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As more food and beverage sales move online, e-commerce is becoming a bigger part of food startups' strategy. Take Siete Family Foods, which makes grain-free versions of Mexican-American staples, like tortillas and chips. The six-year-old company is now using its website to test out new products before selling them in physical stores. Through a new section of its site called Small Batch, Siete Family Foods plans to launch ten new products within the next year, selling anywhere from roughly 100 to 1,000 units of each. The goal is to gather data on what types of Siete's most loyal customers are most interested in, and use that data to pitch retailers on carrying that product in stores.
There's a new most-talked about acronym in the DTC world these days: SPAC, which stands for special purpose acquisition company. SPACs give startups an alternative way to go public, without going through the traditional IPO. In a SPAC, a group of individuals raise money in order to acquire a company with the purpose of taking it public. At least one direct-to-consumer startup, Hims has already opted to go the SPAC route. But investors caution that SPACs won't entirely replace the traditional IPO process.
One of the dominant moods of 2020 has been paralyzing uncertainty, and it's been particularly prevalent this week as Americans wait for the results of the presidential election. The election isn't the only thing on direct-to-consumer startup executives' minds -- after all, once the election is over, Black Friday is right around the corner. But Election Day also can't be business as usual.
Many direct-to-consumer brands have long held off on selling through Amazon. But they can't completely ignore its orbit, as Amazon still sets the conversation in e-commerce. There's a laundry list of DTC brands that have still held off on selling through Amazon -- Glossier, Warby Parker, Allbirds and Away to name a few. But, a few trends emerge among the digitally-native brands that have taken the leap to selling through Amazon.
Brands and retailers that have struggled to keep their businesses afloat are holding on to the notion that it’s all uphill from here. And, new research indicates that they’re looking to the election to cement hope for a brighter, recession-free future. In an early-October Glossy/Modern Retail survey of 67 brand and retail workers, 38.7% said the economy is a top-three issue that’s most important to them in this election.
In conversations with a handful of direct-to-consumer startup executives about their holiday marketing plans, the biggest concern cited was figuring out when was the right time to run holiday ads. Both to ensure that customers order far enough in advance so that they get their products by Christmas, and to ensure that they are spending their holiday marketing dollars most efficiently. The executives Modern Retail spoke with said that for the most part, they weren't that concerned about rising digital advertising costs, either because they've been able to further diversify their ad spend away from digital this year, or customer acquisition costs are still lower than they are last year.
Despite experiencing record e-commerce sales during the coronavirus, DTC CEOs are trying to prepare for how to handle some worst-case scenarios over the holidays. Specifically, fears over shipping delays and how to compete with deep discounts are keeping them up at night. As they've had to do throughout the coronavirus outbreak, they're trying to figure out what unexpected scenarios to plan for.
Prime Day is a big sales day for Amazon. While the company doesn't disclose exact revenue figures, the e-commerce giant said that Prime Day sales last year were higher than the last Black Friday and Cyber Monday combined. But Amazon's goal on Prime Day isn't just to get people to buy more physical product. It's also to encourage more people to buy Amazon Prime memberships, and to get the companies that sell on Amazon to spend more on advertising. And that's evidenced by the way that the company encourages Amazon agencies to prepare for Prime Day, by getting their clients to spend more on advertising.
There's no shortage of "last chance" sales hitting email inboxes these days, as desperate retailers like Gap and Macy's are trying to squeeze some much-needed revenue out of shoppers. But that also makes it harder for younger startups to grab customers' attention, when every retail company in the world is trying to email them. So, some startups are turning to text message instead to promote sales or key events. Thinx, used text messaging to promote its 30% off sale in August, while Lensabl is encouraging customers to get their first-time discount via text message instead of email.
In March, the fundraising environment for direct-to-consumer startups was "downright frozen," as Michael Duda, managing partner at hybrid accelerator agency and venture capital fund Bullish, put it. Now, March seems like a lifetime ago. Over the past six months, many direct-to-consumer startups in categories ranging from home improvement, health and wellness, and food have struck it big, reporting that their online sales have doubled or tripled while customer acquisition costs have decreased. Consumer investors are starting to close deals again, while investors that had previously soured on DTC startups because of high customer acquisition costs are starting to change their tune.
While some direct-to-consumer startups have reported that their online sales have tripled or doubled since the start of the pandemic, not every retail company is benefitting from the e-commerce gold rush. In March and April, demand for certain products like travel accessories and wedding attire all but evaporated as those activities became impossible to do under stay-at-home orders. So companies that sell these types of products are doing something they swore they never would before: offer a sale.
A number of direct-to-consumer startups have reported huge revenue growth during over the past several months, in some cases acquiring double or triple the amount of new customers that they did during the same period last year. Now, their focus is on keeping those new customers. Even though retention is important for DTC startups year-round, it is especially so during the pandemic, as more customers are buying certain types of products online for the first time.
All big-box retailers are now trying to become tech companies. That's the takeaway from the news that Walmart is teaming up with Microsoft to submit a bid to acquire TikTok. Acquiring TikTok could help Walmart grow its advertising business astronomically -- and that could be a boon for e-commerce startups looking for somewhere else to spend their money besides the Facebook-Google duopoly.
The business landscape was upended overnight when a virus wreaked havoc on the world. Now, digitally native brands are trying to figure out how to operate in this new landscape. In this report, Modern Retail details all the shifts that occurred over the last year.
Despite their affinity for shirking traditional retail practices, there's one that direct-to-consumer brands can't shake off entirely: the belief that the customer is always right. Or, more commonly, DTC startups like to follow in the footsteps of Amazon, and declare themselves customer-obsessed. But when customers behave badly, it's often retail workers that pay the price. In order for DTC startups to truly champion diversity and inclusion, they have to train their store staff on how to handle racist or belligerent customers.
New research finds that most millennial and Gen Z consumers would be willing to pay more for sustainable fashion and beauty products.
Amazon unsurprisingly posted record third quarter earnings. Sales exceeded expectations, as did profit. Still there were a few things of note. Amazon didn't highlight its third-party sellers as much as past years, for example. It did, however, nod to its growing suite of new revenue engines. Here's a look at the e-commerce giant's most recent earnings.
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