The consumer goods company of the future

What has caused the retail boom in online sell­ers?

The bar to set­ting up a busi­ness has low­ered sub­stan­tial­ly. Ten years ago it might have tak­en years and plen­ty of cap­i­tal to build a retail offer­ing. That’s no longer the case. If you have a good idea, you can build a web­site in hours or set up a shop on Ama­zon or Etsy. As a result, there are more inde­pen­dent retail­ers than ever, cre­at­ing more choice for con­sumers and more oppor­tu­ni­ty for entre­pre­neurs. Our analy­sis found there could be 2,795 UK-based Ama­zon sell­ers turn­ing over £1m per year. Thra­sio has cre­at­ed dozens of Ama­zon mul­ti-mil­lion­aires via acqui­si­tions of these kinds of sell­ers.

How did the Covid-19 pan­dem­ic dri­ve changes in con­sumer behav­iour?

When the pan­dem­ic hit, peo­ple who had pre­vi­ous­ly dis­missed ecom­merce were sud­den­ly forced to go online, super­charg­ing long-term soci­etal behav­iour­al changes which stretch way back to the tech boom at the turn of the mil­len­ni­um. We saw a decade of advance­ment in dig­i­tal adop­tion in just days. A 2020 study by McK­in­sey found that online deliv­ery vol­umes grew ten-fold in a peri­od of eight weeks last year, and online enter­tain­ment grew sev­en years in five months. It took Dis­ney Plus just two months to grow to a size which Net­flix required sev­en years to achieve. Cru­cial­ly, the behav­iour­al changes are like­ly to be per­ma­nent, with research by Thra­sio find­ing that more than 50% of the UK pop­u­la­tion will buy half of their Christ­mas goods online this year, a 10% leap on pre-pan­dem­ic 2019.

Why is it hard­er for the incum­bent con­sumer goods giants to meet con­sumer needs?

Con­sumer pack­aged goods (CPGs) often strug­gle to quick­ly respond to their cus­tomers’ needs because it can take a lot of time and mon­ey for them to get new goods to mar­ket. The research and devel­op­ment meth­ods they use have remained large­ly unchanged for the past few decades. In con­trast, Thrasio’s approach to build­ing the next-gen­er­a­tion con­sumer goods com­pa­ny is to quick­ly but care­ful­ly recog­nise and acquire brands sell­ing high-qual­i­ty prod­ucts that peo­ple already love, and then help them grow. Where­as tra­di­tion­al CPGs still base their mod­els around ver­ti­cal man­u­fac­tur­ing and dis­tri­b­u­tion and shelf space in brick-and-mor­tar stores, Thra­sio embraces sup­ply chain flex­i­bil­i­ty and online search, while reviews and tar­get­ed dig­i­tal cam­paigns replace big nation­al adver­tis­ing cam­paigns.

Con­sumer feed­back is also built into the mod­el. By find­ing these brands, we already know we have prod­uct mar­ket fit and qual­i­ty goods, and we’re then able to apply our exper­tise and oper­at­ing resources to help those prod­ucts reach more cus­tomers. We can test and improve quick­ly, using sales data as the feed­back loop rather than tra­di­tion­al cus­tomer sur­veys or focus groups. This approach enables dig­i­tal brands to have sol­id sig­nals in three to six months, not sev­er­al years.

What does the con­sumer goods com­pa­ny of the future look like?

The trends towards con­ve­nience, choice and per­son­al­i­sa­tion will con­tin­ue to accel­er­ate while fur­ther reduc­ing bar­ri­ers to entry for those want­i­ng to cre­ate their own brands online. At Thra­sio, as we are embed­ded in the sell­er ecosys­tem, we have a deep and rich under­stand­ing of how retail envi­ron­ments oper­ate and can lever­age pro­pri­etary con­sumer data to dri­ve and adapt our approach.

As such, we’ve been able to build a diverse port­fo­lio of cat­e­go­ry lead­ers in only three years, and are one of the fastest com­pa­nies to reach uni­corn sta­tus while remain­ing prof­itable. When we find a brand we believe in, we move quick­ly, mak­ing strong offers that pay at high mul­ti­ples and are struc­tured to max­imise earn-outs as brands suc­ceed. We now expect mil­lions more entre­pre­neurs to start their own busi­ness and grow or sell to the likes of Thra­sio to con­tin­ue the brand’s jour­ney.

For more infor­ma­tion, vis­it thrasio.co.uk

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