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As the hospitality industry continues to adapt to the virtual world, service workers like chefs and bartenders are seeking new opportunities to supplement their lost income. In recent months multiple platforms, like Demi and The Industry Collective, have launched to directly match these experts to everything from brand sponsorships to paying consumers.
One of the most frequently touted advantages of going direct-to-consumer is the ability to collect more data on customers. And one of the most straightforward ways companies can do that is by getting customers to fill out a quiz. But as executives at brands like ThirdLove and Clare told Modern Retail, there's more to creating a successful quiz than just following a Buzzfeed-like template.
Four founders of direct-to-consumer startups spoke with Modern Retail about how they've had to rethink how they run their businesses over the past year. Now, all are trying to figure out what consumers will want to spend their money on once the pandemic subsides -- and what they'll be willing to venture to a store for, versus what they will still want to buy online. Plus, a new direct-to-consumer startup launches in Walmart, and an e-commerce CEO is getting into venture investing.
This week's DTC briefing delves into what's fueling a new crop of new sites that are trying to be both a marketplace and a reviews site for direct-to-consumer brands. At least early on, these sites are better designed to help brands tell their stories, rather than to help customers figure out, for example, which DTC swimsuit brand to buy. And, a Q&A with Win Brands Group co-founder and CEO Kyle Widrick.
Since first launching checkout on Instagram two years ago, Facebook has made news when it's gotten large retailers like Target and Sephora to use the service. But now, it's adding a new feature to the service aimed squarely at attracting more direct-to-consumer startups. On Tuesday, Facebook announced that it would add support for Shop Pay as a payment method through its checkout service .By partnering with Shopify, the main engine powering many direct-to-consumer startups' businesses, it gives Facebook another way to coax these companies into trying its checkout service.
Caraway, a predominantly direct-to-consumer cookware startup, is kicking off its first physical retail partnership. The startup announced on Tuesday that it's launching a new cookware set that will be sold exclusively in 81 Crate and Barrel stores, and through Crate and Barrel's website. Caraway just launched in November 2019, but CEO and founder Jordan Nathan told Modern Retail that he thought it was important for Caraway to start selling its products through other retailers' websites early on, because "we want to be where customers are buying for big stages of their life."
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.
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.
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.
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.
Airlines are promoting their excess food in part because they have so much of it in storage. But by bringing their food and drinks more closely into people’s lives, they are also building their brands. For the airlines, this might signal a brief lifestyle brand pivot, where the snacks and drinks they keep onboard become part of the larger pitch for why a customer should fly with them.
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.
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.
Emilie Arel joined Casper in late 2019 as its president and chief commercial officer. She oversees all the disparate and growing parts of Casper's retail business. Arel spoke on the Modern Retail Podcast about what she's focused on during her tenure, as well as how the pandemic through everything into disarray. "I don't think we recognized how much people would invest in their home so quickly," she said. "We had no clue we'd still be sitting in our houses almost a year from then that was not on the horizon."
Read MoreAt 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.
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