Who is Honest?

The Honest Company (www.honest.com) was cofounded in 2012 by Jessica Alba and sells eco-friendly lifestyle and cleaning products including baby diapers, wipes, bath and body care products, and non-toxic cleaning products. It’s annual revenue is tracking to exceed $150 million in 2014, three times the revenue of 2013. Investors love Honest and have pumped $122 million into the company to date, with the most recent $70 million Series C in August 2014. Now, it is preparing for an IPO. Honest is the epitome of fast-track, sustainable startup success in Silicon Valley. It’s success is built upon a very deliberate marketing and branding strategy.

eCommerce Success = Design + Targeted Marketing

With so many startups popping up nowadays, it is more important than ever to stand out. One can do this by bringing in design early on and making it part of the core of a product, not simply an add-on. Honest entered a tough market. Launching a new, branded company in a crowded category is one thing, but launching an online, subscription-based brand in a crowded category is entirely another.  Successful e-commerce startups in today’s tech and consumer-savvy world, like Honest, exhibit a crucial similar characteristic: design is tied to targeted marketing and they are mutually reinforcing.

Let’s take a look at their email marketing strategy. All of Honest’s emails have colorful, dynamic images. This increases the ‘open rate’ for their emails by over 20%.

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Their email marketing campaign is also triggered by consumer browsing and purchase behavior. I signed up to receive Honest emails as two different people: H and Patti. As H, I spent 20 minutes only browsing through the website. After 2 days, I received an email inviting me to follow Honest on every social media channel. So I did, flipping through launch pics on instagram and watching Jessica Alba’s interviews on facebook.  After 3 days, I received another email offering a free trial of either baby products or personal care essentials. This targeted, proactive marketing strategy increases the conversion rate for Honest by 3x.

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As Patti, I placed several items in my shopping basket but never completed the purchase. The marketing campaign that ensued was frighteningly effective. After 1 day, I received an email saying I ‘honestly’ forgot something in my shopping cart. After 2 weeks, I received an email with a 35% discount off the entire purchase and 3 days to use the promo code. When I still didn’t make a purchase, I received another email in 7 days giving me 40% off. By this discount, I actually made my first purchase because it was all too tempting. Honest’s lapsed marketing campaign for abandoned cart consumers is one of their most effective, increasing conversion rate by 6x.

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Sure, all e-commerce startups can adopt this targeted email marketing strategy, but that is not enough to build a sustainable business model in today’s world (assuming you don’t want your business to be based on one-off sales hits or flash sales).  A strong web platform is undoubtedly important, with targeted and personalized emailing which encourages trial and prevents opt-out. However, this platform must be reinforced by an appealing and intuitive UX in order to brand-build.  With Honest, Jessica Alba’s celebrity appeal makes deploying its social-media strategy and getting followers easier. For the rest of us considering starting an e-commerce company, it’ll be more important than ever to budget for and lay out the groundwork for a comprehensive, personalized marketing strategy before starting.

Sources:

  1. Interview with Sloan MBA ‘15 who interned at The Honest Company in marketing.
  2. Honest emails

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