Decreased cost, increased sellers, and the US market launch are pacing Peekaboo Beans
Peekaboo Beans Inc. (TSX.V: BEAN) is a direct-sales retailer of high-quality children’s apparel. Their award-winning brand and apparel promotes the importance of playtime over screen time, through thoughtful designs and custom developed fabrics. Through the direct-sales model, they train people to be entrepreneurs and build a business and generate income on their own terms.
Natasha Frakes: Hi, I’m Natasha Frakes and you’re watching Market One Minute. Joining us is Traci Costa, Founder and CEO of Peekaboo Beans. Traci, thank you so much for sitting down with us again.
Traci Costa: Thank you.
Natasha Frakes: Now, as a refresher for our investors, what is Peekaboo Beans?
Traci Costa: Well, Peekaboo Beans is really reinventing the way that parents dress and shop for their kids. We create our children’s apparel with intention, meaning that we are really looking at their developmental needs, which inspires independence and confidence and comfort in their activities all day and every day. Our polished wardrobe essentials are premium in quality and durability, and versatility, and really provides for stress free dressing and meaningful shopping experiences.
Natasha Frakes: Since we sat down last year, what has Peekaboo accomplished?
Traci Costa: So, since we last met, we have launched our business into the United States and now we’re represented in 34 states and every province in Canada. In one month, we outpaced the entire 2017 in our stylist recruitment. We launched with our new manufacturing partner, which has decreased our cost of sales, which overall, improves our gross margin.
So, we’ve been working with a brand and marketing agency to really reorient our brand and our market messages. And we’re testing new campaigns through a digital marketing strategy to really strengthen our brand and positioning within the market space.
Natasha Frakes: So, why did you choose a direct sales model versus having your products in a traditional brick and mortar retail store?
Traci Costa: So, this distribution model is really the way of the future. If you look at the Uber’s of the world or the Airbnb’s of the world, they’re creating distribution through people. This model gives moms, or parents, a meaningful opportunity to earn income on their own terms, less stress, and around a work-life balance that they want to generate. It’s also a low-cost hyper-growth distribution model.
Natasha Frakes: How does your average order size compare to the industry average in direct sales?
Traci Costa: Well, we’re actually over the industry average. So, our parties are approximately $600, whereas the industry average is $400. Our average order is $125, which industry average is $70.
Natasha Frakes: That’s impressive. So, you’re not expanding into the US markets. So, how big is the opportunity there and what have you learned in the Canadian markets that will help you in the US?
Traci Costa: So, the US children’s apparel industry is a 30-billion-dollar industry. What we learned in Canada is that there’s three critical components that make a successful direct sales company. The first is a premium product offering. The second is you have to pay your reps well to sell the product and build teams. And the third is, you need to create a culture that is meaningful for your stylist to stay and share the opportunity with others.
So, we’ve set the stage for success in the US, where this is a really meaningful way for people to make additional income in their homes and where one in seven households has a direct sales business.
Natasha Frakes: It sounds really promising, Traci. Thank you so much for being here.
Traci Costa: Thank you for having me.