During the coronavirus pandemic, direct-to-consumer startups in categories ranging from personal care to athletic apparel have reported tripe-digit sales growth. The big question though, is how much it will last, as coronavirus cases start to rise again in some states like California and Texas, forcing other businesses to close once again. Five direct-to-consumer startups said they aren't seeing many signs of headwinds -- yet.
Out-of-home advertising has slowly picked back up in recent months. But now DTC brands, who've long favored the sleek subway ads, are finding new ways to target potential customers as pedestrian foot traffic picks up in cities. Using LinkNYC kiosks allow new brands, like United Sodas, to modify campaign creatives based on daily factors "down to the weather, news cycle and even nearby restaurants," said CEO Marisa Zupan.
In a way, pre-sales and waitlists are counterculture to today’s “fast delivery” windows, but they can also be a vital tool in building a customer base during uncertain times. For new brands like direct-to-consumer A/C maker July, pre-orders gave them two benefits: the opportunity to make connections and manage the uncertainties, said co-founder
For this week’s Modern Retail Talk, Fly By Jing founder and CEO Jing Gao speaks about her trials and tribulations during the coronavirus. When quarantine in the U.S. first began, Gao said, “sales tripled overnight.” This was thanks to past work the company had been doing: "brand exposure, influencer seeding, paid ads." They all "paid dividends," she said.
Shopify has a bevy of competitors, like Magento, WooCommerce, Salesforce, Microsoft Amazon and BigCommerce, which just filed to go public this week. But no one company yet has emerged as the biggest threat to Shopify's position as the go-to e-commerce platform for DTC brands. Shopify's dominance says a lot not just about the state of other e-commerce platforms, but also about the state of DTC brands.
Before the coronavirus, opening more brick and mortar stores was a surefire way for DTC brands to acquire customers more profitably. Now, that calculus is changing.
The shift in real estate planning, along with healthy online sales, has changed the way DTC brands think about real estate. It's also why the role of experiential stores -- those like Showfields, Neighborhood Goods and B8ta -- could be even more important to brands when it comes to awareness and conversion.
For this weeks Modern Retail Talk, Lumi co-founder and CEO Jesse Genet discussed how she approaches the difficult issue of figuring out how to best package a product. Her company works with brands like Curology and Empathy Wines. The secret to good packaging, she said, involves a lot more than just finding a good-sized box and putting the item in it.
After months of Instagram posts about how "we're all in this together," and turning their factories into production centers for masks, direct-to-consumer brands are finally starting to return to business as usual. That's particularly evident by the number of new startups entering the market. But they playbook they're following is rapidly changing.
First came wine boxes, now it's time for curated cocktail kits. As the virus waves continue, services argue consumers are prepared to play home mixologists beyond the pandemic. Which is to say: craft cocktail kit delivery is having a moment.
E-commerce platform Elliot raised millions of dollars and hyped itself for month. But when launch day came around, everything went kaput. How did such a highly anticipated startup end up this way?
All retailers that rely heavily on brick-and-mortar stores have had to pivot their business models in recent months, and toy store startup Camp is no exception. But what's unusual about Camp, which has five stores, is that it doesn't rely just on sales of toys in order to drive revenue. Co-founder and CEO Ben Kaufman previously told Modern Retail that only 20% the business comes from toy sales. The company also makes money in-store sponsorships and ticket sales for in-store activities like interactive storytimes and arts and crafts sessions. But since the coronavirus has forced Camp's stores to close for months, Camp has had to figure out ways to move those sponsorship deals online.
Despite virus exposure fears, individualized samples aren't always the answer, said Deciem co-founder and CEO Nicola Kilner. Despite launching a successful virtual try-on program, "The Abnormal Beauty Company" will continue allowing customers to test products at home for up to a year.
Despite experiencing unprecedented sales declines, some retailers are still willing to open their wallets. At least, Lululemon proved it was when the athleisure brand announced last week that it was acquiring Mirror, a connected fitness startup that it had previously acquired, for $500 million. The news was largely celebrated as a "win" for the direct-to-consumer community. But it may also gives some startups a sense of false hope.
For the inaugural episode of our new and improved Modern Retail Talk series -- where we feature a new founder/retail expert every week to discuss a specific issue pertinent to the new reality we're all living in -- Modern Retail (digitally) sat down with co-founder and CEO Matt Alexander about how the company is strategizing its reopening, and what it's learned over the last few month.
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