So much for staffing up on seasonal store associates. According to a November 2020 Glossy and Modern Retail survey of brand workers, in preparation for this holiday season, brands shifted their resources away from stores to investments that better serve online shoppers. Read more in our latest research brief.
If the last nine months did nothing else for retailers and brands, it made them realize that there are some downsides to being precious and exclusive about where to sell products. A Modern Retail and Glossy survey, in which we queried employees at brands and retailers, found that more companies this year plan to try out a variety of new digital sales channels they never did before. Here's a look at our most recent holiday related data.
After surviving the Black Friday rush, direct-to-consumer brands have a new challenge at hand: how to ensure their holiday sales aren't hampered by long shipping delays and going out of stock on certain items. Founders say that they are trying to incentivize customers as much as possible to order early, as well as giving as many details as possible about warehouse and supply chain challenges, in the hopes that shoppers will be as patient as they were in the spring.
This year, some retailers and major marketers are treating Cyber Monday as a Cyber Week or even as an unofficial Cyber Month, boasting sales once reserved for a single day for much of November. Lengthening Cyber Monday from one day to several days or weeks isn’t all that surprising given the rise in e-commerce due to the pandemic. With more holiday shopping happening online this year, getting shoppers’ attention with early deals is a logical move, according to industry analysts who say that worries about shipping delays has people shopping earlier for holiday deals this year.
One year ago, Clorox launched a direct-to-consumer supplement label called Objective Wellness. Now, Objective is taking another page out of the DTC playbook by partnering with Gravity Products, the maker of the weighted Gravity Blanket. The two are selling 'beauty sleep kits' on each of their respective websites. The move shows that even big CPGs are taking cues from the DTC playbook.
In the five days following Thanksgiving, there's usually a wave of retailers offering anywhere from 20% to 50% off of their products. But this year, the wave of brands offering deals between Black Friday and Cyber Monday will feel more like a never-ending tsunami as brick-and-mortar retailers try to make up from revenue lost during the spring. Still, eight direct-to-consumer startups Modern Retail spoke with said that they plan to swim against the current, and don't plan to offer any steeper discounts during Black Friday than they did last year.
This year, retailers and brands are focusing on building out their digital fulfillment programs and are expecting record e-commerce sales, according to new research from Modern Retail and Glossy. As such, they are forecasting a digital windfall. What's more, the brands surveyed said they are implementing a bevy of services and offerings to better facilitate. Here are some takeaways from our most recent November survey.
Brands are changing things up this holiday season. In a November survey of 27 Glossy and Modern Retail readers who work for brands, 37% of respondents said their companies will be running promotions for eight weeks or more this holiday season, while just 18.5% said they ran promotions for eight weeks or more in 2019.
Eight years ago, startups turned to Shopify primarily to sell products online. Now, a startup might turn to Shopify to help fulfill orders, get some cash for their business, or use its point of sale system when it opens a physical store. As the startups that launched on Shopify, like Allbirds and Glossier, have grown up, Shopify's influence over the e-commerce ecosystem has ballooned. Now, the company is at an inflection point. The bigger that Shopify gets, the more calls the company faces for it to launch services that solve the biggest pain points of its merchants -- but it could risk diluting Shopify's focus.
Podcast advertising is booming -- particularly in light of the news Spotify recently announced that it is acquiring podcast advertising and publishing platform Megaphone. And direct-to-consumer startups are helping fuel that boom, considering the long-running joke that Blue Apron, MeUndies and Casper are essentially underwriting the shows they advertise on. The Spotify-Megaphone deal could have significant implications for what types of DTC brands are able to advertise on podcasts.
For many direct-to-consumer brands looking to sell and ship their products through someone's website besides their own, there's still only one dominant choice for them in the U.S., and that's Amazon. Despite the emergence of dozens of direct-to-consumer startups in every category from cookware to mattresses to pet food, no marketplaces have emerged to focus solely on these direct-to-consumer brands. That, in theory, leaves an opening for a new marketplace to create an alternative to Amazon for these direct-to-consumer brands.
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.
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.
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.
With in-person sales largely out of the picture this holiday season, brands must adapt to deliver the frictionless experiences that online consumers expect and demand.
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