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Hands-free shoe brand Kizik has grown rapidly under its direct-to-consumer (DTC) model, with sales of its slip-on footwear rising from around $4 million to $5 million a few years ago to $100 million today, its CEO Monte Deere told Retail Brew.
But marketing to customers directly can be expensive and unpredictable, Deere said, so now the DTC brand is expanding into wholesale and brick-and-mortar.
“Gross margin is really, really great at e-commerce,” Deere said. “What’s unpredictable is the marketing expense to sell the shoes.”
This story might sound familiar: Fellow DTC brands such as Allbirds and Solo Brands have followed a similar formula—and to varying degrees of success. Solo Brands, for example, recently reprioritized direct sales after pivoting into wholesale, in part because weakness in the DTC channel was dragging on sales.
Brick by brick: Deere said Kizik plans to avoid these pitfalls by controlling the pace of its expansion into these other channels.
Deere said the brand is opening brick-and-mortar stores gradually, testing their performance and using that knowledge to inform future openings. He noted that Kizik opened its first brick-and-mortar location in Utah last year. Now it’s opening five more across a range of different marketplaces based on that learning experience.
“You have to keep things moving, but we’re not going to commit to 50 stores before we’ve tested five,” he said, adding that the longer-term goal is to open 15 stores by 2025.
Deere said he expects brick-and-mortar stores sales to contribute 15% of revenue by next year.
Wholesale expansion: When it comes to wholesale, however, Kizik is expanding at a faster clip. Building on its partnership with Nordstrom, the brand plans to sell out of 500 wholesale locations by the end of the year after starting 2024 with just five, according to Deere.
“We opened the gate to wholesale and our friends at retail rushed right through it,” Deere said.
Having a greater presence in wholesalers, he added, gets the brand in front of customers and makes the cost of selling more predictable.
Spending on brand: An additional aspect of this transition is that Kizik is shifting its marketing spend from performance (i.e., generating leads and sales online) to brand awareness, which Deere noted can be “challenging for an e-commerce-first company.”
The brand is nonetheless leaning into this approach with the launch of a new marketing campaign called "Motion Is Magic," which is emphasizing the comfort and frictionless experience of its slip-on shoes.
In another branding initiative, Kizik recently opened a pop-up store in New York City’s Soho neighborhood that features interactive visual installations.
“It’s one thing to spend dollars to close a sale through Google or Meta,” Deere said. “It’s another thing to put up a beautiful pop-up experience.”