Kits Eyecare caps period of brand investment with new CMO and first CIO

But marketing spend will be likely cut back following its first six months as a public co.
KITS OOH

In taking their business public on the TSX in January, the founders of Vancouver’s Kits Eyecare promised to use part of the proceeds on brand investments they held off on making pre-IPO as the company focused on building a strong customer experience.

Those investments, which included the brand’s first awareness campaign, amounted to $4.4 million (representing 22% of revenue) during its first quarter as a public company – roughly four times the $1.1 million (or 8.1% of revenue) it had spent a year prior.

According to Joseph Thompson, Kits co-founder and COO, the investments helped deliver on two of the company’s key business objectives – namely, driving an increase in its auto-ship subscription business and growth within its higher-margin eyeglasses business – leading to a 42% increase in revenue for the three months ending March 31.

Now as it works to capitalize on that momentum, the company has hired a new CMO and moved its former lead marketer into the newly created role of chief information officer, even as it looks to return marketing spend to pre-IPO levels on the longer-term.

Stefan Harvalias, a former VP and global head of marketing at Match Group’s Plenty of Fish, has been hired as CMO. His background includes prior roles at McCormick, Visa, Kraft Heinz and EA Sports. While at Plenty of Fish, Harvalias helped scale the dating service’s subscription business, experience that Thompson says will be valuable as Kits looks to continue building its auto-ship program.

Moving into the new role of Kits CIO is Rob Long, who first joined the company in January 2020, having previously led the direct-to-consumer division at Dyson Canada. A category veteran, Long also helped launch Coastal Contacts in 2008 and later worked at glasses retailer EyeBuyDirect in Shanghai.

One of the next phases of growth for Kits will be having “a scalable data-tech platform,” says Thompson. To that end, Long will lead the IT department on setting up the business to have “a very fast iteration and cadence of tech releases.” In addition, he will put his deep technical background to work “bridging the gap between the marketing and tech squads.”

Thompson says the company is pleased with the ROI of its first brand awareness campaign, launched in February and featuring a guru character that tapped into mindfulness trends in an attempt to allay consumers fears around buying a highly technical product online. The campaign, led by agency OstrichCo, aired in Canada during the Super Bowl but has not yet been tested in the U.S., where Kits’ takes in approximately 80% of its revenue.

During the quarter in which the campaign debuted, Kits subscription business grew, and today 24% of its contact lens sales are through the auto-ship program. Thompson says the offering provides greater convenience for customers, while creating a recurring revenue source for Kits.

The campaign also had a material impact on Kits’ sale of eyeglasses, its higher-margin, growth business. During Q1 of this year, Kits delivered 42,000 pairs of glasses to customers, roughly double the amount delivered during Q4 2020. And last week, it announced having shipped its first one hundred thousandth pair of prescription eyeglasses – a milestone it claims to have achieved “faster than any other optical retailer in history.”

Later this month, it will run a second campaign, which is set to debut during The Bachelorette. But over the longer-term, it anticipates reducing marketing spend to levels representing roughly 8% to 10% of revenue as it pursues customer loyalty through a superior net promoter score and online shopping experience, according to Thompson.

“It’s our view that the business in every industry that has the highest NPS is also the most valuable, because they have very high loyalty with customer and see high repeat business,” he says.

Kits has hired over 90 employees over the last two years and it plans to add around 50 to 100 more across marketing, technology and operations over the next year.