We’re saying goodbye to Thankyou Nappies (for now), and we’d love to unpack with you why.
When we launched Thankyou Nappies our aim was to make a great nappy, and groundbreaking launch data showed us that parents who hadn’t used our nappy gave it the highest net promoter score in the category after trial. It looked like we were well on the way to achieving what we’d set out to do! But it wasn’t long before it felt like a thousand tons of bricks were falling on us. We saw competitor brands double down on their promotions in rapid time, discounting their products so dramatically that their tactics fundamentally changed the category. We were warned and somewhat prepared for these sorts of strategies, but the battle was on from the get-go. We did what we could to fight the good fight. We launched bold marketing campaigns (like the ‘We’ll get you through the night, and if we can’t, we’ll send you a box of Huggies’ campaign!). We created subscription nappy services. We even made the tough call to pull Thankyou out of the food category to put all our resources into winning the ‘nappy wars’ (who would have thought such a cute category would be this hectic to operate in!). However, even with all these efforts, we couldn’t stay above 5% market share and were struggling to sustain the marketing investment needed to keep nappies afloat. When a product is at its infant (pardon the pun) stage of a lifecycle, it’s not usually very profitable, if it’s even profitable at all. With our model, that’s a massive challenge for us because, at its core, Thankyou exists to generate as much profit as we can to help end extreme poverty.
As a team, we sat back and thought deeply about the category and our role in it. We identified three fundamental challenges which eventually became the backbone of our decision to take the learnings and leave the nappy category.
The decision to exit nappies was driven by the following:
We didn’t have what it took to win commercially in the nappy category.
We didn’t own the factory (which meant we did not have enough margin to play the deep price-cut promotional game), and we didn’t own the store (we are not a lower-priced home brand product). We also didn’t have access to huge amounts of capital to run Thankyou Nappies at a financial loss for a long period of time in the hope of one day making a profit
It’s a ‘tough-to-please-everyone’ category.
We discovered that even the market leader within nappies in Australia experiences a 1 in 5 failure rate when it comes to the product working for customers. What does this mean? Well, it turns out that every baby is unique, which means that not every nappy fits the same, and therefore doesn’t work the same on every child. This means it’s hard to cater to everyone with this product. We asked ourselves an abstract question: If a Thankyou hand wash ‘failed’ to deliver on its product promise (clean hands), as in, if the product didn’t clean some people’s hands. Would that be ok? We don’t think so. This would be breaking our brand promise of delivering a great product to you.
We’ve wrestled with the sustainability of Thankyou Nappies.
From day one in our Thankyou Nappy journey, we wrestled with sustainability. When we launched single-use nappies to meet 95% of the market’s need, we also launched a reusable nappy. The sales of the reusable nappy were very low. The sustainability ‘level’ that we’d achieved in our single-use nappies was a great start, but for us, it wasn’t good enough, and we weren’t prepared to greenwash.