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Spring cleaning has a different meaning for Grove Collaborative. <\/span><\/span><\/span><\/span><\/span><\/span>The company is embarking on several changes to boost both its bottom line and planet-friendly reputation.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nEarlier this month, the company <\/span><\/span><\/span><\/span><\/span><\/span>rebranded its core private label<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span>, Grove Co., to improve visibility on retail shelves. Grove also consolidated all of its own brands under the Grove Co. label.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nThe sustainability-driven home products company also launched a new e-commerce model in late February to encourage noncore customers to browse freely on the company\u2019s website and incentivize them to order more products.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cWe will move from the gated first order experience to one that is shopping focused and provides incentives for customers to subscribe to items and build the most planet-friendly and wallet-friendly order as possible,” CEO Jeff Yurcisin said, according to <\/span><\/span><\/span><\/span><\/span><\/span>a transcript<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span> of the company\u2019s fourth-quarter earnings call on March 6. \u201cWe expect this to reactivate and reenergize our 5 million customer base, further increase our total addressable market and appeal to all conscientious customers.”<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nChange is necessary to stay afloat financially, Yurcisin said. Net revenue in the <\/span><\/span><\/span><\/span><\/span><\/span>fourth quarter was $59.9 million<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span>, down 3.1% from the third quarter of 2023 and 19.2% year over year. <\/span><\/span><\/span><\/span><\/span><\/span>For the year ahead, the company expects net revenue between $215 million to $225 million and adjusted EBITDA margin of 0% to 1%.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cThis is just the reality of what happens in a subscription model \u2013 when you go from unsustainable advertising spend to growing more organically from your core, and then growing out in a more candidly sustainable way,\u201d Yurcisin said in a recent interview with Retail Dive. \u201cThese changes will allow us to better match best practices across e-commerce that I’ve seen throughout my career and drive growth in new acquisition channels.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\n\n
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\nJeff Yurcisin, CEO of Grove Collaborative<\/p>\n
Courtesy of Grove Collaborative<\/p>\n
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Under the former subscription model, customers were onboarded with a default subscription. While they received freebie gifts to entice them to try Grove\u2019s products, they had to subscribe to repeat orders for any product they purchased themselves.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u00a0<\/span><\/span><\/span><\/span><\/span><\/span>\u201cWe just blew up that model \u2026 and [are] enabling a wider set of customers to open up the [total accessible market],\u201d Yurcisin said. \u201cNow you can just purchase [an item] and we can be that trusted brand for you. Secondly, we\u2019ll be able to better find those customers using more traditional channels, like Google.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nThe revamped subscription model debuted on Feb. 29, and Yurcisin said the initial response has been positive.<\/span><\/span><\/span><\/span><\/span><\/span> <\/span><\/span><\/strong><\/span><\/span><\/span>Yurcisin said vendors are helping to fund some of the subscribe-and-save benefits through a partnership with Grove. Over half of the products found on the website are available for subscribe-and-save.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cIt\u2019s the inactive customers that I believe we really have a path to really engage because they like us,\u201d Yurcisin said. \u201cWhen we surveyed them, they still trust us and are still Grove fans. They just haven\u2019t had a need for a box showing up in a particular type of subscription model on a very regular basis. So we\u2019re approaching this a little differently.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nNew customers will get 20% off their first order with Grove when they subscribe to an individual product, then 5% off each subscribed item in repeat orders thereafter.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cNow we have an incentive \u2026 through subscribe-and-save \u2014 by partnering with our vendors to lock in these wonderful dark green customers,\u201d Yurcisin said, referring to environmentally conscious shoppers. \u201cThe people who want to change daily life to be a little bit more planet first.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nBut Yurcisin acknowledged that attracting this group and staying profitable is a balancing act.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cEach e-commerce retailer needs to find their own unique business model that allows them to serve customers well, but also deliver enough margins to have a sustainable, profitable business,” Yurcisin said in an email to Retail Dive. “Grove is the first retailer to be plastic neutral with carbon neutral shipments. Our customer chooses us because we help them find those great products that minimize their impact on the environment.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nBut when many items on Grove\u2019s site are under $10, getting to bigger orders requires subscriptions, according to Yurcisin.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\n\u201cWhat we have to do is get to a large enough order size with $50, $60, $70, $80 in a box, where we are able to ship to a customer in a planet friendly way,\u201d Yurcisin said. \u201cThe customer receives real value, the shipping cost per item decreases, and the impact we have on the planet improves \u2014 mainly because our unique offering is the only one that is most focused on reducing, measuring, and reporting one\u2019s plastic pollution impact.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u2018I think we have home position right now\u2019<\/span><\/span><\/span><\/span><\/span><\/h3>\nLast fall, Grove Collaborative announced a leadership shake-up with <\/span><\/span><\/span><\/span><\/span><\/span>co-founder Stuart Landesberg stepping down<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span> as CEO after a decade. Landesberg became executive chairman on the company\u2019s board, and he continues to oversee strategy, capital markets and corporate development. Yurcisin officially took over the CEO role last August.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nEight months in<\/span><\/span><\/span><\/span><\/span><\/span>, Yurcisin wants the company to reach profitability and prioritize innovation, while staying true to its planet-first mission.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cOur vision is to truly transform the consumer products industry into a force of human and environmental good,\u201d Yurcisin said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nThe San Francisco-based eco-friendly products company is doubling down on sustainability. Yurcisin refers to this as \u201cGrove\u2019s point of differentiation\u201d and why customers trust the brand.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n
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