BarkBox’s Growth Strategy: 8 Keys to its Success

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By Tricia McKinnon

If you are a dog owner then you have probably heard of BarkBox. BarkBox subscription boxes contain dog treats and toys that are loved by millions of dogs. While many subscription based companies have failed BarkBox has been able to keep customers or should I say, dogs, coming back for more. Bark, which was founded in 2012, now services more than 1.8 million households.

Bark is so optimistic about its prospects after making $379 million in 2020 it recently used a SPAC to go public. If you are curious about why Bark has succeeded while others have failed then consider eight elements of its strategy to grow its business.. 

1. Solve a real-world problem. Sounds cliché but it works. About a decade ago Bark’s co-founder Matt Meeker had recently adopted a 130 pound Great Dane named Hugo when he was out looking for dog treats and toys. He was surprised to find that after canvassing his Brooklyn neighborhood there wasn’t a lot available for a dog of his size nor were there a lot of fun, unique or cool dog toys or treats. That frustration gave way to the idea for BarkBox. “We wanted to be a positive, fun, higher-end brand for dog parents,” said Meeker. 

2. Start small then scale. Initially Meeker only showed a mock up of his idea on his phone to a few people but after a number of them showed interest he began to sign up subscribers. Once 50 people subscribed over a two month period Meeker felt the concept had legs. That was back in December 2011. One year after launch Bark had 15,000 subscribers. By December of 2013 Bark had 100,000 subscribers and $6.7 million in funding. Now you can find Bark merchandise at 23,000 retailers including Target and Costco.

3. Use the right packaging. Like Apple, Bark knew that if it creatively designed its subscription boxes including what’s inside people would be inspired to create unboxing videos to share with friends on social media. While Bark used tactics like search ads and email marketing, Bark attributes a lot of its initial success to word of mouth. “The most effective marketing has been customer referrals,” said Meeker. “That and these customer box opening videos. People have started to do these video reviews with their dogs and putting them on YouTube. That’s been tremendous in getting us new customers.” 

Bark also uses monthly themes to keep pet owners excited about upcoming subscription box drops. Past themes have included: Barkfest in Bed, Lick or Treat and Chewrassic Bark. These themes inspire freshly designed boxes each month and provide a reason for dog owners to continually create and share unboxing videos. “If you took out social media, Bark and Co. wouldn’t be a company,” says Stacie Grissom, Bark’s director of content and communications. “We’ve really invested in entertaining people and engaging with people in deep ways,”

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4. Personalize your product offering. Everyone talks about personalization but few companies do it really well. Bark’s subscription boxes can be tailored based on your dog’s size, chewing intensity and allergies. "There aren't any options in terms of brands that are creating products for your dog as an individual -- individual dogs have different needs," says Meeker. If your dog can’t eat chicken then you won’t be sent any treats from Bark containing chicken. If your dog is over 50 pounds you will receive a size large subscription box instead of a smaller one. Each month BarkBox sends customers 150,000 different variations of its treats and dog toys to over 1 million customers. “Personalization and being flexible to the changing needs of our customers is what has given us such high customer retention,” says Manish Joneja Bark’s CEO 

Bark also asks customers to provide feedback so they can make their boxes even more customized. “Our products are designed and created by us and we have deep customer relationships as well as an enormous amount of data that we leverage from our customers, which informs product design and development decisions. It also enables us to offer highly personalized offerings for an individual dog.” says Joneja.  

5. Keep your friends close and your enemies closer. Deciding whether to sell on Amazon is a question all direct to consumer brands face. Many brands decide not to sell on Amazon worried Amazon might start selling the same products as they do or they don’t want to lose access to customer data. In the past Meeker has said he views Amazon as: “both a threat and potential partner.” But Bark decided to launch on Amazon in 2018 and was one of the first brands to join Amazon’s subscription service that allows Amazon customers to sign up for product subscriptions directly on Amazon’s website. 

Bark decided to sell on Amazon because its where customers are searching for products and having a large volume of customer reviews made up for some loss of control and insight. “We wanted to use Amazon as a customer acquisition channel, same as Facebook and Instagram, where there’s a higher cost of acquisition. Being early is a huge advantage on Amazon, as it was on Facebook in 2012,” said Meeker. “That’s part of what makes it appealing. Customer trust with Amazon also helps a lot, and the idea of Amazon introducing the product to people was promising to us.”

To prepare for selling on Amazon Bark built a small team to work on its Amazon business and hired a consultant with experience selling on Amazon. The team spent a year developing its Amazon strategy which included identifying high margin, high volume products within the pet category on Amazon. “The idea was to reverse engineer our products to find out where the most opportunity for product development was, and then build the line out from there,” said Meeker. Bark eventually started selling on Amazon with five products. Bark has seen success with its Amazon business, reporting earlier this year in its filing to go public that its Amazon business grew at a yearly rate of 150%.

6. Own your most important assets. When Bark first started out it used websites like Etsy as well as tradeshows to source products for its subscription boxes. But over time it gathered a substantial amount of customer data which it used to create its own products. Each year BarkBox creates 500 new toys. Manufacturing its own products also makes customers sticky because if your dog loves BarkBox you have to get those treats from Bark, you can’t get them anywhere else. This strategy is no different from what all of the big box retailers like Costco or Target do with their private brands. If you want Kirkland branded products you have to go to Costco to get them. 

Being vertically integrated has helped Bark to achieve high margins. By cutting out the middlemen Bark has been able to achieve a gross margin of 60%.

7. Create something unique. One of the things BarkBox did right was to build fun and excitement into its offering. Its monthly themes create a fun experience not just for dogs but for owners as well. Bark is not just selling someone else’s boring old toys. Bark also hires comedy writers to make its content more engaging. That makes its offering hard to emulate. 

8. Know when and how to expand. Many direct to consumer brands get trapped into using digital marketing as their only means of acquiring new customers. But over time that can prove to be very expensive. Digitally native menswear retailer Bonobos struck a deal in 2012 to sell its merchandise at Nordstrom. Speaking about the need to have a physical presence Bonobos co-founder Andy Dunn has said the brand's "most profitable business" is its partnership with Nordstrom. Dunn has also said that e-commerce is a "tremendously challenging, frequently unprofitable business." 

Not wanting to be late to the party, in 2017 BarkBox began selling in Target and now it sells through 23,000 retailers including Costco and Amazon. At the end of the day the internet provides a great start but you have to go where the people are. Most retail sales take still place offline with 87.5% of retail sales in the United States taking place offline in the second quarter of 2021. Even Amazon has stores, over 600 of them and the Wall Street Journal reported recently Amazon is planning to open department stores. 

Tricia McKinnonStrategy & GrowthComment