The D2C business model has been disrupting industries for years now, changing the way we purchase everything from eyewear, to groceries, to skincare and now…A/C’s.
In true D2C style, this young startup is rocketing to stardom by putting user experience first and building a product based on real customer feedback – collected in the field first hand by founders Erik Rauterkus and Muhammad Saigol. Let’s take a closer look at some of the factors that make July so promising.
Want to learn more about D2C shifts?
The story behind the startup.
Like most great concepts, the idea for July came from its founder’s own less-than-ideal experiences buying and installing air conditioners, e.g.:
- Carrying the heavy appliance upstairs.
- Getting cut on a sharp edge during installation.
- The fear of accidentally dropping it out the window during installation, etc.
Co-founder Muhammad Saigol had a family background in producing appliances (including A/C’s), prompting him to think about possible upgrades and improvements. As described by Erik Rauterkus:
“As we talked about it more, it became apparent that we might actually be in a position to do something about it.”
A personal understanding of the industry pain points was only the beginning. The co-founders started a window A/C delivery installation service called “Don’t Be Hot” to learn more about their target audience’s needs.
As a first step, they bought a number of window A/C’s wholesale and sold them online to New York-based customers. The company website enabled customers to schedule deliveries and installations right at check out, sometimes just a few hours after placing the order. Many of the deliveries and installations were done by the founders themselves.
Within the first two weeks, they sold close to $50,000 worth of A/C’s and gained invaluable first-hand insights about the challenges their customers were experiencing. Rauterkus explains:
“We got to install these A/Cs again and again – in wide windows, narrow windows, brownstones and high-rises. Each installation taught us a little bit about what was so wrong with the experience.”
Some of the key learnings gathered in the field included details about customer’s design preferences, how they used their units and the most coveted features. This essential data became a blueprint for what would later become the July A/C.
Armed with their newly acquired insights, Rauterkus and Saigol created an improved product and service with customer experience at the forefront. They teamed up with San Francisco based design group Box Clever (known for their work with Away and Caraway Cookware) to create an easy-to-install, minimalist and customisable design.
A sleek, clean design coupled with convenient online ordering, free deliveries and a system that clicks easily on and off your window, are just some of July’s selling points. These features make it an excellent choice for customers looking for a no-hassle alternative to traditional window A/C’s.
The result of this exciting experiment? After only two months from its April 2020 launch, July already had a waitlist of 20,000 customers.
How it works.
During their time in the field, it became clear to the founders that convenience, ease-of-purchase, an attractive design and ease of installation were among the most highly valued features for their customers. With that in mind, the purchasing process was kept simple and straightforward.
July A/C’s come in two easy choices. Depending on the space that needs cooling, customers can choose between a small unit for $375 or a medium unit for $415. For $30 extra, customers can even add a three month supply of air purifying filters that help reduce pollen, pet dander and other pollutants.
In compliance with customer requests for convenience, July units can be operated via remote control, the July app or voice control through Alexa or Google Home. The installation process is a breeze and can be done in four steps:
- Place the installation frame in the window.
- Secure it by adding screws in the holes along the top.
- Extend the sides out until all gaps are filled.
- Use the provided handles to click the actual unit into the installation frame.
The importance of a personal touch is yet another key factor used by July to create a superior user experience. Most reviews and articles describing July A/C’s, rave about having one of the founders install their unit personally. Much of the startup’s content also features the founders, as demonstrated by Saigol in the video below.
This approach helps create a sense of community around the product, which increases interest and customer loyalty.
Last but not least, every July unit comes with free contactless delivery, and the startup has partnered with Handy to offer installation services to those who need it for $150. Features like contactless delivery and the option for additional installation services are undoubtedly the result of the founders’ time in the field. Getting to know different customers with different needs, might have helped them foresee how useful these additional features could be for elderly buyers during the Covid pandemic.
So what makes this startup so buzzworthy? Well, for one thing, the founders did a great job of identifying serious market gaps and creating a product that covered them all in one package at a reasonable price. Here are just a few of July’s strongest selling points:
1. Aesthetic and customisable design
July’s light colour, minimalist design and changeable front panels make it compatible with most interiors, creating a more pleasant user experience.
2. Carbon offsetting
With the environment increasingly on everyone’s mind, July is doing its part to offset carbon emissions by partnering with carbonfund.org to plant a tree for every unit sold. Most buyers prefer companies that reflect their values. An environmentally responsible approach will appeal to a large number of customers seeking earth-friendly options.
July units are hassle-free, with two main BTU options to choose from, online ordering, free delivery and an installation that can be accomplished in just a few steps—eliminating the anxiety of installing it incorrectly.
4. Energy efficiency
According to the website, July A/C’s produce 2/3 fewer emissions than most window A/Cs on the market, and they use 10% less energy. These features will appeal to customers who want a more environmentally responsible choice and wish to keep their energy costs down.
5. Smart features
Customers can control their July unit from anywhere, anytime through the July app, Amazon’s Alexa or Google Nest. These features speak to customers that value convenience. For example, what’s better than walking into a perfectly chilled apartment after being in the sweltering summer heat? July users can simply program their units using the app before they even get home, and achieve the effect without having to wait.
July is an excellent example of how important it is to really understand your target audience and deliver on that demand. The dynamic is similar to what startups like Warby Parker did in the eyewear industry or Away did for suitcases.
Another critical takeaway from the July story is the importance of researching customer pain points and using the insights to create your customer experience. D2C companies excel at this particular step, resulting in some pretty inspiring success stories, e.g. Glossier, Bark Box, Bonobos).
It’s also a great case study to illustrate the D2C business model and how this hands-on, lean approach can be leveraged to take businesses like July to the next level.
If you’re looking for a hands-on approach to build and validate your MVP with real customers, checkout what we can offer you in the Pilot phase.
Get inspired by these 10 D2C moves.
Find out how major corporations are making the most of the stay-at-home economy by shifting to D2C.