How Brie Read unearthed a huge problem, hidden in plain sight, and used £100k to set up Snag, one of the fastest growing DTC businesses in the UK.
“Whoa, this is going to work a lot better than we had thought”
In a world where pretty much anything you can imagine is available at the click of a button, it is easy to think that all the good ideas have already ‘been thought’ and all the products we need have already been produced, packaged up, branded and released to the world. If you ever feel frustrated and defeated by the thought that if only you had started to think about setting up a business five years ago rather than now, the story of Snag tights is one for you.
In less than three years, Snag have built a business with revenues over £3 million a month, customers from around the world for a single product range that has existed forever and is available in pretty much any shop that sells clothing. And all this with only £100k of seed investment. The story of how this happened and how quickly Snag has become an enormous success should serve as an inspiration to us all and a reminder that the best ideas are often hiding in plain sight.
Brie Read, founder of Snag.
It all started when Snags founder, Brie Read was walking down George Street, Edinburgh's main shopping street, when her tights began to fall down. It was not just by a bit; they worked their way down to below the knees. "It was really embarrassing and one of those things you take to heart" explained Brie when we met to talk about her company. "When I told my friends about it, they all understood the problem only too well. Whether they were short or tall or tiny or big, they all agreed it was impossible to find a pair of tights that fitted properly. It was a crazy idea, how could a product that nearly all women wear be so bad? So, to understand how big the problem was I set up a Google survey of 3000 women across the UK, and it came back that 90% of women cannot ever find tights which fitted them properly".
Recognising that you may not be the only one with a problem is one thing but setting up a UK wide survey is not typically how you work out if you are right. That is unless you have a background in Data Science, which is precisely what Brie had.
Brie was a Computer Science and Psychology graduate, disciplines which have shaped her career in profound ways. As a self-confessed data nerd, Brie first made a name for herself by learning that numbers should drive all product strategy. Her intuitive feel for how numbers should inform marketing decisions bore fruit very early in her career when she was asked to use her numerical skills to become sales and marketing director just a few years into her first job. It was a daunting prospect for someone who confessed to knowing very little about marketing at the time, the first thing she did was to remove 90% of its product lines (they sold educational courses) and remove discounts from its best selling products. Most people in the company thought she was insane, but overnight the business went on to sell the same number of courses but make more than double the profits. Brie continued "For me, it was a real wow moment. I realised if you could apply the insights of the numbers you could become way more efficient. From then on, I was effectively a marketeer, but one with faith that I could solve problems with data".
“This opportunity is huge, and we would be stupid not to try and fix the problem”
Brie went to on serve as marketing director and then CEO for several companies including Diet Chef and the Post Code Lottery, always with a focus on "what is the data telling us about what our customers want from our products". She then went on to become CEO of ForceTenDigital, which was at the time the UK’s largest Facebook advertising agency, helping businesses get the most out of their Facebook adverts.
It was while she was at the Facebook agency that she had her George Street moment and used her data science background to answer the question "is it just me or is this a really big problem waiting to be solved?".
It was impossible to interpret the survey data in any other way than, to quote Brie, "This opportunity is huge, and we would be stupid not to try and fix the problem". According to Brie the problem with tights is primarily a legacy issue that’s a mix of a commoditised market, product decisions made mainly by men (who are not generally the end customer) and also because women have become so used to poorly fitting tights they have accepted that this is just the way it is.
Armed with this knowledge, Brie spent a couple of years finding the right manufacturer who understood the issues and agreed to team up to help fix them. It may be easy to think Snag is an overnight success; however, this underestimates the serious amounts of work Brie did to get the business in shape before launch. In addition to the challenge of working out how to make a much better product at a competitive price, Brie was already also figuring out her sales and marketing plan. Initially, the sales would be made through a simple one-page Shopify site. Critically she knew she needed margins that would work with 25% of revenue being channelled straight back into marketing the business. Brie was an expert at Facebook marketing, and she knew that you need to have enough funds available for marketing activity.
Snag do one thing and they do it well.
Brie had also spent a bit of time raising some seed funding from her network. In the end, she conservatively raised about £100k, which was pretty much the amount that was needed for the first proper production run to make sure there was some stock in the system.
It was time to go live. There was no grand unveiling or launch party, according to Brie "To be honest I wasn't sure I should do it, but the opportunity was clear, and we had done the work with the manufacturer. We had cobbled together a website which I had hooked up to a Facebook advertising account. Sitting in Victoria Station late one afternoon waiting for a train, we unceremoniously put the website live. When I checked the numbers that evening, not only were real sales coming in, but there were also a lot more of them than we had ever anticipated. I was like, whoa, this is going to work a lot better than we had thought."
The mix of the differentiated products, the marketing messages and the Facebook ads were doing the job of bringing the brand to people's attention. Sales jumped from £15k in the first month to £300k a month in less than a year. In their first full year trading, they did £2.3 million in sales. And it did not stop there. Second-year sales were £13.3 million, and now, in only their third year, they are on track for over £30 million, with revenues now hitting £3m orders per month. This sort of growth is atypical. Not even DTC icons like Gymshark have a better growth story in the same time frame.
Having a better product is at the heart of Snag's growth, but just as critical has been their ability to find customers and create a lasting connection with the brand. Understanding how to advertise on Facebook and Instagram helps tactically, however, it's in the marketing fundamentals where Snag is most impressive. To ensure the brand is not seasonal, they change the selection depending on the time of year and website region. They make sure they have thick tights on display in UK winter, with thin and footless versions offered up at the same time in Australia. They make sure their models are reflective of the customer mix across their regional websites. For example, they will use completely different models for the same tights in the US, compared to the one used for the UK or Germany. They are also obsessed with good customer service, making sure they can give local support in all their markets and always have someone on hand to help with customer issues or questions. Listening to their customer's suggestions resulted in a brand new product "Chub Rub shorts", essentially a pair of tights cut off above the knee for warmth and comfort when you still want to show off your legs. This product was such a hit they sold their entire summer UK launch stock in less than 2 weeks.
The reviews reveals lots of happy customers who seem almost suprised to find a product they actually like.
Unsurprisingly for a data devotee, Brie lets the numbers guide her in their most critical strategic decisions. For example, which countries to launch in are driven by locations of website hits and quantity of international orders. The size and shape of the models on the website are dependent on the most popular sizes sold. You won't find many size 0 models on the website as the numbers tell them they are not selling products to women of that size. For this reason, up to 10% of models wearing the tights on the website are male models. The data shows them that up to 10% of their products are bought and worn by men.
Brie and her team do a great job of looking after their customers sizing requirements, customer service, returns, and championing sustainability, all of which build brand loyalty. Doing this is good for business at the best of times. It can also make all the difference when the tough and unexpected events arrive, particularly ones which threaten to take the whole business down. Brie found out what it means to have a loyal and inventive customer base when the current pandemic rapidly put an end to business as normal in March 2020.
“Our CFO ran the numbers and gave us the news that we would be out of business by July”
The sudden lockdown across the world meant that overnight, Over 65% of the Snag business disappeared. Export sales either did not or could not happen, and domestic orders suffered as everyone had other things on their mind rather than buying their next pair of tights for work. Brie picks up the story, "When Covid first hit we were not that worried, we had made a decent amount of money the year before. We used the excess stock we had to do our bit and donated 24,000 pairs to NHS workers. Our focus was on looking after our people as well as helping wherever else we could. It was only after a month or so into the pandemic we realised we had a big problem. We had become used to steady growth largely driven by our advertising spend with Facebook. In the months leading up to the lockdown, we had continued to spend heavily on Facebook. It was only when we realised that we still had to pay our bills, but suddenly we had no money coming in to do this, we realised we may not survive. Suddenly, we were £800,000 in debt with £600,000 of that owed to Facebook, who had no interest in giving us more time to pay our bills. Our CFO ran the numbers and gave us the news that we would be out of business by July".
When things like this happen, most businesses do things like renege on supplier payment agreements, shed staff and put up prices. Snag instead used the customer loyalty and goodwill they had built, to find a much more elegant solution. They ran an unusual promotion. The Snag model is to make sure the products are sold at the lowest price possible, all the year round, which is why they do not run promotions. The cash crunch forced them to promote but with a twist. Brie explained, "I thought to myself, yeah that's it, we are shutting up shop. So in a very Snag way, I went on Instagram and started talking to our customers, and it was they who came up with this amazing scheme. It was a two for one offer, but they don't get their second pair of tights for another six months. This made sense for everyone, the customers get great value, and they get a nice new pair of tights just before Christmas, and we get the money in now. The idea came together on Sunday, we launched it on Monday, and by Friday we had £1.25M in the bank. It was insane".
The simple, community driven, Save Our Snag campaign which rescued the business when the COVID-19 pandemic struck.
The business got through that existential crisis and has since started to grow at pace again. Snag is an organisation which continues to be guided by the numbers, with each web visit, purchase and customer interaction showing them the way. Being a skilled data scientist and using the numbers to give her team the confidence to try things out is clearly paying off for Brie. She did, however, offer me one last bit of advice, "You know, having [numerical] skill is useful, but you also need to be thinking about the data points as actual people, not just clicks or numbers". If a data scientist can remember that, there can be no excuse for the rest of us.