Lara Schmoisman
00:05
This is Coffee Number Five. I’m your host, Lara Schmoisman. Hello everyone, and welcome back to Coffee Number Five. My coffee is ready. It’s actually getting a little cold because I’ve been seeping away for a little while and I need that extra dose of caffeine today because we’re going to be talking about the next level of communications. I remember when we started with email marketing and it was about, okay, let’s just send people all the emails and let’s put them in the BCC. And oh my God, you start getting all these responses and it was crazy. And then we said, let’s say, okay, let’s have a specific email to send emails to people. So not everything comes to my inbox. And then we start having more platforms. And now the platforms reach and next level because we can do these incredible automations.

Lara Schmoisman
00:58
And now it’s about SMS messaging and MMS messaging also that means when we send images. So it was natural that some companies will come and take care of this space and just create a relationship with consumers by text message. And let me tell you, I do text messages for customers and ESA technology is out there. But at the same time, the rules are tricky. So I’m super excited that today we have Nicole Collins. She is one of the founders of, well, I mean, her trajectory is incredible. So welcome, Nicole. I’m going to let yourself talk about your trajectory because you’ve been in the industry, you collaborate with the biggest beauty brands ever. And on top of that, now you are the founder of 213 Deli, which is a platform that sells by text message.

Nicole Collins
01:59
Yes, that’s right. Lara, thank you so much for inviting me. I’m so excited to have coffee with you and chat with you today and talk a little bit about text commerce. I’ll tell you a little bit about myself. I’m a real die hard beauty junkie. Starting from junior high school, I was reading all the glossy magazines and trying all the tips and I still remember all those out of date beauty tips, right? You can only wear either dark eye makeup or dark lipstick, but not both together, which I think is absurd. But anyway, I’ve been a die hard beauty junkie my whole life. And so about 20 years ago I got into beauty. I am from Los Angeles, born and raised.

Nicole Collins
02:37
I went to the University of Southern California, fight on trojans and I got a master’s degree on the east coast and just wanted to come home every day that I was away from home. So I got back to California and started working in beauty. And early in my career, I worked with a lot of indie brands long before that was a hot buzzword. It just was smaller brands. That’s what California really was at the time. And then in 2012, I had the very good fortune of meeting the founders of a little startup. I founded the brand partnerships team. I was one of the first dozen employees there. And that became Ipsy, the world’s largest, most successful beauty sample subscription company.

Nicole Collins
03:19
That was an amazing entrepreneurial ride to be on from a handful of people at the very beginning to hundreds of employees at the end. And now it’s a multi billion dollar business. My role there was talking about sampling, and sampling wasn’t a new concept, but social media was new. In fact, we still called it new media, which really tickles me and makes me laugh. And so were pairing samples to consumers with a social media marketing campaign. And it was a little bit revolutionary at the time and really fun to be part of. I left that company in 2017 when my shares fully vested, along with Michelle Phan, the original co founder of that business and the first woman to get a billion views on YouTube. Really, I always say the first real beauty influencer.

Nicole Collins
04:08
So Michelle and I partnered with two chinese business partners and started a company called Yumei, taking american beauty brands to China. We launched a social commerce business. We had a store on an app called Little Red Book. And if you’re familiar with chinese social commerce, you’ll know that app. That was a very cool entrepreneurial endeavor. Ultimately, the four of us partners were not aligned on our execution strategy and I left. But I learned a lot about social commerce during that time. One of my partners was former Alibaba. When I was in China, I met a lot of her colleagues who had started, they were entrepreneurs and had started businesses in China. It really planted a seed for me that there are so many cool ways to discover and shop for beauty.

Nicole Collins
04:56
And I thought, wow, the american consumer is being deprived of all these cool ways to discover and shop. And so I started consulting after that, and I worked with some really cool social commerce apps, Talkshop Live, which is still going and is really successful, and I’m really proud of them. Super great, which didn’t work out, and some others. And then a year and a half or so ago, my friend and my colleague from Ipsy, Corey Weiss, called me and he said, hey, nicole, what about text commerce? And I was like, that’s it. Ding, ding. That’s it. We’ve got to do it. And so that was the beginning of 213 Deli.

Lara Schmoisman
05:34
And so tell us a little bit more about how us to develop this technology because also right now there’s a lot in almost every state that is a little different about sending text messages. So how you operate this platform or you have your own platform, how did you work around this?

Nicole Collins
05:54
Yeah, so there’s a big difference between SMS or text message marketing and SMS commerce, right? So I think we’re all really familiar with being a super fan of a brand and signing up for their text messages. And then, you know, once, two, three, four times a week they’ll send you a text message, which is a marketing message. It says, hey, you might like this new product that we launched, etcetera. And it’s always got a link to go to their website where you may or may not get lost and you usually don’t purchase. I don’t think that the american marketers have really nailed text marketing, to be honest with you. 213 Deli is text commerce.

Nicole Collins
06:36
So the idea is that you go to 213Deli.com, you sign up for free, meaning you just give us your phone number or maybe you see an influencer that you love talking about it on social and you click their link from Instagram or TikTok and then you’re signed up. It’s free to sign up. Once a week we’re going to send you a text message. It’s mms, multimedia messaging, right? So there’s a visual and then a pretty verbose text message about why this particular product is great with a price. And if you want to purchase it, you text back one, two or three. I want one unit, two units or three units and you’ve made a purchase. Your credit card number and your shipping address are tied to your phone number.

Nicole Collins
07:17
So when you text one, you’ll receive a message saying thank you for your purchase. These items are shipping to this address, which you can change if it’s the wrong address and that’s it and it’s coming to you. So the idea is that only once a week we’re sending the very best of the best in beauty. If that doesn’t tickle your fancy that week, you’ve at least seen something really cool that’s interesting that you can tell your friends about and if you want to, you can make a purchase.

Lara Schmoisman
07:42
Let me ask you a question. How different are the rules from marketing emails to SMS?

Nicole Collins
07:48
I mean, you’ve got, you only have a short number of words that you can use on text, right? In email, you can use a number of images, you can be very verbose, you can have hyperlinks to various different things on email. That’s the benefit of email. The challenge with email is that everyone is oversaturated with marketing emails and the open rate is really low. 98% of text messages that land on anyone’s phone are read within three minutes. So that’s delightful for anyone doing text message marketing, specifically text message commerce. I think that puts an onus of responsibility on the company sending the text. Don’t send messages that aren’t super important.

Nicole Collins
08:38
With 213 Deli, we send a much longer text than you get from most SMS marketing because SMS marketing is often two to three lines and they’re trying to hook you to click on a link to go to a website and go down a rabbit hole. With SMS commerce, we’re not doing that. We’re trying to hook you into an impulse purchase. We want you to see something go, oh yeah, I need that right now. Click and you’ve made a purchase. So it’s a little bit more verbose, but not nearly as verbose as each is.

Lara Schmoisman
09:10
But also there are laws about sending MMS.

Nicole Collins
09:14
You have to have permission. Yes. So you cannot buy a list of phone numbers and start text messaging people. Whereas you could buy a list of email addresses and start emailing people. No. So with SMS, with text, people have to opt in. They have to give you their phone number and click a box that says, I’m a human, not a robot, and I give you permission to send me text messages. And every time you send a text, there’s also at the very bottom fine print that says reply stop to stop receiving these messages.

Lara Schmoisman
09:43
And what about the times that you can send a SMS message or text message?

Nicole Collins
09:48
Well, I don’t know. To be perfectly honest with you, I’m not sure what the laws or the rules are around when to send. I’m optimizing to send when I know people are primed to make a purchase. So we send our text messages at noon Pacific on Thursdays, which is 03:00 p.m. On the east coast and 09:00 a.m. In Hawaii. We have actually quite a few subscribers in Hawaii, so it’s an ideal time to send that message. And also lunchtime or post lunch. 03:00 p.m. If you’re on the east coast is a great time to get a little pick me up. Oh, this is a really cool product. Fun. And you literally just text back to buy. So we’re optimizing for when we think people are going to be interested in making a purchase.

Lara Schmoisman
10:33
So let me ask you a question. How did you, I mean, did you have to create a new platform you had to build or you started using existing platforms? And what are the challenges that you face while you’re building, or you were doing your research to create this new, innovative Ecom text message? Can you say Ecom? No, textcom.

Nicole Collins
10:57
It’s not Ecom really, because you’re not buying from the Internet or from a website. You’re buying really via text message. It’s not a wildly new concept in the world, certainly not in China. They use WeChat and text commerce all the time. It’s also pretty popular in Europe as well. It’s really new in the United States. There are not that many companies doing it. The most successful company using text commerce in the US is Winetext, Gary Vee’s wine text, where once a day he sends you a message about wine, you text back the number of bottles that you want and he ships them to you. We were very much inspired by that. We met with a series of technology partners and chose our partner based on fantastic technology, fantastic customer service and optionality as well.

Nicole Collins
11:57
We have proposed new technology features to our partner that our partner is working on specifically for us. But I do think that it will be a huge benefit to all other partners as well. You know, there’s always a challenge with any business in being first. And I have been working personally in early stage startups for more than a decade now. So whatever that says about my mental health, I’m a risk taker with a high risk tolerance. But, you know, I’ve been saying for at least ten years that you want to be a step or two in front of a customer to pique their interest and get them to follow you. You don’t want to be three or four steps ahead of a customer where it’s a little bit too confusing and then you lose them. So text is great.

Lara Schmoisman
12:43
They are for early adopters, but not too early that you cannot get the traction needed.

Nicole Collins
12:50
That’s exactly right.

Lara Schmoisman
12:51
I think one of the most inspiring TED talks that I ever seen. I think it was a. Yeah, I think it’s a TED talk. It’s a three minutes TED talk that says why some companies fail and why some companies succeed. And he shows all these reasoning, but I say at the end of the day, it’s timing. The only reason. Timing.

Nicole Collins
13:17
I agree with that. I’ve been saying that if you want to have a successful business, you need to have, number one, a truly great idea, number two, a great product that matches that idea, number three, the team that can actually pull it off. And number four, money. And if you don’t have all four of those things, it will not be a success. It’s like a four legged chair, and the chair cannot stand up with two or three legs. You know, I worked at Ipsy, which is a wildly successful company that was a tiny startup, and I worked for plenty of completely failed startups as well because they didn’t have all four of those things.

Lara Schmoisman
13:54
Yeah, I get you. And even if you start a small business with all those pillars, it might take you a very long time to maintain it, or it’s never, it might take a long time to happen.

Nicole Collins
14:09
And also you might fail as well. Even if you have all of those things, you still might fail, but you’re definitely going to fail if you don’t have all of those four things.

Lara Schmoisman
14:16
Absolutely. Absolutely. So tell me a little more about how you choose brands. Who are the brands feature in 213 Deli?

Nicole Collins
14:24
Yeah, so I should tell you a little bit about the name. 213 is the original area code of Los Angeles. Corey and I are native Angelenos. Our third business partner, Jules Camposano, is a European who moved to New York who eventually moved to LA. And I always joke with her that she drank all of the La Kool Aid because now she’s a yogi and a surfer and all the things. So two, one, three is a nod to Los Angeles, our hometown. And a deli is a place where anyone goes anytime and gets something great and leaves happen. So it’s a lighthearted and cheeky name. We hope that you come to 213 Deli to discover some really cool new beauty and wellness grooming products.

Nicole Collins
15:04
We hope that you purchase, we hope that you’re delighted, but certainly we hope that you smile every week when you get those messages.

Lara Schmoisman
15:11
There you go.

Nicole Collins
15:12
Thank you. We launched last July, so it’s been much less than one year. And. And so we’re still very much in launch mode and in growth mode. And the name of the game right now is for as many consumers as possible to hear about two and three deli and to sign up for free to receive our weekly text messages. The merchandising strategy. And that’s really the hat that I wear. I’ve been a merchant in beauty for 15 plus years. The merchandising strategy right now is that we really want to feature extremely well known brands with national distribution. It makes a customer trust. 213 Deli. Either I’ve heard of this brand or I’ve tried it before. I keep hearing about it on social. Now let me make a purchase.

Nicole Collins
16:01
And also when you look at two, one, three deli.com comma, we have editorial content on every brand that we’ve ever featured in every product. And so if you’re trying to decide whether you want to sign up for 213 Deli, you can see, oh, wow, these are prestige and luxury brands that I’ve heard of that are cool, that are trusted, and I think that gains a lot of trust for the customer. The ultimate merchandising strategy with two and three deli is personalization. When we achieve scale and we have enough customers, we will know each of our customers brand preferences, shade preferences, what type of skin they have, what type of hair they have, whether or not they want to receive messages about hair care products or nail or whatever their favorite categories are.

Nicole Collins
16:43
And then each week, they’ll get a personalized message based on their preferences. We’re not quite there yet again, under one year in business. So right now we’re sending truly amazing products from fantastic brands that are pretty universally appealing.

Lara Schmoisman
16:58
How do you planning to get that data for the customization based on quizzes or you have a plan how you’re gonna get that personalization?

Nicole Collins
17:08
Yeah, you know, the thing about the modern consumer is that they’re very happy to give you all of their personal information, send out a little quiz, give a small incentive, and people are really happy to share. Also, the customer is keen on personalization, and they sort of expect personalization everywhere that they go. And so they know that they have to tell you what their preferences are. The other thing is that we can see everything that they’ve ever purchased. So even if they never told us, I can tell by your buying behavior what you’re interested in.

Lara Schmoisman
17:35
So your model is a drop ship or you acquire, you buy wholesale products.

Nicole Collins
17:43
There has never in the history of beauty been a business model using drop ship that was ever successful. I challenge anyone to correct me if they think I’m wrong on that point. I’ve never seen a successful business where it was drop ship. Customer service is crucial to growing a community. Again, winning trust and loyalty from your customers. So our brands ship all of their product to the 213 Deli warehouse. The objective is that we sell out every single week. So on Thursday at noon Pacific, when you get a text, we should be sold out by Friday afternoon at the very latest, all of that merchandise. So we ship in 213 Deli branded packaging. You deal with customer service with 213 Deli, we really own the customer.

Lara Schmoisman
18:29
Absolutely. So how many customers do you have right now and how many sign ups.

Nicole Collins
18:37
Every single day we’re growing. Every single day, people are telling their friends. Every single week. We’re working with influencers and beauty editors who are talking about this really innovative way to shop, and also the products and brands that we’re supporting. So our numbers are changing on a daily basis right now.

Lara Schmoisman
18:55
That’s fantastic. And what platforms do you use? Do you use any platform specific that is out there or this was custom made for you specifically?

Nicole Collins
19:05
No. We have a tech partner for text messaging. We have a shipping partner. We have a partner secure partner for processing credit cards. We’ve cobbled together all of the different tech partners that we need to pull off a really seamless experience. But it’s a truly seamless experience. When you sign up for two, one, three deli, the first thing that happens is you get a text offering you a welcome gift. Right now it’s $1 for this or that, and you can make a choice, one product or the other, and you don’t have to make that purchase. If you do, you give us your credit card and shipping information, which you only have to do one time. We’ll ship out that product that day, and then the next time you want to make a purchase, you quite literally text back one, two, or three.

Nicole Collins
19:52
There’s no checkout process at all. Another part of what makes it really impulse and addictive and that ships out the same day as well.

Lara Schmoisman
20:02
And how do you deal with returns? Because this is not something people touch. How do you create all the communication and returns? Is a customer service is also by text message or is by email or phone call.

Nicole Collins
20:17
You can text or email us. Right now we’re not accepting any returns at all. So you want to be sure about your purchase.

Lara Schmoisman
20:23
I see. Do you see that there is, it’s interesting to me that you will offer. Why one, two, three? Why people will buy three of one? It’s just because of the promotion that you offer or to stock up.

Nicole Collins
20:36
Usually it’s gifting. First of all, the vast majority of our purchases are one people purchasing for themselves. Every now and again we’ll get a two. I presume that’s for a gift. Excuse me. And very rarely do people buy three. Again, I presume that’s for a gift. Last holiday we saw a lot of twos and threes, so it’s easy to guess that was for gifting, you know. But this week we dropped the good patch and the drop was the early bird duo, which is the b twelve awake patch. From them, it’s a vitamin patch. Oh, you missed it. Oh, no, we’ll have to get it to you. And then under eye patches, three sets of the deepuff, under eye patches, and three sets of the dark circle patches.

Nicole Collins
21:27
These are kind of single use and so we got a lot of people buying two and three. I think it was the early bird duo is $25. There was a free gift of the three sets of depuff patches. Free shipping, always with two and three deli. And again, because that was single, those are sort of single use. A lot of twos and threes this week. And I think those were people stocking up because it’s an amazing brand. Killer products.

Lara Schmoisman
21:52
Yeah, absolutely. And that’s. Do you have any plans also in the future to support more indie brands? Because your background, it’s coming from ipsy and distribution, indie brands. I can believe that there is a little passion there for indie brands.

Nicole Collins
22:08
I have a huge passion for an indie brand. I could go on and on. Olga Lawrence in skincare was one of my all time favorites. Valde Beauty Lipstick is basically all that I put on my mouth.

Lara Schmoisman
22:21
I love it. I mean, Margarita Riyaga, how can she go wrong?

Nicole Collins
22:27
She is the godmother of the beauty industry and a beautiful soul. I love her. I also love Jamie makeup. It’s the only blush that I wear. So I personally am a diehard fan of indie beauty. As an entrepreneur and a business person, I really want to look at the goals and objectives of the business. And right now that’s growing subscriber delighting customers, selling out. So eventually when we hit scale and we know our customers preferences, we’ll also know whether they’re interested indie brands, which I think is sort of a real discovery, right? Like what’s new and what’s next. And then we’ll be able to feature those brands to the exact right customer.

Lara Schmoisman
23:09
Do you think that at some point it’s going to become more than once a week? Text?

Nicole Collins
23:15
Sure, definitely. That’ll also be part of preferences. Text listen. It could be text me every day or it could be text me once a month. Right. So that will again really be up to customer preference.

Lara Schmoisman
23:26
Tell me a little bit about your theme because you started this from scratch and you told us about your partners, but how big of a team you need right now. I know that you have a partner also for shipping, which is a completely different structure and it’s a huge endeavor to shipping, but your core team doing everyday duties, deciding the brands, creating the assets for the promotions, website development, I don’t know what else you have in your team, but tell us a little bit more about that.

Nicole Collins
24:00
The whole team right now is me, Corey and Jules, the three founders of the company. I’ll say this entrepreneurship is not nearly as sexy as social media makes it out to be. It’s not that sexy at all. But you know, I, Corey, Jules and I are in our forties and fifties and we have been around the block and we’ve got really great networks. And in order to be successful right now we’re leaning on a lot of friends and on our networks, but the day to day nitty gritty is the three of us.

Lara Schmoisman
24:35
Absolutely. I’m so glad that you mentioned this because at the same time, all of you guys have a lot of industry experience and as you mentioned, you have the network. I’ve been seeing a lot of indie brands and probably the two try to do it yourself or someone who just had a vision of a product without understanding the industry. And that’s very challenging because executing and learning at the same time, it’s.

Nicole Collins
25:03
Difficult, it’s nearly impossible and you’re going to waste a lot of time. I’ve been doing consulting work for many years since leaving Ipsy and I love early stage startups. So most of my clients have been early stage startup. And I always tell them that hiring me as a consultant is going to help you not waste time and money because I’ve got the knowledge and the experience and the network to help you. I also work with the students at USC who created the USC Business of cosmetics club. And again, I think because of social media, so many of them have entrepreneurial aspirations. And I always say, listen, you’ve got to get some real life work experience under your belt. You’ve got to build a network and you’ve got to kind of understand what it is.

Nicole Collins
25:49
And I also joke all the time that I’ve always had an entrepreneurial spirit. Somehow I had enough sense to know that I needed experience under my belt. But also I wouldn’t go out and start a motorcycle company. I don’t know anything about motorcycles. I’ve never been on a motorcycle. It’s not my deal, you know, and.

Lara Schmoisman
26:07
This is something I, I created The Darl, my agency, to help smaller branders scale. And this is what I telling them, by hiring an agency, you don’t have to get all the blows and whistles at the beginning, but get the basics right. Working with an agency, there are a lot of platforms, a lot of discounts that I can get them just because they’re working with an agency. So you’re going to be saving money in a different way.

Nicole Collins
26:34
It’s sort of like hiring an interior designer to help you decorate your house. Right? They’re an expert. They’ve done it before. They understand scale. They will get you discounts on things. It’s a streamlined and intelligent way to use your time and money, which is limited.

Lara Schmoisman
26:49
Absolutely. And I always tell that you need to think how much your time is worth. You trying to figure out how to do an Instagram post or trying to see how the algorithm works. Is it a better time for you than be networking or trying to try to place your product somewhere?

Nicole Collins
27:03
Right, exactly.

Lara Schmoisman
27:06
I see a lot of entrepreneurs getting so lost in the little things that they forget about the big picture that this is. You want actually to make money and sell a product.

Nicole Collins
27:15
Yes, exactly.

Lara Schmoisman
27:17
So what’s next for you, Nicole? Anything else going on in your world? Are you still consulting?

Nicole Collins
27:25
Yeah, I do consulting work again, always early stage startups. I love an indie brand and, but, you know, my heart and soul is in 213 Deli. And a very wise person once said to me, you don’t launch a business, you are launching a business for about two years when you first get off the ground. So we’re very much still launching the business, trying to grow our subscriber base and, you know, with our eye on the, really eye on the prize of getting to personalization, which I believe will be a huge game changer for our business.

Lara Schmoisman
27:59
Absolutely. And also I will say that even for year four and year five, you’re still, I don’t know if you’re launching anymore, but you’re restructuring because as you grow, you always need to relaunch.

Nicole Collins
28:13
Yes, yes, absolutely. And also, again, because I’ve been an early stage startup for so long, I think any smart entrepreneur has an idea of who their customer is, what their customer wants and how to pull that off. But then once you get rolling, you have to respond to real customers. Right. And real customer feedback, how they’re behaving, et cetera. And we definitely learned that with IPSY. And so lots of fantastic learnings from being part of that successful startup. And not for nothing, I learned a lot in my failed business at Umay as well. So taking all of those learnings with me now into 213 Deli. Yeah.

Lara Schmoisman
28:50
And I always say that the failed business doesn’t mean that you cannot use those findings, relaunch it with another name or another target audience, because a lot of founders also, I see that they are so in love with their product that they believe that they are their own target audience. Many times it takes you shots to, I say, give it a facelift or maybe get a new face, a rebranding, go for a new target audience. Or just listen to your consumers. You will learn so much from it.

Nicole Collins
29:23
Yeah, I’d say one of the biggest game changers with social media is the ability for brands to have direct conversations with customers that didn’t exist before social media. You know, you were putting out print magazine ads or television ads and there was no customer feedback. So it’s a true blessing. You have to put your ego aside and listen to that. And if you’re a smart entrepreneur, you do really listen to that and pivot and sidestep and make sure that you’re delivering.

Lara Schmoisman
29:49
Also, you need to respond because it’s not available that you put out there and it’s going to happen and people just see it and they don’t have an opinion. No, people have an opinion. So you need to take your, you go and notch dog and listen to your customers and respond accordingly. And that’s part of customer service. So how do you get your feedback now in 213 Deli from your customers? Are you doing surveys?

Nicole Collins
30:17
We did do a survey at the end of last year. I mean, again, we’ve been in business for less than a year. So there’s the, in the life cycle of a business, we’re, you know, still in the womb almost. So we did do a survey at the end of last year, mostly around merchandising. What’s most exciting to them? What types of products? What types of brands, what types of drops? Because we always drop one product, there’s always a gift with purchase and free shipping. I love to do outside the box things with merchandise, like put two complementary brands next to each other. We recently did RM’s lip to cheek in the shade demure next to a give beauty powder blush duo.

Nicole Collins
30:55
Any celebrity makeup artist will tell you cream blush powder blush together is what will stay on your face all day, all night through the red carpet. So I love things like that. I was delighted to know that our customers love that as well. Of course, social media, namely Instagram for us and then text. It’s text message. You can text us anytime. We also have hi deli.com if you want to send us an email.

Lara Schmoisman
31:19
Very cool. Nicole, thank you so much for being here, for having coffee with me and for sharing this amazing experience and new technology. And we. I’m looking forward to see more and more personalization. It has me, your product really has me excited.

Nicole Collins
31:36
Good. Thank you so much. Thank you for having me. I admire you and all of your podcast guests, so it’s a true pleasure to be here. I appreciate you so much.

Lara Schmoisman
31:45
And for you guys, I will see you next week with more. Find everything you need at LaraSchmoisman.com or in the episode notes right below. Don’t forget to subscribe. It was so good to have you here today. See you next time. Catch you on the flip side. Ciao ciao.