August 10, 2022

Giften Market (Season 4 Episode 31 )

Martha Krueger started Giften Market  – an online gift shop featuring thoughtfully curated products from inspiring small businesses, including many from Minnesota Makers. Shop hundreds of products produced by emerging and underrepresented entrepreneurs, small artisan studios, and specialty retailers, or create a unique gift box that you hand pick the products online.

Giften Market Podcast Transcript

Stephanie Hansen 0:12
Hi, this is Stephanie Hansen. And you’re listening to the makers in Minnesota podcast where we talk to cool people doing cool things. And my next guest is Martha Krueger and she’s with gifting market. And I have been following your story, I think since you originally almost started your online marketplace, which I’m crazy about. Welcome to the program, Martha.

Martha Krueger 0:34
Thank you, Stephanie.

Stephanie Hansen 0:36
I don’t even know how I first found out about you. But I think it was because you were sourcing local products. And I was interested in what you were doing. And you know, one of the things that happened originally, when we started seeing more local products online, was there wasn’t really like a way to put more than one product together unless you inventoried. So we were working on, is there a way that you can do that, and you have really created a cool website where people can order gift products, you can order them boxed up, or I’m really curious, you have a make your own gift box, which I think is super clever. Tell me a little bit about how you got started in this gifting business?

Martha Krueger 1:21
Sure, sure. So I’m a serial entrepreneur, and a serial gifter. So kind of combined both things. gifting is my third business. And I’m really, really passionate about it. I, I found that a lot of my free time was spent shopping for gifts for people trying to get it to them on time making it look nice, pulling together thoughtful products. And I’m like, you know, shopping should be fun, like, the special occasion should be celebrations. But this is really, really stressful for some reason. You know, friends and family all across the country. And it seems like every week, there’s something to be to be thinking about. And as I was looking for online destinations, that could solve this problem, I wasn’t coming up with a whole lot, you know, I was surprised that there was no kind of go to destination with small business small batch products that they can wrap for me add a card shipped directly to friends and family in a timely manner. And so I thought, You know what, I’m just gonna, I’m gonna try it. I’m gonna launch some things, see how it goes and kind of grow and involve from there?

Stephanie Hansen 2:43
So Weren’t you afraid? Not afraid? That’s not the right word. But one of the reasons I think people haven’t done this is they didn’t want to house all this inventory. And you seem to have figured out like the inventory and the fulfillment piece of that. So how did you figure all that out? Or did it take a lot of research? Or did you just order small quantities of the products you liked?

Martha Krueger 3:06
Little bit of everything. So with this being an E commerce business, I, I started building out the website and kind of coming up with favorite products and brands that I really wanted to be part of that site. I learned quickly by just putting together that demo store, a store can look really empty. Even if you have, say 200 products. I was trying to make it so people could search by occasion, and price point and brand values. So if you’re looking for a Father’s Day gift under $50, if there’s only one option for people, that’s not a great website experience. So I learned pretty early on I did need a decent amount of inventory to be able to keep people on the side and satisfy enough of those needs. So I definitely brought on more inventory than I was even originally planning. I did sell my previous company in 2019. So I had some some seed capital to fund that initial inventory run.

Stephanie Hansen 4:15
And we should probably just mention, I believe that was the socialites, right?

Martha Krueger 4:18
Yes. Yep. So marketing about that, because that’s a great story to sir. So right out of college, I went to St. Thomas studied entrepreneurship and business communications. My business partner, we did group projects together and just kind of got along really well had compatible workstyles. So 2011, we launched the socialites, as a social media only marketing agency, which no one was doing at the time. Social was pretty new. I think like Facebook pages for businesses had just rolled out. So we were early to that. Gabe, but started getting some some great traction early on, picked up for it as a client, lots of General Mills brands had a lot of fun with it. And about nine years later, I’m like, No, I’m ready for a new challenge. I want to start something from scratch, again, was really itching to get into E commerce and kind of solve this this gifting problem that I have in my own life. So yeah, sold to my business partner, October 2019. And then I had a very basic, really early version of gifted market that I launched Small Business Saturday 2019. So but about a month later, we had a more formal launch in May 2020s, kind of like peak lockdown Mother’s Day week. And that’s really when we started getting some good traction. You know, we were running Facebook ads saying still need a Mother’s Day gift. People were like I absolutely do. And you know, I’m not leaving my house, or we’re not doing our normal brunch or family get together this year. So what a great way to kind of build my own gift box with maybe some brunch items or self care items. And I love that you can pack that, wrap it and ship it for me.

Stephanie Hansen 6:13
You were very timely. And one of the things that I think comes along with this business for you is you have a really good understanding about your metrics, and your digital marketing strategy. I did read an article in the Wall Street Journal about you and how Facebook has really lost a lot of momentum for small business marketers once Apple started increasing the privacy widgets. And you have a statement in there that really struck me and I think it was, and correct me if I’m exactly wrong, but I think it was like for when you did a Facebook ad like you knew your return was generally about $14 per customer acquisition.

Martha Krueger 6:56
Yeah, that was my cost. So my average order value is around $100. And it cost me $14 To get that customer.

Stephanie Hansen 7:05
What I thought was amazing about that is, so I sold a company in 2000. Let’s see, it’s been five years. So 2016, I guess. And at that time, I knew exactly to what my acquisition rate was. And we had really good metrics. And people kind of forget that it takes money to make money sometimes, right? So that if you know what that that composition is, and you can track it, you can spend money in places that you know, especially the internet, when it’s an online purchase, that That click is gonna happen. And it takes a while to get those metrics. And I’m really impressed that you tracked it to that level and that degree, because I mean, when we sold our business, we were spending $150,000 a month on digital advertising. But we also knew the exact amount of return on the products that we were selling through the internet. So I just want people to hear that. Because if you do find someone that’s good at the digital strategy, you can put money there if you can make money there.

Martha Krueger 8:12
Yep. That’s the game. That’s the challenge. And so

Stephanie Hansen 8:15
you really, I am assuming learned a lot about that through your experiences at social life and really have taken that to this business. What I love about gifting is the flexibility of it. So if I want to order a gift basket for a new mom, I don’t necessarily have to use all the products that you’ve put in the mom box. I can I add other things, too. How did you figure out that strategy in the fulfillment filament piece of that?

Martha Krueger 8:42
Sure. So that was a big part of why I wanted to start gifting is just the ability to like, create my own thing. I mean, there’s occasions where you just want to send a quick thank you or thinking of you and spend around $40. And then other occasions where you really want to, you know, pull out all the stops for the 50th birthday that you can’t make it there in person. So yeah, just having that flexibility was a big piece. The way that we figured out how to make it work on the back end, is we we stocked several sizes of white gift boxes, kind of keep it simple, blank slate, everything is white. They’re nice gift boxes looks great with the satin ribbon, we add crinkle paper to everything. So that’s kind of our stock. You know, behind the scenes, we’ve got lots of boxes stacked up gift boxes and ribbon and blink cards. And then we have to have our shipping boxes that fits everything nicely. So that was kind of a challenge of trial and error. How to how to make sure we have the right packaging materials, so nothing gets dented or broken in transit. So some learning curve there. But then beyond that In our warehouse, there’s actually rows and rows of bins of product. So if you see six different scents of a lotion tube on our site, there are six different side by side bins with maybe 30 to 50 units of each product in each bin. And so when an order comes through, our team prints a pack slip of every line item, so kinda like exactly what you’d see on the receipt. There’s a SKU associated with each product. And our team goes to each associated bin picks the product and then we we kit on demand. It’s called we wrap and ship everything custom from they’re

Stephanie Hansen 10:39
so smart and so much work to if, in any given day, like how many people are in your warehouse, or is it you and your family, because sometimes I’ve seen that too are people every week they’re going in and getting their orders. Stay with us, we’ll be right back.

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Martha Krueger 11:37
So it started out me and my family, I would say after that Mother’s Day rush 2020 the momentum continued, which was great, but it almost just like happened overnight. So being able to fulfill out of home was no longer doable. Once I got to 20 orders a day, I just like I couldn’t carry all the boxes to the post office anymore. Because I think my first time I had like a 40 pound load that I had to get out the door. I’m like, Alright, I really need to start looking for warehouse space. It was challenging because a lot of warehouses didn’t want to do in person tours during COVID are some of them were overwhelmed with demand to begin with. So it did take a while to find a partner. I’m currently at a three PL. So third party logistics. So I actually outsource the bulk of my fulfillment right now to a team that just fulfills mainly Amazon packages, but also, I’m on Shopify, so they, they crank out all of my daily orders from the e commerce website. And then they have trucks that come and pick up from USPS ups, UPS and FedEx every business day. So that’s nice. I can, at least for now focus on the website experience, the marketing, product selection, merchandising, and all of that, which isn’t

Stephanie Hansen 13:04
that the most fun part? Kind of? I don’t know, I had a company that we shipped and had logistical. And I just was like, Oh, I hated dealing with the, you know, I didn’t get my business cards on time and blah, blah, blah. But I loved like the thinking of new products and developing new products. What what does it take to get a product on your site, you have some national products, but you also have some Minnesota folks like Foley coffee like essence one, what if a local person is listening to the Sun wants to provide you with product or be on your site? What do you look for?

Martha Krueger 13:41
Sure. So there’s actually a pretty long list. And on our site, I think we have like 850 Live products right now from 150 different vendors. So it is kind of a lot to manage and keep organized. But there’s a lot of fun and in that amount of variety as well. So that’s what I would, I would consider our live catalog. We also have a back catalogue of brands and products that we are aware of and we keep in mind to pitch specifically to businesses for corporate gifts. So sometimes we’ll say hey, we really liked this thing, but we’d actually want something less expensive or a larger size or whatever it might be the gluten free version of the pancake mix. Hey, we have a go to for that maybe we don’t stock a full benefit 12 months out of the year but we also have a lot of ideas, additional ideas and product recommendations beyond what you see on the site. So what we look for specifically high quality products, great, you know, brand story and values. Most of the products on our site are made in the USA small batch Do they have values like organic?

Stephanie Hansen 15:06
Giving back models?

Martha Krueger 15:08
Yeah, give back models. You know, just just things you can feel really good about placing your dollars there. And not on Amazon is another big one, we do have some crossover with, you know, products that are on Amazon. But a lot of them aren’t things that you could just easily place a bunch of Amazon Prime orders, get it to your house and do your own gift box, there’s, you know, they’re extra thoughtful and special. So the quality of the values are a big piece. Logistically, we also need items that are smaller and lightweight, ideally, because a lot of our customers will add eight or 10 things to cart, and we’ll put them in one gift box. So we can’t have anything that is too big, that’s just too challenging. To do that with or too heavy, that’s really going to increase that shipping cost. The aesthetics are a bigger piece than I realized early on about that. So for that big Mother’s Day launch, I had tons of products in my house at the time in early 2020. And I was just putting together combinations by color. So we had like all these light blue products. And I’m like, you know, that will look really good in a box together. Now it’s one of our best sellers. It’s called the uplift gift box. But I just took a casual picture of it in my living room of you know, hey, if you if you order this box, here’s exactly how it’ll show up. And it looks great. It’s a great mix of products. And that, that ended up doing really well, you know, people will see the ad or they’ll just see the product listing. They’re like, drawn to the aesthetics of it, they click on it, they read the description, and they’re like, hey, that, that seems that seems perfect. I was surprised as I was trying to do other combinations of, hey, here’s a breakfast box. And I think these are, these are great mix of products. If it just didn’t photograph well or like fit that well together in a square box, it was challenging to sell it. Because you know, I don’t have a brick and mortar store, everyone is buying based on the photo and short description alone. So the aesthetics are a big piece of it. So when it comes to packaging being I guess, eye catching on a screen. That’s a big deal. Let’s see what else. So it’s been around time.

Stephanie Hansen 17:36
Yeah. So you have a lot of experience in the social media space with your past company. So how much does social media play into your strategy for sales? I know you’re a strong digital marketer. When we talk about like seeing a picture of something on social and then you know, like you can buy right off Instagram now. So I imagine for you, that was a game changer.

Martha Krueger 18:02
So early days before the apple privacy changes, you’re absolutely right, pretty much everyone who bought from us, saw us on Instagram, click through on an ad came to shop at our website and ended up buying something from either are ready to ship collection, or they they spent a little more time and built their own custom gift box. So early on Instagram was critical to new customer acquisition and really just getting people off of the Instagram platform of just scrolling and checking out vacation pics that into the over to start shopping today that it’s still important for us to be showing up on Instagram, but we’ve shifted all of our paid ad dollars over to Google. So it’s really about you know, that search intent and that keywords someone’s plugging in, if it’s Mother’s Day gift idea. And we’re showing up or we do a lot of self care, Wellness Spa oriented gift boxes. So a lot of the search terms that people are using, were showing up in the Google Shopping results. And it’s um, it’s even smaller than on Instagram. So that visual, that photo of the gift box is truly a thumbnail. And so we need to capture attention with that thumbnail, when we’re alongside six plus competitors. So that’s changed a little bit in terms of how we’re thinking about launching new products and how we’re shooting the photos of them. And using a lot of data on what are our best sellers. What’s working really well already with our Google ads and how can we create maybe two more gift boxes just like our bestsellers but a different scent a different color, differentiate it in some way?

Stephanie Hansen 19:57
What I want the small business people to hear from You know, what you’re articulating so well, is how important the analytics of your business are, and how to translate that analytical data into product development, product acquisition sales lines, you have really tangible knowledge of how to do that and trackable because you’re obviously selling so much online. But people I think, don’t think about some of these things. And then an algorithm changes, like Instagram, for instance, a lot of my clients are freaking out, because the static photos that they’ve used to market, their businesses aren’t getting any traction anymore. And now they have to be investing in reels, and video, much more so than they had in the past, I think I did a test with the customer. And for every 10 reels or for every, it was nine reels showed to every one static photo. So if you didn’t have a really robust video strategy that was going to be really challenging to get seen anymore. Are you finding that that’s for you to?

Martha Krueger 21:11
It is it is and, you know, it took me a while to evaluate, you know, what’s next after these iOS changes? I think some of us marketers and you know, in chatting on Facebook groups and stuff, it seems like maybe things would rebound a bit, and they haven’t at all. And this these privacy changes, you know, Apple was the first big one, but there’s others that are going to follow. And so how can we create like a sustainable marketing strategy when we can’t just rely on if I put some money in here, for every 14 I spend, I get a new customer at the time, what was the thing holding me back was financing for inventory. So I could have put a lot more money into that channel if I had the inventory to fulfill. But today, you know, I’m thinking a lot more long term. And what what channels can I own, that that can’t just be turned off tomorrow. So that’s the website experience our email list, we’re starting to do more with video outside of just social or, Hey, it’s up for 24 hours type of thing. But how can we create really great YouTube videos, that people are searching for gift ideas, and we can do something fun and fresh, and maybe get some PR out of it. If if BuzzFeed or a site like that is looking for those ideas and features a clip from our video or wants to interview us for ideas. So we’re thinking a lot more, I guess, outside of the standard formula of post one thing on Instagram per day, and,

Stephanie Hansen 22:51
and maybe we’ll see a resurgence you mentioned, PR, maybe we’ll see a resurgence and people wanting to connect with radio shows, TV shows, Instagram or influencers that do live content. Because a lot of that sort of died back when all you had to do was just put your, you know, items on a Facebook page. And so it’s interesting that I think some of those traditional mediums that have a lot of influence, are maybe going to be back in play. And so public relations becomes a bigger part of the strategy, which it frankly hasn’t been for a while because digital has been so much.

Martha Krueger 23:36
Yeah, it’s just really getting so expensive. I know, I’ve mentioned that $14 figure a few times. But now on Google, I spent about $45 to acquire a customer. And so normally I’m, if I’m lucky, I’m just breaking even on that first sale. So I’m really relying on repeat customers and larger group orders for corporate gifts to kind of keep keep the engine running.

Stephanie Hansen 24:01
Yeah. And that leads to that website experience being so important. Because if you spent $45 to get that first customer to break even and then the experience isn’t greater, they don’t come back. I just I’m very impressed by you. I think you’re a really just smart, savvy marketer, and it makes me just really happy that you’re having such success. I just I really am a fan of your site. And I just can’t wait to order order more things. i i When we started working together. It had been a while since I’ve been back at the site and I was like, Look at her. She’s really grown this into something. And one of the things that I think people under value as customers is how touched a customer feels when you send them something, whether it’s a handwritten note, whether it’s a small gift item, whether it’s a gift box, you know, we underestimate the impression that you you can make on someone in this very digital, fast paced world by just reaching out to them in the moment. So whether someone’s lost a pet or and they’re a customer or someone’s dealing with health challenges, or you talk to them, and they’re just not having a great day, it doesn’t take a lot to really make someone’s day. So absolutely,

Martha Krueger 25:17
we call it the virtual hug effect. Yeah, for sure. COVID era, how can you send a virtual hug and every single day, I get the joy of reading people’s little gift messages, sending a virtual high five or cheers or a hug to that, that special person that they can’t be with in person. And I know that in a couple of days, they get to open up and unbox a chocolate bar, a candle, fun little, little gift things that will make your day will make them smile. And the first person they’re going to think of is that person who sent them that gift, giving them a call or a text or you know, letting them know just how how special they feel.

Stephanie Hansen 25:59
I can think of too, I had cancer, I think it’s going on 11 years ago now. And I can still remember the people that sent me stuff, even if it was cards, like I can just really remember. And I had a few people that like sent super different things. And I just I remembered being so touch in such a time when I was so down and just I couldn’t you know, really engage with everybody that because that was just too sick. And I just needed to focus on myself and my family in that moment. But it really did mean a lot and just know if you’re out there and you’re someone that you can touch someone else and make their day you should because it really makes a big difference. So Martha, it’s awesome. It’s giftun market.com. I’m gonna go ahead and I’ll put links in the show notes here, keep on keeping on and if people need if they want to reach out to you with products, or if they have like a business order that they want to do, like maybe they specifically want to do gifts for new mothers or that kind of thing. I know you can work with them to do custom orders as well.

Martha Krueger 27:02
Absolutely. Yeah, that’s one of the best parts of the job just being creative. And

Stephanie Hansen 27:06
tell me about your favorite custom box that you’ve done. Oh,

Martha Krueger 27:11
you know, it’s hard to pick but we had a recent one. The the only briefly got was we’re hosting an event at a haunted house. Do you have any spooky products that aren’t that aren’t. You know, to, to on the paranormal big Yeah, to, you know, we don’t want to like freak people out. But we want to get them excited to come to this haunted house event. And it’s summer, so it’s not even Halloween yet. But our team came up with some really fun ideas we did old fashioned cocktail kit with these ghost stir sticks, smudge sticks, some nice vintage style candy and treats. And then we wrapped everything with faux cobwebs and tiny spiders, who was never like unboxing it was just really fun and different. And yeah, it was fun to pull together. There was also like a tight timeline and like these other challenges that our team just really thrives on, you know how to how to be the one that can, you know, take this seemingly impossible challenge of getting these spooky gifts out to people all across the country before the event so that it serves as their invitation. And, and that was really fun. Yeah, right.

Stephanie Hansen 28:33
Thank you for being our guest today on the makers of Minnesota. It was lovely to catch up.

Martha Krueger 28:37
Yeah, I agree. Thank you, Stephanie. We’ll talk soon bye bye bye.

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