E-Commerce Development Company in Chicago

CPG / Food & Beverage

A Chicago-based CPG company ($780 million annual revenue, selling through grocery retail — Kroger, Walmart, Target — and food service channels) wanted to launch a D2C e-commerce channel for its premium product line. The brand sold through 45,000 retail locations but had no direct consumer relationship — the retailer owned the customer data, pricing, and shelf placement. Problems: no first-party data (the company had zero direct consumer data — all consumer insights came from syndicated data like IRI/NielsenIQ and retailer data sharing), margin compression (retailer margins took 40-50% of the consumer price — D2C could capture the full margin on premium products), limited product innovation (retailers controlled shelf space — only proven, high-velocity products got placement, making it impossible to test niche or premium variants), and brand control (the company's brand presentation in-store was limited to packaging — no ability to tell the brand story, communicate values, or create an emotional connection). The company estimated D2C could generate $15M in year-one revenue from its most engaged consumers — those who seek the brand out rather than encountering it in-store.

We built a D2C platform on Shopify Plus with subscription commerce, first-party data collection, and product innovation testing. (1) Subscription commerce: the primary D2C model for CPG. Subscribe and save: customers subscribe to regular deliveries of their favourite products at a 15% discount. Frequency options: every 2, 4, 6, or 8 weeks (matching consumption patterns for food products). Flexible management: skip, pause, swap products, or change frequency — the management interface is designed for zero friction (the #1 cause of CPG subscription churn is inability to easily manage). Build-your-box: customers create custom assortments — selecting products to include in each delivery, mixing across product lines. Seasonal additions: limited-edition and seasonal products offered as one-time additions to existing subscriptions ("Add our Summer BBQ Collection to your next delivery for $24"). (2) First-party data platform: building the consumer relationship the company never had. Progressive profiling: capturing data across the customer journey — taste preferences during onboarding, dietary information when browsing, and feedback after purchase. Product feedback loops: every delivery includes a feedback mechanism — "Rate each product 1-5, tell us what to include more/less" — creating product development data directly from consumers. Cohort analytics: understanding D2C consumers in segments — health-conscious buyers, gourmet enthusiasts, convenience seekers, gift buyers — each with different product preferences and communication styles. Retail bridge: connecting D2C data with retail data (where available through retailer data sharing) — building a unified consumer view that improves both D2C and retail channel performance. (3) Product innovation testing: using D2C as a test channel. Limited runs: launching new flavours, formats, or product lines as D2C exclusives before committing to retail scale. A/B testing: showing different product presentations (photography, descriptions, pricing) to different consumer segments and measuring conversion. Consumer panels: enrolling D2C subscribers in product testing panels — sending pre-release products and collecting structured feedback before retail launch. Data-driven retail pitches: when a D2C-exclusive product performs well, presenting conversion data, repeat purchase rates, and consumer feedback to retail buyers as evidence for shelf placement. (4) Brand experience: the storytelling that retail can't provide. Founder story: the brand's heritage and values communicated through rich media — video, photography, and narrative content integrated into the shopping experience. Ingredient sourcing: transparent sourcing information — "Our vanilla comes from [specific farm] in Madagascar" — with supplier profiles and quality documentation. Recipe and usage content: recipes, pairing suggestions, and usage ideas that connect the product to the consumer's life — content that drives repeat visits and positions the brand as a culinary authority. Community: user-generated content — customer recipes, photos, and reviews — building community around the brand. (5) Channel conflict management: protecting the retail relationship. Pricing parity: D2C prices at or above retail prices — the subscription discount brings the effective price to retail parity, not below. D2C-exclusive products: launching products available only D2C — no channel conflict because the products aren't in retail. Geographic complement: marketing D2C to consumers in areas with limited retail distribution — reaching consumers who can't easily find the product in stores.

D2C revenue: $18.2M in the first 12 months (21% above the $15M target). 65% of revenue from subscriptions ($11.8M recurring) — demonstrating the power of the subscribe-and-save model for CPG. First-party data: 142,000 consumer profiles built (from zero). The company now has direct consumer data that exceeds what was available through syndicated data: taste preferences for 89,000 consumers, dietary information for 67,000, and product feedback on every item in the catalogue. This data now informs retail product development — the CPG company's VP of Innovation called the D2C consumer panel "the most valuable product development tool we've ever had." Product innovation: 8 D2C-exclusive products launched in year one. 3 of the 8 performed well enough to present to retail buyers — 2 secured national retail distribution based on D2C performance data (conversion rates, repeat purchase rates, and consumer feedback). These 2 products are projected to generate $45M in retail revenue in their first year — innovation that wouldn't have happened without the D2C testing channel. Subscription metrics: average subscription value: $68/month. Subscription retention: 72% at 6 months (above the 65% CPG industry benchmark). Build-your-box subscribers have 84% retention — the customisation creates switching costs. Average subscriber purchases 8.4 deliveries before churning — lifetime value of $571. Channel complement: D2C did not cannibalise retail sales. Retail sales grew 3.2% during the D2C launch year (in line with category growth) — the D2C channel captured incremental demand from consumers who actively seek the brand. 22% of D2C customers report that they also purchase the brand at retail — the D2C relationship increases brand awareness and loyalty that benefits all channels. Development investment: $280,000 over 14 weeks.