Startup Founders Provide Insights on CX Innovation in the Era of COVID-19

By design, disruptive companies are meant to, well, disrupt existing industries and business processes. But what happens when companies of all sizes and across a wide spectrum of industries are disrupted by a pandemic? At the recent MIT Sloan Retail Conference 2020: Modeling the New Normal, a group of startup founders shared their experiences adjusting to the changes brought on by the COVID-19 pandemic and their outlook on a new retail landscape. 

The COVID-19 Game Change 

Zak Normandin is the founder and CEO of Iris Nova, the parent company of organic beverage brand Dirty Lemon. Before the outbreak of COVID-19, his company had a bustling wholesale business selling to hospitality and food services companies—many of which are now struggling to stay afloat. In addition to those struggles, Normandin said he noticed an influx of brands popping up. “The barriers to entry for launching a beverage company are relatively low,” he said. “Now, startups are accelerating because people are out of work and sitting at home.” 

Normandin said these new challenges forced him to move even faster to acquire and serve customers, which included expanding the company’s same-day delivery capabilities. And while the company was already mobile-first, it was also witness to a large behavioral shift in older customers who were placing online orders. “All of a sudden, food and e-commerce has been accelerated by several years in a matter of months,” he said. 

Meg Maupin, co-founder and CEO of Atolla, a direct-to-consumer brand that sells customized skincare products, also noticed a rapid uptick from other demographic groups. After the pandemic arrived, “who our customer is quickly changed,” Maupin said. “Because people can’t get facials or see an expert in person, we started seeing older customers put together their full routine [online].” 

More people shopping online are not the only noticeable changes. Customer demands have also changed. Cynthia Plotch, the co-founder of Stix, a DTC brand that sells pregnancy and ovulation tests, noted, “We’re seeing more demand for educational resources and online content because how people access medical care changed.” Plotch said she and her colleagues also noticed other changes. Instead of customers looking for information and products to increase their chances of pregnancy at the onset of the pandemic, “70% of our customers were using our products to avoid pregnancy.” This was an un-anticipated trend and the company is now using these types of customer insights to drive its marketing and ensure it delivers relevant content. 

Rob Smith is the founder of the Phluid Project, a gender-free retail brand and community space. Smith had recently opened a store in the hip New York City neighborhood, NoHo, when the pandemic came crashing down. “As a retailer, you always have competing priorities,” he said. The pandemic prompted him to adjust his priorities by closing the store to focus on the Phluid Project as an education platform and “lean into the activist part of who we are,” he explained. 

New game plan 

Experimenting with new ways of reaching customers and leveraging data insights were a priority for the panelists as they ventured into a newly changed retail landscape. “With all these brands coming online, it’s becoming expensive to acquire customers through paid channels like Facebook,” Maupin said. Her plan is to test a variety of earned and owned media channels, while embarking on more R&D to build out the company’s digital products. 

Smith noted that in many ways, COVID-19 has provided the Phluid Project opportunities to focus on what is needed to be successful. “I freaked out when everything disappeared in March,” he said. “But then I thought of a quote from Deepak Chopra: find every challenge and make them into opportunities. COVID has forced me to regroup and refocus.”