Talking Home Décor with Suze Dowling of Pattern Brands

Dan:
Hey everyone. Welcome to another episode of Safety Stock. I’m Dan alongside Will Davis. Will. How you doing today?

Will:
Fantastic, Dan.

Dan:
We are pleased to welcome another guest to the podcast. First one in a while. So joining the show today is the chief business officer and co-founder of pattern brands, Suze Dowling, sues. Welcome to the show. We’re excited to have you here.

Suze:
Thank you for having me I’m on it. I’m honored to be the first guest in a while. Hopefully I can pull it off, you know, keep it interesting.

Will:
We’re excited. There was a lot of people that didn’t make the cut, but then we were like, Suze is great.

Suze:
I mean, that’s the thing you’ve gotta keep those standards really high,

Will:
Super high. Yeah.

Suze:
Super high setting that bar and then making sure you live up to it.

Will:
Yeah, absolutely. Now sues for our listeners. Can you do us a favor and just give us a little bit of your background about what you’re doing at pattern and a little bit about how you got there?

Suze:
Yeah, absolutely. So patterns of family of brands focused on the home. So we actually hit our three year anniversary last week. And it seemed, congratulations. Thank you. We, it seemed like one of those whirlwind adventures where I’m kind of like, how has it only been three years, but also, wow. That feels like lifetime. So essentially we are a multi-brand company that sells home worst products. So our products range from kitchen tools and utensils to home storage organization decor, you name it, we have it. There’s currently least six brands that we manage. So open spaces, equal pods, gear, letter, folk yields, and PTO. But we’re always looking to add new brands to the family. So a little plug, if you’re in the home worst face and wanna sell, please contact me. But what’s kind of special about our model is that we have a one team, one cap table model.

Suze:
So what that means is while we are this multi-brand company, all of our team members are actually pattern employees and work across the entirety of our brands in the portfolio. And one of the big reasons we, we really came up with pattern was these days D TOC brands need to be, you know, experts in everything, right from email marketing to paid to, as you guys are very familiar supply chain and logistics, and then everything in between. And you know, it it’s one of the reasons we’re actually really excited about our model is because we really believe that there kind of needs to be this new business model for this very growing community of eCommerce brands. So pattern’s role is essentially to fill the gap between kind of massive scale IPO exits for entrepreneurs and, you know, honestly, no exit often, you know, so we really are focused on very thoughtful acquisitions of D TOC businesses. And then when brands join our family, they kind of have the benefit of our unique ability to provide that world class marketing and brand building, but also really importantly, coupled with a lot of that in-house operational excellence and a much more mature brand, you know, platform. And then one of the things that excites me is that we’re also giving these entrepreneurs, you know, the exits that they deserve and, and that’s a really rewarding feeling.

Dan:
Yeah. And we’ll be remiss to say first congrats on raising a series B round. Was it? Thank you. You guys announced a month ago, 25 million. And also you mentioned you have six brands. You also acquire two brands in that, in that process.

Suze:
Yes. It’s, it’s been a big couple of months, I will say. It’s, we’re very fortunate from, you know, our investors to just have really incredible relationships with our investors. And we’re really thrilled to bring, you know, a few new faces on with the series B round and then yields and PTO were the most recent additions to the pattern family. And so that was, it was a really cool moment to, you know, celebrate and reflect as a team of, you know, how far we’ve come and also, you know, all the, all the mold we’ve still wanna achieve.

Dan:
Yeah. And, and before pattern, everybody knows you guys from, from the G lane days where pretty much every, every startup in, especially in the New York city area always kind of wreck out to you guys.

Suze:
Yeah. So those that don’t know gin lane, it was a, a brand building agency that really focused on, you know, primarily D TOC brands.

Dan:
And what led, I guess, to that creation of pattern brands, you mentioned three years ago, the entering that home good sector, but also entering it before, I guess the COVID lockdowns were probably were benefited from everybody stay at, at home and buying those kitchenware items or just decor, as you mentioned earlier.

Suze:
Yeah, absolutely. I mean, it was, I mean, it was a decision that we didn’t go into lightly because we’d ran, you know, this agency together for, for many years and, you know, it kind of helped work with entrepreneurs to launch 50 plus businesses. And, and honestly I’d say had a lot of learnings in the process and you know, a really incredible experience being at that forefront, the wide variety of categories in, in D to C I think for us, you know, in partnering so closely with entrepreneurs, we really had also gotten that entrepreneurial itch for ourselves. But we also had really had this vision for this like one team, one cap table model. That was something that I think was always very important to us. We always say in some ways we’re building pattern for ourselves so that we can have a pattern home at the end of this, in that, you know, each of us were going through some really important life moments, whether it was moving in with a partner getting engaged, married, or other life’s milestones where kind of making, shaping and growing our homes was becoming increasingly at the forefront of our minds.

Suze:
And then obviously COVID hit and I think staying at home became at the forefront of everyone’s mind, not just ours. So it’s been, you know, a really interesting time to, to be in business,

Will:
You know, and, and Sue’s, it’s interesting, you know, as you’ve talked about, you know, how a pattern came to be, and now as you know, we’re coming out in a lot of ways from, you know, the pandemic and as people are going, going out more, what are some of the aspects of your supply chain that you think are doing well? You know, some that are either not doing so well or that were like keeps you up at night in terms of like keeping pattern going.

Suze:
Honestly, that’s a really good question. I mean also I think having this conversation in 2022 versus 2020 is a very different story. You know, it’s been a lot of learnings over the last couple of years, but I’d say where we are today. There’s a lot of things that are going well, you know, I’m really proud of our team. And I think something that we always think about is just how do you really build a close relationship with your supplier? Because so much of this is about that partnership with them. And we’re really, you know, very lucky to have great suppliers that are allowing us to produce really high quality products, but also working with us and giving us flexibility as we kind of go through our growth curve. You know, I’d say one of the big learnings we’ve had and, and really thinking about things is, you know, how do you hedge against some of those extended lead times, both production and shipping, and how do you kind of get ahead of preparing for possible shutdowns, which obviously was a big factor in 2020 and 2021.

Suze:
You know, our suppliers I’d say have been super transparent with us in their workloads, their lead times price changes, how we solve the quality issues. So there’s a lot of mutual trust there. And I think one of the fortunate things, you know, in our acquisition model, right, is that some of these supplier relationships have actually been around a long time, even pre-PA. And so, you know, when we acquire a business, we’re also acquiring those relationships, but that means that we have to nurture and, and show that we can be a really great partner to those suppliers. You know, post-acquisition two things that I always just think about. And we talk about as a team, one is just budgeting those longer lead times than quoted. So like have your built in buffer if there are delays that are unplanned. And then two is really, you know, inventory planning and how do you really provide forecast and kind of plan any production increases with your suppliers so that you can get ahead of additional tooling or expansion plans.

Suze:
You know, and again, just to the point of it being a relationship, right, the suppliers that are essentially an extension of your team, so you need to treat them as such and give them those very proactive updates versus waiting for them to, to kind of, you know, take it from you, things that keep me up at night. I mean, many things, but on this play chain side, you know, probably similar to many companies, a lot of it’s fear of the unknown, you know, I think in the past couple of years, we’ve seen, you know, both the impacts of both like the pandemic and political conflicts and it’s, it’s kind of, you know, being about, you know, how do you anticipate what’s next? How do you be proactive and see around corners and kind of the action focus, but also realize that there’s a lot out of your control and, and that’s, you know, that’s a scary feeling for our soul. And so I’d say we feel very well positioned, especially going into Q4. We’ve really stocked up and are, are in a really solid place, but there’s always those unknowns and nothing is predictable right now.

Will:
Appreciate that candor. Do you see sues, you know, from, we’ve seen a lot that from an article perspective, people are talking about a lot more inventory than they anticipated, as things are shifting from that side. Has it been easy to flex if that’s the case for pattern or has it been that you’re ordering cadence has actually been rather in tune to what you’re buying habits have been from a customer perspective?

Suze:
You know, I think we’re certainly in a, for fortunate position that we sell a lot of evergreen products. So I think, you know, there’s those that are perhaps in the fashion sector or some other sectors that are much more trend driven for us. You know, we, we sell really fundamentally functional products that do marry form and function, but, you know, a spatula is a spatula. And so for us, we’ve really thought about, you know, in our ordering, how do we separate into core versus fashion or ABC, you know, stock. And we really, you know, lent very heavily into core and making sure that those evergreen colorways that can be sold year round, we’re sitting in a very healthy, you know, position. I think, you know, our, our more fashion based areas, which are typically colorways versus whole, you know, skews themselves are areas where we, we typically buy to MOQ and are very comfortable, you know, stocking out of, it’s not to say there’s not some products that we’re more deeply stocked in than we’d anticipated and, and, you know, so be it, I think, you know, ultimately I would rather, you know, pay for storage state side than be without the inventory and have less sales.

Suze:
And we’ve done, you know, that math, there, there are, you know, a few skews who have done some selective markdowns for, you know, version one of inventory that we need to move through to give a better and improved product to the customer. But overall I’d say I have felt very fortunate to be in that position that said, you know, I think one thing that did catch us by surprise was almost the timelines, you know, caught up. You know, we earlier this year were really anticipating ongoing, you know, severe delays, ongoing container shortages, and also trying to get ahead of kind of bulk pricing to, to kind of get some of the, the price breaks that, you know, we were looking at, some of those timelines caught up and, you know, hindsight being 2020, do I think I could have delayed a few POS for a couple of months probably, but you know, again, good news is we will move through the inventory and, and ultimately it, you know, they really are evergreen skews

Dan:
In a predominantly a D to C business. And especially with recently inflationary pressures where, I mean, what gasoline was super high now it’s coming down, but you’ve hit on it with container prices were pretty high. Now they were coming down or even raw material prices have gone up. How do you, how has that impacted, I guess, the business as a whole in D TOC side. And also, I guess the advertising model has also gone through changes in the last few years as well.

Suze:
It’s, I mean, it’s look, it’s interesting in that, you know, your gross margin is king still, and that is something where we have very I’d say very, very detailed on understanding every single lever in our business that makes up, you know, cm one and, and what we need to do to, to maintain very healthy, you know, gross margins that said, you know, we are primarily D to C, but we’re not only D to C and that’s been a big shift, I’d say in the last 12 months, especially of really deliberately moving omnichannel where I’d say D to C is still at cornerstone. And I think, you know, what we’ve built, you know, the last 10 years on, in, in terms of, you know, a belief system that DSC is, is the forefront. But I, we are firm believers of omnichannel, especially after iOS 14.5.

Suze:
You know, I think that really brought pretty major changes to kind of how you think about digital marketing and also scaling a DDC business. You know, I’d say like for digital marketer data is king, the more information you have, you know, available to input into those campaigns, like the better results you’ll see, but kind of post iOS updates. Your reporting is really off your campaign. Budget optimization is less reliable. Your retargeting is that much harder. And that hits that your kind of contribution margin to lab. Which means, again, that you’ve got a really be very confident in those gross margins to have the room, to be able to still spend on marketing. I’d say, you know, for us, and I’d say probably many, the D to companies it’s really, for so many years being Facebook and Google, right. That have been ruling that digital ad space, but with kind of iOS coming into play, I’d say there’s been a much more substantive move, you know, industrywide to, how do you get more creative to reach your audience?

Suze:
And I’d say, we’re almost seeing like what’s old is new again. So for us, it’s almost about kind of looking at what are some of those classic marketing techniques alongside the diversified channels. So we now have select products available on Amazon. We have a wholesale presence, you know, with a wide variety of retailers. And then most recently with the acquisition of PTO, we actually have a brick and mortar store. And then, you know, for us outside of that, we’re looking at print popup, activations collaborations how we kind of deepen, you know, relationships with influences and content creator networks TikTok, even though I’m not the best at TikTok, we have an amazing team that’s

Dan:
You should see will on TikTok. He gets after it.

Suze:
I, I will say it’s, it’s a beast that luckily one of my co-founders is really amazing at and very passionate about, but you know, it’s all of these things combined and, and that’s where, again, I, I think growth is just no longer as linear as it once was. Right. And it’s about really understanding those fundamental financial levers of your business, and then also getting creative and how you recoup some of the margin drain that, you know, we’ve all experienced.

Dan:
No, that’s great to know in the home good sector, as you now have six brands, what do you see the next, I guess, two to five years look like for pattern, but on top of that, what, what innovation should people maybe be on the lookout for that’s coming in that home? Good sector.

Suze:
It’s kinda interesting. I’d say, look for pattern. You know, it’s really just about adding new brands to the family and, and kind of growing the existing brands. You know, our goal is really how do you create that entirety of the pattern home? Like how do you fill out those rooms of the home? You know, for us, we look for brands where, you know, it’s about those almost little, every day unglamorous moments that we all have in, in our homes. And how do you make them just a little bit better? So certainly you’ll see, I’d say new categories within the home, you know, and, and the pattern family, both in the coming months, but also the coming years. I’d say innovation in the home sector is kind of an interesting thing, right? Because part of it is you wanna innovate, but also like the fundamentally is just, you know, some, some baselines of how you interact, you know, with your home.

Suze:
That’s what I’d say with COVID. We definitely believe that people’s relationship with their home has changed for the long term. You know, people are being much more intentional about their surroundings. People are obviously working remotely or at least partially, and, and therefore just spending more time in their homes. And so for us, I think innovation is more about how do you be multifunctional in your home environment? Like, so how do you create new variations of existing items versus kind of just going to like very niche use cases and audiences. I think there’s a, a role of, of things that make sense for, for niche use cases and audiences, but for us, it’s really about taking those core items in your home and thinking, okay, how do you make them actually more functional or more easy to use that’s, it’s just something we look for. And in how we think about our products pipeline is how do you marry form and function? So for us, it’s like, yes, create very design driven products, but they have to be functional for your everyday needs. And you know, I’d say our innovation approach as a whole will be very much driven by our direct with consumer approach for us. It’s, it’s very much about going to the consumer and helping them, you know, co-create and innovate with us to, to really meet their needs and where they are today.

Will:
We did have an email in from somebody and they, you know, knowing that there is a home expert, we’re gonna call you a home expert for this case and use your home expert hat from an innovation side. Do you think there’s anything coming that’s going to remove the need for a junk drawer in the kitchen? Or do you think that it’s always going to be with us? No matter what

Suze:
I mean, I’m thrilled to be cold and home expert because homeowners have been my passion since I was three years old. So I’ve been training my whole life for this question. I think human behavior is human behavior. I would love to think that there is a, a solution for the junk jaw, but the reality is you get fix one problem and another junk drawer’s gonna come up. Right? So while I will say our, our open space is our home organizing brand has some amazing draw divide is and little mini bins that can make a life at home a lot better. And it’s like, no matter what do you really think that you’re not going to be compelled to just like throw your spare mail in the drawer with some sticky tape? And like, I dunno about you. I probably have light bulbs in there. Some screws,

Will:
Random tool. Yeah. Random, small handheld tools that you need around just there, like Phillips flat heads.

Dan:
Well, was this an email or more of a you know, living situation type thing, just wanna figure out, I

Suze:
Think can ask Dr. Sue’s type question.

Will:
It doesn’t matter necessarily where the emails come from. , you know, number one,

Dan:
We’re just honored to get an email. That’s

Will:
All. Yeah. We’re honored to get emails. Yeah. You know, and we always, you know, we always plug hello at avil.com. That’s a Y l.com, but people wanna know the junk door is something that I, I didn’t know if it’s like only an American thing, if it’s also as like predominantly Australia, is it a world thing

Suze:
That is a worldwide human condition? I think.

Will:
All right. Well, there you go. I mean, people wanted to know,

Suze:
I think what we can do and you can then tell the people is we could do it before and after of your drunk drawer and you can make it a little inspiration so we could hook you up. Some straw divides some trays, some small bins we’ll, we’ll talk offline and I, and then

Dan:
We’ll TikTok it.

Will:
Yeah. Then I’ll put it on the TikTok. Now I’ll go. And tag pattern brands for the before and after.

Suze:
I mean, I think this is we we’re just giving the world what they want,

Will:
Your welcome world.

Dan:

Suze:
Mm-Hmm they should be thankful. So please email in more questions and we here will be happy to answer them.

Will:
That’s right. Absolutely. Sue, well, it has been a pleasure. Speaking with you, you have great in us. Great. Tons of insight. I think the interesting thing is, is that, you know, we, we see our homes all the time, obviously. And so the interesting things about how they get there, what’s the problem. And what’s not in the uniquity that pattern brands is bringing to the equation is really cool to, and so thank you for taking the time to speak with us.

Suze:
Of course. And I’ll, I’ll say like for everyone, your home is, is a place, but it’s also a feeling it’s where you should feel comfort and control. And so ultimately just make your home feel like you, whatever that is to you, you know,

Will:
Nice and, and Suze, where can people learn more about pattern? Where can they get some of the cool offerings that you have

Suze:
Amazing. They can go to pattern brands.com. And from there you can either buy and navigate to our products themselves. Or if you’re interested in, in kind of having a conversation about selling to us, you can also navigate to the M and a portion of, of that side as well.

Dan:
Awesome. Well, I’m a big fan of the under the bed storage, cuz that’s where, that’s my personal junk drawer right there.

Suze:
Now at you version one of version two felt canvas

Dan:
Canvas.

Suze:
Good. I will say that’s, that was a big learning for us. Was you shouldn’t ship air, like the big, the first one, what didn’t fall down and was literally huge, very aesthetic, but also not as functional as it should have been. So we had to kind of eat our vegetables and go back to square one and redesign. But I think version two is like a really solid product that we’re super proud of.

Will:
There you go. Yeah. Well, perfect. All right, Suz. Well, thanks for being with us and if you have any questions, feel free to send in an email and then we’ll get it to SU and get you an answer. And that is, hello@anvyl.com. That’s A-N-V-Y-L.com and we will speak to you next episode.