Goodbye Thankyou Nappies
To those of you who are following the Thankyou story and are awaiting the result from the ‘No Small Plan’ campaign - first up, we probably should have titled it ‘No Short Plan’! Inviting the world’s biggest companies (and accepting proposals from many others who’ve come forward to say they could help) has led to a very busy 2021 as we negotiate and discover who we’ll partner with to help take Thankyou to the world. While we work and wait to be able to bring you an epic ending to that campaign, we’re taking the time to review what will be part of Thankyou’s future as we expand globally and what won’t.
When it comes to one of our products, we’ve made the call to (in a manner of speaking) go backward to take Thankyou forwards. This means you’ll soon see Thankyou nappies disappearing on shelves across Australia.
Our vision for the nappy range was to help fund child and maternal health projects for mums and their bubs living in extreme poverty by offering consumers a life-changing, functional nappy that would compete with some of the best products available on the market. We’re proud to say that, thanks to the tens of thousands of parents (you!) that backed the range by buying it, we’ve been able to serve 186,000 mothers and children in vulnerable communities with child and maternal health solutions.
This was made possible because the launch of nappies was one of our most successful product launches ever. We took an initial 10% market share in the subcategory we entered, and thanks to our incredible community, almost instantly, we saw a huge consumer groundswell join us. Some of you reading this may even have bought some of the first boxes on shelves, and we want to say thank you for that - it wouldn’t have been possible without your support.
We mentioned earlier that our aim was to make a great nappy, and groundbreaking launch data showed us that parents who hadn’t used our nappy gave it the highest net promoter score in the category after trial. It looked like we were well on the way to achieving what we’d set out to do! But it wasn’t long before it felt like a thousand tons of bricks were falling on us. We saw competitor brands double down on their promotions in rapid time, discounting their products so dramatically that their tactics fundamentally changed the category. We were warned and somewhat prepared for these sorts of strategies, but the battle was on from the get-go. We did what we could to fight the good fight. We launched bold marketing campaigns (like the ‘We’ll get you through the night, and if we can’t, we’ll send you a box of Huggies’ campaign!). We created subscription nappy services. We even made the tough call to pull Thankyou out of the food category to put all our resources into winning the ‘nappy wars’ (who would have thought such a cute category would be this hectic to operate in!). However, even with all these efforts, we couldn’t stay above 5% market share and were struggling to sustain the marketing investment needed to keep nappies afloat. When a product is at its infant (pardon the pun) stage of a lifecycle, it’s not usually very profitable, if it’s even profitable at all. With our model, that’s a massive challenge for us because, at its core, Thankyou exists to generate as much profit as we can to help end extreme poverty.
As a team, we sat back and thought deeply about the category and our role in it. We identified three fundamental challenges which eventually became the backbone of our decision to take the learnings and leave the nappy category:
The decision to exit nappies was driven by the following
1. We didn’t have what it took to win commercially in the nappy category.
We didn’t own the factory (which meant we did not have enough margin to play the deep price-cut promotional game), and we didn’t own the store (we are not a lower-priced home brand product). We also didn’t have access to huge amounts of capital to run Thankyou Nappies at a financial loss for a long period of time in the hope of one day making a profit
2. It’s a ‘tough-to-please-everyone’ category.
We discovered that even the market leader within nappies in Australia experiences a 1 in 5 failure rate when it comes to the product working for customers. What does this mean? Well, it turns out that every baby is unique, which means that not every nappy fits the same, and therefore doesn’t work the same on every child. This means it’s hard to cater to everyone with this product. We asked ourselves an abstract question: If a Thankyou hand wash ‘failed’ to deliver on its product promise (clean hands), as in, if the product didn’t clean some people’s hands. Would that be ok? We don’t think so. This would be breaking our brand promise of delivering a great product to you.
3. We’ve wrestled with the sustainability of Thankyou Nappies.
From day one in our Thankyou Nappy journey, we wrestled with sustainability. When we launched single-use nappies to meet 95% of the market’s need, we also launched a reusable nappy. The sales of the reusable nappy were very low. The sustainability ‘level’ that we’d achieved in our single-use nappies was a great start, but for us, it wasn’t good enough, and we weren’t prepared to greenwash.
Here’s what we’ve learned from the Thankyou Nappy journey:
- 1. Thankyou supporters are wild. Tens of thousands of them crowdfunded the launch. Over five hundred people hosted Thankyou Baby launch parties in their homes. On a day we needed help, hundreds of people headed into stores to put stickers on boxes to help our team. Remember how we said we got 10% market share quickly? That’s because of people. That’s a lot of parents changing a lot of nappies. The impact that this chapter has had on Thankyou will go well beyond the money it raised. It’s shown us the Thankyou movement is strong enough to launch new ideas into categories that many think we can’t. And we’ll take this learning, and together, we’ll go again and again.
- 2. Our greatest challenge might be sustaining sales and enduring in these tough categories against some of the biggest companies in the world; it’s the classic David vs. Goliath kind of stuff. But we’ve found a new way forward. Here enters No Small Plan. Give it a watch, and join us on our journey to finding a partner and together becoming a bigger David.
- 3. The sustainability side of things is super tricky. You can nail it by creating a ‘too expensive’ product that no one buys or simply greenwash a cheaper product. But that’s not who we are.
While we’re saying goodbye to Thankyou nappies, for now, this does not mean that one day we won’t be back. Who knows what could happen in the future with the right partner, the right go-to-market plan, and the right (sustainably made) product!
There are many moments in our history where it seems like we’ve had to go backward to go forwards. But imagine this with us for a moment. In archery, when a bow gets drawn backward, an onlooker who is only watching this part of the motion could have the perspective that the arrow is going in the wrong direction. This perspective feels true, but it misses out on a very real future reality. The reality is that the arrow is about to be propelled further than it’s ever been, at a rate faster than it’s ever traveled before.
This process doesn’t always feel great. Right now, we have five of our very own team who have had babies, and they are all wearing the last of the Thankyou Nappies; this includes our daughter Jordan. We are sad, too, as we head to the shelf to choose another brand of nappies – especially knowing it’s a shelf space we fought so hard to stay in. But, the advantage we have is that we do know where we are heading. We see the vision of Thankyou and believe in the direction. We know it’s not about the distance or time it took for an arrow to go backward; what matters is how far it gets propelled and how close it lands to the target.
To the families who backed Thankyou Nappies, many people have been impacted because of your support over the years, so on behalf of our impact partners and communities – thank you. As we look forward to the future of Thankyou and imagine the scale of impact in the days to come, we know that refining the ‘Thankyou arrow’ is something that we must do to hit the target we see.
That target? We aim to go all-in on bridging the gap between the $63 trillion that we, consumers, spend on goods and services and the 736 million people living in extreme poverty. We see a bridge that sustains and holds up over time. We see a world where not one person lives in extreme poverty, and we’re going all-in for it.
Daniel, Justine & the Thankyou team.