07 July 2022
This startup built Gen Z's version of the focus group
Working with brands including Moët Hennessy and NASCAR, Knit recently raised $3.5M.
Working with brands including Moët Hennessy and NASCAR, Knit recently raised $3.5M.
In order to understand what resonates with consumers, it’s important to talk to them.
Consumer brands have long recognized this, and put lots of effort in pursuit of gaining the customer voice. They deploy research teams that conduct focus groups to seek out feedback from consumers about their own behavior, as well as what might motivate them to purchase a particular product.
Under this model, the qualitative side of the research is key. Being able to hear directly from consumers allows brands to incorporate their voice in strategies they set out, and decisions they make. It’s where the pulse of the consumer is taken, and effectively de-risks what they release in the meantime.
In a digital age, however, these focus groups can feel like increasingly cumbersome endeavors. Brands might spend weeks – not to mention tens of thousands of dollars– traveling around to talk to groups of dozens of people. And we’ll emphasize here that they’re doing this in-person.
“That’s not going to work in today’s digital environment,” Aneesh Dhawan told The Current. “The world is moving too fast. Consumer preferences are changing too quickly.”
Dhawan is the CEO of a startup with an answer to the focus group for the time of TikTok.
Knit offers a platform that allows brands to upload market research questions or ideas for new creative, which in turn go to a network of more than one million Gen Zers. In return, the brands get feedback through a 30-90 second video, as well as via traditional survey format. Research that has traditionally required getting a big group together in the same place is now available on-demand.
“Because it’s asynchronous, you’re still able to talk to hundreds of people, but it happens within hours and you’re still getting that qualitative feedback through these videos,” said Dhawan.
The platform also has AI tools that allow video analysis of the feedback in what the company said is minutes. This helps brands turn qualitative feedback into quantitative data. With brands able to tap this network frequently, consumer feedback can be incorporated at multiple steps of a team’s process.
With brands including Moët Hennessy and NASCAR signed on as customers, the company recently closed on $3.55 million in seed funding. The investment round was led by Silicon Road Ventures with participation from Bread and Butter Ventures, Alumni Ventures, Bootstrappers.mn, Operate Studio and TiE Global Angels.
While the Gen Z voice can often be painted as elusive, the startup has a direct understanding of the cohort, since the founders are in the group themselves. For his part, Dhawan has long been captivated by the power of connecting brands and Gen Z consumers. He launched a cause marketing agency called Feed A Friend at the age of 16, and went on to start a nanoinfluencer platform specifically designed to help connect brands and the age cohort.
Cofounder and CTO Raahish Kalaria previously founded adtech company FreeCopy and computer vision-based home automation solutions company One Remote.
Through their personal and professional experience, the entrepreneurs saw how their digitally native generation can be difficult to reach for research by brands, and their tastes and behavior change quickly. At the same time, the video format of TikTok and YouTube was a primary means of creating content and interaction. They sought to put those insights together to build the company, offering a large, diverse and unbiased group of Gen Zers for brands, with feedback delivered through a medium that meets them where they are.
Starting the company while in college, Dhawan and Kalaria participated in the Techstars accelerator’s 2019 ‘Farm to Fork’ program, which was a key building block toward the launch of Knit in January 2021. Working with marketing and innovation teams, the company now has over 30 enterprise customers, including the WNBA and Harman International (maker of JBL Speakers). It also works with startups.
With an Austin-headquartered team of about a dozen people, Dhawan said the company is working to expand the available voices in provides access to beyond Gen Z, enabling brands to tap consumer insights in all age groups. In one step toward that, it has a network of four million millennials to draw on. Knit also wants to make these insights available from consumers globally, and plans to start expansion in the EMEA and LATAM regions.
“One of the biggest leaps that we’ve made and are continuing to make is expansion past Gen Z and into the general population so that any brand can talk to any consumer, anywhere in the world,” Dhawan said.
Through the investment round, it now has support from investors who bring experience to assist the company beyond providing funding. Atlanta-based Silicon Road Ventures has a particular focus on commerce, while Bread and Butter Ventures brings particular expertise in SaaS.
“The quality of partners that we brought on with this round of funding is going to help us accelerate our trajectory not just over the next 12-18 months, but also over the next 7-10 years as we build a category defining company,” Dhawan said.
Value and values are colliding in the buying decisions of consumers, Asendia finds.
Is the values-oriented consumer being replaced by the value-oriented consumer?
That’s what a new study by ecommerce delivery firm Asendia set out to determine.
With inflation continuing to be elevated, there are clear signs that shoppers are more mindful of what they pay for an item. In the survey of 8,000 global shoppers, Asendia found that price was now the top factor in buying decisions for 52% of consumers, followed by value for money, which was a factor for 44% of shoppers.
This inflationary behavior reflects a period when consumers are seeing prices rise. Yet it also follows a moment when sustainability rose as a factor for many consumers, and is remaining there. Over three-quarters of American shoppers considered themselves to be sustainability-minded, and 85% of millennials identify as such.
Yet with price rising to the top of the list, it seems that the more immediate price pressure is slightly outweighing wider-scale global impacts – at least for now.
These factors are not just weighing on consumers’ minds. Retailers are seeing how it impacts their own bottom lines. The survey found that 58% of retailers indicated that shoppers were buying less frequently over the last year, and added that basket sizes are down.
While price is top-of-mind right now, it's not an either-or between cost and planet. The truth is that both dynamics co-exist in the mind of the shopper. And it is likely that both factors are changing consumption patterns. The survey found that 70% of shoppers are planning to cut back due to “economic uncertainty,” yet they are at the same time rethinking buying habits to minimize their environmental impact.
There is even more pronounced dissonance when it comes to the preferences of sustainability-minded shoppers. The survey found that plenty of consumers are eying sustainable products. Findings indicate that 47% of consumers are buying organically, and 24% are opting for vegan goods.
Yet they also want items delivered fast, which is a practice that stands to increase carbon footprints. Yet despite the concerns about price, there are signs of willingness to pay more in this area. The survey found that 48% would pay more for faster fulfillment. Yet 23% would pay more for greener fulfillment options, even if an item took longer to arrive at their door.
Meanwhile, 26% of Gen Z shoppers who said they are sustainability-minded still shop fast fashion, which is known to have big environmental downsides.
Asendia Global Chief of Business Development Renaud Marlière said the survey results indicate that “shoppers aren’t prepared to put price entirely before principles in their consumption habits.”
“This is creating what we’ve coined the conflicted shopper; consumers who seek value for money – acting with price-sensitivity and spending-caution on one hand, but want to consume in line with their values on the other, opting for eco-conscious decisions across their buying journey, from product choice to fulfillment methods,” said Marlière, in a statement. “Retailers now need to cater to both ends of the conflicted shoppers’ value spectrum if they are going to win customers, loyalty and lifetime value.”
In the end, delivering on both value and values still matters.