Periods And Incontinence: The Compelling Strategic Fit Of A Disruptor With An Industry Leader
Founded in 2013, Thinx—period-proof underwear—drew attention for its taboo-breaking guerilla marketing campaigns. The startup disrupted the feminine hygiene category with its reusable menstruation panties.
There had been little innovation in sanitary napkins and tampons for nearly 100 years. “Disposables take hundreds of years to decompose,” said Maria Molland, CEO at Thinx. “Consumers want environmentally friendly products.”
Since becoming CEO in 2017, Molland has navigated five obstacles:
- Repairing the company’s reputation after Miki Agrawal, co-founder and CEO, stepped down after being accused of sexual harassment.
- Going from a premium niche brand to reaching a mass market.
- Selling nationally to globally.
- Managing supply-chain issues during the pandemic, during a high-growth stage.
- Destigmatizing reusable panties from gross to clean and easy.
Molland overcame these challenges and oversaw the strategic acquisition of a majority stake in Thinx by Kimberly-Clark, a leader in reusable period and incontinence products.
“When the press first hit [about Agrawal], I stepped away from the recruiting process,” said Molland. “Several months later, I re-engaged when I found out the unit economics were so impressive. I’d run several e-commerce companies and knew you had to have gross margins of at least 65% to afford to spend on marketing and product innovation. Thinx’s margin was 80%.”
There was also a personal connection. Molland had 10 rounds of in vitro fertilization (IVF) treatments. For health and wellness reasons, her doctor recommended she wear Thinx. “I just loved the product,” she exclaimed. Molland joined the company in July 2017.
With low morale, the Thinx team had dwindled from about 40 employees to 26. “I think the team really wanted more professionalism [and a roadmap] to get to the next level,” she said. They were passionate about the product and wanted to know how they would scale the company.
Molland spent the first two months writing a long-range plan to take them from a direct-to-consumer niche premium brand to a mass market with omnichannel distribution. “We knew we needed to ultimately get into mass retail because that’s where 90% of the customers buy their feminine hygiene products,” said Molland.
Because of all the negative press about Agrawal, there was a lot of pushback from retailers in the U.S. But the story hadn’t gotten much attention in the U.K. Through an intermediary, Thinx was able to get distribution in Selfridges, a chain of high-end department stores in the U.K. Selling through Selfridges would give the company an understanding of the operational capabilities necessary to serve other retailers. Being sold in Selfridges, a highly regarded retailer,was a “stamp of approval,” signaling to U.S. retailers that maybe they should Thinx products, too.
“In some respects, I think Selfridges didn’t know exactly what Thinx did,” said Molland. “We were placed in the basement next to tech gadgets.” The night before Thinx was on sale, Molland stopped by the store to check on the display. A manager told her they had pulled the display because it used the word “period,” which management thought was gross, especially for the men browsing headphones.
Fortunately, Thinx had done a lot of PR, and many customers came in asking for the period underwear. Management quickly was convinced that customers wanted the product, and they had the display moved back. Management added a second display in the lingerie section. “The success helped us get Nordstrom on board,” said Molland.
There was also a trickle-down effect. Target and Walmart wanted to sell Thinx, too. “Last year, retail represented 5% of revenue, and it’ll be 25% this year.”
Thinx needed to stagger supplying Target and Walmart with products for operational capacity reasons. Molland chose Target first, hoping to get Walmart later, which they did. “The list will grow even longer very soon,” said Molland. Selling through mass-market retailers also required launching a lower-priced product line: Thinx for All.
A more significant opportunity for Thinx is incontinence. One in three women experiences incontinence, and it happens post-baby and throughout the rest of a woman’s daily life. Period products are for women ages 12 to 50 and only 5 to 7 days a month. Men and other demographics need the incontinence product, too. The company’s brand for bladder leaks is Speax by Thinx. “We are going to rename this product line,” said Molland.
“Running a startup in today’s day and age is much harder than last year,” sighed Molland. Marketing costs have doubled, supply chain costs have quadrupled, and it has worsened with the Ukraine war.” Increased cost was one of the reasons the Thinx board decided to sell a majority stake to Kimberly-Clark. The company had already invested $25 million.
For example, Thinx didn’t have the buying power to participate in upfronts when network television was sold to major advertisers before the regular buying season. “You save about 30% of your marketing costs by participating in the upfront,” said Molland. Kimberly-Clark had the wherewithal. “And the same is true for the supply chain.” By participating in Kimberly-Clark’s RFP process, Thinx saves big time on shipping and material costs.
Thinx and Kimberly-Clark will be launching co-branded products in Australia, India, Malaysia, Hong Kong, and Taiwan. Going global requires operational infrastructure that Kimberly-Clark has and Thinx doesn’t.
Clever advertising can only get you so far. “Getting people to understand how the product works through product education was the biggest challenge,” said Molland. “If you don’t understand how the product works, washing the panties can sound pretty gross.”
So they are strategic about product education, both in terms of messaging and the channels used. Through a lot of testing, they figured it out.
The company addressed key barriers in several ways.
- Nighttime: Thinx launched a sleep short to get people to try the brand.
- Higher absorbency: Originally, Thinx was positioned as a backup to tampons. Women didn’t believe that this thin layer of protection was absorbent. The company launched a super absorbent pantie that holds up to five tampons worth of liquid. It is thicker because consumers relate thickness to absorbance.
- Teen girls: When Thinx gets a teen girl as a customer, the company usually gets the mother, too. Moms won’t buy the panties for their daughters until they try them first. So it’s a twofer product.
- Covid: Women were suddenly home. Women were willing to experiment with a new product with a bit of education.
Molland sold a majority stake in Thinx for a very good valuation. Terms for the deal were not disclosed.
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