Well, thank you all for joining us today and Mark, great to have you here. Thanks so much. Your video really captures the wide array of what you have. Everything from hair styling tools to vacuums to blenders. And I've got to say, that's not necessarily an exciting area. So, what have you done to bring excitement and freshness to something as simple as a vacuum or a blender?
Well, well, look, solving consumer problems is exciting. You know, and these are problems that you could say, well, vacuums have been around for a hundred years. I mean, hasn't every problem been solved? And the reality is that consumers work around the problems that products have. And what SharkNinja's business is about is identifying those known or unknown consumer problems and then creating solutions to those problems, or trying to identify things that consumers are doing outside the home that they're not able to do inside of the home. And we can talk about what a number of those look like.
You've used social media to get the word out on some of these newer types of things, ice cream makers being one of them. What have you learned that works? And I'm curious to also hear what's not worked for you.
Yeah. Well, look, first off, I would say, historically we started out doing infomercials back 17, 18 years ago. So you'd wake up at 2:00 in the morning and you'd see my partner on TV and he was doing some sort of demonstration that we came up with in his living room or something like that as we wrote these infomercials. And it was really about educating the consumer about what was unique or different about our products and how it could help them in the home. And we saw very quickly back in 2008, 2009 that the consumer was getting more and more power. They were not just looking at things like consumer reports. They were going to online reviews and they were looking at online reviews and they were making their buying decisions based upon the research that they had done. And as you fast forward to 2016, they'd go into Facebook group chats. And then ultimately, around 2019, that really evolved much more into social media. And so, consumers are getting their information through social media, but they're also hacking our products and they're bringing our products to life on social media. We would run a commercial on NBC at 9:00 at night. The only people that would see that commercial were the people that were watching that show. Whereas today we put something on social media and if you look in the comments section consumers are saying when is the product coming to Norway? When is it coming to Portugal? I mean the consumer has so much information today. The challenge of social media is there's such a high bar for authenticity and if it feels like you're forcing something, people can be very much turned off.
What have you learned that maybe flopped or didn't feel authentic that you learn from and use as you go forward?
Well, well, let's start with, you know, you have to develop products that consumers love. Okay, that is where our business starts and stops. I mean, we develop 25 ground-up products a year that we bring to market and consumers love our products. And so the authenticity has to start with that: you can't sell something that ultimately the consumer decides, hey, this is not really a great product. The second is that you've got to start activating a user-generated flywheel. Okay? Where consumers on their own are doing something with your product to bring it to life. In the month of December, we have a product called the Ninja Creamy. It's an at-home ice cream maker. 99.8% of the content on social media in the month of December had nothing to do with SharkNinja. It was just consumers buying the product, bringing it home, developing their own recipes, and then going and putting their own content out into other consumers.
How do you do that though? It feels a little bit like capturing lightning in a bottle to count on consumers to just latch on to something you put out.
Testing, testing, testing. I mean, you think that you develop products and it's lightning. It's not lightning in a bottle. Okay? It is, before a product goes out into the market, that product is in a thousand consumer homes around the world for as much as 4 weeks. We're making anywhere from the time a product goes into tooling to the time it goes to mass production, we're making anywhere from 80 to 150 changes on that product, getting consumer feedback, having them tell us what they love, what they don't love about the product, and then iterating, iterating, iterating. And we do that on the product, we do that on the messaging, we do that on the packaging, we do that on the social media content, but it's testing, testing, testing.
What's an example of something you've changed by learning through testing?
You know, we've developed vacuum cleaners, for example, that we think aesthetically a handle might look great, and then we'll put it into consumer homes that are a group of older consumers, 70-year-old consumers and over, some of which have arthritis, and they tell us, 'We hate the handle of the vacuum.' Okay? It's not easy to push. It's not easy for them to grip. We'll scrap it and we'll retool it and we'll redesign it and we'll start over again. So it's not just about getting feedback from the core consumer. It's about getting feedback from extreme consumers. I mean, consumers on either end of the spectrum. A vacuum cleaner might be really easy for a 35-year-old person to push around the house, but what's it going to be for a 75-year-old person with arthritis to push around the house?
You mentioned vacuum cleaners have been out forever. It seems like a hard thing to innovate in. How do you come up with ideas to push a device that's been around forever forward?
Yeah, I'll give you a great story that came up a couple of years ago. We went into about a hundred consumer homes and we're in thousands of consumer homes over the course of a year and we're watching consumers vacuum. And during the vacuuming session, a group of those consumers turn the vacuum over, take a knife or a scissor, slice the hair off the brush roll, pull the hair off the brush roll, throw it in the garbage, go back to vacuuming, and at the end of the cleaning session, we say to them, 'Is there anything you would change with your vacuum?' and they say, 'No, it works great.' I'm sure any of you, show of hands, have had this happen to them as you're vacuuming. And we say, 'Well, we saw you turn the vacuum over and you almost slice your hand off.' And they start apologizing and they start saying, 'We have two daughters, we have pets, of course we have to do this.' They apologize for the deficiencies of the products because they've been using them for 20, 30 years, and this is just what they do. Well, that becomes a nugget of inspiration for our engineers where we go back and say, 'Could we develop a vacuum cleaner that doesn't wrap hair?' And 18 months later, we come out with Shark self-cleaning brush roll and it winds up becoming the number one selling vacuum cleaner in North America.
How do you think about the next categories to break into, the new products to come out with? I think your goal is to expand into two new categories this year and launch about 25 new products. Pretty ambitious. So where do you see room to play and a right to play as a company?
Well, so those are two interesting points. I mean, there's a lot of companies that aspire to go into new categories, but either the retailer or the consumer sees you and puts you in a box and says we don't see your brand moving into those categories. So the first thing is we have to answer the question what gives us the right to be in that category. The right to be in that category is not because a buyer will buy the product. There has to be some higher authority. What are we bringing to the consumer that they're not currently able to get with the products that are out there? And so as we enter categories, the next door opens. And a great example of that is we entered into the beauty space a number of years ago in the hair with hair care, and our products became some of the bestselling hair care products, we were the fastest growing hair care brand in North America today, and that ultimately opened the door for us to go into skin care. And we developed a product at the end of last year, we just launched it this year in the US, called the Shark Cryoglow. And as the consumers started accepting us in hair, they ultimately said, 'Wow, I would consider Shark for a skincare product,' and that product has done great. But we're bringing to the consumer what we feel like is market-leading performance, solving some sort of problem that the consumer has, great quality and reliability, but we're doing it at an extraordinary value. You can't in today's environment have two of those four things or even three of those four things. You've got to have all four of them.
It's no secret that consumers are very selective about their purchases, especially now coming out of an inflationary period. A lot of your products come at a high price tag, especially those beauty products you mentioned. What are you doing to convince them that it's worth it?
