For decades, dry ice has been the standard packing solution for frozen and perishable foods. But with much of the depleting supply going toward keeping Covid-19 vaccines cold, brands that rely on dry ice to ship products to consumers are looking for alternatives.
Rothy's had just launched a new category, handbags, when the coronavirus pandemic hit in March. The brand, which got its start in 2016 selling ballet flats, acted fast to retool its product lines. For one, the company quickly started churning out masks in its wholly-owned factory in Dongguan, China. Then, it shifted its focus to ramping up prints and colors in products like sneakers that Rothy's figured would be more in demand as people started to spend more time at home. Rothy's didn't emerge from 2020 fully unscathed, but it did manage to end the year profitable.
As the pandemic continues to upend the ways people shop, direct-to-consumer startups are continuously looking for creative ways to reward customers through the launch of new loyalty programs. Handbag brand Dagne Dover launched its first-ever loyalty program last week, through which customers can earn points not only for buying product, but also for writing a review, or following the company on social media. Hair care startup Prose also launched its first ever membership program over the summer, incorporating perks like access to one-on-one virtual consultations and a wellness podcast. It's a trend that started before the pandemic, but now it's more important than ever that companies find ways to reward their loyal customers, even if they're not able to buy product right now.
Within the past month, a number of new SPACs focused on the consumer sector have emerged. Some consumer investors are looking at SPACs as a way for them to get more involved with later-stage companies, and if their SPAC does well, it could give them a competitive advantage over other venture firms. But as more SPACs launch, they'll be more competition to win over the best candidates poised to go public.
Social media complaints have been piling up on social media for direct-to-consumer furniture brand Joybird. Some customers Modern Retail spoke with said that not only are deliveries being delayed -- a common occurrence amongst all retail companies during the pandemic -- but that they are receiving incomplete orders, like only part of a sectional or a table with no legs. And, that when they've reached out to Joybird's customer service teams, they've struggled to get an explanation.
The pandemic helped push secondhand resale sites, including Poshmark and The RealReal, into the spotlight. One platform that's been quietly building a following is Tradesy, which is mainly geared toward fashion and luxury shoppers. In an interview with Modern Retail, Tradesy founder Tracy DiNunzio discussed the importance of building a robust authentication program early in order to scale a resale site.
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.
For the DTC brands still betting on physical retail, expansion is on hold right now. But those in booming categories, such as homeware, are finding opportunities to expand into brick and mortar through wholesale partnerships. One example is Parachute, which launches at 65 Crate & Barrel stores this week.
When it comes to art buying, brick and mortar galleries have historically dominated the space, making for an intimidating experience for most everyday shoppers. However, while the art world is struggling without in-person auctions, marketplaces like Artsy are finding that the pandemic is helping expand the market to include young customers.
ClassPass, which began as fitness boutique-booking app back in 2013, has been rapidly expanding into other areas such as wellness and beauty treatments. In the past year, the platform has added 6,500 non-workout venues to help diversify its marketplace offerings and potential revenue. And the company plans to double down on this area.
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.
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.
While gyms rush to build out virtual workout products to retain members, seeking out corporate clients has become a growing trend within the industry. From nationwide players like Equinox and Gympass, to regional studios like Fhitting Room, the race to be featured in employers' wellness offerings has begun.
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