Public Goods, an online-only consumer packaged goods company, is making its first foray into physical retail. The startup announced on Tuesday that some of its products like shampoo, toothbrushes and facial cleanser, will now be available for purchase in select CVS stores.But Public Goods' strategy differs from that of other CPG startups in that shoppers have to buy a $59 per year membership in order to buy products from its website. So when Public Goods starts selling in CVS this week, it will be the first time that its products are available for purchase without a membership. It will be an important test for the young startup as to how receptive customers are to buying one-off products from Public Goods at a traditional retail store.
From competing with giant retailers for customer loyalty to improving the supply chain, sectors across the DTC world have been transformed by the pandemic. Five direct to consumer brand founders give their takes about the changes they anticipate when the world eventually emerges from the ongoing crisis.
It's difficult to raise money for your startup -- and even more difficult if you're a person of color. Modern Retail spoke to multiple founders and VCs, and they described the venture capital world as insular, overly cautious and easily dismissive of big markets that cater to diverse segments they don't personally relate to. Several eventually threw in the towel on fundraising, choosing instead to bootstrap their ventures.
DTC Twitter is obsessed with Tweet threads. Or, at the very least, they are frequently cited as recommended reads in industry newsletters like 2pm Inc. and Lean Luxe, and often serve as inspiration for further discussions in Clubhouse, Slack, or virtual events. Heavy Twitter usage is not unique to the DTC startup scene, but these Tweet storms are a good a mirror to expose the strengths and weaknesses of DTC startups.
For years, DTCs relied on monthly subscriptions for reliable revenue. But given the current climate and economic uncertainty, relying on those recurring fees may no longer be an option. Some brands, like at-cost goods seller Italic, are going back to the drawing board by truly "cutting out the middleman." However, access to these no-markup products comes at a cost of an annual membership.
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.
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.
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.
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 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.
One thing is true for nearly all conversions on Amazon: They’re captured by products on page one of the search results. And a significant share of purchases go to just the top few results.
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