D2C Chocolate Brand Awake develops e-commerce

While many emerging brands start direct-to-consumer (D2C), given the low barrier of entry into the channel, and then use their e-commerce popularity to sell their product to retailers, the caffeinated chocolate brand Awake went the other way, using its retail location to build a customer base for its D2C business.

“Our in-store distribution has actually helped us build a B2C business rather than the other way around,” said the founder and CEO of Awake Chocolate. Adam Deremo says PYMNTS in an interview. “And we’ve validated that a good percentage of people who come to our site and buy – we know that from interviews – first encountered our product in a store somewhere.”

He added that the brand’s surveys reveal that between 50% and 65% of its e-commerce subscribers discovered the product this way. The company’s three co-founders hailed from PepsiCo, forming the brand in 2012, so “brick-and-mortar b2b distribution and brand building” was where their expertise lay. Indeed, the brand is present in 20,000 stores in North America including Walmart, Meijer and others.

Deremo added that during the company’s “first five years” the company “didn’t pay attention” to the D2C chain until it onboarded new employees “out of the school” who defended the value of the channel.

“We were in danger of becoming obsolete,” he said. “For a new, innovative brand, it’s kind of weird not to embrace cutting-edge channels.”

While the brand’s D2C business has now been around since the late 2010s, the past two years have seen retention increase significantly. The company now notes that 42% of new e-commerce customers will buy again, and customers buy an average of 100 bites of caffeinated chocolate at a time, a value of more than $70.

It is certain that a significant portion of consumers seek to fulfill their food and beverage needs through digital channels.

Data from the July edition of PYMNTS’ ConnectedEconomy™ series, “The ConnectedEconomy™ Monthly Report: The Rise of the Smart Home,” which is based on a May survey of more than 2,600 U.S. consumers , found that 40% order groceries online for home delivery every month, and more than half of those consumers do so once a week or more.

Get the study: The rise of the smart home

Since groceries depend on regular consumption and repeat purchases, a subscription model can be an effective way to drive repeat purchases. That said, Awake only “began to focus on [subscriptions] this year” after an employee argued that consumers want to receive the product regularly and that the model would in turn promote loyalty and long-term value.

“We actually grew our subscriber pool almost 3 times this year,” Deremo said. “Having said that, we were starting from a very low place, but I’m quite encouraged by how it’s going.”

Indeed, the purchase of food and beverages by subscription is on the increase. Research from the recent PYMNTS study “How The World Does Digital: The Impact Of Payments On Digital Transformation”, which draws on census-balanced panel surveys of more than 15,000 consumers in 11 key economies, reveals that the Usage of grocery subscription services jumped 8% between Q1 2022 and Q2 2022.

Related: Research Finds Global Consumer Digital Engagement Jumped 1.2% in Q2

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