like a one-and-one purchase, and you'll never see them again?

They get a sense of how well product diversification is going to go for you. That's going to be something you're going to be able to leverage, and they get a sense of how healthy your business is from a subscription standpoint. They get a sense of how healthy that queue of businesses that recurring revenue. So, when we talk about routines, we talk about personas, right?

How many of your marketing teams have led you through an ideal customer profile exercise? Some of you? Some of you? Yes. They typically look something like this, right?

“Sometimes they have funny names like busy Bonnie or TechSavvy Ted, right?”

We're going to call this one juggling gen, because your girl Jan is juggling a lot. But these persona cards are typically focused on demographics. They tell us what our consumers, who our consumers are, they don't tell us what our consumers want, and who and what their behaviors are, right? So we'll go through this one.

And as an elder millennial, it's a break at to you, millennials, but we are now solidly considered middle-aged. I don't know, none of us like that, oof, oof is right. So I'm already feeling the effects of what time and gravity is starting to do to my body. I live in Salt Lake City, and I know random, shout out mom talk.

Um, so my skin is constantly ravaged by the dry desert sun, and I care about my, I care about my sunscreen, um, I am an SVP of marketing for a very busy tech company. So you girls a little haggard, and I have a very moody teenage daughter who is just as busy as I am, minus the ability to drive herself anywhere. So I'm always in a car.

The older I get, the less time I have, time is by far my most precious resource, which means that I am fanatical about my routine. I am fanatical about my routine because I want all of the moments of joy. I want all the ease in my day, all without having to think too hard about it.

In short, I am busy, I am bougie, and I hold the majority purchasing power for my household.

“And I am an ideal consumer because I love a good product, but I'm not buying a product,”

I'm buying a brand promise. I am buying healthy skin, better hair, more ease in my day, a seamless morning routine. Nice, easy coffee to make in the morning, right? In fact, it doesn't take much to acquire me as a customer. If most of you were just a kind of target me with a good Instagram ad, there's like a 70%

chance I'm going to buy, but I am also fickle. So the question is, will I purchase, will I renew, will I subscribe, will I add your product to my routine? I don't know, when my Instagram looks like this. And my YouTube, which I watched this morning while I got ready, looks like this, right?

Build the best health and wellness routine, build the best skincare routine, wake up

before I am here's why. I am constantly chasing the dragon. I am constantly chasing what's going to get me to my goals as quickly and easily as possible. You know, fear of missing out or foam out drives millennial experiential behavior. It drives our purchasing decision to drive us to show up and to engage.

In fact, this is led me to in the last year, I have tried nine different sunscreens. This is a little outdated, I think this is actually more. I have tried, I've tweaked my skin care routine 14 different times. I have switched from tea to coffee to masha, and now I am off caffeine, I know, wild. I have tried truly every protein vehicle out there, I've tried the chips, I've tried the cookies,

I've tried the pop-tarts, I've tried the bars, I just tried David protein backstage, if you

“want to chat, if you want to know what I think after let me know.”

Supplements, supplements is my new thing because that's like the pinnacle of easing convenience in the morning. I've tried five of your meal plan services and I've tried two different catletters because once you find a catletter you like, you're not really trying to chase that dragon like you're pretty happy, shout out pretty litter.

And this consumer behavior has led to something interesting, it has led to this distinction between a product that is bought and a product that is kept. So I want you to think about your bathroom hierarchy at home because the bathroom hierarchy really tells all, because there's an absolutely a difference between the products that are on the top of your bathroom counter next to soap that you reach for every day.

And the products that you use once and end up like underneath your bathroom counter next to toilet paper, right? That is the difference between a product that is bought and kept. That is a difference between a product that is a nice to have and a need to have. And your ability to be a product that is kept, all relies on your ability to understand

a doubt and take action on the routine economy. So let's take a step back and talk about where we're at as a society right now. All of a sudden, the 40 year old millennial and the 24 year old jenzer are in charge. The millennials now are the biggest population, the biggest generation, they represent the biggest percentage of the country's workforce and they hold the most purchasing power.

And I'm finding these two groups to be really fascinating and two sides of one coin when we think about consumer behavior.

“I think Harley talked about that this morning was the difference between what are jenzer”

and what millennials really value in their purchasing decisions. So in terms of the economy, millennials are still driving most spending power.

I think the collective annual income of $1.8 billion millennials is $2.5 trillion dollars

and is expected to reach $4 trillion by 2030. Whereas jenzer, they're really influencing consumer behavior. Their scene is the taste makers of their generations. This is the same role that every generation at this point took on. I remember when this is millennials, but now we're out of date, we're two-key.

So in short, jenzer are telling us what to buy and millennials are buying it. Now in terms of priorities, both of these generations are prioritizing dependence. I think 35% of millennials in 28% of jenzer report to having to financially support family members. Millennials are now in their sandwich era, which means that we're trying to get enough protein

in the day, while also trying to take care of children and also starting to take care of elderly parents. We have responsibilities looming large for us. Now jenzer, there was a survey done of how much people spend on their pets a year. Jensie spent an average of $2,000 a year on their pets, which is more than any other generation

surveyed and it's growing. It continues to grow. Both our experience or valuing experiences, millennials are going to splurge more for experiences where jensie is really looking for more value and more bang for their buck. Millennials are starting to really embrace consistency, right?

are looking for variety, they're looking for niche products, they're looking for things that are hard to find. Now in terms of disposition, it's anxiety, it's anxiety all around, it's anxiety for both generations.

“I think 78% of jenvy and 81% of millennials report to having experience workplace stress.”

Both of these generations are going out under the world with this whole new set of fears and worries about the world, and this is led to a very interesting trend. It's led to impulse spending behavior with 51% of millennials and 45% of jensie reporting to spending money to sue anxiety. Now, this is my favorite, this is really leading consumers to spend their dollar on things

that elevate their everyday lives, right? This is exactly what Harley said this morning, this is little treat culture, right? This is, I went to the grocery store, I deserve a little treat. I did my taxes, I'm going to go to Starbucks and buy a nine dollar much because I deserve it.

People are choosing to spend their dollar on things that they can control, things that elevate their every single day lives, and their routine sits at the intersection of this. So today's buyer is choosing to splurge on luxury goods to sue their economic despair. Traditional markers of success, like buying a house, 401k who is cheap, these seem out of reach for younger generations, and so they're choosing to spend things on spending their

money on things that elevate their everyday lives, whereas jensie are really embracing this mentality of I'm going to spend that dollar because what really matters anyway. They're really starting to see this in disenchanted with society and capitalism as a whole, and so they're choosing to spend their dollar again on things that they can control. So this really means that we are facing a change in economic value.

So when we first started out in the goods and services economy, everyone was fighting against

commoditization, right? The internet was the greatest force of commoditization, because all of a sudden I could get online, and I could instantly compare product to product, which drove everyone to care about three things and three things only. Price, price, and price, right?

This was the rise of D to C brands, D to C brands, all of a sudden prioritized a one-to-one relationship with their consumer. They could own and end product experience, and they could innovate at the speed of the consumer. Now, we're all competing in the attention economy, because you've prioritized digital experiences, you've prioritized where your buyers are, but this has gotten expensive, because

attention has become commoditized, attention has become the rarest commodity in the economy, because there just isn't enough attention to go around, right? I've gotten like 19 ads just today, just this morning while I was scrolling through. And I'm sure, you know, we know how many emails we're going to get during Black Friday's Iron Monday.

It's a lot to compete with, and this is expensive. You have seen your acquisition costs, and this year we'll be no different. You can spend an hour working through your ad budget with AI, and still have to make every change yourself.

“Triple Wells Moby uses your business data to recommend exactly what changes you should”

make, and then can go and make those changes for you with your approval. You can plan before any money moves. Book a demo at triplewail.com/limitedsupply. That's TRIPLE, WHALE.com/limitedsupply. You know in order to truly disrupt the economy, you have to figure out a way to be embedded

in a daily lives of your consumers, and you have to stay there. But I have some good news, every level of economic disruption has been difficult, but

this one is going to be easier because we've never seen people care their routines as much

as they do now. The entire societal zeitgeist has risen up to meet this need. How many of you listen to the Uberman Labs podcast, or are there any Uberman dads out there? I'm a Uberman dad, right? His latest ad on his podcast, he's coming out the book called Protocols.

Because we fucking care, like I want to know if I should call puns or not. I want to know if I should, like, mount tape at night. People want the protocols they want to understand how to elevate their every single day. Because routine really is the invisible scaffolding that sets up our success. We all have goals, we all have dreams, and our routine is how we get there.

So I want to talk a little bit about how you can leverage your teen in Q4 to be successful and to take advantage of this change in the economy.

So my very first one, product diversification.

And this is fascinating because this is exactly what tech did. So tech started out as like one type of software for one type of buyer. I worked for a dental company for a wet dental software company, and they started out as a point in reminders. Then they started to eat up like online forums and payments, right?

“This is the best way to be part of somebody's routine, is to own the entire fucking routine.”

Right?

We love our, we have some really great examples of this bare faced as a, as a recharge

merchant. They do such a great job. They're toning paths are sort of their tip of the spear product. This is the most popular product. It's what they get everyone in with.

And then they start to eat up more pieces like, hey, Jen, would you like to try a vitamin C serum? Um, I got nine, but sure I'll try another one. If you don't have a replenishable, find a replenishable to she is another example of

“this because how many times in your life do you buy up a day?”

Once? I don't know. I don't know why I'm supposed to refresh that. They started to create, uh, and see the bathroom as a full category.

They came out with toilet paper, they came out with candles, right?

Really thinking about this. So this leads me to my next point. Take your out your category. Figure out the category that you're playing in, Casper is my favorite example here. They started out as a mattress company, but again, how many times do you buy a mattress

in your lifetime? So they started thinking, rethinking their category as a sleep company. So all of a sudden, me as a consumer can start thinking about Casper in terms of my sleep routine, not just my mattress buying routine, right? So all of a sudden, I'm buying the glow lights next to my beds, so I can wake up nice

and easy. I'm thinking about the pet beds, right? Think about the category that you own, and figure out what your product diversification strategy is after that. Product positioning.

Now, this is my favorite. I can nerd out about product positioning, product marketing is my background. So when you go to sites that you interact with and you go to the product drop down, that's product positioning. However, they've laid out that information for you, but many companies think about this

“as sort of what do we do versus what do we do for you?”

And they have a hard time making that connection. So there's kind of two ways that you can do product positioning, others many, but we'll just outline too.

Let's talk about Lulu Lemon first.

This is a brand that I interact with many times. I can go to the product drop down, and I can search by what I'm looking for, right? And I can go down the drop down, and I can look for leggings. But this assumes that I know what I'm looking for, which Lulu Lemon assumes, right? Because I am looking for leggings.

I click on leggings, and all of a sudden, they have to differentiate why their leggings are better than every other person's leggings. Right. They have to differentiate based off of their fabric, because they don't a good job with this, right?

Why a lion is better than set active, sculpt flex. They have to feature war because of their product positioning, or they can product position based off of my goals as a consumer, right? All of a sudden, I can go down to the drop down, and I can say, oh, I'm getting into running. I'm getting into tennis, and I can start seeing their products in terms of my everyday

in terms of my goals. Now, subscriptions, if you have a replenishable subscription, you just have to be out subscription. This is the best way to be part of somebody's routine, especially like our friends of Ego Mar here.

“If you have a product that requires usage to see results, like I think you have to use”

Ego Mar for at least like two to three months to actually see results, subscription is the way to go. And if you're going to go that route, make subscriptions to star up your show. Ego Mar is in a great job here with making a sort of a subscription CTA in the nav, they've made a subscription benefits page, they've outlined the subscription benefits, and each of

their in their products as well. Our friends at a ray, we love a ray. They have understood that routines are ever changing, they have to create optionality. So when you go to check out where the ray, you can choose your frequency. You can choose where I want to set every three months, where I want every one month, and

they have advertised the benefits of using for two months, right? Like 74% of participants reported less IBS symptoms, right? After two months of usage, you can make it very clear how often you have to use this product to get the value. Now, at recharge, we see a ton of brands that do the convenience part very well, right?

Let's just do a 15% discount, let's make it nice and easy to check out. Let's make it so you don't have to worry about reordering, just auto-ship. And they forget about the value piece, they forget about the value piece, and so we have a lot of brands that are starting to use rewards as strategies, right? Orange car rewards milestone-based rewards cash-back credits.

It's a way for you to solve a genuine need in my day, in my life, while also creating moments of joy and delight. I know, recharge, pushing subscriptions, groundbreaking, but we promise it pays off. We promise it pays off in GMB. We were talking to a brand who does, I think, 10% of their revenue on subscriptions, but

their subscribers have a seven times more valuable LT than their one-time purchases, which is like if you could just move that subscription revenue, but like 5% God, that would be like hundreds of thousands of dollars in GMB, right? It nets out, and they keep getting more valuable over time too. So when you think about your acquisition costs for Black Friday, say, "Remonday, the best

way to make sure those pay off is by getting someone into a subscription that's going to continue to get more valuable, the longer they're with you."

And that's our goal.

“It's to make sure that you're not thinking about sort of this moment in time revenue,”

but sustainable revenue.

It's sustainable revenue.

It's going to keep growing and getting more valuable for you as time goes on. And that's it. That's it for me, everyone. So thanks.

“If you want to chat, subscriptions come by me after.”

All right.

Now, listen, September 24th in New York City, I'm hosting the 3rd Q4 Summit, okay?

It's free to attend. It's going to be about 500ish brands in the room. We're going to have programming all day.

We're going to have breakout sessions.

It's going to be a very special room. You can attend for free, okay? Just go to ecomfounders.com/Q4. Fill out the form for a ticket. My team will review it and we'll make sure you get a ticket and you're in the room.

But September 24th, I want to see you there. If you have any questions, shoot me a DM on Twitter. Otherwise, I'll see you there. Thanks for listening. We'll be back next time to cut through the noise on CPG, retail, and e-commerce.

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