In December, Coca-Cola led a $15 million funding round for Iris Nova, a four-year-old company that sells primarily through text, at a valuation of $60 million.
Known through Dirty Lemon, a brand of flavoured waters marketed as “elixirs” on its website and which sell for $65 a case, the company has become an example of near parody about the millennial-focussed wellness brand. But it’s working.
Founder, Zak Normandin, explained the model to the Financial Times. “Imagine if Coca-Cola had a profile on every person that has purchased Diet Coke over the last 30 years. They would be able to create a new product to sell to the customers that they’re now losing – the people that used to drink Diet Coke but aren’t drinking it anymore.”
New customers go to the website once, where they are able to link their credit card to their mobile number. From then on, they can order a replenishment by texting, and it will arrive either same or next-day to every major US market.
It hasn’t come cheap. At the beginning, the FT reports, the company spent $30,000 a day advertising on Instagram. But that soon built a community of young adults, especially millennial women, wandering and sharing content featuring the brand’s distinctively squat bottles. Like the iPod’s strategic coup when it first launched with white headphones, distinctiveness works.
The company is now looking to where it can take its SMS re-ordering system beyond the soft-drinks business. “SMS is the most ubiquitous form of communication in the world,” Normandin says. Though the current focus is beverages, “there’s a huge opportunity to really challenge the way products are getting to consumers.
The fundamental insight is that the drinks business is powered by a lot more than just drinks. It’s an insight he brings up in reference to Coca-Cola often. In June, he told TechCrunch “I think that if Coke were to start today, it would do things exactly the way we are”.
Now the company is planning to spend $100m to expand its offering to teas and plans to introduce 12 brands by the end of the year. Despite the fact there are no plans to expand to a marketplace, his thoughts on what drives the business are telling.
“What we think is that billion-dollar brands will not exist in the future,” he said. “I have no specific loyalty to Dirty Lemon as a brand. Our goal is to meet the needs of consumers right now. Eventually, if it goes away, that’s fine – we’ll create new selections for that same consumer group.”
Bots are considered to be among the most important emerging technologies for brands and agencies as they offer enhanced engagement through one-to-one rather than the one-to-many interactions. WARC’s 2019 Marketer’s Toolkit found that 34% of brands and 46% of agencies are prioritising the development of chatbots and messenger apps, behind only AI and the Internet of Things among developing technologies.
Sourced from the Financial Times, TechCrunch, WARC