The DTC bubble was supposed to pop in 2020; instead, it became even more inflated. Fears that the pandemic would lead to a dip in consumer spending never panned out for most DTC startups, as the people most likely to be their customers -- young professionals working from home -- subsequently spent more of their money shopping online. Over the course of the year, companies in categories as disparate as hair care and bedding reported that their sales doubled or tripled over the course of the year, even as stores were ordered shut. Now, going into 2021, direct-to-consumer startups are trying to figure out how to best capitalize on the growth they saw this year.
In 2020, retail workers could no longer just be salespeople. They also had to be safety officers, virtual stylists and shepherds of buy online, pickup in-store orders. The job of the employee changed every single month," said David Marcotte. senior vice president of cross-border retail at Kantar Consulting. In 2021, retail workers shouldn't be pulled in as many different directions -- but the lines between roles will likely continue to blur.
In 2020, new-to-market startups started to do away with branding tactics that have historically been popular on Instagram. Pastels and Sans Serif font have been replaced by bright colors and oversized lettering, while startups are centering their social media centering their social media strategy around busting taboos or reaching customers that have historically been overlooked. As the direct-to-consumer startup space has gotten more crowded, startups have found that they need a different proposition than just creating a new e-commerce experience for mattresses or luggage -- and that requires a new branding playbook
Telehealth experienced a boom in 2020, as the pandemic forced people to replace in-person services with online alternatives. That also means it's been an explosive year for telehealth startups like Ro, which is projecting that it will end the year with $230 million in gross revenue, up 55% from the year prior. The scope of Ro's role in health care also changed dramatically this year, as the startup launched its own digital pharmacy and acquired a software startup called Workpath, that assists in deploying nurses for at-home visits. Ro's co-founder and chief growth officer Rob Schutz spoke with Modern Retail to share more details about the company's vision.
With Christmas just days away, retailers are doing everything they can to try to get customers to not add to the online shipping backlog. While, at the same time, still getting customers to buy. For most retailers, that means offering extra incentives for last-minute customers to use same-day fulfillment options like buy online, pickup in-store, or to buy gift cards. But for retailers who don't have buy online, pickup in-store enabled at all of their store locations, they are instead charging extra --upwards of $20 -- for expedited shipping. It could cost them some last-minute shoppers.
The resale industry has been one of the biggest winners in 2020, culminating in resale app Poshmark filing to go public. Poshmark's S-1, which was published on Thursday, reveals that the startup was actually able to turn its first profit of $8.1 million during the first nine months of 2020 -- a rarity among consumer startups looking to go public. But Poshmark still faces a number of challenges ahead in its quest to become a public company. Here's our detailed look into the company's just-released financials.
Shipping delays are getting worse and worse for e-commerce businesses right now, and Etsy shops are no exception. In recent days, Etsy forums have been flooded with sellers looking for advice from one another on how to deal with shipping delays. "USPS delays are killing my plants and killing my business in turn," one seller said on Wednesday, writing that packages were often taking 10-14 days -- and sometimes up to four weeks -- to ship. As third-party sellers on a rapidly growing e-commerce platform, Etsy sellers only have so many options to try to address shipping delays.
Reebok's future as a part of Adidas is now in question, after the German sportswear brand confirmed to media outlets on Monday it "has started to assess strategic alternatives for Reebok, including but not limited to a potential sale of the business." Reebok has lost market share in U.S. sneakers since it was acquired by Adidas, and though Adidas has recently been reinvesting in growing Reebok's profile, a coronavirus-induced sales hit made it harder for Adidas to build the Reebok brand.
Holiday pop-up markets have been a winter staple of malls and city centers for years. But this year, holiday pop-ups look a little different. While some places are still moving forward with in-person events, other companies are instead turning their pop-ups into online marketplaces, either because new pandemic restrictions have made in-person events all but impossible. The challenge is that not all of the businesses who typically sell through holiday markets are equipped yet to sell online, and getting people to discover new small businesses is a tougher task online.
Right now, retailers are focused on getting items to customers in time for the holidays. But come January, they'll have a new headache to contend with: processing all of the items that ultimately get returned. Some research has shown that items bought online are more likely to be returned than those bought in store, with online apparel having some of the highest return rates. Given that people are expected to do more of their holiday shopping online this year in lieu of visiting a store, retailers are also bracing for the likely scenario that people will want to make more returns this year than ever before. To prepare, they are trying to give customers as many ways as possible to make returns.
Thanks to record e-commerce sales, it's been a good year for direct-to-consumer founders. Except, maybe, for founders of direct-to-consumer razor startups. Months after the FTC blocked Edgewell's proposed acquisition of Harry's, the FTC announced that it would be suing to block another proposed acquisition in the razor category: P&G's intended acquisition of women's razor startup Billie, which was announced in February. Founders and investors that Modern Retail spoke with pointed to the fact that the razor industry is highly consolidated, and even two blocked acquisitions in this category would not spell trouble for other DTC startups looking to sell to a CPG conglomerate.
On Monday, Ikea announced that it would be shutting down its print catalog, after a 70 year run. While there are a few other companies have shut down or temporarily cut back on print catalogs this year, like Uncommon Goods, Ikea is actually an outlier. But that's also because Ikea has been lagging behind its competitors in recent years in building out a big e-commerce business.
Carriers like FedEx and UPS have been warning for months to expect holiday shipping delays. But now, they are taking more drastic steps by imposing some limits on the number of packages it will pick up per day from companies. The package pickup limits are being imposed on major retailers like Nike and Macy's, down to startups like aperitif brand Haus. Retail executives told Modern Retail that while they expected some delays, they felt like carriers haven't given them enough notice, and are leaving them out to dry during their busiest time of year.
In order to prevent Amazon from clawing away more of their business, shipping carriers are trying to forge deeper partnerships with other platforms that work closely with retailers and e-commerce companies. That's evidenced by FedEx's latest acquisition, announced last week. The logistics carrier is acquiring ShopRunner, a marketplace that offers its members free two-day shipping and returns on products from more than 100 retailers.
After surviving the Black Friday rush, direct-to-consumer brands have a new challenge at hand: how to ensure their holiday sales aren't hampered by long shipping delays and going out of stock on certain items. Founders say that they are trying to incentivize customers as much as possible to order early, as well as giving as many details as possible about warehouse and supply chain challenges, in the hopes that shoppers will be as patient as they were in the spring.
At the Modern Retail Summit LIVE, retail executives will come together virtually to discuss effective strategies for driving sales by building a loyal customer base both online and offline.Buy Passes