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.
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.
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.
This weekend, beleaguered athleisure brand Outdoor Voices added a familiar face from the direct-to-consumer world to its board. Ashley Merrill, the founder of sleepwear brand Lunya, is joining Outdoor Voices as chairwoman of its board of directors, and also participated in a funding round for the company through her investment platform, NaHCO3. Merrill's addition as chairwoman comes after a few months' worth of public relations headaches for Outdoor Voices.
At-home fitness has been having a moment particularly over the past few months, and startup Mirror was able to cash in big on it. On Monday, Lululemon announced that it was acquiring the connected fitness company for $500 million. Mirror had raised $72 million to-date, and is projecting over $100 million in revenue this year. "I think this should be considered one of the big wins in the direct-to-consumer space," said Web Smith, founder of e-commerce newsletter and website 2pm Inc.
Stitch Fix has long maintained that its business model is a blend of art and data science, with its stylists, who represent the artistic side of the company, ultimately deciding which clothes to send to clients. But 11 current and former stylists Modern Retail spoke with said they felt like the artistic side of the company has been devalued, following the announcement earlier this month that Stitch Fix was laying of 1,400 of its California stylists between now and the fall.
After months of stocking up on essentials, summer is proving to be a bright spot for struggling industries like apparel. Swimwear is an example in which brands with a dedicated following are reframing what their merchandise is used for. It can also mark a turning point for other stunted travel-related categories.
Direct-to-consumer startup founders have found themselves in a number of unprecedented situations over the past three months -- from having to keep their company afloat while stores were closed to having employees confront them about racism within the company. Many of these same startups have also found themselves in hot water for how they responded to these situations. The issue at hand is simple: customers feel like these companies aren't practicing what they preach.
A cohort of former Everlane employees, the Everlane Ex-Wives Club, released a four-part statement highlighting the company’s alleged toxic workplace. The company, which recently faced criticism over alleged union busting-related layoffs, said this is the first it's hearing of the accusations in the 14 testimonies.
While big players like Grubhub and Doordash try to get every restaurant in the United States on their platform, smaller companies like Chowbus are doing things a little differently. Instead, they go narrow and deep; Chowbus only features Chinese restaurants, building a more loyal user base. It may present a new blueprint for food delivery apps.
As the apparel industry struggles to return to its pre-covid level of sales some secondhand clothing startups have been thriving as shoppers become more price conscious. ThredUp released its annual report on the state of secondhand clothing, and said that from mid-March to the end of May, its weekly gross transaction volume has grown 20% compared to the same time period last year. And it's not the only secondhand clothing startup seeing growth.
Big brands are increasingly taking a stand and pulling back on Facebook advertising. Many DTCs likely find themselves in the uncomfortable position of agreeing with the move but unable to make such a pledge themselves. Growing brands rely on Facebook and Instagram for growth, and cutting that off could significantly hurt a company's bottom line.
The coffee industry has had to grapple with the future of wholesale since the pandemic hit. However, it's also opened up new revenue streams. The combination of millions of customers working from home along with cafes operating at limited capacity forced roasters and distributors to quickly pivot to DTC.
United Sodas of America unveiled its line of 12 flavors of low-calorie soda last May, which came after two years of development. At the most recent Modern Retail+ Talk, co-founder and CEO Marisa Zupan said the compant surpassed forecast sales by 5x over the past month. “Learning about people’s behavior at their delivery preference was valuable during this period,” she said.
Seventy-three percent of shoppers now use multiple channels to research and shop before making a purchase. And 90 percent expect consistent interactions across all of those channels.
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