It's a good time to be a startup that sells products for cats and dogs, as the pet care sector is currently booming. Earlier this month Wild One, which launched in 2018 by selling accessories like leashes, announced that it would start selling some of its products in Target. In October, another dog food startup, Jinx, announced that it would start selling its products on Petco's website. These pet care startups have a few trends working in their favor, namely that a number of pet shelters reported record adoptions in 2020.
An Apple iPhone update is about to upend the advertising strategies of e-commerce companies. The update has the greatest implications for app developers, but it also will significantly impact e-commerce companies who spend most of their advertising money on Facebook and other mobile ads. Here's what every e-commerce company needs to know about the iOS14 update, and how to prepare for it.
Last year, many direct-to-consumer startups saw record sales -- but they also struggled to produce and ship enough product to keep up with customer demand. If the first few weeks of 2021 are any indication, those issues are likely to continue well into the new year. Since the beginning of the pandemic, startups have been scrambling to find ways to speed up production, mostly by adding more suppliers and placing orders for products further in advance. A year later, and the problems persist.
Retailers are trying to get their employees vaccinated -- and fast. There's a clear incentive for retailers to encourage their employees to get vaccinated as quickly as possible: as more of their employees get vaccinated, it decreases the likelihood that one of them will contract the coronavirus at work. However, mandating that employees get the vaccine presents its own set of challenges.
As retailers increasingly open more stores in strip malls or open-air shopping centers, they're also rethinking what these locations should look like. Locations of Macy's new off-mall chain, for example run only 20,000 square feet, tens of thousands of feet smaller than the typical department store. As other retailers like Sephora and Foot Locker are looking at opening more off-mall locations, they're following similar playbook.
Walmart is starting off 2021 by losing one of its key e-commerce executives. Marc Lore, who has led Walmart's e-commerce strategy since the big-box retailer acquired his startup Jet.com for $3.3 billion, announced he was leaving Walmart after nearly five years. It leaves Walmart without the person who has previously been deemed the architect of its e-commerce strategy. All this during a year in which e-commerce is likely to once again experience tremendous growth — and as the coronavirus pandemic drags on.
The direct-to-consumer startup boom has also fueled the rise of a number of secondary industries — for example, buy now pay later services. Affirm just went public this week and if its Wall Street debut is any indication, it’s got some staying power. Affirm disclosed in its S-1 that it generates nearly 30% of its revenue from just one company: Peloton, one of the darlings in the DTC space. But the relationship between buy now pay later services and DTC startups runs deeper than that.
Outdoor furniture company Outer pays its customers to turn their backyards into "showrooms," which prospective new customers can check out as they're deciding whether or not to buy a sofa or a rug from Outer. It's something that the startup has done since launching in mid-2019. But 2020 was the year in which Outer started to prove that its model has traction. The company did more than $12 million in sales in 2020, up from $1.1 million in 2019. Now, the company plans to lean on its customers more to help fuel its growth, as it seeks to expand the showroom model.
For the past several years, more and more people have started abstaining from or cutting back on alcohol during the month of January, as part of a campaign known as Dry January. For startups that sell alcohol-free versions of beer, wine and cocktails, that means this is their month to shine. Modern Retail spoke with founders of startups like Curious Elixirs, Ghia and Ritual Proof Zero about how they are trying to attract new customers this month.
A boom both in online shopping and sales of home goods have helped give Bed Bath & Beyond new life. The big-box retailer has reported more than 75% growth in e-commerce sales during each of the last three quarters. The company's chief digital officer, Rafeh Masood, spoke with Modern Retail about how the company is seeking to capitalize on its e-commerce growth.
Shopify announced that it would be banning two online stores affiliated with President Donald Trump. Meanwhile, Stripe has reportedly stopped processing payments for the Trump campaign. Rarely do political calls for action extend to e-commerce marketplaces or software providers. But recent actions signal that may start to change.
There's two competing narratives right now taking shape in the direct-to-consumer space: one, that venture capital funding is starting to fall out of favor with DTC startups. And two, that it's a great time to raise venture capital funding as a consumer startup, as more investors are finally waking up to the fact that there's a huge opportunity for these companies as more people do more shopping online. But these two concepts aren't necessarily mutually exclusive. Some DTC startups are still raising venture capital money, they're just doing so later on. Or, if they take VC funding, they are taking steps to ensure their cash lasts longer.
Since taking over as CEO of Thinx in 2017, Maria Molland has sought to turn the startup -- and subsequently the period underwear category -- from a niche player into something that's at home on the shelves of mass-market retailers. To bring about this change, Molland has started to invest more in traditional advertising, running the company's first TV ad in 2019, as well as expanded its wholesale presence. Of course, like over other startup, the coronavirus pandemic threw a wrench in Thinx's plans. Still, Thinx is closing 2020 with close to $80 million in revenue, and ended the year profitable.
The architect of JCPenney's most recent turnaround plan has left the company. Last week, JCPenney announced that CEO Jill Soltau was leaving the company effective December 31. During Soltau's two-year tenure, she started to take some steps JCPenney around, by paring down the company's in-store assortment, redesigning some of its private label brands, and had started to experiment with new store formats. But some analysts said she didn't move quickly before the coronavirus pandemic hit. Now, JCPenney's path forward under its new owners, Simon and Brookfield, is unclear.
Direct-to-consumer startups were among the biggest beneficiaries of more people doing their shopping online in 2020, with some startups like Brooklinen and Prose reporting that their sales more than doubled or tripled this year. Now, going into 2021, DTC startups are out to prove that the sales growth they reported this year isn't just a flash in the pan.
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