Invest Like the Best with Patrick O'Shaughnessy Jeremy Cai - Manufacturer to Customer – [Founder’s Field Guide, EP. 33]
May 13, 2021
In this conversation, Jeremy Cai, the dynamic Founder and CEO of Italic, shares insights on disrupting traditional retail by connecting consumers directly with manufacturers, cutting costs significantly. He delves into the evolving role of manufacturers in supply chains and how emotional and rational decisions influence consumer choices. Jeremy discusses the challenges of competing with established brands and the aspiration of creating an 'everything store,' emphasizing the importance of innovation and kindness in entrepreneurship.
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Customer Education
- Italic's business model requires aggressive customer education due to its online presence and membership model.
- Unlike Costco's reliance on word-of-mouth, Italic utilizes digital channels to convey its value proposition of high-quality goods at lower prices.
Membership Experiment
- Italic's membership experiment during COVID-19 led to a 10x increase in purchasing velocity.
- Despite concerns, average order values remained stable, and the shift to a membership model helped solidify Italic's focus on technology and operations.
Manufacturer Challenges
- Manufacturers face pressure to lower costs, making their business challenging.
- Brands profit from high markups, leading to further cost pressure on manufacturers and incentivizing price increases for consumers.