The Modern Retail Podcast: Recent Episodes
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The Modern Retail Podcast is a weekly show that hears from executives in the retail space, from legacy companies to the buzzy world of DTC startups. Cale Weissman, editor of Modern Retail, hosts.
Uri Minkoff knows a thing or two about getting a brand off the ground. Beginning in 2005, he and his sister built the luxury brand Rebecca Minkoff, ultimately selling a majority stake two years ago. During those early years, he also launched his own technology company, Fortis Software, that he led for about a decade until he went back to focusing on his joint venture with his sister. And, it turns out, Minkoff and his father co-founded a business in the late '90s that Minkoff is only now beginning to really focus on. BodyHealth is a nutrition and supplement company that's been around since 1997. It sprung out of Minkoff's father's physician clinic, which Minkoff also helped get off the ground. The clinic is called LifeWorks -- "And we built what has now become the largest or second largest integrated medical clinic in the country," Minkoff said. Through LifeWorks, Minkoff and his father saw demand for supplements and medications aimed specifically at top-tier athletes. "One of the things that we found early on is, clinically, what the doctors found was that protein was a big issue -- and, particularly, protein digestibility [and] absorbability." That is, many people were trying to take a protein supplement, but their bodies weren't actually absorbing it. Over the years, BodyWorks launched more products but focused more on the medical retail track. Over 20 years, its distribution ballooned to over 2,000 physician offices, even with Minkoff not actively leading it or focusing on its growth. But now he's set his sites on growing BodyHealth even more -- focused specifically on direct-to-consumer. Minkoff had the realization a few years ago that "there's no reason that we shouldn't tell the story and expand this," he said on the Modern Retail Podcast. "Let's do repackaging that's appropriate for consumers, that's not just going to be on physician shelves." So far, it's working. BodyHealth will be in 1,000 store shelves by the end of the year. In August, it debuted on Erewhon shelves -- something Minkoff is very proud of. What has helped BodyHealth grow, said Minkoff, especially over the last year is its direct connection with customers. The brand has a vibrant Facebook page of over 30,000 members where its most obsessed customers share ideas, feedback and recipes. "Our email list is growing wildly, because of the content that we put out there," Minkoff said. It also helps that Minkoff has some business successes in his back pocket to inform of his how to build BodyHealth. "I'm obsessed with building companies," he said. "I'm obsessed with creating products that are for end consumers. And I've kind of been that way my whole life."
This week on the Modern Retail Rundown we start with the news of Shein and Forever 21’s new partnership, in which the companies will sell each other's merchandise. Next, Subway sells to a private equity firm after months of rumors -- after decades of family ownership. Finally, a look at Rolex's new acquisition of legacy watch retailer Bucherer.
News cited: https://www.cnbc.com/2023/08/24/shein-strikes-deal-with-fast-fashion-retailer-forever-21.html https://www.modernretail.co/marketing/there-are-a-lot-of-misunderstandings-about-how-o[…]-app-is-trying-to-get-ahead-of-its-own-marketing-narrative/ https://www.wsj.com/business/deals/subway-sandwich-chain-agrees-to-sale-to-roark-capital-11812c1f https://www.bloomberg.com/news/articles/2023-08-24/rolex-to-buy-bucherer-in-major-retail-move-for-swiss-brand
Georgia-Pacific is a company most everyone in the U.S. has interacted with. It's a paper conglomerate behind some of the biggest names, such as Brawny and Dixie. But even though the products are ubiquitous, when is the last time a shopper has really thought about such a brand? This conundrum is what Laura Knebusch thinks about every day. Knebusch is the CMO of Georgia-Pacific, and is in charge of all consumer-facing marketing and customer experience endeavors. It's a tall order for a parent company that has brands in most mass retailers, small retailers as well as online. "We have to be thinking about how we are delighting consumers with the experience they have with our brands every time they are interacting with us," Knebusch said. She joined the Modern Retail Podcast this week and spoke about how she approaches marketing such a behemoth. One major facet of Knebusch's marketing philosophy is to always be testing out new channels and ways to reach customers. "We do have a focus on experimentation," she said. "It's not a set, we're going to do this many [experiments]. But, each year, we want to make sure that we are carving out a certain amount of investment so that we can experiment and learn and not just invest in the things that are tried and true. With the world changing so much, that's absolutely critical." One thing that's no longer an experiment, though, is online grocery. According to Knebusch platforms like Instacart grew thanks to the pandemic and are more or less here to stay. That being said, they are still in their infancy. E-commerce, she said, "is an area where we are testing and learning and experimenting because it's changing so much. And we are seeing capabilities develop really quickly. So it has to be kind of an experimental mindset." And many of the ad offerings on those platforms have yet to mature. "I think measurement is still a really big opportunity in this area," she said. "Companies like Instacart are putting a lot of focus in this area and evolving, but there are still opportunities… particularly in the area of kind of measurement -- making sure that you can return the value for those investments that you're making in them." For her, it all boils down to a new retail paradigm that every business must contend with. "Consumers expect more from brands -- they have more choices, more ways to purchase and more ways that you can reach them," she said.
This week on the Modern Retail Rundown we discuss the latest reports of Instacart’s approaching IPO, which can come as soon as September. Next is a look at Aldi’s acquisition of Winn-Dixie and Harvey's parent company -- a major expansion in the Southeast for the German grocer. Finally, a new story outlines Everlane’s new goal to shed its image and become a top apparel brand. Stories cited: https://www.bloomberg.com/news/articles/2023-08-17/instacart-said-to-plan-for-september-ipo-in-boost-for-listings https://www.wsj.com/articles/instacart-sees-revenue-profit-boost-ahead-of-public-listing-1d7891d https://www.cnn.com/2023/08/16/investing/aldi-buys-winn-dixie/index.html https://www.supermarketnews.com/retail-financial/secretaries-states-want-ftc-block-kroger-albertsons-merger https://www.forbes.com/sites/pamdanziger/2023/08/16/under-new-management-everlane-leans-into-quiet-luxury-with-a--sustainability-edge/ https://www.nytimes.com/2020/07/26/fashion/everlane-employees-ethical-clothing.html
The U.K.-based retailer has become synonymous overseas with value-based apparel. But the company has been steadily growing its U.S. fleet with the hopes of becoming a powerhouse retailer in North America, as well. Its first store opened in 2015 and it currently has 20 open. Over the last 12 months alone, the company opened up seven new locations. And, according to Primark's president of U.S., Kevin Tulip, the plan is to get to 60 stores in the region by 2026. "The strategy was always about opening up a handful of stores and testing and learning," said Tulip on the Modern Retail Podcast. He joined this week's episode and dove into the retailer's international expansion strategy, as well as its evolving approach to technology and e-commerce. Tulip certainly knows a lot about the Primark brand. He first joined the company when he was 16. "It was a weekend job -- straight out of school, while I was studying, doing four hours on a Saturday, four hours on a Sunday," he said. "And I really fell in love with retail." Two decades later and he's risen the ranks from a store associate to president of an entire area of business. Right now, one of Tulip's main focuses is on finding the right locations for new stores. As he describes it, it's an art and not a science. "We've taken our time and understood the locations we're going into," he said. "This isn't about just opening as many stores as we can." One other big question surrounding Primark is its approach to e-commerce. The retailer has staunchly focused on in-store sales. It recently upgraded its U.S. site to be more accurate with merchandise, while still getting shoppers to go into local stores. Even though Primark is testing some buy-online, pickup in-store options in the U.K., Tulip insisted that stores are still the primary focus. The digital strategy, he said, "isn't focused on creating the website to be transactional."
On this week’s Modern Retail Rundown, we discuss the growing consolidation in the Tapestry’s big acquisition of Michael Kors owner Capri. Next, why brands are reducing the rewards in their rewards program to improve margins. Finally, we talk about Amazon scrapping a majority of its apparel private labels amid growing anti-trust ridicule. Stories referenced: https://www.nytimes.com/2023/08/10/business/tapestry-capri-merger-luxury-fashion.html https://www.modernretail.co/marketing/ralph-lauren-and-coach-are-resonating-with-younger-digital-first-shoppers/ https://www.cnbc.com/2023/08/05/companies-crack-down-on-customer-perks-and-rewards-like-airline-miles.html https://www.wsj.com/articles/amazon-cuts-dozens-of-house-brands-as-it-battles-costs-regulators-3f6ad56d
U.K.-based fashion brand Kurt Geiger has been around since the 1960s, but has big plans to further expand its U.S. presence. The brand entered the U.S. around six years ago. "The U.S. is our number one market, it's bigger than the U.K.," said CEO Neil Clifford. "It will be north of $200 million this year… I think next year, comfortably, we'll be north [of] $300 million." Meanwhile, this year the brand as a whole is on track to bring in more than $40 million EBITDA on nearly $500 million in total revenue. But what the U.S. currently doesn't have is a Kurt Geiger retail store -- this growth over the last half-decade was thanks to its department store partners like Dillard's and Nordstrom. It was also thanks to e-commerce sales, which came in at $40 million this year in the U.S. -- three times as big as the U.K.'s online DTC sales. Against this backdrop, Kurt Geiger is ready to enter physical retail. Clifford joined this week's Modern Retail Podcast and spoke about the brand's growth and future ambitions. He's been with the company since 1996 and shared some of the biggest lessons he's learned over those decades. "I'm a big lover of North America," Clifford said. "So we always talked about [how] surely we will be successful there." But the company didn't enter the U.S. until only a few years ago. "We were a little scared," he said, "because it would be a huge venture." Despite the initial reticence, the venture is working out. Next year, Clifford said, Kurt Geiger plans to open its first U.S. stores. "We will open a new flagship store in London in September… our largest ever store, 3,500 square feet. And that is really the [evolution] of our concept -- it will be the template for the U.S.," he said. Now, Clifford has big plans on the marketing front -- an area Kurt Geiger has never really invested in. "We definitely have been very pleasantly surprised on the level of impact we can make digitally without having any stores," he said. "We definitely have turned our dial to digital marketing in quite an intensive way to support our brand awareness growth."
On this week’s episode of the Modern Retail Rundown, the staff dissects various news coming out of the retail industry. This was a busy week for earnings reports -- and we’ll start out by breaking down Amazon’s blockbuster quarter following mass layoffs. Next, we take a look at E.l.f.'s hyper-growth path, courtesy of Gen Z adoration. And lastly, a look at how Diamond Crystal is trying to position its kosher salt to home cooks. Stories cited: https://www.cnbc.com/2023/08/03/amazon-amzn-q2-earnings-report-2023.html https://www.modernretail.co/technology/why-amazons-grocery-delivery-efforts-have-fallen-flat/ https://www.barrons.com/articles/elf-earnings-stock-price-c475322e https://www.glossy.co/beauty/e-l-f-beauty-carves-out-skin-care-as-fourth-portfolio-brand/ https://www.nytimes.com/2023/08/01/dining/diamond-crystal-kosher-salt.html https://www.thekitchn.com/trader-joes-diamond-crystal-kosher-salt-23549559
Coffee shops may have seen a dip during the pandemic, but they’re back and booming. That's especially true for the coffee chain Bluestone Lane. The company is ten years old, but has really kicked business into gear over the last few years. The coffee shop has over 60 locations and has seen its business grow 350% since the pandemic. Its founder and CEO Nick Stone joined the Modern Retail Podcast this week and spoke about Bluestone's strategy and future ambitions. Part of the thesis behind Bluestone is customer service from Down Under. "If you have a coffee shop or a cafe in Australia that has the best coffee, but if they deliver it in a way that is cold and impersonal and obnoxious, Australians will boycott it," Stone said. (It shouldn't come as a shock that he is Australian.) According to Stone, the best way for a business like his to thrive is to provide a good experience. "In hospitality, you really have no intellectual property." Instead, he has tried to build Bluestone as a place people want to spend time in. That means doing one thing and doing it well. While Bluestone has attempted side-hustles like its own line of CPG products, Stone now believes that it's hard to run multiple types of businesses at once. "I think it's incredibly hard to do both at the same time unless you have enormous resources," he said. For him, the focus is on opening more locations -- Bluestone is slated to have 70 locations by the end of this year -- while making sure customers feel comfortable and welcome in them. "I think ultimately coffee shops should be about driving community," he said.
On this week's Modern Retail Rundown, we discuss a report by Bloomberg detailing how Daily Harvest handled its recall last year. Next, a look at Bud Light’s decline as America’s favorite beer in light of the company's latest controversies. Lastly, governments are increasingly cracking down on Amazon's counterfeit and pricing practices -- most recently in light of its secret deal with Apple. News cited: https://www.bloomberg.com/news/features/2023-07-26/daily-harvest-lentil-crumbles-recall-saga-has-rocked-the-company https://www.cnbc.com/2023/06/14/bud-light-beer-sales-trail-modelo-in-may-following-anti-lgbtq-backlash.html https://www.nytimes.com/2023/07/23/business/modelo-bud-light.html https://techcrunch.com/2023/07/26/apple-amazon-price-collusion-uk-lawsuit/ https://www.politico.com/news/2023/07/25/ftc-lawsuit-break-up-amazon-00108130
For high-end bedding brand Boll & Branch, the secret to growth has been on direct sourcing and keeping profitability always in mind. That's according to founder and CEO Scott Tannen. Boll & Branch first launched in 2014, and is currently bringing in more than $200 million in revenue a year. He chalks up this success to the way he built out his supply chain. While most DTC companies claim to cut out the middleman, Boll & Branch doesn't merely go to the manufacturers to make sheets. Instead, it works directly with cotton growers, which Tannen said made for a more robust business. "When you disrupt that supply chain, you have an opportunity to build a margin profile that's really, really strong," he said. "You're not living and dying by only buying your consumers." It also helps that some high-profile people like his products. "Among our fans include pretty much every living president at this point," he said. Jenna Bush, for example, is a brand ambassador for the company. And Tannen added, "I was very lucky that President Clinton invited me to meet him because he loved the product so much." Tannen joined this week's Modern Retail Podcast and spoke about Boll & Branch's growth. Much like other bedding brands in the space, Boll & Branch operated mostly online for many years. Then, shortly before the pandemic, it opened up a few stores. For obvious reasons, the company focused less on retail expansion. It did, however, ink a few wholesale partnerships with the likes of Nordstrom and Bloomingdale's. Now, Tannen is focusing once again on retail growth. The company is opening up three new stores this year, with plans to potentially open more after that. As Tannen described the retail strategy, "I'm thinking about: where are we winning? And where can I win bigger? How can I think about gaining more share where I'm leveraging a strength?" Another major lesson Tannen learned is to make every business decision with a long-term vision in mind. "We're always focused on staying above our SKUs from a profitability standpoint and from a capital standpoint," he said. "I plan to be in this business for a very long time -- we're not on a race to nowhere to either figure out how to get cash in the door, cash in my pocket or anything like that."
On this week's Modern Retail Rundown, we begin with a discussion of a new Wall Street Journal report dissecting how DTC footwear company Allbirds lost its way. Next, we take a look at the latest acquisition headlines. Over the past week, Keurig Dr. Pepper announced a $300 million investment in exchange for 33% equity in coffee company La Colombe. And on the direct-to-consumer side, the 6-year-old intimates brand Cuup has sold to FullBeauty Brands, which also recently bought the plus-size fashion brand Eloquii from Walmart.
For Solo Brands, being DTC represents more of a state of mind than it does an exclusive sales channel. "A lot of people have in the last five years equated DTC to e-commerce," said John Merris, CEO of the portfolio company that owns Solo Stove, Oru Kayak and Chubbies, among other brands. "We believe that direct-to-consumer is focused on the relationship… All direct-to-consumer is actually talking about is a brand's ability to connect with its consumers." That thesis has translated to Solo owning a variety of brands that sell both offline and online, but Merris insists that they all are able to connect uniquely well with their target customers. He joined the Modern Retail Podcast this week and spoke about Solo's growth over the last few years, what it's like being a public DTC company as well as why he looks for in potential acquisitions. One of the major focuses for Solo as a company is maintaining profitability. "We do not buy businesses that aren't profitable," he said. And this was one of the reasons his company decided to go public in late 2021. "We were just on a tear -- growth was really solid, we were very profitable, we generated free cash flow," he said. While the economy has certainly shifted since 2021, Solo has been able to maintain its profitability -- at its most recent earnings its gross profit increased 11.4% to $54.4 million. Merris considers Solo to be a brand that outperforms competitors. "Our business was pretty sound, it still is," he said. "And I think that you see that now, in this environment, there are very few businesses -- especially [those] that would consider themselves direct-to-consumer businesses -- that are still growing and doing so profitably." Solo represents a small but influential group of companies trying to take a roll-up approach. Merris was clear that Solo doesn't have targets in terms of number of acquisitions each year, but that it's always looking for new companies to join that fold that fit its parameters. With that, Merris has yet to find company that has a business model analogous to what he's trying to build. "There really isn't any sort of conglomerate or aggregator -- or whatever you want to call it -- that we aspire to be like," he said.
On this week’s Modern Retail Rundown, we give a recap of the influencer-led Amazon's Prime Day, which for the first time included deals on travel. Next is a look at the fallout a UPS strike can have, and the impact it can have on online retailers and brands' fulfillment. Lastly, we talk energy drinks backlash in light of Logan Paul's Prime facing an FDA investigation into its caffeine content.
Shein has been around for nearly a decade, but we're just beginning to learn more about the brand now. Over the last two years, the e-commerce platform has taken the world by storm. In 2021, it caught most people by surprise when it became the most downloaded U.S. iPhone shopping app. Today, it is the number three top app on App Store. But with this rise to fame has come a lot of questions. For one, Shein is largely known as a seller of fast-fashion apparel. Its products are cheap, and it sells thousands of them -- which to many, seems like a model that's both wasteful and reliant on cheap labor whenever possible. But after years of seeming silence, Shein is now talking and trying to give a sense of how the company works. "We like to call [our model] on-demand production," said Peter Pernot-Day, Shein's global head of strategy and corporate affairs. "The way it works is: we will identify potential products, we'll work with one of our small-batch production partners, and we'll make between 10 to 100 copies of that garment -- we'll then offer it for sale," he said. If the garment resonates, Shein goes back and finds a partner who can manufacture it at scale. "That's allowed us to operate profitably -- it's also allowed us to dramatically reduce excess inventory waste." Pernot-Day joined the Modern Retail Podcast this week and spoke about the company's overall direction, its strategic growth in both the U.S. and countries like Brazil as well as why it's attempting such a big marketing push now after years of relative press silence. He started as Shein's general counsel in 2021 and took this more front-facing role last year For the past year, Shein has been facilitating a marketing spree to try and tell its story on its own terms. This has included pop-ups around the U.S., as well as work with influencers. One recent influencer promotion sent TikTok personalities to factories in China, who then posted about their experiences on social media. This was met with criticism far and wide of influencers describing a paid press trip as a journalistic endeavor. But Pernot-Day felt the entire ordeal was misconstrued. "I think that those influencers spoke honestly about what they saw," he said. "And I think it's a shame that they were attacked for it on social media. I don't think that they bear any responsibility for reporting honestly about what they saw on their trip." Despite the perceived blowback, Shein remains a popular e-commerce platform that seems to be growing by the day. One of its big efforts to maintain this growth is a third-party marketplace. The company is trying to find local brands to sell their goods on the platform. The marketplace is currently running in both the U.S. and Brazil. As Pernot-Day described it, this push is part of Shein's focus on localization. "The final piece [of this strategy] is finding both suppliers who make and manufacture Shein clothing, but also third-party sellers who are interested in coming alongside us and reaching our customer base in these local geographies," he said
This week's Modern Retail Rundown starts out with a discussion about brands rushing to Threads. Then, we dive into the state of homeware retail in light of The Christmas Tree Shops going out of business. Finally, the show discusses why Claire's is putting off its IPO after revamping its business for Gen Z. News links: https://techcrunch.com/2023/07/06/threads-wont-be-fun-but-it-will-give-brands-a-home-away-from-twitter/ https://www.npr.org/2023/07/03/1185809716/christmas-tree-shops-liquidate-stores-bankrupt https://www.retaildive.com/news/claires-postpones-ipo/684926/ https://www.fastcompany.com/90917315/ipo-market-outlook-stocks-growth-companies-ey-report-2023
For frozen food startups, direct-to-consumer is a difficult channel to make work. But for MìLà, which makes food products like Chinese soup dumplings and noodles, being able to ship directly to customers is a core part of its business strategy. "DTC is very important to us because we do have a direct connection to our customers," said Jennifer Liao, co-founder and president of MìLà. She joined this week's Modern Retail Podcast to talk about the brand's growth. MìLà began as a Chinese food restaurant but transformed into an online food business when the pandemic first began. Using a Google Form and messaging apps like WeChat, in 2020 Liao and her husband would take soup dumpling orders and locally deliver them throughout Washington. But the dumplings became more and more popular, and so the couple decided to expand its domain. First, it started shipping to more areas. Then, the company brought on a 3PL to ship frozen dumplings across the country. Today, MìLà has expanded its facilities, employs over 100 people and has grown its product line beyond just dumplings. It's also expanded sales channels with a recent launch in a Bay Area Costco with plans to sell in Central Market in Texas and Wegman's on the East Coast. The company has also caught the eyes of celebrities -- actor Simu Liu recently joined MìLà as chief content officer. Even with the growth, Liao said the brand has remained consistent with its recipe. "We haven't changed the quality of the ingredients," she said. "We haven't changed the way that we do it, but we have obviously scaled much more efficiently." But figuring that out comes with growing pains. For example, when MìLà first began shipping nationwide, it offered a "melt-free guarantee." That is, the dumplings were supposed to arrive at people's doorsteps still in their frozen state. But the brand ran into issues in 2020 with supply chains backed up and deliveries bottlenecked. "We had actually about 20% failure rate for our soup dumplings, where they would arrive melted," Liao said. After some trial and error, as well as tweaking its fulfillment strategy, MìLà was able to overcome this issue. And even though DTC presents issues like this -- Liao is insistent that the company will continue to use it as a sales channel. While grocers are increasingly interested -- and the it's easier to ship frozen food to grocery aisles than it is to individual customers -- the brand has a direct line with its biggest fans, and that's helped MìLà grow. "I don't think we would stop DTC," Liao said. "I think we would try to figure out what is the right ratio of distribution."
Tattoo care brand Mad Rabbit has a mission to make a growing niche of body care mainstream. The company, which first launched in 2019, makes products for people with tattoos. That includes body washes, balms and other aftercare needed to make sure the ink doesn't fade. And while it's recorded large sales growth year-over-year, seeing over 100% sales growth over the last two years (with the help of an appearance and subsequent deal on the show "Shark Tank"), it believes mass retail is the next arena in which to prove itself. "Where do you go [from where we are now]," said co-founder and CEO Oliver Zak, "it's beauty and mass." Zak joined the Modern Retail Podcast this week and spoke about his ambitions for the brand. The mass part of the retail expansion equation is already in the works. Just this week, Mad Rabbit unveiled plans to expand to over 1,800 Walmart locations. But the question is: how do you ensure that people will buy the products on the shelf? According to Zak, it's a question of messaging. "I think a big key is screaming tattoo on the signage opportunity that you do have," he said. "I've never walked down a Walmart and seen anything related to a tattoo before." Another big part of his strategy is gaining acceptance from the tattoo community. "When we first entered the industry, the biggest barrier we had was that we weren't tattoo artists," Zak said. "Many of them have a problem with 'outsiders' coming in and making money off the backs of tattoo artists. And to a certain extent, that is what we're doing." But over the years, Mad Rabbit has tried to partner with all types of tattoo artists and make them know that they aren't mere suit-and-tie interlopers. That has begun paying dividends now, Zak said. "This past year at conventions," said Zak, "it's been nothing but love."
This week’s Modern Retail Rundown starts off with a check-in on Daily Harvest and its planned retail launch, following a tumultuous year of lawsuits. Next, a look at TikTok testing a digital store selling its own products. Lastly, we discuss a Wall Street Journal story about the changing return policies among online retailers — and how it’s impacting shoppers’ behaviors. Stories cited: https://www.fastcompany.com/90908456/daily-harvest-food-startup-toxic-tara-flour-recall https://www.businessinsider.com/tiktok-could-sell-own-products-us-after-uk-test-trademark-2023-6 https://www.wsj.com/articles/online-shopping-clothes-returns-16500969
"International foods are having a moment," said Miguel Leal, co-founder and CEO of Somos Foods. Indeed, that's the thesis of his startup, which makes Mexican food products currently sold in over 6,000 stores including Whole Foods and H-E-B. The company has been around for two years and sells products like chips, salsas as well as rice and bean packs. It first started as an online brand but quickly realized that the way to grow a brand like his is by zeroing in on grocery distribution. "Life was definitely pointing us into retail," Leal said on the Modern Retail Podcast. On the show, he spoke about the state of both CPG startups and why international foods are becoming an increasingly popular area for national grocery retailers. Leal knows a thing or two about national retail. He and his co-founders all worked together at Kind -- in fact, Kind founder Daniel Lubetzky is one of Sonos's co-founders. Leal also worked as the chief marketing officer at both Cholula and Diamond Foods. This background helped him realize that there was white space for a premium Mexican food brand. While high-end Mexican restaurants have risen the ranks in U.S. culture over the last year, "it was the same canned beans and fluorescent yellow hard shell tacos at grocery store." Thus, Somos aims to be a step above Old El Paso. So far, the idea seems to be working. Somos continues to expand into new national retailers as well as expand its product portfolio. Most recently, it launched a salsa macha condiment. "We have some big retail announcements coming soon over the summer, another big one in the fall, and then by the end of the year," he said. "But we also have some really exciting products coming into the market."
On this week's Modern Retail Rundown, we discuss why Amazon is not including shopping app Temu in its competitive pricing algorithm. Then, a look into the state of food delivery apps in the wake of reported layoffs at Grubhub. Finally, we look into the news that Instant Brands -- the maker of the Instant Pot -- is filing for bankruptcy. News cited: https://www.reuters.com/business/retail-consumer/price-war-amazon-excludes-rival-temu-competitive-price-checks-2023-06-13/ https://www.wsj.com/articles/grubhub-to-lay-off-about-15-of-staff-85e87595 https://www.fastcompany.com/90892020/doordash-q1-earnings-2023 https://www.nytimes.com/2023/06/15/business/instant-brands-bankruptcy.html
Athleticwear brand Legends wants to be the Lululemon of professional sports. The company -- which sells products like basketball shorts, swim trunks and athletic tees -- launched in 2019 with a slew of professional athlete investors. Since then, the company has brought on more influencers to its program and -- thanks to these partners -- has seen sales consistently grow, even though it hasn't focused much on organic marketing. In 2020, the company made about $10 million, and that grew the following year to about $16 million. This year, said co-founder and CEO Scott Hochstadt, the focus is on really growing the business. "We're at a point where we've we've built the brand," he said. He's hired a crack team of retail and marketing operators who are "ready to accelerate things and scale it out." He joined the Modern Retail Podcast this week and talked about the growth strategy behind Legends. Hochstadt knows a thing or two about sports and celebrities. After playing lacrosse in college, he brought the sport to the West Coast and ended up launching a lacrosse lifestyle brand that he ultimately sold. Then, with a business partner who was working with big sports stars Kobe Bryant at the time, Legends was born. "We have the biggest athletes in the world training with us in this spot," said Hochstadt, "and I have the factories and I have the design capabilities to build products for these guys." And so, Legends launched with the help of quarterback Baker Mayfield and NBA stars Steve Nash and Matt Barnes, among others. The white space that Hochstadt saw was a premium sportswear company that speaks to a certain type of athlete. "Vuori is more lifestyle yoga," he said. "Lulu is your wife's brand that makes men's products now." For the first couple of years, Legends held individual activations to get the word out. For example, it would sponsor shows with celebrities and hold drops of limited-edition apparel. This helped establish the brand as something more on the elite tier. But the focus now is on going from small brand major athletes like to a mainstream name. "We spent a couple of years just building out the team, building out the products and building out the brand," said Hochstadt. "Now the team is in place, and… this will be our biggest growth year."
In this week’s episode of the Modern Retail Rundown, our staff dissects all various changes and announcements coming out of the retail industry. First we start with the news that Nike is walking back the decision to sever ties with previous wholesale partners like DSW and Macy’s. Next, an announcement of GameStop CEO’s firing — and replacement with board member Ryan Cohen as executive chairman — has rattled up the company’s passionate shareholders. Lastly is a look at fresh M&A news in the DTC space, with the acquisition of cookware brand Great Jones. The Modern Retail Rundown is released every Saturday morning.
Kids' apparel brand Hanna Andersson is four decades old but in the midst of a huge business transformation. In 2019, it decided to close all of its stores and focus solely on its online business. The company says this strategic shift has helped stay focus and grow in new ways. "We're 100% direct to consumer and are frankly much more profitable because of that -- and, honestly, much more attuned to our customers in anticipating their needs," said Aimée Lapic, CEO of Hanna Andersson. She joined the Modern Retail Podcast this week and dove into her strategic mandates and the areas of growth she's most excited about. Lapic has worked in retail for a long time now. She worked at both Gap and Banana Republic, helping lead their early online experiences and marketing strategies. She then moved to the tech sector at places like Pandora and GoPro. But she came back to apparel last summer when she accepted the role of CEO at Hanna Andersson. "Honestly one of the reasons why this is such a fun moment for me is that it is full circle from how I started my career in apparel," she said. With nearly a year under her belt, Lapic has been focused on launching new initiatives. For example, the apparel brand -- most well-known for its pajamas -- has expanded into children's athletic wear. Beyond that, Hanna Andersson also launched a peer-to-peer resale program. That first began earlier this year with 2,500 listings and has already expanded to over 17,000, according to Lapic. But one of her big focuses has been on tapping into the brand's already robust community. Parents have bought Hanna Andersson for years -- Lapic said she's spoken with new moms who wore the clothes themselves as children. But much of this hasn't been fostered by the brand itself. "There has been a very strong community for many years of Hanna customers that love our brand, that speak on behalf of the brand, that hasn't actually been fostered by the brand," she said. Lapic now is trying to find ways to tap into these brand enthusiasts and have them be a bigger part of research and the company's overall retention efforts. As Lapic sees it, there are a bunch of new initiatives afoot, but the goal is on one big thing. "We have done a lot of work, really focusing the team on what's going to make a big difference in the brand and the growth story," she said. "First and foremost, it's all about building this brand awareness."
This week's Modern Retail Rundown starts out with an analysis on why digital fast fashion players like Shein and Temu lose money on orders despite their popularity. Next, recent earnings reports show that dollar store chains like Dollar General and Dollar Tree are struggling as customers cut back on spending. Finally, we take a look at big companies like PepsiCo. continuously raising prices to increase profits, even as product demand declines. Stories cited:
https://www.wsj.com/articles/fast-fashions-curious-comeback-8a5516c5
https://www.wired.com/story/temu-is-losing-millions-of-dollars-to-send-you-cheap-socks/
https://www.cnbc.com/2023/06/01/dollar-general-dg-q1-earnings-report-2023.html
https://www.cnbc.com/2023/05/25/dollar-tree-dltr-earnings-q1-2023.html
https://www.nytimes.com/2023/05/30/business/economy/inflation-companies-profits-higher-prices.html
Voyage Foods envisions a world where the most popular food products aren't reliant on their source ingredients. And it believes business-to-business is the best way to reach its lofty goals.The company, which is only a couple of years old, currently makes peanut-free peanut butter spread, cocoa-free chocolate and coffee-free coffee. The idea is that these are some of the most popular foods in the world, but they all carry their own allergen, environmental and political baggage. CEO Adam Maxwell joined the Modern Retail Podcast this week and spoke about Voyage's trajectory.Voyage is different from other brands for a few reasons. For one, it isn't targeting wealthy consumers looking for food alternatives. Instead, it is making competitively-priced products in the hopes that it can reach the masses."The people who need food tech and these kinds of food tech solutions aren't rich white people in San Francisco or New York City," Maxwell said. "It's the parts of the world that can't afford the real thing."That is, cocoa and coffee are expensive commodities and Voyage thinks it can replicate its flavor more cheaply.Voyage first started out online, but just launched in Sprouts supermarkets a few weeks ago, and is hoping to continue expanding its retail footprint. But Maxwell said the real business plan is to focus on B-to-B. He hopes to partner with large CPG brands who want to expand their flavor offerings in more sustainable and allergen-friendly ways. For example, an ice cream company could partner with Voyage on a peanut-flavored ice cream that people with peanut allergies can enjoy.Grocery, he said, is a way to initially build the brand. "Retail is a small function of what this business will be," he explained. "It's the easiest, fastest way to get to market."The company is still small -- it raised a $36 million Series A last May. But it hopes to ink key partnerships to continue its growth in the coming hear, with the plan to become a CPG powerhouse."We're bringing our next facility online, around this time next year," he said. "We'll have around 100 million pounds of annual capacity."
Livestream shopping has yet to hit true mainstream levels in the U.S. but Ntwrk thinks it can help. The platform has been around since 2018, and says it has doubled in size every year since launch. Ntwrk's approach to livestream commerce consists of a combination of brand, retailer and celebrity partnerships, along with limited-edition drops. As Aaron Levant, Ntwrk's CEO, described it, the idea at inception was to create a "live, engaging, entertaining platform where some of the biggest brands and celebrities in the world are dropping exclusive products creating that kind of FOMO and tune in moments that you feel like you can't miss -- and things sell out fast." Now, he went on, "we've done that at scale -- and now we've gone much beyond that we've moved into new categories, new verticals, new supply side of the product." Levant joined the Modern Retail Podcast this week and spoke about Ntwrk's growth and ambitions, along with the overall U.S. livestream shopping market. One of the early inspirations for Ntwrk was the game show app HQ; "Once or twice a day, you get a push notification. And people would tune in at mass and be highly engaged. And I wanted to take that same ideology, but apply it for a product drop," he said. Levant has a background in fashion and streetwear, and those past professional connections helped give Ntwrk its initial cultural cachet. Leveraging past celebrity relationships, he said, "allowed us to build a pretty big audience base very quickly for very cheap because of these relationships we had." The platforms has featured drops from brands like Nike as well as celebrities like Billie Eillish and Odell Beckham Jr. It's this direct relationship with the brand or creator that Levant said makes Ntwrk successful -- and different from competitors. "We're not a peer-to-peer platform," he said, "not just anyone can sign up and start using our tools to sell." While Ntwrk is still seeing growth -- and is expanding to new categories like collectibles and toys -- it still represents a niche market in the U.S. Levant, however, still thinks the U.S. will catch up with other countries like China where livestreaming is more prevalent. "Their use and adoption of intuitive mobile-first technology is still drastically ahead of us," he said. "I think it's just a few years before we catch up."
PetSmart is trying to maintain its dominance as a leading pet retailer. The privately-held company, which has been around since 1986, reportedly brought in $2.5 billion in revenue in the second quarter of this year. But the retailer is also trying to stay relevant with its shoppers and find new ways to engage them. Stacia Andersen, PetSmart's chief customer officer, joined the Modern Retail Podcast this week and spoke about her role and the evolving pet space. PetSmart is not a startup by any means. Its loyalty program boasts 55 million members, and it works with a variety of talent, like HGTV's Nate Berkus and Jeremiah Brent. But the landscape is getting more competitive. With that, Andersen said PetSmart has been evolving its marketing strategy. "We evolved our brand voice most dramatically probably a couple of years ago, when we went back and looked at our customer base," she said. "Our brand voice evolved from individually marketing different sales or individually marketing services … to this overall brand platform and voice about why customers do what they do." The idea behind it was to connect with customers. "This is really what our brand voice is about," she said. "It's far more emotional, it's far less transactional." With such a large business, figuring out the customer profile becomes difficult. But Andersen said the retailer has figured out a few things. For one, most of PetSmart's customers are female; they often have multiple pets; lastly, they're often from families with children. Understanding this overall profile, Andersen said, has helped PetSmart refine its overall marketing strategy, as well as its loyalty plan. One of Andersen's most important mandates is establishing a retail presence that is more than just a place to buy pet food. With that, she's been leading various campaigns and partnerships to make the company more of a lifestyle brand. The idea isn't just to grow sales, but to do something deeper and give the brand more credibility. "There is a buzz factor," she said, talking about PetSmart's influencer partnership strategy. "There is a wow factor. And it also lends credibility to our own design."
Bala Footwear is the latest apparel brand going after working professionals. The company makes shoes aimed specifically at medical professionals. Co-founder Brian Lockard worked at Nike for nearly five years. And the ethos of that brand informed Bala's thesis. "At Nike, one of the phrases that was so important that we always used was: Always listen to the voice of the athlete," said Lockard on the Modern Retail Podcast. "And we've decided we would build a company where we always listen to the voice of the health-care professional." On this week's program, Lockard spoke about how he's grown the brand, which first launched in 2020, as well what he's planning for the future. So far, the company has raised over $2 million in venture capital, saw $4 million in revenue its first year and says that sales continue to grow month-over-month. The idea behind Bala is that essential workers like nurses are on their feet for most of the work day. Yet, there's no footwear that's designed with that in mind. Some nurses wear clogs for comfort, others wear running shoes for support. But both of those items have drawbacks to nurses. To get a sense for their needs, Lockard interviewed many members of the health-care community. This served both a product research and marketing function. "What's really cool about the health-care marketplace is how tight knit the community is," said Lockard. "If you reach early adopters and they drive word of mouth -- they're always around colleagues." With this, Bala has its own rotating group of health-care professionals it leans on for product development and marketing outreach. "They're involved in telling us where we should be showing up, from a marketing perspective," said Lockard. While Bala is sold predominately online, the company is now slowly seeking out other sales channels. It's inked a few retail deals with select shoe stores and is looking into other possible partnerships. But, according to Lockard, he is still focused on making sure the brand doesn't grow too quickly. "One of the worst things that can happen is getting 100 new retail locations overnight," he said.
Levi's Latin American business is growing -- but it's very different from its Northern counterparts. The apparel brand's svp and managing director of Latin America, Rui Carlos Da Silva Araujo, spoke on the Modern Retail Podcast about how the company approaches this part of the business -- and its overall approach to DTC. This episode was recorded live at the Modern Retail DTC Summit held in Miami. Levi's Latin American business grew by about 70% in the first quarter of fiscal year 2022, and Araujo said the company plans to continue growing and opening more stores. While the brand's digital business is continuing to grow, Araujo said stores remain one of the most important sales channels. "We see this opportunity still in Latin America that people want to go to the physical stores," he said. Currently, Levi's has 400 stores in the Latin American region, and the company is in the midst of an overhaul of its entire experience. It recently unveiled its Indigo store concept, which Araujo described as a way to showcase Levi's as lifestyle brand. It features fewer products and more experiences, such as in-store tailor shops. "The stores are really happier, the product is different," Araujo said. He hopes to have 50% of the Latin American stores to feature the Indigo model within the next two years. But no one store is the same. That's because Levi's customers are different not only between regions, but also between countries. Latin American customers, he said, "are much more European-driven -- south European, like Spain in Italy -- much more than the U.S. in some countries in Latin America. So the Colombians, the Argentinians and the Brazilians, they are really, really fashionable." Even with the emphasis on stores, Levi's is still focusing a great deal on digital. It has its own DTC sites for all the countries it serves, but local marketplaces like Mercado Libre also play a big role. "You need to have your mark, you have your own sites," he said. "But you need to have your marketplace players there." Even so, a big focus for Levi's right now is thinking about new retail concepts that customers will want to hang out in. Said Araujo, "we are seeing this momentum and the physical retail is working for us. So I think that's a huge opportunity."
Outlines is trying to be the Quip toothbrushes for bathroom and home cleaning products. The company launched earlier this year with a shower liner subscription service. The idea is that customers can buy the shower liner along with other accessories. Then, every few months they can pack up their used musty one, send it to Outlines who will recycle the material and then send another brand new clean liner. But Outlines isn't stopping at shower liners -- the startup is launching both a replenishable body scrubber and a toilet brush soon. "I knew that if I was to replace [a product like a shower liner], it was simply going to landfill," said Luke Young, one of Outline's co-founders. "So I would live with it for far too long -- and you wouldn't live with dirty sheets or any other product like this in your home." Young and his fellow co-founder Meg Murphy joined the Modern Retail Podcast this week and spoke about the genesis of Outlines and how the direct-to-consumer business is trying to grow and get its products into new homes. Both Young and Murphy were working in DTC before Outlines. Young was working in adtech for a U.K.-based DTC company that sells education products, and Murphy was also working at a British CPG startup that made glue products. They met at a coworking space and got to talking about the state of shower liners, and decided to launch their own company. Thus, Outlines was born. The company launched its first product at the beginning of 2022. The big question was whether or not a humdrum product like shower liners would work with a subscription model. As the two founders put it, it's all about education. The website focuses specifically on detailing how much waste is made because of thrown-out used plastic. And the hope is that people will align with the sustainability ethos around the company. The strategy to get eyeballs was to be available on the company's website first and try to find new customers who were searching online for new products like a shower liner. "I think we made a lot of mistakes in the first couple of months of what we were bidding on [and] where we were specifically marketing, but it was really just a process of testing and learning," said Young. Now that the two founders feel confident in the branding and messaging, their expanding the product base as well as looking toward new sales channels. And those announcements may be on the horizon. "We love retail, we're very excited about it," said Murphy. "we've spoken with some buyers to get some early feedback -- they're definitely ready for a refresh and a new brand to come in."
Cloud Paper is trying to get more people -- and businesses -- to try its products. The company makes bamboo-based tree-free toilet paper. When it first launched in 2019, co-founder Ryan Fritsch said the goal was to grow via business-to-business partnerships by selling to businesses like corporate offices and hotels. Its first major account was a Seattle WeWork. But then the pandemic hit, and office buildings shut down. As a result, Cloud Paper had to pivot its business to be consumer-facing. Two years later and the company is continuing to see year-over-year growth. But it's no longer a business focused solely on supplying toilet paper to other businesses. "Consumer sales are still driving the majority of our sales today," Fritsch said on the Modern Retail Podcast. The idea behind Cloud Paper was to make an environmentally conscious toilet paper. "Toilet paper hasn't changed much for many, many decades -- and it hasn't changed much, especially in terms of sustainability," said Fritsch. "It's very much lagging behind other household goods." With this in mind, the company decided to use bamboo as its source since the plant is both abundant and renewable. In addition, Cloud Paper decided that its consumer-facing business needed to be subscription-only when it first hit the market as a way to rope in repeat shoppers. The bet seems to be working out, even after the coronavirus-induced toilet paper mad dash. The company recorded a huge sales bump in 2020, but didn't see much churn after inventory leveled out. "We actually didn't see much change at all kind of once things got back to 'normal,'" Fritsch said. But even though the subscription business is healthy, Fritsch is dubious of it as a one-size-fits-all model. He's seen many subscription companies come and go -- and it's usually because the product didn't fit with the business plan. "Everyone wants to launch a subscription box or a product on subscription," he said. "But it was our idea early on that most products out there don't need to be subscription." Luckily for him, toilet paper does seem to be working -- at least for now.
Better & Better is taking an unconventional approach to oral care. The startup makes a toothpaste infused with vitamins -- a way to kill two daily-needs birds with one stone. But educating shoppers about how the product works is easier said than done. On the Modern Retail Podcast this week co-founder and CEO Vladimir Vukicevic spoke about how he's been positioning the company. "I [wanted] to build something that's really personal and near and dear to my heart," he said. "Better & Better stems from my personal desire to not have to take any more vitamin pills or supplement pills ever again." The big question for Vukicevic was, at first, whether or not Better & Better could make a product as he imagined. The second was if people would buy it. It took a few years, but both questions were answered. After hundreds of test formulas, Better & Better's first vitamin-infused toothpaste went to market. The company manufactured 20,000 units in early 2021 and sold out within six months. With that under its belt, the company has expanded into new products like toothbrushes and floss, and raised a $4 million round of funding last March. Better & Better is now using that to expand its product offerings and toothpaste varieties as well as to go into new sales channels. For example, Better & Better entered Amazon after focusing initially on its DTC website. According to Vukicevic, the company realized that it needed to be sold at the places customers most often bought their essentials. "Amazon is the starting point for a lot of people -- for most people -- when it comes to these types of products," he said. Since launching on Amazon earlier this year, it has become one of Better & Better's fastest-growing channels. The focus now, according to Vukicevic, is to continue expanding Better & Better's product line as well as get into retail stores. The last few years, he said, have been a test to see if people want such a unique oral care product. Said Vukicevic, it's clear that people do. With that, he said, "hopefully we'll be in retail by the end of this year."
Grocery and CPG are certainly hot areas for startups, but it hasn't always been that way. Brooklyn Delhi, a company that makes Indian-inspired sauces and condiments, has been in the business since 2014. This week on the Modern Retail Podcast, founder Chitra Agrawal talked about growing the business -- and the current DTC landscape. Brooklyn Delhi began as a predominately local company. Agrawal got laid off from her marketing job but had already been building a following as a food blogger. It seemed only natural to try her hand as an entrepreneur. In its early years, Brooklyn Delhi made its achaar products, an Indian pickled condiment, and mostly sold it locally in New York City. The brand started getting on shelves in small grocers, as well as became featured in trendy Brooklyn restaurants. "We always pictured our product on store shelves one day," said Agrawal. "But to get there, I think we first knew that we needed to start at this very local market level to kind of understand what was it that people thought about the product." It took some time, but the strategy worked. Today, Brooklyn Delhi is available nationwide in stores like Whole Foods, as well as available on its direct-to-consumer site and with meal kit services like Blue Apron. And it's expanded its products beyond its hero achaar product to simmer sauces. There have been some road bumps. For example, Agrawal said Trader Joe's was in talks with Brooklyn Delhi for a potential private label partnership, and then she noticed that the retailer ended up making its own achaar product that looked suspiciously similar to hers. Agrawal decided to go public about what she viewed as blatant product copycatting. "I wanted to say something because I wanted people to know that we did not pack the watered-down version of Trader Joe's," she said. "Because so many people had come to us and they were just like, 'this doesn't taste right, is this your product?'" Even so, the company has moved on and moved up. The focus now, said Agrawal, is to grow the DTC arm as well as expand its product line. Currently, Brooklyn Delhi has 11 SKUs, but Agrawal hopes to have as many as 15 launched in the next year. "There's going to new a lot of new product coming out for Brooklyn Delhi," she said.
Evite has big plans to be more than just a free digital invitation service. The online platform has been around since 1998, providing essentially the same service: online invitations. But the business has had many ups and down. Two years ago, David Yeom and George Ruan purchased the business -- Yeom hails from e-commerce businesses like the Honest Company and eBay; Ruan co-founded Honey. Yeom joined the Modern Retail Podcast this week and spoke about the company's transformation. "Evite, from a user activity standpoint [and] from a financial standpoint, has never been healthier, more profitable in its history," he said. The two believed Evite was in need of fundamental changes. For one, the company's revenue was long ad-based. But, as Yeom said, that was "too much compromising on the user experience." Additionally, Evite's look wasn't current -- it looked dated, he said. "For a brand that has the history that it has -- is it still cool to the younger millennials and younger moms?" Yeom said. With that in mind, Yeom implemented some major changes. For one, he wanted to focus more on commerce than ads. Now, the company both facilitates gifting -- it has become Amazon's biggest gift affiliate -- as well as earns revenue from premium digital invitations. True, 90% of Evite's customers still opt to use free cards, but 10% now shell out for a nicer design. In addition, Evite changed its entire look and feel. Before, the company had outsourced most of its design. "The priorities were just a little baffling," Yeom said. Now, it's all done in-house and the company has a more up-to-date look and feel. The hope is to attract more younger users -- Yeom said that one-third of the invites sent today are for children's birthday parties. With all this, Evite has been able to grow its business. It turned a profit in 2021 and now has big international ambitions. The company plans to expand to other English-speaking countries like Canada, Australia and the U.K. "We're a party company, and Americans aren't the only ones that want to party," said Yeom.
Nearly five years ago, Aaron Luo co-founded the DTC luxury bag company Caraa. Now, his latest venture zeroes in on Spanish meats. Luo and fellow Caraa co-founder Carmen Chen Wu launched charcuterie brand Mercado Famous this past summer. Both Luo and Chen grew up in Spain, and have fond memories of tapas hours with friend and family. "The mission behind Mercado was to bring not only the best we can find in Spain when it comes to charcuterie, but change the narrative around charcuterie a little bit," Luo said on the Modern Retail Podcast. "We just felt that there's a newer and younger audience that's somewhat neglected." The company sells meat products ranging from an $11.99 serving of sliced jamón to a $300 entire cured pork leg. While the company is selling predominately through its website right now, Luo said he has ambitions to grow other channels too. "I think wholesale will have a bigger play in Mercado Famous than Caraa, for sure," he said. "The goal for the brand is to go mass to a certain extent, if we can." True, handbags like Caraa's are made from leather -- the same material many meat products come from -- but the businesses are very different. Still, Luo said the earlier experience helped prepare him for this latest one. "The reason we felt very confident starting Mercado Famous back in 2018 is all the scar tissues and the learnings we've had in the DTC world," he said. That is, through Caraa he learned the ropes of brand storytelling and customer acquisition. And he's using all that knowledge to help grow Mercado Famous. Some things are very different, however, than they were when Caraa first launched in 2014. For one, the VC environment is very different. That being said, Luo has long believed that most retail brands are not best for venture investing -- and that thesis, he said, is being proved today. "I think it works for tech," he said, but "this is not a tech company." For now, Mercado Famous is still figuring things out. Luo has big plans to ink wholesale deals and other types of partnerships. But, he admits, the brand is still a baby; "we're not even crawling, just moving our heads."
For the Swiss athletic apparel company On -- known by many as On Running -- the focus has always been on being both premium and exclusive. According to co-founder Caspar Coppetti, the concept when it first launched in 2010 was "we want to be the most expensive product on the market." On's shoes retail for between $130 and $200 a pair. It took a few years, but the strategy worked out. In its most recent earnings report, On's quarterly revenue hit around $307 million and direct-to-consumer sales represented 38% of its business. Coppetti joined the Modern Retail Podcast this week and spoke about how the brand, best known for its running shoes, has tried to focus on growth while maintaining its brand integrity. "When you have a strategy, and it's a premium strategy -- it's a very simple strategy," said Coppetti. "You have to always keep supply below demand. Nothing builds desirability, like scarcity, right? And you have to be 100% buttoned up and prepared to walk away from things that could be good for business in the short-term but would hurt the brand long-term." For the first few years, this made things difficult. On walked away from some retail partnerships that likely would have jumpstarted business. But now, Coppetti said he's happy the company was so selective because it cemented On's name as a premium product. That helped make it a brand that athletes sought out. Tennis star Roger Federer, for example, is not only a spokesperson for the brand but an investor. And even beyond Federer, On is trying to take its athletic partnerships even further by offering new types of sponsorships and contracts. "The sponsorship model is broken," he said. "It's basically a duopoly, where two large brands control the market and they play very ugly games at the cost of the athletes." Despite the brand's early focus on exclusivity, Coppetti also spoke about the need to leverage key wholesale partners. The company is sold in thousands of individual running boutiques, as well as larger retailers like REI and Foot Locker. "We felt we needed the validation, not just [from] the best runners but also of the specialty shops," he said. Even with DTC representing over one-third of On's business, the company still focuses on growing retailer partnerships. What's more, Coppetti said that the two businesses aren't antagonistic; "they are very complementary and additive to each other," he said. "When we start working with a retailer, our online sales will go up in that area." Now, On is on an upward trajectory and expanding into new products and regions. According to Coppetti, this success was thanks to the company holding true to its values and keeping the big picture in mind. "It took a lot of discipline. But, you know, we're Swiss -- we're known for discipline," he said.
Home goods sales may be cooling, but Fernish is still seeing growth from furniture rental. On the Modern Retail Podcast this week, Fernish co-founder and CEO Michael Barlow joined to speak about the state of the industry and how he's been growing his company. Fernish first hit the market in 2018 as a furniture rental service. The idea was that many young professionals often moved to cities and were expected to move into new apartments and completely furnish them. For a monthly fee, they get access to nice items to showcase in their home, and are also given the option to rent to own. "This is a problem that's indicative of the apartment renter in urban metros that's moving every one to three years," said Barlow, "between finishing college or secondary education and ultimately settling down." But more than just making it easier to move from city to city, Barlow insisted that there's a sustainability angle to this business too. "You can call that flexibility, you can call that convenience, you can call that sustainability -- those are the pillars that we've defined our business around, which really marries the service economy and the subscription economy to a very legacy and old asset class," he said. So far, things are working out. Fernish first launched in Los Angeles, but has recently expanded to the East Coast in cities like New York City and Washington, DC. The company has raised $75 million to date and says that its revenue increased by more than 17x over the course of the pandemic. When Fernish first started, it sourced from other high-end retailers like Crate & Barrel. Now, most of its furniture it makes in-house. "We prioritize North American manufacturers now," Barlow said. But part of what has made the business work, he said, is its focus on curation; "We offer a couple hundred [products] because we can go really deep with our suppliers and our manufacturer partners on core SKUs." The big question is whether growth will slow. Some bigger players like Wayfair have reported rough earnings -- and the retailers like Target that invested in home goods are having difficulty selling inventory. Barlow says those headwinds haven't hit Fernish yet. "I can tell you, June was our best month ever, a little bit stronger than July in terms of new business added. And July was our third best month ever," he said.
Express was a ubiquitous mall retailer, but it's now trying to become much more than that. CMO Sara Tervo gave some insight into this brand. This week, on the Modern Retail Podcast, Tervo spoke about the Express's evolution. The apparel retailer first began in 1980, and was known as a mall mainstay. Now, Tervo has spent the last three years trying to refresh the retailer's image. "When I joined the brand, we were needing a transformation," she said. Slowly but surely, that change has started to happen. "What we really had to do was rebuild our approach to content, understand what was most relevant and connected across all the different platforms, rebuild our budgets and constantly iterate, learn and generate more content -- in an effort to connect and create conversation [as well as] to create a more relevant brand," Tervo said. Much of this focus was about livening up the company's social presence, as well as figuring out the types of inventory that worked best with Express's customers. Additionally, Tervo realized the company couldn't be considered a retailer dependent on promotions. "We needed to pull back and drive value in different ways than just discounting," she said. So far, said Tervo, things have been going well. At its second-quarter earnings released last May, net sales increased 30% year-over-year to $450.8 million and e-commerce revenue grew 21%. Right now, said Tervo, the company is focused on growing its e-commerce revenue to over $1 billion. "We have bold goals for that channel," she said. Beyond that, Tervo is laser-focused on figuring out customer acquisition in this wonky marketing environment. The big thing she's learned over the last few years is to be authentic -- even tapping store associates -- and to try out everything. "We're always curious about beta partnerships and different ways to test and try new ways to connect with customers," she said. In the end, Tervo has unveiled a new Express -- one that's focused on digital and resonating with customers. Even so, Tervo doesn't think malls or in-store retail is dead. "I'm sure you've heard a lot of different people say that you can never replace an in-person experience. There's just absolute value in that," she said. "What's dying is probably bad in-store experiences or malls."
The coffee business changed overnight when the pandemic first hit, and Counter Culture Coffee has been rolling with the punches. This week on the Modern Retail Podcast, Counter Culture founder and president Brett Smith spoke about where the industry is going and how his company has evolved over more than two decades. Counter Culture, which first launched in 1994, was one of the first roasters to focus on direct trade, meaning it took great pride in working directly with coffee growers and suppliers. "What we felt was important was to go down that supply chain and really understand the source, the farmers," Smith said. "Because we felt like there was an opportunity to, in essence, have a conversation with the suppliers." At the time, roasters directly sourcing from growers and including them in their consumer-facing marketing was unheard of. But it's now become commonplace, and Counter Culture was one of the early businesses doing such practices. According to Smith, the fact that coffee companies like Counter Culture have become known for their ethical sourcing is a nice after-effect. he didn't intend for it to be such a big marketing hook. "The litmus test is are we going to do this if no one knows about it, will we still do it?" he said. Now, the market has changed. It's table stakes for most higher-end coffee roasters to tout their direct supply chain relations. What's more, the way people buy coffee has changed. Counter Culture first grew by partnering with restaurants. Then, it expanded to coffee shops. And it evangelized its business via local training centers it opened around the country. Here, baristas can stop by to learn about the products, and even average customers can stop by to get a sense for what the business is about. Today, Counter Culture has over a dozen training centers in cities like New York, Los Angeles and Chicago. When the pandemic hit, Counter Culture's wholesale business cratered by 90%, but its direct-to-consumer revenue soared. Now, things are leveling off. But Smith said that he is focused on new areas of growth -- including airports and grocery. All of this means the company is still growing, but Smith is trying to figure out how to handle the growth sustainably. For example, he's expanding his facilities to better handle grocery and DTC orders -- which were straining the business due to their different packaging sizes. "I think that the growth question is, ultimately, it comes down to working hard to grow sustainably. Would we all like to double every year? Yeah, in a certain way. But you got to understand what that means," he said. "You got to understand where is that going to create pressure? Where's that going to potentially compromise a long-term relationship?"
The eyeglasses industry is very competitive, but EyeBuyDirect is focused on cornering the market via affordability. The EssilorLuxotica-owned company has been around since 2005 and its primary focus has been on value: a pair of frames from EyeBuyDirect can be as cheap as $6. This week on the Modern Retail Podcast, CEO Sunny Jiang spoke about the company's trajectory and how she's been steering the ship. Jiang has been at EyeBuyDirect for 15 years -- she first took a job there when she was fresh out of university as a finance controller. She's risen the ranks ever since, going from operations director to general manager and then ultimately becoming CEO in 2017. "Since I've become CEO the company has grown nearly 300%," she said. EyeBuyDirect was one of the first online-only glasses players. Though Zenni is a few years older, Warby Parker is much younger. And, according to Jiang, the way the company is able to sell glasses so cheaply is because of its business model. "we manage everything from the beginning to the end," she said. This includes manufacturing, logistics, even returns. "This allows us to have the ability or possibility to forward a lot of profitability directly to customers." When EyeBuyDirect first launched, there were hardly any digital competitors out there. Now, the playing field is a lot more intense, thanks to leaders like Warby Parker and America's Best. Over the last two years specifically, Jiang said that a number of competitors have also been upping their digital games. Still, she's confident that the company can continue to grow. According to her own competitive analysis, the top three or four eyeglass players only account for about half of the market. To her, that means she can continue taking market share and finding new customers. To do that, EyeBuyDirect recently underwent a rebrand, upgrading the look of the website and the company's marketing materials -- including its logo, fonts and overall imagery. On the program, Jiang described the entire process. "One of the reasons why we were thinking to rebrand is that we found the brand or the company didn't have a clear purpose," she said. With that done, Jiang is currently crafting a five-year plan for EyeBuyDirect's growth. This means boosting its customer service options and also trying to up its delivery speed. "The category will continue to grow, and I will make sure that EyeBuyDirect will beat the benchmarks."
The next billion-dollar brand probably won't be a DTC startup. That's according to Jason Bornstein, principal at Forerunner Ventures. He's out there trying to look for the next big business to invest in, and he's not so sure online-only brands are the best way to go. Instead, he's focused on bigger innovations. Bornstein joined the Modern Retail Podcast this week and spoke about his background, investing thesis and the areas on which he's focusing right now. "What we're really looking for here are new business models -- innovations -- on the tech side," he said. "So is there technology underpinning the business?" Bornstein has been in digital retail for decades, hailing from early DTC entrants like Bonobos. And while those brands caught investors' eyes and were able to grow using a direct-to-consumer-only model, Bornstein isn't sure that will fly anymore. "To be successful as a brand -- as a digital brand… there's going to be fewer venture dollars going into those businesses," he said. In his eyes, VC doesn't work well with most consumer-facing brands unless they have a real differentiator that the market has never before seen. And the tricks that earlier brands used to grow customers aren't enough to merit billion-dollar valuations. Instead, Bornstein is looking at new ways traditional business models are being upended. He named digital health care as one example, along with the rise of resale. But beyond that, Bornstein said he's also interested in the ways companies find customers and keep them. In the past, he said, 'there was very little focus on loyalty and on retention." Now, "I think we're going to see the next generation of brands be successful by focusing on that." Does that mean Bornstein and Forerunner aren't going to invest in any of the new digital-only retail brands? Not exactly. But, he said, "it's going to be fewer companies than we've done in the past."
Prose is a hair care company in growth mode, but it's also laser-focused on remaining a responsible brand. One of the people behind this push is Helen Nwosu, the company's vp of social impact. On this week's episode of the Modern Retail Podcast, Nwosu spoke about how she juggles the needs of a scaling brand while maintaining Prose's core values -- which include being transparent about its sustainability efforts, providing a safe and equitable workplace and making its products accessible to more people around the world. "My role is really tied to the fact that my founders... all wanted to have social impact and business as a source for good clearly embedded in the business from the get-go," Nwosu said. That doesn't mean that Prose, which was founded in 2017, isn't riding a rocket ship, business-wise. The company, which sells custom hair products, has seen revenue grow 3x for three years in a row. It brought in $80 million of revenue in 2021. According to Nwosu, who has spent her career working at the intersection of social impact and business at companies like Louis Vuitton, the way to keep a company honest is to work beyond a marketing lens. For example, Prose has been a certified B-corp since 2019 -- which means that company has to prove certain elements of social and environmental performance. What's more, Prose is also a public benefit corporation. "What's interesting is that it makes our public benefit a mandate to our board," said Nwosu. That is, Prose doesn't have to just write nice-sounding marketing copy about why it's acting both sustainably and ethically, but it was to report on all of its initiatives to its board and external organizations. "It's part of our legal charter," she said. "It's not just something that we put on our website." With that, some days she's working on front-facing activation and other days she's poring over technical documents. "It's really technical," Nwosu said, "I do like that aspect of the job because that's where the magic is." Another part, she said, is making sure the entire company is in lockstep with its values -- including how the products are made. For example, all of Prose's manufacturing happens in Brooklyn. "In this day and age, where most manufacturing companies -- specifically for consumer good -- are moving outside of big urban areas, we're allowed to provide really great jobs," Nwosu said. Right now, Nwosu is working on many projects -- including trying to cater to wider swathes of customers as well as keep Prose's many sustainability efforts up to date. For example, the company has sharing resources with other beauty B-corporations, allowing them to "really talk about transportation, logistics and ingredient sourcing." Those, she said, "are probably the three biggest challenges for a company of our size." So far, Prose says, it has reduced its carbon intensity by 67%. "At the end of the day, three times growth means we're making more product [and thus] we're using more of the planet's resources," Nwosu said. "So that has to be something that I mold the company to do mindfully -- let's build each product that we build better. So that's where my focus is really."
Maev is a startup that believes dogs should be eating as well as humans. The company first hit the market in 2020 and has been steadily growing ever since. For its first year in business, it was faced with the problem of selling out of products. This led it to bulk up its manufacturing and raise a $9 million round of funding. Now, Maev founder and CEO Katie Spies says the company sees sales growth of about 15% month-over-month. She joined the Modern Retail Podcast and spoke about the company's growth and the overall premium pet food market. Spies doesn't have a background in pet nutrition, but she did work as a dog walker to learn the ins and outs of what pet owners need. "I spent a year as a dog product dog walker," Spies said. "And I was getting to know a lot of consumers and figuring out what their headaches were." This time on the street with dozens of dogs helped Spies coalesce on a business plan for Maev; the company would sell human-grade dog food online. After two years of beta testing and figuring out the proper product line and formulas, Maev hit the market in late 2020. It was a good time to launch a dog food brand. During the first year of the pandemic, one in four Americans got a dog, Spies said. "Pet ownership skyrocketed, and more and more people started purchasing pet products and grocery products online," she said. So Maev didn't so much have a problem finding customers. Instead, the problem was in making sure it could keep its supply chain going and get products to customers. "The trouble was really just keeping inventory on the shelves in our facility and running a facility to continue producing product, despite Covid happening in the world," Spies said. This meant that Maev had to go from working in a test kitchen in New York to expanding to a contract manufacturer who could handle its demand. Now, Spies says the plan is to grow even more. While Maev is still only available online, Spies has her eyes on some new retail channels. "We started with just our own e-commerce site," Spies said, but "moving into [online] marketplaces is next on our list."
Jacob Zuppke’s tagline for his company is “cats keep pooping.” It's a blunt way to help people understand what his company does: Zuppke is the CEO of Whisker, the company behind the Litter Robot, an electronic-self cleaning litter box that retails for as much as $649. And, the tagline has born out; and the parent company is trying to expand beyond just litter boxes, with an automatic pet feeder and its own cat litter. The pandemic didn't slow Whisker's sales, and that's thanks to the Covid pet adoption boom. "We were already growing at a really exciting rate pre-Covid," said Zuppke on the Modern Retail Podcast. "I think that was just a little bit more gas on the fire." Whisker has been around for over two decades, but Zuppke joined the company in 2015 to help focus its digital strategy. Then, the company's sales were about 66% direct-to-consumer and 33% Amazon. Now, the company sells more via DTC -- but is actively expanding other channels, including a new retail partnership at 40 Hollywood Feed pet supply stores. "We are building a physical footprint to tell the story of what the Litter Robot is capable of doing," said Zuppke. But even with this retail expansion, much of Zuppke's focus is on growing digital sales and getting more people to know the Whisker and Litter Robot name. One lever Whisker has leaned especially heavy on is TV. "I think we as people that have learned to consume TV in a certain way, when we see something on TV, we tend to have a sense of trust for whatever reason," he said. With that, TV has become a very useful channel for brand storytelling. That being said, not all TV is the same; "We continue to find that linear performance better than connected," Zuppke said. For now, the focus is on growing the brand. For Zuppke, that's become a more challenging goal since there are now two brands: Litter Robot and its parent Whisker. While the former is the most popular product, Zuppke very much sees growth for other brands to bloom under Whisker. "We built our iPhone before we built our Apple," he said.
Digiday Media is proud to present The Return, a podcast about what the return to the office can look like as corporate America adapts to the new, not quite post-pandemic normal. The Return follows the staff at one Atlanta-based advertising agency through Covid outbreaks, as well as the highs and lows of transitioning to hybrid work after two years of pandemic lockdown and working remotely. While the future of work is still under construction, employees across the country are forging their own paths to determine what that future looks like amidst parenthood, corporate mandates, long commutes and an ever-looming pandemic. The Return is hosted by Kimeko McCoy, senior marketing reporter at Digiday, and produced by Digiday audio producer Sara Patterson. Listen to The Return on Apple Podcasts, Spotify, or wherever you get your podcasts.
Pistachio milk startup Táche has big plans to take on Oatly and its ilk. Founder and CEO Roxana Saidi joined the Modern Retail Podcast and explained how. Táche has been on the market for a little less than two years, but it has already begun making a real dent. The company has sold over 1 million units and has expanded its retail and coffee shop footprint nationally. According to Saidi, things are just getting started. The first hurdle, according to Saidi, was making sure she could build a viable business. She knew that she had a good idea with pistachio milk, as it was made in a more sustainable process than other milk alternatives like almond milk. "In 2015, [California was] experiencing our worst drought on record," she said. "At the same time, 99% of almonds that are consumed in this country are grown in California, where the almond trees require and soak up more water for the state than the inhabitants of California." Conversely, pistachios, she said, "require 75% less water than almond trees." And thanks to her family's connections to pistachio farms in the Middle East, she was able to have a direct source to the main ingredient. But even with all this, pistachio milk was expensive to produce, especially for a startup making a small initial order. Saidi realized she had to make something many people could afford. "I knew that if Táche was going to be priced at $10 or above, it actually wasn't a product I was going to pursue," Saidi said. "That was my threshold." Ultimately, Saidi was able to get it down to $7.99, which meant the idea had legs. The next step was figuring out production. It's easy to have an idea, but you actually need people to buy it. So for four years, Saidi made inroads with food professionals in the hopes that she would gin up enough demand to land an initial purchase. As Saidi described it, she saw the success of cult alt-milk favorites like Oatly and realized she too could create buzz by getting hip coffeeshop pick-up. Pre-2020, Saidi was able to get many cafés interested. But then the pandemic hit and everything changed. This pushed Táche's launch to November 2020. And with many cafés still shut at the time, the Táche team had to reconsider ways to get more people to try the product. "So we had to get really creative through various channels to drive trial -- marketing opportunities, donating a little bit of product to shops, anything and everything," she said." Now that most stores are back open, Táche is seeing much of its growth in the food service space. Saidi said that the plan for this year is to continue to focus on that; currently, the company gets about 50% of its sales online direct-to-consumer and 50% through its retail and café partners. But next year is when Saidi is going to focus more on bigger retail expansion -- Táche has plans to launch with some national players in the fourth quarter of this year. Once that really gets going, Saidi has big plans for scale. "I think food service will be our primary revenue driver this year," she said. "Next year, it probably will actually turn into retail. And then retail will continue to be the primary revenue driver from there." All this being said, the alt milk space is not what it was five years ago. "There's no denying that alt milk fatigue has become a thing because of how many options [there are]," she said. "But I think what has worked really well for us is two primary differentiating factors: one is on the health side, and one is on the sustainability side."
King David Tacos began as a Brooklyn-based taco cart and has expanded to dozens of locations, and has big expansion ambitions beyond New York City. According to founder and CEO Liz Solomon Dwyer, this is thanks to its persistent branding and ability to grow a rapt customer base. She joined this week's Modern Retail Podcast and spoke about the company's growth and ambitions. King David began in 2016 after Solomon Dwyer quit her job in advertising and made the bold move to go into the food business. She grew up in Texas and believed there to be a big hole in the breakfast taco market in New York. As she described, her father told her that she should open a taco stand in Times Square. "I thought that was an absurd idea," she said. Her father's response was that "it's just weird that they're not there. And it seems like so perfect for the New York morning." The idea stuck with her. It first began as a catering company, and then started an outdoor cart. Today, King David Tacos is available in over 60 retail locations, its own brick-and-mortar restaurant and even in the hot bar section of select Whole Foods locations. The most important aspect to get right, according to Solomon Dwyer, was the branding. Tex Mex food, she realized, had never quite made it in New York City -- and that's likely because of the way the restaurants messaged themselves. "I feel like part of the reason that breakfast tacos had struggled to take hold here was because everything was all Texas-theme, Southern-themed," she said "It's theme-y theme-y, gimmick gimmick." And for her, she wanted King David's to be more authentic. It helped, of course, that she had advertising experience in her back pocket. With this playbook, business is quickly picking up -- though Solomon Dwyer is still figuring out ways to evolve the overall model. For example, the tacos are now available in Whole Foods's hot bar, and she is trying to figure out a way to make her products stand out in a usually un-branded section of the store. "It's been a challenge," she said. But she does have one important piece of advice for people trying to learn the ropes; the most important way to build a business like hers is to become a cult. "The way you sell a lot of tacos is you become a destination," she said.
Maude is trying to redefine the sexual wellness space. The brand -- which sells condoms, lubricants and vibrators, in addition to other products -- has been growing its presence and business over the years. It first began as a direct-to-consumer brand, but is now sold in stores like Sephora. According to founder and CEO Éva Goicochea, the company is only getting started. Maude began as a predominately DTC business in 2018. But Goicochea said she focused early on getting the word out -- and making sure people understood the brand properly. This included getting press pieces out before launch, as well as reaching out to hotels to carry the products. "We found like-minded partners when it comes to hotels and made a giant list on Airtable and started reaching out to them," Goicochea said. What does like-minded mean? "We partnered with hotels that had that design-bent," she said. For those hotels, they likely already had say, condoms, but they hadn't yet found companies that branded sexual wellness products like Maude. For those hotels, said Goicochea, "[the products] needs to be high quality because there's this trust barrier." With this strategy, Maude has continued to grow. The brand is now available in 33 countries and is continuing to grow its product line. Much of its success, said Goicochea, is based in brand identity. "We had this thesis," she said, "that [intimacy products] should be approached in this really unified de-stigmatized way." This, said Goicochea, is resonating with customers. And now the focus is on growth -- albeit, profitable growth. With that, Maude is looking to expand its domain. The focus this year, she said, is on product launches and expanding into new markets. She added, "it's retail next year."
Temporary tattoos are no longer relegated to children's birthday parties -- they're becoming a bigger and more widely accepted part of the body part industry. Much of that is thanks to Inkbox, a Canada-based company that was acquired by Bic last January for $65 million. Inkbox's co-founder and CEO Tyler Handley joined the Modern Retail Podcast this week and spoke about the brand's growth and sales -- as well as the overall temporary tattoo industry. Inbox uses an active ingredient its founders discovered in a fruit in Panama that leaves what looks like a tattoo mark on users' skin for one to two weeks. But the company's products don't work like traditional temporary tattoo offerings that put simple designs on pieces of paper. Instead, Inkbox partners with both celebrities like BTS and famous tattoo artists to sell customers' designs -- as well as grow out its own marketplace of designs where the creators can take a cut of the sales. According to Handley, the majority of Inkbox sales come from its artist marketplace. "We have this artist marketplace with over 10,000 designs from over 700 artists from around the world who make collectively several million dollars a year selling tattoos on our platform, which we're always really proud to say," Handley said. It took some time to get to this point -- the company is now seven years old -- and much of Inkbox's success was thanks to inroads it has made with the tattoo community. For example, early on the company opened its own permanent tattoo shop as a way to get to know more artists in the industry. "We wanted to at least immerse ourselves in the authentic world of permanent tattoos -- to build more genuine connections with artists," Handley said. It seems the strategy worked out given the growing marketplace and the Bic acquisition. And now that Inkbox is part of a much bigger company, Handley has big plans for expansion. This includes retail partnerships and more deals with bigger celebrities. "We're at a stage now where we can't just be direct-to-consumer," he said. Currently, Inkbox is sold in stores like Urban Outfitters, but Handley has plans to expand further. But even with this growth has come some hurdles. For example, Instagram used to be Inkbox's primary acquisition channel. But recent privacy and algorithmic changes have made it much more expensive and less effective. "It was really disheartening to see the greed of Meta affect our ability to get our content in front of consumers," said Handley. "Essentially you have to pay to get in front of anyone there now." With that, now Inkbox is focused more squarely on channels like TikTok. "It's really authentic in terms of its entertainment and engagement. And it's a totally different way you have to approach it," he said. With all of this, even more expansion is on the horizon. "[We're focused on] getting our lifetime value and basket size up by releasing new products -- we launched subscriptions three weeks ago," said Handley. "And soon we're launching some other products that adorn other areas of your body -- let's put it that way."
Italic is trying to become a luxury brand in its own right. The company has been around since 2018 and has gone through many iterations. At the same time, the underlying model has remained consistent: Italic forges partnerships with the manufacturers of well-known brands like Staub and Samsonite and sells unbranded products directly from the facilities at a fraction of the price. While the company has seen growth over the last few years, it's changed some of its business mechanics. Most recently, for example, it decided to halt its membership-only model. This change, said founder and CEO Jeremy Cai, has positioned Italic for more success. Cai joined the Modern Retail Podcast this week and spoke about the company's latest approach. "Our strength really is in the business side," Cai said. "We've built a pretty strong supply chain orchestration platform... We basically had to build our own version of Shopify, our own version of a returns platform, our own fulfillment network and so on and so forth." But by building such a strong back-end comes the problem of how to define a company like Italic. In some ways, it's a marketplace that directly matches manufacturers with customers. That's, in fact, how Italic first marketed itself. Now, Cai has realized that customers simply don't see it this way. "For all intents and purposes, we are a brand," he said. "Because they don't really see or need to see what goes on underneath the hood." Going away from its membership-only model isn't the only big change Italic has made of late. A few years ago, Cai had big plans to expand to multiple categories -- he saw Italic as partnering with numerous manufacturers that manufactured many diverse products. Now, he's realized that curation is more important. "We can't simply expand rapidly for the sake of expanding supply," Cai said. If the products don't sell through, that leaves the manufacturers Italic is working with in a lurch. "We do have a tremendous amount of responsibility in terms of our agreements with our manufacturing partners," he said. That has made Italic think smaller and with a more curation-focused lens. "We started the year thinking we were going to launch 1,000 products," said Cai. "We'll probably launch 100." Another big change for Italic is its focus on organic growth and less reliance on digital platforms like Facebook. So far, things seem to be working. "We cut our growth spend by 5x from March to April this year, and our revenue grew -- and it's continuing," Cai said. "So it's kind of like, what were we spending money on in the first place?" With that is the larger goal of making Italic a prestige brand that isn't wholly reliant on one-off customer acquisition techniques. It's a focus that nearly every DTC brand faces right now. Over the next year, Cai said, he's dead set on "figuring out a path of growth into the future where we can continue to sizably grow the business without needing to solely rely on paid [advertising]."
The last few years have been a rollercoaster for travel companies. But Australian luggage brand July says business is now beginning to boom. "Things have changed, lockdowns have come to an end now -- 2021 was a progressive lift on that. And this year, in 2022, things are flying again," said co-founder and chief strategy officer Athan Didaskalou. Didaskalou joined this week's Modern Retail Podcast and talked about the brand's growth and expansion plans. July was first devised in 2018 with the intention of being a luxury luggage company that could take on both Samsonite and Rimowa. "[Rimowa's] acquisition from LVMH reinvigorated design and travel," Didaskalou said. "I'd be lying to say I wasn't a fan." Still, he believed that his company could take on the bigger name players in the industry. "We thought we could do it better," Didaskalou said, by making lighter bags with unique design features like curvier edges and personalized monograms. The first year of business, things went well. But then every luggage brand's worst fear materialized: the world shut down. "2019 was the official retail launch, and 2020 we were almost shutting the business down. It was really that drastic because we didn't have the runway of a few years under the belt in order to be able to survive a zero revenue year." One of the ways July survived the pandemic was by launching new non-travel products like drink bottles and backpacks. The other part was by going into new territories that eased travel restrictions earlier than Australia -- namely, the U.S. For Didaskalou, launching in stateside was an entrepreneurial dream. "I don't think there's any Australian business that doesn't fantasize from day one about launching in the U.S.," he said. "The people are there, the scale is there, the appetite is there for newness." Now, according to Didaskalou, business is humming and more products and markets are in the pipeline. But even though the company has its Australian roots, the United States remains the primary focus. "It's all about the U.S.," Didaskalou said. "We see the demand, we have made an impact. And we can't wait to just start making and delivering more products that get people excited."
Things got scary for Neighborhood Goods in 2020. "We went through layoffs and furloughs -- all sorts of challenging things," said co-founder and CEO Matt Alexander. "And we had just come into the year on a real tear, and it was just really gut-wrenching to suddenly be in that moment." But business has returned, and his updated department store model -- which has retail space in city centers like Manhattan, Austin and Plano and hosts a variety of brands in exchange for a revenue share -- is doing numbers once again. "Sales continue to grow and we continue to add more brands," Alexander said on the Modern Retail Podcast. Alexander joined Modern Retail for a live podcast recording at his New York City store in Chelsea Market during Digiday Media's Commerce Week. There, he spoke about changes to the business and how he's preparing for the future. While sales obviously dropped during the pandemic -- and the company had to close all of its stores for an extended period of time -- Neighborhood Goods was able to see some glimmers of light via its digital services. "Our stores are ostensibly their own warehouses. Local delivery, same-day deliveries, in-store pickup, things of that nature, we were able to offer that for products that were otherwise going to take weeks -- if not months -- to arrive with customers," he said. "And so that actually became a real driver for us." But now, digital is no longer the focus -- it's all about the store. Traffic, Alexander said, has picked back up to pre-pandemic levels and stores are more productive than ever before. In fact, he said the real issue he faces is too much traffic. "We're just getting an absurd amount of people to the point that it creates like a lot of challenges as to how you operate with it," Alexander said. Still, it's a good problem to have. Now, the focus is on growth. That could mean more stores, though Alexander he's still trying to figure out where that may be. It could be California, Atlanta, Nashville or even a smaller suburb, he said. But he's optimistic about the future of his business -- as well as the state of physical retail itself. "At the end of the day, the fundamental picture continues to improve," he said.
The e-commerce portfolio model has been getting a lot of press of late. And OpenStore thinks it may have cracked the code for finding and acquiring DTC brands. OpenStore launched in 2021, and the idea was the use proprietary technology to suss out which online brands have the most upside. It's raised over $130 million both in venture capital and debt. E-commerce brands can go to OpenStore's website and share their Shopify sales data with the portfolio company. "We've built an engine, powered by data science, that is essentially looking at the historical financials and the order history of the business, and allowing us to come up in relatively real-time with a price for the business, which we then present to the founder," said co-founder Michael Rubenstein. He joined the Modern Retail Podcast this week and spoke about the current state of e-commerce portfolio companies and why he thinks OpenStore is poised for success. According to Rubenstein, OpenStore is focused on aggressively growing its portfolio. Last year, the company said it had ambitions to make an acquisition a day. Rubenstein wouldn't confirm exactly how many purchases this company has made, but said "we have done dozens of acquisitions... We're buying companies very regularly at this point." So what is an ideal candidate for an OpenStore scoop up? According to Rubenstein, it's usually brands whose GMV is between $500,000 and $10 million. He sees OpenStore as a way for serial entrepreneurs who are tired of the current business to make a profitable exit. "They're ready for liquidity -- there's whatever it is that they want to go do next," said Rubenstein. It is, admittedly, a more difficult time for e-commerce businesses than it was a year ago. E-commerce growth is stagnating and inflation is making sales growth difficult for many brands. Still, Rubenstein thinks OpenStore is more than just a business glomming onto a recent bubble. Our plan is to own these businesses, grow these businesses, develop them and help them to realize their full potential," he said.
The key to DTC towel brand Weezie's success is staying in its lane -- or, bathroom. That's according to co-founder Lindsey Johnson who joined this week's Modern Retail Podcast. The company, which makes luxury bath towels along with other bathroom-related products like bathrobes and bathmats, has seen year-over-year growth and said late last year that it was on track to hit eight figures in revenue in 2021. "The bath towel is the hero product of Weezie, and we are going to stay in that world," Johnson said. According to Johnson, what has helped Weezie grow is the company's relatively conservative approach to growth. Other than a seed round, Weezie has remained bootstrapped -- and it's been very intentional about every expansion or new sales channel into which it's dived. Some of that is because of the very nature of the business. Weezie offers custom embroidered towels -- all of which are made and fulfilled in its own U.S.-based facility. Scaling such an operation is difficult, to say the least. "[Wholesale] is something we've always struggled with... because customization is such a big part of the business," she said. "While, of course, our products are wonderful on their own, it doesn't tell the whole story." Now, thanks to growth from the last few years, Johnsons is trying to figure out how to grow these channels while remaining true to Weezie's roots. Meanwhile, she's also trying to figure out where to expand to next geographically. Weezie currently has one store in Atlanta, which she says has been a successful sales driver and brand booster. With that, Johnson is also thinking about opening more stores, but added "it's not in the near-term roadmap." Put together, Johnson has big plans for the next few months -- but is also trying to make sure Weezie stays by its North Star. "I think it's a big year of just investing in the future," she said.
General Mills is known for being the company behind household name brands Wheaties -- but it's also trying to build out a robust DTC strategy. At the Modern Retail DTC Summit, held last week in New Orleans, General Mills' global e-commerce lead of DTC Carter Jensen took to the stage to talk about how he approaches his role. That conversation was recorded for this week's Modern Retail Podcast. Jensen isn't the usual CPG conglomerate leader -- he only joined the company about two years ago. "I come from a weird hodgepodge of startups and consulting and agency land for the last 10-plus years," he said. But this variety of hats worn has helped Jensen better conceptualize how such a big company can go about direct-to-consumer strategies. General Mills brought in about $4.5 billion last quarter -- and direct e-commerce represents likely a tiny fraction of that. This year, General Mills is on track to launch DTC campaigns with about 30 brands -- which he described as "exponentially" more than the launches from the previous two years. Still, Jensen said that DTC is an increasingly important part of the overall program at the company. "The vision of DTC from the top has shifted and changed," said Jensen. And a lot of that was thanks to the pandemic-led e-commerce boom. "We look at DTC now as not necessarily the end all be all, but a really important part of what we call the connected commerce journey." Different brands have different needs. For example, General Mills has upstarts from its incubator program -- and the company uses DTC tactics to gain helpful consumer fit data. The conglomerate also launches standalone websites for product drops, like it has for limited-edition Wheaties boxes. While General Mills does use e-commerce as a revenue driver for some brands, it is still very small compared to the company's vast distribution channels. And, at the end of the day, the company's playbook depends on each brand. "We lean on our brand teams, they are the brand experts. They're the ones who know their products, their partnerships, their consumers the best," said Jensen. "We come in with the DTC capability of knowing the tech stack, knowing what works, knowing how to ship products... we're the coach versus the quarterback, and we let them take control."
Bokksu, which connects U.S. customers with Japanese snacks, is still bullish on subscription boxes, according to its founder and CEO Danny Taing. The company, which first launched in 2016, began by offering a subscription box that featured Japanese snacks that were never before available in the U.S. Growth for the first few years was on the slower side, as the company remained mostly bootstrapped. Two years after launching, the company really started to hit its stride. And is now expanding beyond subscription boxes and launching its own marketplace. "In early 2018, we had about 1,000 subscribers, and in just one month, we grew that to over 3,000," Taing said on the Modern Retail Podcast. "It was because of this viral Facebook kind of campaign." With that growth, however, came some struggles. "The warehouse in Japan was not equipped to deal with triple the amount of orders," Taing said. "And that was way before I had a logistics team or director." But Bokksu was able to roll with the punches and still grow. The company has doubled its revenue and customer base every year since 2018. This came as other subscription box brands like Birchbox faced major headwinds. But, according to Taing, Bokksu never experienced subscription fatigue. "I think what helped was that we have a very strong underlying product that changes every month that a lot of people get a lot of value from," said Taing. "It's not faddy." Earlier this year, Bokksu closed a $22 million Series A round of funding, giving it a $100 million valuation. That happened after years of receiving nos from VCs. For Taing, it was validation that his company had staying power. With this cash infusion, Bokksu is focusing on its marketplace expansion. Still, Bokksu remains focused on its hero product. "Subscriptions are still the majority," said Taing. "That's our core thing."
For the kitchen brand W&P, it's been a good time for the home products space. This week on the Modern Retail Podcast, W&P president Kate Lubenesky spoke about how the company has evolved and grown. "We had great growth in 2020 and 2021," she said. W&P first launched 10 years ago with its first product: a mason jar-inspired cocktail shaker. Now, the company has expanded a great deal, with hundreds of different products including cups, cutting boards, cocktail kits and ziplock bag alternatives. "We've really refined our point-of-view to be equal parts function and design," said Lubenesky. With that, W&P has figured out exactly what its brand voice is; "We don't want to be everything to everyone... we're really singularly focused on kitchen products." Lubenesky joined the company in early 2020, right before the pandemic began. She hailed from kitchen product stalwarts like Oxo. "When I walked into the door, we were really at this fantastic inflection point as a business where we had this great portfolio of products that was really starting to click and hum in the marketplaces and with our retailers, like Crate and Barrel, Sur La Table, William Sonoma and just all these wonderful culinary retailers," she said. But then, of course, the coronavirus spread around the world and changed everyone's plans. Even so, W&P was able to switch revenue gears and continue growing. Many wholesale accounts -- including independent gift shops and department stores like Nordstrom -- had to pull back on their partnership with W&P in early 2020. But other sales channels began to grow. The brand's Amazon sales, for example, went through the roof. Additionally, W&P's corporate gifting revenue skyrocketed. "Having that really healthy platform -- and a balance -- allowed us to thrive in 2020," said Lubenesky. Now, the company is focused on growing even more. That includes inking more wholesale partnerships -- if, of course, the retailers are a good fit. And there's also always product expansion. "We're really focused on product development and innovating and inventing new categories that consumers aren't even aware of that they need," Lubenesky said.
It's been a big year for TalkShopLive -- and for livestream commerce in general. The livestream commerce platform has been around since 2018. Until 2021, it was completely bootstrapped -- but it took a $3 million seed round a year ago this past February. Since then, TalkShopLive has been ramping up partnerships with major publishers and retailers, including Walmart and Condé Nast. Co-founder and CEO Bryan Moore joined the Modern Retail Podcast this week and spoke about the platform's growing presence. "2020 was when we started to see a lot of people come on with their books and music and have these blockbuster sales," he said. "It proved the model and proved the value for creators." Unlike other livestream commerce apps, TalkShopLive focuses on offering embedded streams. While customers can go to its website to see what programs are airing -- which, according to Moore, many people do -- brands and publishers can also host the streams on their own websites. In Moore's description, that makes for a better relationship for retailers working with publishers -- along with creators trying to launch their own commerce lines. "One of the things that we've consistently heard across the board from the creator front is that they really appreciate having a destination outside of their traditional social platforms to use as their shopping destination," Moore said. This comes as the livestream commerce space as a whole has seen big gains. Apps like Ntwrk and Whatnot have raised hundreds of millions of dollars over the last few years, and many experts say that North America is finally beginning to adopt the medium. According to Insider Intelligence, livestream commerce is a $300 billion market in China and western countries are increasingly testing it out as well. One of TalkShopLive's biggest recent successes is with Walmart. The big-box retailer tested out a few livestream programs in late 2021. Apparently, the company liked it -- Walmart has upped its programming by about 420%, said Moore, and has booked livestream commerce programs through the summer. "The brand experiences team at Walmart is really phenomenal and completely understands the value of this space and how to really maximize it for their customers and their suppliers," said Moore. For now, Moore is focused on growing TalkShopLive's partners and getting more retailers and creators testing out its offerings. "You're going to see a lot of other retailers launching over the next quarter," he said.
Couplet Coffee, which sells both coffee beans and coffee-related products online, is only a few months old and is trying to enter the market with a bang. Currently, it's available online as well as at select partners like Lotto.com's Players Cafe. Founder and CEO Gefen Skolnick joined the Modern Retail Podcast this week and spoke about the launch. "Couplet was my side project in college," Skolnick said. "I've just been obsessed with coffee for over ten years now." For the last year, however, Skolnick has been testing out to see if the brand could become a viable business. Much of this was done via limited-edition drops, as well as one-off retail partnerships at pop-ups like a recent Bumble-sponsored NYC cafe. In the beginning, Couplet's landing page was a barebones cashdrop site that sold a small amount (for example, 30) limited-edition coffee bean bags or products like french presses. These drops sold out quickly -- much of that driven, according to Skolnick, by social media buzz -- which gave more credence to the brand. Now, Couplet is trying to take things to a new level. While it still has small-scale partnerships with artists and drops limited edition products, the brand is trying to grow its permanent presence as well. It is currently in 17 retail stores nationwide. In addition to its online offerings, which went live earlier this year, Couplet is opening over 20 coffee cart locations at Players Cafe. Skolnick said more expansion announcements are on the horizon. Growing this type of company was new terrain for Skolnick. Despite only being in her mid-20s, over the last few years, Skolnick had worked in a variety of capacities -- from software engineering to DTC marketing to investing. But, she hadn't really honed in specifically on coffee before. So Skolnick grew her network to get a better understanding of the space. "I spent all of last year... figuring out how operations work, figuring out how DTC brands do what they do, figuring out how coffee companies do what they do and creating an advisor and investor ecosystem that could help me figure it out," Skolnick said. All this helped Skolnick raise a seed round of funding in 2021. This education isn't over now the Couplet has officially launched -- but the plan is to continue growing the company. While Skolnick is seeking out more coffeeshop and retailer partnerships, she's also hoping to grow the product line and keep Couplet true to its roots. Even with the growing amount of external partnerships, Skolnick said, "we're primarily a DTC brand."
Lightning-fast delivery services are taking cities like New York by storm. And Gorillas is trying to be the leader of the pack. This week on the Modern Retail Podcast, Adam Wacenske, Gorillas' U.S. head of operations, spoke about the online grocery service's growth plans and strategy. Gorillas is a grocery delivery app that began in Europe, but is currently only available in New York. Its main value proposition is that it can give customers their items in the blink of an eye -- usually in less than 15 minutes. Last year, it raised nearly $1 billion in funding, and only a month ago the German-based company announced plans to raise an additional $700 million. That's because competition is stiff. There are a bunch of other delivery apps out there -- from GoPuff to Jokr -- that offer similar services of stocking dark stores with products and having couriers at the ready to deliver them to customers' homes. Though Wacenske said that Gorillas is focused on giving the best possible experience and having the fullest assortment of groceries. "From day one Gorillas has been focused on a full assortment," he said. "We've always had what was akin to a medium-sized grocery store." Wacenske knows a thing or two about being part of a fast-growing startup. His last job was at WeWork, and he spoke about how his past experience lent itself to this current role. "There's a lot of similarities to WeWork," he said. Specifically: both companies focused on growing physical presences and making them more convenient for their customers. Meanwhile, the beginning part of this year was difficult for some players in the fast delivery industry. Two companies, Fridge No More and Buyk both closed down U.S. operations in the course of a week. "It's super unfortunate," said Wacenske, adding that both companies' closures were "out of a lot of people's control." While those companies certainly faced difficulties with growth, Wacenske is optimistic about the future -- both for Gorillas and the fast-delivery space. "This is a really young industry in the U.S.," he said. "I can't fully predict as to what's going to happen, but there's certainly going to be more space for more opportunities and for more than one company in the future."
It may seem simple to order a bouquet of flowers and have it delivered to your home, but a lot of work goes into such a task. On this week's Modern Retail Podcast, Seth Goldman, the CEO of online flower and plant delivery service UrbanStems, discussed the ins and outs of the e-florist business. Over the last two years, UrbanStems saw year-over-year growth in both 2020 and 2021 -- even after the company shut down its local delivery services in March of 2020, which resulted in a 60% decline in its business at that time. But when things reopened in July, the company was back on track and "revenue growth continued to scale," said Goldman. Indeed, sales grew 130% in 2021. Now, with these two years in the rearview mirror, Goldman says he's figuring out what parts of the business to invest in. "For all brands, it's about starting to make sure that all of those customers that tried us out are sticking," he said. Venture funding is helping with that. Last year, Urban Stems raised $20 million, giving it a valuation north of $100 million. This year, Goldman is trying to continue figuring out how to best use that money. One of his focuses is on building out the infrastructure that allows the company to deliver its flowers. Meanwhile, Goldman is also investing in both the technology and user experience side of things. Lastly, the company is also investing in its team and growing its headcount. Goldman spoke about all of those aspects of the business -- infrastructure, technology and talent -- and how he's thinking about prioritization. "There's a lot of work to continue to do across all three," he said.
For direct-to-consumer furniture brand Sabai, sustainability reigns. The brand, which launched in the summer of 2019, and saw a growth spike in both 2020 and 2021 -- much of which was spurred by the pandemic-induced home boom. According to co-founder and CEO Phantila Phataraprasit, much of its growth was thanks to increased interest in sustainability. Sabai's products -- which range from sofas to ottomans -- are all produced with sustainability in mind. [Sustainability] can be in so many different things and be applied to so many different aspects of a business model," said Phatarapsit. "We try to apply it to every single aspect." She joined this week's Modern Retail Podcast and spoke about the company's growth. Sabai sources recycled material for all its products, as well as uses plastic-free shipping. The brand also just launched a buy-back program in the hopes of making it possible for its used products to not be thrown out. According to Phataraprasit, this has resonated with customers. "We maybe didn't appreciate how much people throughout the country care about sustainability," she said. She had originally thought Sabai would be popular in places like New York and Los Angeles, but it turns out people in smaller even suburban areas were also interested. Now, the hope is to grow and get the word out even more. Phataraprasit spoke about Sabai's social media plan -- which includes using its Instagram following for product research, while also investing in other smaller, visually-driven advertising channels like Pinterest. The idea with all of Sabai's social content is to build a brand that customers clearly understand its point of view and values. "The community that we had on Instagram was very much part of [our product development] process," she said.
Umamicart is trying to bring authentic Asian grocery items to more U.S. consumers. The app launched in early 2021 and, according to co-founder and CEO Andrea Xu, has been seeing double-digit growth month-over-month. It offers Asian products from sauces to meats to vegetables, growing from 400 SKUs at launch to now over 1,000. Xu joined the Modern Retail Podcast this week and spoke about the trials and tribulations of growing a digital grocery startup. According to Xu, Umamicart began because of a gap she saw in the market. Namely, for many people it's hard to find Asian-specific grocery items beyond specialized grocery stores that are usually in specific, often metropolitan areas. "If you're lucky enough that you're near an awesome Chinatown, that's super great," said Xu. "But not everybody has that." So, the idea with Umamicart is to bring those types of products to more people. Currently, it is available in 11 states -- with plans for more expansion following a $6 million fundraise that closed in December. But the concept isn't to just bring a large Asian grocery store online. Instead, Xu and her co-founder have been working to partner with small- to medium-sized Asian brands and suppliers to give them another channel to sell their products. "People ask me a lot: 'why can't I buy this at Whole Foods?'" said Xu. "I'm like, well, Whole Foods is not working with the number of suppliers that we're working [with]." Now, the focus is on expansion -- both geographically and product-wise. "We're probably going to at least double our catalog within the next few months," said Xu."Geographically, we also plan to expand. I'm not sure exactly to which exact locations, but we're definitely going to be expanding this year."
It’s been a turbulent few years for Reformation, but the women’s clothing and accessory brand is forging ahead. According to CEO Hali Borenstein, the focus now is on building trust both with customers and employees. “It is all about walking the walk,” she said on the Modern Retail Podcast. Borenstein became Reformation’s chief executive in 2020 when its founder and then-CEO Yael Aflalo stepped down after a former employee’s social media post went viral that alleged unfair treatment of non-white employees and micro-aggressions such as being passed over for promotions in favor of white counterparts. (An external review of the allegations by a law firm published five months later asserted Reformation’s workplace to be “not racist”.) At the time, Borenstein was president and vp of merchandizing. “I think that the summer of 2020 really shined light on the fact that we did not have enough focus on our internal people,” said Borenstein. Now, she said, she’s looking toward the future. “My focus has really been not just on the growth of the business, but making sure that our team everyday feels like they are heard and valued,” she said. Reformation focuses a great deal on transparency and sustainability. According to Borenstein, one of her most important moves as CEO was being open and honest about all parts of the business. “Not every decision is an easy decision,” she said. “But I will share with you why I made a decision and why the leadership team is thinking about something in a certain way.” Growth is another a big focus for the brand. The company currently has about 25 locations globally -- and has plans to open more over the next year. “We really believe in having more stores,” Borenstein said. “And then, within our store experience, we also want to continue to innovate on it so that we’re really building the best experience possible.” While 93% of Reformation’s business is direct-to-consumer, the brand does have a few wholesale partnerships with retailers like Nordstrom. But, according to Borenstein, “we use them for strategic purposes -- mostly [building] brand awareness.”
In 2019, startup chai brand One Stripe Chai saw coffeeshops as the ticket to its success. Then the pandemic came and everything changed. After a bumpy few months, the brand focused predominately on its direct-to-consumer website and finding online customers. And while its foodservice business has resumed, founder and “chief chai officer” Farah Jesani says she’s still focused primarily on growing the DTC sales. Jesani joined the Modern Retail Podcast and described the quick change. Right before 2020, Jesani said, One Stripe had over 70 coffeeshop wholesale accounts. “That’s where I was like, okay, this feels like this is a viable business. This feels like something we can really grow,” she said. Then the pandemic hit and “everything tanked.” At that time Jesani was faced with a decision: does she close up shop or does she pivot? She opted for the latter, and began testing out consumer-focused products and packaging -- something she had never done before. After a few months of trial and error, it worked. The brand got written up in publications like Bon Appetit, and this helped launched the DTC business -- which Jesani says has remained pretty profitable since launch. “To date, we’ve barely put in any ad dollars,” she said. Now that things are opening back up, Jesani is focusing on growing both DTC and wholesale channels -- although supply chain hiccups have made things slow going. As Jesani described it, 60% of her focus is on DTC and 40% on other retail partnerships. With that, she’s enthusiastic about the prospect of more growth. The hope now, she said, is to find a national retailer. I would love for our concentrates to be in Whole Foods,” she said. “More than that, I would love our concentrates to be the concentrates that are used at the coffee shops at Whole Foods.”
Online apparel marketplace Dia&Co is trying to tap into the $21 billion inclusive sizing market. Within the last few years, more brands have begun introducing a wider range of sizes. But according to co-founder and CEO Nadia Boujarwah, most businesses are only scratching the surface. Boujarwah joined the Modern Retail Podcast this week and spoke about Dia&Co, as well as the current state of plus-size apparel. Dia&Co has been around for six years, and has witnessed big shifts in brands’ plus-size strategies. “If you look at what the supply side of the [plus-size] equation is doing, it is remarkably anemic,” Boujarwah said. “About less than 20% of apparel dollars that are spent in the U.S. each year are spent in those sizes.” Her company has been trying to change that. Inclusive apparel has had its ups and downs over the last few years. Between 2018 and 2019, more brands were entering into the space than ever before, Boujarwah explained. But the coronavirus changed a lot of product roadmaps. Throughout that time, Dia&Co was focused on bringing a platform that women could trust to provide clothing choices in many sizes. Now, said Boujarwah, more brands are once again doubling down on plus-size options, which is giving Dia&Co a helpful boost. What’s more, there’s a large and growing group of plus-size influencers that Dia&Co has been tapping. Currently, the company partners with upwards of 500 influencers every month. Though Dia&Co has dabbled in building its own brands, Boujarwah said the company is primarily focused on connecting customers with other apparel giants like Madewell and Wacoal -- as well as helping those brands better market their plus-sized offerings. With that, Dia&Co has a huge opportunity at its fingertips, said Boujarwah. “We have always been a multi-branded retailer and a multi-category retailer. So our audience is broad,” she said. “Within that, we can serve different price-points.”
DTC startup Firebelly Tea is hoping to help the hot steeped beverage reach the celebrity status of coffee. That’s according to co-founder and CEO David Segal, who joined the Modern Retail Podcast this week. Segal isn’t new to the tea world -- he founded one of the biggest tea retailers in North America, DavidsTea. After selling his shares in the company in 2016, he is now embarking on a new tea journey. Tea, said Segal, “is the second biggest drink in the world, next to water,” even though, he said, “North America is a little bit late to the party.” “There’s a reason it’s been around for so long,” Segal said. “It’s really that good -- especially high-quality loose leaf tea, which is what we’re trying to show people with Firebelly.” The idea, for now, is to make a direct-to-consumer destination with Firebelly. But rather than just selling tea leaves, Segal wants to provide the entire experience. So, Segal has spent the last few years sourcing good tea blends along with the best types of tea products -- such as kettles and thermoses. “The key is the product, it starts with the product,” Segal said. “You can have a great marketing message, you can drive trial, but when it’s all said and done, people have to love the product and want to come back.” Firebelly’s other co-founder is Shopify president Harley Finkelstein. In some ways, the two experiences complement each other. Segal brings the tea industry know-how, and Finkelstein navigates the e-commerce world. “I think that the world has changed a lot since I launched DavidsTea, selling online has improved a lot,” said Segal. “One thing Shopify has done is create this whole ecosystem that really levels the playing field for merchants to be able to sell.” And, for now, that’s the plan. Sell tea and tea products online, and hope to grow the business from there. Of course, given his past retail experience, Segal is still open to the idea of brick and mortar. “I’m not ruling out the possibility of opening some retail stores,” he said. “I think there might be an opportunity down the road, certainly ones that are highly experiential.”
Win Brands Group has been around since 2017, but this is the year the DTC roll-up strategy is really beginning to gain steam. The company owns a slew of online businesses, including the candle company Homesick and the weighted blanket brand Gravity. According to founder Kyle Widrick, things have been building nicely since inception, but thanks to big pandemic-related changes Win is now set up for more growth. “We’ve built up our holding company and our structure and our process in such a way that we plan to do a third vertical and a fourth and a fifth,” he said on the Modern Retail Podcast. “And this will continue for a decade-plus to come.” Most recently, this week, Win announced that it raised $40 million and acquired a new company to its portfolio: a hat brand called Love Your Melon. On the program, Widrick spoke about his ambitions for LYM, as well as the crossroads many founders of growing online brands face. “It was clear they were going to have to hire a tremendous amount of more people to get to success on Amazon and at retail,” said Widrick. “So the question becomes: Do you want to build that yourself and hire those folks yourself? Or do you want to partner with someone like Win?” Another big topic in the e-commerce space is the rise of roll-up companies. Though Win has been around for a while, other firms -- many of which like Thrasio and Perch are focusing on marketplaces like Amazon -- are continuing to grow and amass large amounts of venture capital funding. According to Widrick, his company and the others are different for a variety of reasons. One of the big ones being branding: Win Brands Group looks to acquire companies with a notable brand, while many other roll-ups are looking for fast-selling SKUs. Ultimately, said Widrick, that leads to the ultimate ambition he has for his company. “We’re partnering with great founders and making bets on great brands that we plan to be around for the next 20 years-plus,” he said. “These are not flash in the pan -- in and out -- these are long-state businesses that we’re betting on for the long term.”
The non-alcoholic drink, which launched in 2020, tastes similar to a European apéritif. And, according to founder and CEO Mélanie Masarin, there’s growing demand. She joined the Modern Retail Podcast this week and spoke about Ghia’s journey thus far. One of Ghia’s big markers is its branding. Ghia is available in the U.S. in both cans and bottles, and has a very retro eye-catching look. This was all by design. “I really wanted Ghia to not be another pastel-colored millennial brand,” Masarin said. Instead, she focused on the looks and feels of more analog iconography, like old restaurants. “We had to be unapologetically loud and fun.” This look has helped the company grow. It launched at the beginning of the pandemic, and was initially sold only online. But even so, Ghia was able to grow. Sales, Masarin said, have nearly tripled year-over-year. Now the focus is on getting more people aware of the drink. Some of that may include a foray into more physical retail stores and restaurants, she said, but that also comes with its own costs. “Everything is more expensive,” she said. “We are just being really thoughtful and trying to basically build redundancies with every single vendor that we can.” What’s more, she’s confident that there will be continued interest in non-alcoholic spirits. “This is not just wishful thinking,” Masarin said. “I do believe there’s a shift.”
The leap from Richard Branson to crypto isn’t that big, as it turns out. For venture capitalist Mags Kala, all it required was quitting her day job. Kala used to work at Bain Capital, helping out big brand names like Shea Moisture and Virgin Voyages. But one day she decided to leave it all behind and strike it out on her own. After about a year of going solo, she’s become especially keen on the Web3 space. On this week’s episode of the Modern Retail Podcast, Kala explained how and why she made the jump. For her, as a consumer investor, she wanted to be on the ground floor of the biggest changes in regards to how regular people spend their time and money. That’s what initially turned Kala on to the world for crypto. What was it that made it click? According to Kala, an expensive digital avatar of an ape. “Joining the Bored Ape NFT craze was very eye-opening for me,” Kala said. Here, she was describing the company Bored Ape Yacht Club, which auctions off pixelated pictures of apes using blockchain-based contracts and cryptocurrency. While it’s a phenomenon mostly for people online (with a lot of money to spare), Kala said the rise of these NFT artists made clear many other things as well. At its core, these types of new programs hit at a base-line question she’s always trying to answer as a consumer investor, Kala said: “What’s truly next for the consumer economy?”
Energy drinks are in the midst of a renaissance. According to Fabiola Torres, CMO and svp of PepsiCo’s energy drinks category -- which includes big brands like Rockstar -- the renaissance is about finding who the core customer is. Her focus, she said on the Modern Retail Podcast is to “really go deep into storytelling, making sure that our products continue to get better and better.” Torres joined the PepsiCo team in April 2020, right when the pandemic hit. Before, she worked at high-end brands like Beats By Dre and Nike. In her eyes, she was excited about leading the marketing for a ubiquitous product that still resonated with unique subcultures. That’s no easy task, however. Energy drinks have a bunch of connotations, and their popularity has risen and fallen like changing tides. But as gaming platforms continue to reach new users, and with Gen Z being such a driving force of culture, energy drinks are making a comeback. According to July data from IRI, the energy drink category grew 11.6% year-over-year. PepsiCo’s strategy with Rockstar, which it acquired in 2020, is to team up with people and events that are popular in the communities it wants to target. This includes teaming up with Microsoft on its latest Halo release, as well as a bunch of influencer campaigns. That’s especially true for social campaigns; “When we talk about TikTok, it works with influencers that have the reach,” she said. The hope is to find the gaming, youthful zeitgeist while also figuring out areas for growth. What’s more, according to Torres, Rockstar is just the beginning of energy drinks under Pepsi. “The future is bright for us,” she said.
Another year has come and gone, and big changes came to the retail industry. Giants like Shopify and Amazon grew even bigger, while older retail models like department stores suffered. Meanwhile, online brands saw big growth but faced their own unique set of headwinds. And newcomers, like fast fashion mobile app Shein, became more of an everyday staple. This week on the Modern Retail Podcast, we decided to take a look back and dive into some of the most important issues we wrote about over the last twelve months. Reporters Maile McCann and Saqib Shah as well as managing editor Anna Hensel all dove into the topics they thought drove 2021's retail narratives. These storylines give some insight into what’s ahead. Online strategies remain top of mind for companies both big and small. Meanwhile, people are discovering products in new ways.
Oats Overnight, a spoon-free, protein-based drinkable oatmeal, has been made in-house since the company began. Founder and CEO Brian Tate started Oats Overnight in 2016 out of his kitchen, and after about a year of formula development, began selling the bottled oats via the brand’s website. Part of the decision to vertically integrate production was due to difficulties Tate found in securing manufacturers for the product’s unique formula. “At a very, very early stage, we opted to do it [production] ourselves for the flexibility,” Tate said on the Modern Retail podcast. Fast forward five years, Oats Overnight has a growing customer base and new partnerships with Wegmans, Whole Foods and The Fresh Market. The brand tripled its active direct-to-consumer subscribers – from 10,000 to 42,000 – during 2021. This year, the company is up 150% in revenue year-over-year, hitting $25 million in sales in November. As a result, the company’s existing 20,000 square foot Arizona plant wasn’t cutting it. With that came the need to upgrade to a bigger oats-blending plant, said Tate. This year the company has grown to over 100 employees – including 40 on the production line – and is in the process of moving to a 50,000 square foot facility. But running a food plant isn’t as simple as it seems, and requires a lot of financial capital and labor to run smoothly, Tate explained. This conversation is part of Modern Retail’s Chain Reactions series, in which we explore the quick and long-term investments retail brands are making amid the supply chain woes.
As securing space on container ships gets more expensive, brands are coming up with creative ways to make sure their products take up less space. One such company is DTC luggage brand Paravel. Since launching in late 2016, the company has been working on ways to reduce its carbon footprint and optimize its freight routes. One reason for this is because the majority of Paravel’s products are made across Asia and in Italy -- two hubs that experienced delays during the pandemic. These delays prompted co-founders Indré Rockefeller and Andy Krantz to get creative with Paravel’s container packing methods. Instead of shipping empty suitcases, in the past year the company created a packing consolidation program for its manufacturing and loading crew. This process entails nesting Paravel suitcases and carry-on bags inside each other before being shipped to the U.S. While this requires a lot of coordination between manufacturers and offshore logistics, the results are worth the planning, co-founder and CEO Krantz said on the Modern Retail Podcast. This program is also influencing Paravel’s future product design and configurations. “There’s an element of innovation and spatial consideration that this process has introduced and made tangible for everyone on the team,” Krantz said. “From our production and product development folks, to our marketers, to our finance and operation teams.” This conversation is part of a series, called Chain Reactions, in which Modern Retail explores the quick and long-term investments brands are making to minimize their supply chain woes.
International manufacturing continues to create headaches for American brands. For card and board game maker Exploding Kittens, producing the majority of its products in China has had a domino effect on its overall distribution process. “We’ve had challenges for two years now,” Carly McGinnis, head of production, sales and logistics at Exploding Kittens, said on the Modern Retail Podcast. That’s mainly because “about 90 to 95% of all of our goods are produced in China,” she said. In 2020, Exploding Kittens’ initial challenges were not so much with production or freight coming out of China -- but more so with shuttered warehouses domestically. This year, like many others, Exploding Kittens’ logistics team is dealing with double the manufacturing timetables, as well as bottlenecks at California’s ports. The company has experimented with manufacturing in other places over the years. “We’ve produced things in Poland in the past, but China just offers efficiency, quality materials and speed to market like no other location worldwide for us,” said McGinnis. “So we’ve been tremendously reliant on China since the beginning of the company.” Still, the accumulating issues have led the company, which launched in 2009, to look for production facilities outside of China -- starting with Mexico and Poland. Furthermore, it’s exploring more trucking routes from alternative import ports, like Seattle, Washington. While these alternatives have their own downsides, McGinnis said it’s important to continue diversifying away from a rigid supply chain. This conversation is part of a series, called Chain Reactions, in which Modern Retail explores the quick and long-term fixes brands are making to minimize their supply chain woes.
If a boutique wants to carry products from handbag maker Scout, they are going to have to plan ahead. In mid-2020, Scout transitioned to a pre-book wholesale model, which entails giving retailers an opportunity to secure their orders “almost a year in advance,” founder Deb Waterman Johns said on the Modern Retail Podcast’s new series: Chain Reactions. Previously, Scout took retail orders on an as-needed basis and by estimating demand for their upcoming seasonal designs. “It’s a commitment on our part, as well as on their part,” she said of the upfront booking and payment transactions, Waterman Johns said. Wholesale retailers are a major part of the company’s business. Scout, which launched in 2004, and sells its handbags across roughly 50 stores, including local boutiques, gift shops and drugstores. This episode is the first in a series where Modern Retail explores the quick fixes brands are making as a result of the supply chain craziness experienced over the last year-plus. Chain Reactions will dig deep into short-term decisions that had longer-term effects. For Scout, its big change was to the way it handles orders. Waterman Johns said that because of the pandemic’s impact on these smaller accounts, Scout wanted to create a better system for wholesale orders. The shuttering and restructuring of many boutiques and gift shops -- where Scout sells its tote designs -- prompted Scout to want to better understand how it produces and distributes its inventory to wholesale partners, Waterman Johns said. For a business, selling out of products is usually a great thing. However, Waterman Johns said the company wanted to transition into a more efficient “newer normal,” in which Scout ensures its retail partners have access to the merchandise they want while the brand has better insight into its in-demand styles and patterns. So far, the results have been positive, Waterman Johns said. With advanced pre-booking, Scout can also better communicate inventory volume to its overseas manufacturers. Whereas previously, the company was “guesstimating” its wholesale demand (and selling off excess to off-price retailers in later seasons), the new pre-book model has helped avoid over or underestimating demand.
Yelitsa Jean-Charles says she was able to grow her business by being authentic. Jean-Charles is the founder and CEO of Healthy Roots Dolls, which makes toys that represent more diverse backgrounds. “I never really had dolls that look like me growing up,” she said. So, she designed Healthy Roots’ first product, Zoe, which Jean-Charles described as “a little brown girl with kinky curly hair.” Zoe was first devised in 2014 as part of a school project. In 2018, Jean-Charles launched a Kickstarter that raised $50,000. Earlier this year, the company raised a $1 million seed round. And, this past October, Healthy Roots landed in over 1,200 Target locations. Jean-Charles joined the Modern Retail Podcast this week and talked about the company’s journey. Jean-Charles was able to grow the company by posting about her life and experiences. “I talk about loving yourself, I talk about hair, I post selfies, I post about my traction with my company,” she said, “I think it’s really authentic and it clicks with people.” In her eyes, that authenticity part is key. “I don’t think there’s any formula to going viral other than consistency and great content that speaks to a broad audience,” she said. Even so, virality presents a double-edge sword. “Going viral is terrible,” she said. “You run out of inventory, you don’t know when it’s going to be back.” Indeed, when a post of hers went viral earlier this year, Healthy Roots was already sold out of stock. She decided to use the moment as a way to gather preorders. While people waited for their dolls to get in stock, Healthy Roots provided updates. “We started doing Facebook Lives, Instagram lives, sending weekly updates,” Jean-Charles said. “We wrapped it around a narrative of Zoe coming back from a trip.” True, Zoe was at sea, but she wasn’t exactly sailing on a cruise boat -- more of a container ship. These touches are what have helped Healthy Roots grow. For now, it’s focused on one doll and its accessories. But Jean-Charles sees a bright future. “I think it would be a disservice to not explore every opportunity that presents itself to tell a story and connect with children,” she said.
It’s a good time to be an outdoor apparel brand. According to NPD Group, outdoorwear sales are up 45% this year, and some brands have been able to dominate this growing fervor. Teva, the shoe brand known for its velcro strapped sandal, has seen sales grow. In the ’80s, when the sandals first hit the market, Teva was the leader in the space. Then, after a couple decades of dominance, fervor died down, as other competitors like Chacos and Keens began to encroach on its territory. But over the last three years the company has been focused on reemerging as a footwear leader. “In short order,” said Anders Bergstrom, Teva’s global general manager, “we’ve retaken the number one position in sport sandals.” Bergstrom joined the Modern Retail Podcast and spoke about how he’s been handling all the curveballs thrown over the last few years. Teva -- which is pronounced ‘teh-vah,’ not ‘tee-vah’ -- has been around since 1985. “The idea -- the notion -- of a sport sandal did not exist until 1985,” said Bergstrom. Teva, he explained, was the first of its kind. “What Teva did was introduce an active component to the sandal category in a way that had not been done before,” he said. That has been the North Star for the brand -- and it’s long been associated with its well-known classic style. But the brand has been staying relevant with new styles and even brand collaborations. Some partnerships include the singer Jhené Like, Outdoor Voices and Cotpaxi. “The sport sandal itself is so iconic -- it’s so unusual -- that, for lack of a better term, collab partners just have a field day tweaking it,” said Bergstrom. “It’s not a blank canvas -- it is just a number of straps that are attached to a midsole.” What also has kept Teva relevant of late is the fact that a certain type of outdoor apparel has become quite fashionable. What some describe gorpcore -- which includes outdoor classics like Patagonia vests and hiking boots -- has become all the rage in New York fashion circles. Said Bergstrom, the way to know a fashion trend is on the horizon is to look at what’s going on in Japan. “What we call gorpcore is really just the way people in Tokyo dress, said Bergstrom. “It’s really fascinating.” He went on to explain how this has led to a new apparel adage. “If we ever have a question about whether a product is going to work or not, [ask] can you see it on the streets of Tokyo?”
For Corkcicle, the company’s mantra is to focus on innovation through partnerships. The company, which makes a variety of consumption-focused products like cups, travel mugs and wine coolers, has spent the last decade expanding the types of items it makes. And over the last few years, its business has really begun to ramp up. Sales have been growing year-over-year and, according to CEO Chris McDonough, the company is nearing $100 million in annual revenue. Much of that is thanks to some big-time partnerships Corkcicle has inked over the last few years. For example, the company has worked with Disney on a variety of capsule collections for both Star Wars and Marvel franchises. It’s also worked with bigger names in the art world like Basquiat. “It’s moved on a lot from its original days, as I think about the size and scale of the company and some of those partnerships,” said McDonough on the Modern Retail Podcast. “But that DNA of innovation and pushing those boundaries really lives through every day within the business.” On this week’s program, McDonough spoke about how the company thinks about product expansion, as well as the ways it works with partners. One of his big focuses is on constant newness. “We’ve got a very defined brand positioning,” he said. “We have eight areas of innovation -- category expansion that we’ve identified... and within those eight verticals, what we’ve done is mapped out an innovation pipeline for the next three years.” In short, McDonough is focused on making sure Corkcicle is expanding and scaling for years to come. The past two years have been difficult to deliver on such ambitions. Much of that is due to supply constraints and other pandemic-related hiccups. Still, McDonough said Corkcicle was still able to grow and deliver on its promises. One of the most important ways the brand has stayed successful amid these challenges was by being upfront and candid with its business partners. “What we’ve had to do is just keep really open lines of communication,” he said. Rather than put our head in the sand, we’re just really open with retail partners.”
Telemedicine has taken the human world by storm, and Joe Spector thinks the next frontier is pets. Spector is the founder and CEO of Dutch, which offers telehealth services for pet owners -- connecting them with veterinarians virtually. He has some experience in this space as Spector is a co-founder of Hims -- another DTC telemedicine startup best known for its balding and erectile disfunction over-the-counter services. According to Spector, there’s a huge white space for pet care. “I just realized all this innovation that I was a part of on the human side [with Hims] just has not translated at all on the pet side,” he said on the Modern Retail Podcast. So, he decided to bring some of his expertise to the pet care space. Dutch launched this year and is still relatively limited in its coverage. It is available in eight states and offers support for behavioral issues like anxiety and skin issues like rashes for both dogs and cats. “We’ll be growing to having national coverage pretty soon,” One of the big hurdles he’s overcoming is red tape and protectionism. One may think that pet health regulations are more lax than those for humans, but Spector says that’s just not true. His mission, he said, is going state by stating and “changing that red tape.” It’s a playbook he’s familiar with, but that doesn’t make it easier. Right now, his focus is on making both customers and pet health professionals trust Dutch and understand the brand. “The ethos of the company is health care and actually solving the problem,” he said.
During the pandemic, most people sought comfort -- and many of them turned to weighted blankets. Bearby, which makes knitted weighted blankets, saw sales grow more around 5x in 2020. This year, things aren’t slowing down. According to founder and CEO Kathrin Hamm, revenue is on track to double in 2021. “It has been quite a ride,” she said on the Modern Retail Podcast. Though Bearaby considers itself primarily a direct-to-consumer brand -- most of its sales come from its owned online channel -- it has had an interesting distribution trajectory. Only a few months after first launching in 2018, the company inked a deal with West Elm. Since then, the partnership has grown to more Williams-Sonoma brands, and Bearaby has continued to increase its retail footprint with other retailers like Nordstrom. Even with these partnerships, the majority of Bearaby’s sales come from online. And Hamm said she wants to keep it this way, because of product education. “When I had my first weighted blanket, there was no education around it -- it was like, here’s the thing, figure it out,” Hamm said. But, on Bearaby’s website, the company is able to properly explain what a weighted blanket is, what the benefits are, and how to use it. Retail, in this regard, also boosts online sales. In new geographies where Bearaby doesn’t see many online sales, being featured in a store can help teach people about the product. “In most cases, they didn’t know about weighted blankets,” Hamm said. She pointed to the recent Nordstrom partnership, where Bearaby’s products were placed in markets the company has traditionally not targeted. “We’re, for the first time, in markets where we as a brand don’t have a strong presence,” Hamm said. “And already, in the early weeks, we see a lift on our DTC side.” For now, Hamm’s primary focus is to get more people to know about both weighted blankets and Bearaby.
One of the ways direct-to-consumer cookware brand Made In has grown was through its connection with chefs. “Chefs are the new athlete,” said co-founder and CEO Chip Malt. That idea has been core to Made In’s growth. Malt was the most recent guest on the Modern Retail Podcast -- his interview was recorded live at the Modern Retail Summit, held in Palm Springs last week. Indeed, Made In -- which first launched in 2017 -- has inked multiple deals with celebrity chefs, including “Top Chef” judge Tom Colicchio and Mozza co-owner Nancy Silverton. Made In sells to restaurants, which make up only 5% of its total sales. But its partnerships with these chefs have helped Made In become a more prominent cookware player. Malt said sales grew 5x in 2020. The idea behind Made In, he said, was to make a cookware brand that had real brand loyalty. “Food is a very emotional category,” he said, but most people think of recipes or the food itself, rather than the tools they use to make the dishes. “We couldn’t think of anything where people care less about the brand affinity in a space of a product they use so much.” To try and create that brand affinity, Made In has tapped a deep network of culinary professionals. And, as a happy side effect, the company’s business-to-business sales have grown. For now, they remain a drop in the bucket -- but Malt said that the chef community “makes up way larger than 5% of our mindshare.” By focusing on those tastemakers, he said, “it’s an organic growth through that community.”
After hitting it big in Australia, Glasshouse Fragrances is testing out the U.S. market. The company makes luxury candles among other high-end products, and since launching in 2005, has become one of the biggest candle companies in Australia. Now, it is focused on international expansion after launching in the U.S. last year. It is currently available in over 1,200 retail locations in the country, and has expanded to body washes, soaps and diffusers. Founder Nicole Eckels joined the Modern Retail Podcast and spoke about how she built the brand and her strategy surrounding the U.S. expansion. “Scaling to the U.S. was very difficult because we have grown a very big business for our category in Australia,” she said. “And it took all of our resource just to supply that [Australian] market and to serve as that market.” Indeed, over the last 15 years Eckels has been trying to perfect her Australian business. In the early days, she was doing everything from scratch. She had a background in sales, but not so much in manufacturing. “It really was a matter of trial and error,” she said -- figuring out how to make the right products and get them in the right hands. “It was really really tough in the beginning,” she said. But now, she said that the timing is right and it’s time for Glasshouse to bring its products to the U.S. Eckels is doing this by establishing an online presence -- both direct-to-consumer as well as on Amazon. She is also seeking out distribution from independent retailers. “We’re not trying to just be everywhere and get mass distribution right away,” she said. Still, there’s a lot of work to be done. For one, she is still building out Glasshouse’s brand presence in the States. With that, she’s trying to find the right retail partners. For a luxury brand, she said, it’s a difficult balance -- and that’s what she’s figuring out now. “We are a luxury brand,” she said. “We don’t want to be everywhere but we don’t want to be too difficult to find either.”
Kids Foot Locker has big plans to be the number one shoe retailer for kids. According to Jill Feldman, the vp and general manager of Kids Foot Locker, she aims to make it a billion-dollar brand. “That’s not quite doubling [where it is now],” she said on the Modern Retail Podcast, “but we have had really big momentum recently.” There are a few major things Feldman is focusing on: for one, expansion. That includes expanding the product selection, but also Kids Foot Locker’s retail footprint. “We actually are planning on expanding our store base, which I know is a little bit unusual in retail right now,' she said. Part of that mandate is finding the best new locations, she explained, while also diversifying away from older spaces like malls. “We’re finding ways to really become embedded in the neighborhoods where our customers live,” she said. But physical expansion is only a small part of her focus. Feldman is working on revamping the entire in-store experience, as well as continue forging unique brand partnerships. Her team is “coming up with amazing collaborations between [companies like] a food brand or sometimes toy brands,” she said. All of these endeavors are aimed at targeting Kids Foot Locker’s core customers: sneakerheads. For the most part, that title is often thought of as a certain type of (often male) hype beast. But, according to Feldman, “we have a young generation of sneakerheads as well.” With this, the hope is to continue growing the Kids Foot Locker brand -- both in customers, revenue and stores. “It’s one of the fastest-growing banners in all of Foot Locker,” she said.
It’s 2021, and oat milk has become a mainstream phenomenon. One brand leading that charge is Oatly. It’s a nearly-30-year-old Swedish company, but only expanded to the U.S. in the last five years. But its expansion helped spur a nationwide acceptance of dairy alternatives. Mike Messersmith, Oatly’s president of North America, joined the Modern Retail Podcast this week and talked about the brand’s growth, as well as the category as a whole. Oatly started its U.S. expansion in coffeeshops, and that helped it expand into retail; “people discover it, they talk about it and they want to buy a larger carton at the grocery store to bring home,” he said. With that, Oatly is now available nationally and in major retailers including Target and Whole Foods. In tandem with this increased distribution, the last two years have been huge for the milk alternative brand. According to Messersmith, over half of Oatly’s customers in 2020 were new to the brand that year. According to its most recent earnings report last June, the company brought in $146.15 million in revenue, a 53% jump from the year before. And while oat milk is often considered a more bourgeois product, Messersmith said he is intent on getting everyone in the country to drink it. “Our goal in this was not just to bring oat milk to Brooklyn and the arts district in LA,” he said. “I want people ordering oat milk lattes where I grew up in northeast Pennsylvania.” So far, those plans seem to be working out. The milk alternative category as a whole is exploding. Plant-based milk saw 20% year-over-year growth in 2020, hitting $2.5 billion in revenue, according to data from Spins. Oat milk sales specifically tripled in 2020. For now, his focus is on getting people to try oat milk, as well as very conscientiously expand Oatly’s product line. Last summer, for example, the company launched a series of soft-serve flavors. Even with this growth, Messersmith was clear that his strategy isn’t to take things for granted. “We’re still at the very early stages.”
Over the last year and a half, people have increasingly invested in their homes. And mattress brand Saatva was able to capitalize that demand. The ten-year-old company saw revenues almost double over the last two years. In 2017, the company disclosed that it made $207 million in revenue. According to co-founder and chief strategy officer Ricky Joshi, Saatva has been "basically profitable since day one." He joined the Modern Retail Podcast and spoke about how Saatva has been growing and expanding its product line. Saatva has tried to establish itself as the producer of a higher-end mattress made with more sustainable materials. According to Joshi, the intention since day one wasn't to raise a lot of money and, as a result, be forced to scale in a short amount of time. "We really went out there and just tried to organically build the best business possible, being really disciplined in terms of how we managed our spending," he said. The company hasn't raised any VC money, but did receive a private equity investment in 2018 for an undisclosed amount. In the early days, the focus was on making a few products -- namely mattresses -- well, as well as capitalizing on the then-nascent digital marketing landscape. Now, the company is beefing up its advertising efforts and has expanded to other products, including bed frames, sheets and comforters. Joshi said more products are on the horizon too. With that, Saatva has also been increasingly expanding its retail footprint. It has a New York showroom that currently brings in $8 million of revenue a year. Now, the brand is opening new locations in cities like San Francisco, Washington, DC, Portland and Boston. Joshi said that the New York location "significantly exceeded our expectations." With the new stores, Joshi said he's trying to figure out the right goals. For smaller cities, for example, direct sales in stores will be more important than those with larger populations where a store can have greater impact on the overall market. "Every story has its own KPIs and goals," he said. The next year is critical for Saatva's growth, in Joshi's eyes. The company is ready to open more stores, launch new products and gin up more brand awareness. "We're going to take advantage of the growth in the home furnishing sector," he said. "Particularly the luxury part of the home furnishing sector."
It’s been an unpredictable year-plus for the spirits industry, as alcohol consumption shifted away from bars to the home and, now, slowly back to bars. But that presented a unique opportunity for the apéritif brand St-Germain. The Bacardi-owned elderflower-based liqueur has benefitted from growing demand for apéritifs. But according to Emma Fox, the VP of the brand, St-Germain has also been taking great pains to get more people to know it exists. Fox started working at St-Germain about a year and a half ago. Her mandate, she said on the Modern Retail Podcast, was about “making sure that we have the right ambassadors and people that work with us.” Before, a drink like St-Germain would focus predominately on distribution in upscale bars. But Fox has updated her marketing strategy to get the bottle in the hands of both consumers and influencers. Of course, that doesn’t mean bartenders are no longer important. Hospitality professions, she said, “are a part of the fabric of St-Germain.” But, with the coronavirus causing many bars to rethink their businesses, so too did St-Germain have to update its marketing playbook. Much of the focus over the last year, she said. was on making “very very simple content.” The idea was to get more people to understand exactly what the aperitif is. Now, things are accelerating even more -- and Fox is planning bigger promotions and events. At the same time, she said, St-Germain is trying to stay focused on what it is and to whom it caters. “You’ve got a North Star to guide you,” she said. “[Otherwise], I think you can get very easily distracted in a number of ways.”
Cuisinart is generally known for one thing -- its food processor -- but the company has been expanding its reach in the kitchen for decades. In fact, the brand is moving beyond the kitchen into new parts of the home. Most recently, Cuisinart launched an air purifier. That makes for a tall order as a brand marketer. This week on the Modern Retail Podcast, Mary Rodgers, Cuisinart’s director of marketing communications, spoke about how her overall approach has evolved as Cuisinart’s product line has evolved. Rodgers has been at the company for 25 years. That’s a long time -- but her role has only expanded over the years. “The real reason I’m still here is because I work on all these exciting aspects of the business,” she said. “Sometimes when you get in certain companies, you’re very narrow in your field of vision. I like that I have a lot of influence over all of the brand marketing for the company.” Her scope is quite large. She runs the brand’s DTC business, which in 2018 moved from outsourcing fulfillment to bringing it all in-house. The company purchased a fulfillment center in Arizona and used it as a hub for all of its distribution. It held all the inventory for online orders, as well as handled customer fulfillment for online orders from other retailers. In essence, Cuisinart now controls all of its own distribution. “It tightens up the whole system,” she said, “because we’re not shipping an item to a retailer who is then shipping an item to a consumer -- you’re compressing the entire system, basically.” Beyond that, she controls all the other aspects of brand marketing -- which includes well-known channels like search and TV, as well as more experimental channels like TikTok. While Cuisinart is testing out the new app, Rodgers was clear that marketing campaigns must “always tie everything back to strategy.” Since the early days, Cuisinart has tried to compile as much first-party data as it can about its customers. Today, Rodgers is trying to systematize that even more. One of the big things she’s paying attention to is lifestyle changes. Before, items like Cuisinart were often gifted during big life events like weddings. Now, wedding culture has changed and Cuisinart is trying to find ways to remain relevant. With that is the main goal and conundrum of her job. “We have to understand the big picture,” she said. “Where are our consumers?”
Eric Girouard hadn’t planned on launching his company during a pandemic, but that’s what ended up happening. Girouard is the founder and CEO of Brunt Workwear, an online apparel company that began selling its first products -- work boots -- a year ago. While Brunt had been in the works well before the coronavirus first hit, Girouard was faced with a decision in March 2020 of whether or not to delay the launch. Ultimately, he decided against it -- and, in fact, did the opposite and ended up launching earlier than planned. He joined the Modern Retail Podcast this week and discussed how the last year has gone. Sales thus far have been good. “We’ve consistently grown 63% month-over-month since we’ve launched, said Girouard. Brunt was able to grow because people in the trades have had to continue working, pandemic or not. “There was about a two week [work] hiatus,” he said. “And then a lot of our core customers -- the real construction worker, the trades worker that was really building the economy in the country during one of the most challenging times -- were deemed essential.” What’s more, most of these people bought their work gear in person at stores -- but they were forced to find new products online. Those two issues meant that Brunt had a possible way to enter the market. Another big facet of Brunt’s strategy is its brand ambassador program. Before Brunt launched, Girouard spent hundreds of hours seeking out influencers in the trades. These weren’t your usual Instagram-famous accounts -- they were people who recorded themselves doing grueling work and amassed an audience of fellow workers. These are the accounts Girouard wanted repping the Brunt brand -- and this growth strategy, he said, has worked. While Girouard is happy with the current trajectory, he’s excited to get Brunt’s name in front of more people. “At the end of the, day being less than a year old, less than 99% of the country knows Brunt Workwear exists yet,” he said. “We’re just so early in our life cycle.”
According to the dog toy and accessories brand Bark, that’s led to an increase in demand. During its latest quarterly earnings report, the company reported that subscription shipments shot up 52.4% year-over-year, hitting 3.6 million. And revenue grew 57% year-over-year, coming to $117.6 million. According to CEO Manish Joneja, the plan is to grow and expand. Joneja joined the Modern Retail Podcast and spoke about the last year and his big plans for the brand -- which went public via a SPAC in June. Joneja is relatively new to Bark, which first launched in 2011. He was brought on as CEO in September of 2020, coming from Amazon. “What brought me to Bark is what I shared: my love for dogs,” Joneja said. “The market right now serves you as a transactional commerce.” Bark, conversely, is built more on building a relationship. “The foundation of Bark is built on high-level personalization with high-touch service,” he said. The focus is on expanding into new areas -- such as food and dental care -- as well as acquiring more customers. For now, Bark will remain focused on dogs. “We want to make sure we serve the 63 million households [that currently own dogs],” he said. “That’s a tremendous opportunity -- you want to get that right first.”
Gabi Lewis thinks the cereal world is ready for an upgrade. That’s why a few years after he sold his first company, a cricket protein startup, he co-founded Magic Spoon. The brand, which first launched in 2019, is sold entirely online and offers a variety of different protein-filled cereals for around $10 a box. The idea with Magic Spoon, said Lewis, was to “take cereal through the innovation that we’ve seen in categories like ice cream or candy -- where brands have come in and they have just flipped the protein and sugar on their heads.” Lewis joined the Modern Retail Podcast and spoke about how he built the Magic Spoon brand, as well as where he sees it going from here. The one thing Lewis is intent about is Magic Spoon’s focus on cereal. “We’re not entering 20 new categories,” he said, “we’re not going into 30,000 retail stores.” Instead, the company has just focused on just offering its cereal, which currently comes in eight flavors -- including ‘cookies and cream,’ ‘maple waffle’ and ‘fruity’ -- as well as limited edition products that get released every few months. The idea was to create a standalone brand for health nuts who want a healthy breakfast that’s reminiscent of their childhood. According to Lewis, growth has been steady for the last two years. And demand grew even more during 2020. Like many other online grocery-adjacent brands, Magic Spoon saw an explosion of demand during the early days of the pandemic. “We did see a massive increase in demand across the board,” he said, “I think just because there was an increased desire to purchase food online period.” He added that “obviously some of that is continued [and] some of it hasn’t.” Despite industry fluctuations, Magic Spoon has tried to find new ways to discover customers. Rather than focus predominately on Facebook and Google, the company has built out a robust network of influencers who have evangelized the brand since the beginning. Similarly, Lewis has been testing out other new advertising channels like podcasts and television. All of this, according to Lewis, has helped prepare Magic Spoon to continue its steady growth. He is insistent that, despite the look and feel of the product, Magic Spoon is not out there to totally eat General Mills’ lunch. And that, he maintains, is its ultimate competitive difference. “We’re not cereal,” he said. “We are protein powder in the shape of cereal.”
E-commerce saw unprecedented gains in 2020, especially in areas like alcohol that historically relied on in-store sales. Indeed, Minibar Delivery -- a platform whose name aptly describes its services -- saw a 500% increase of new customers in March and April of last year. Now, the company is trying to keep growth apace while adding more cities and liquor store partners to its roster. CEO and co-founder Lindsey Andrews joined the Modern Retail Podcast this week and talked about Minibar’s trajectory. Right now, Minibar is available in 18 different states with its on-demand delivery offering. It also has a shipping service up and running in 40 states too. In 2020, said Andrews, “a flip was switched and things went crazy.” It wasn’t just more customers seeking out delivered booze either; “We did see a massive spike in new stores wanting to get on the platform -- and we tried to move as fast as possible to help them do that.” With that, the last year has been about keeping up with the demand. Now, Andrews says Minibar is looking toward the future. That includes onboarding more retail partners, as well as seeking out new cities to expand to. Even with stores reopening and more people going back out, Andrews thinks consumers have built up a new muscle around this kind of delivery. “I’m 100% bullish on the category,” she said. “I think there’s tons of whitespace and room to grow.”
Designer Brands Inc., parent company of DSW, has been trying to prove itself to be a bonafide digital retailer. This past quarter cemented that the current strategy may be working. After a year of losses due to the pandemic, Designer Brands swung to a profit in the first quarter of this year hitting $703.2 million in revenue. “We were really just trying to manage what was there until we could get our arms around how long this thing was going to last,” CEO Roger Rawlins said on the Modern Retail Podcast, describing the initial days of the pandemic. “That was by far the biggest and most disruptive thing that we had to deal with.” But now, according to Rawlins, things are looking up. After furloughing 85% of the workforce, “we were able to bring folks back,” he said, “and [we were] really proud of how we made it through.” Rawlins joined the podcast this week and spoke about how he’s been leading the company. He has been at Designer Brands for 15 years -- and helped bring the company online. This was a behemoth task; “I’m a stores guy by trade, even though I ran dot com,” he said. But that work over the last decade-plus, according to Rawlins, has helped make a robust online strategy. Designer Brands, for example, doesn’t rely predominately on warehouses and uses most of its stores for fulfillment. Last quarter, nearly 70% of its inventory was fulfilled from a store. What’s more, Rawlins worked to make it so that store associates weren’t focused only on in-store sales. “We gave stores credit for all of the dot com demand they fulfilled,” he said. The idea, he explained, was so that “they could see the benefit of engaging in an omnichannel way.” That program helped the company throughout the pandemic. “[We saw] store associates posting on LinkedIn and Instagram and Facebook,” he said. That drove significant volume “by just fulfilling that digital demand,” he went on. It was those kinds of programs over the last year, Rawlins said, that “really did save our fannies as an organization.”
Convenience store startup Foxtrot is trying to become a national name. Over the last few weeks, the company announced a series of expansion plans. For one, it plans to open 50 new locations over the next two years. Foxtrot is also launching a national delivery program called Foxtrot Anywhere. The retailer’s CMO Carla Dunham joined the Modern Retail podcast and spoke about the company’s big ambitions. While Foxtrot is positioned as a quasi-convenience store, it tries to highlight the quality of its products and fast delivery. Each store features an assortment of local products and Dunham said curation and selection is about “an obsession with whatever is delicious and worth enjoying.” Right now, the focus is on growing Foxtrot’s presence and getting more people aware of the stores. Currently, there are 13 stores in Chicago, Dallas and Washington, DC, and Foxtrot plans to have 18 in total open by the end of this year. As part of this expansion, the retailer is focusing less on convenience items and becoming more of a food service destination. “We’ve really been leaning into our cafe food program much more aggressively, and you’ll see that in our new store format,” Dunham said. What’s more, Foxtrot has been actively building out its own private label -- which includes gummy snacks and ice cream. These products are less economy-priced unbranded items and more Foxtrot-specific delicacies. “The products that we’ve created can stand alone comfortably outside of our stores,” she said. All that put together equals Dunham’s national expansion playbook. Now, the challenge is to get more people to notice.
Furniture became a hot item in 2020, and resale platform AptDeco was ready for that demand. The company’s sales grew more than 300% last year, and is trying to ride that wave through this year. According to co-founder and CEO Reham Fagiri, the company’s emphasis is now on expansion. AptDeco began in New York in 2014, and has been slowly growing ever since. Over the years, it added delivery to Northern New Jersey as well as Washington D.C. Now, more cities are being added. “We launched in Philadelphia earlier this year, and now -- literally two weeks ago -- just launched in the San Francisco Bay Area,” she said on the Modern Retail Podcast. “We’re seeing a lot of opportunity.” Part of the reason for this growth is because AptDeco was able to capitalize on big consumer shifts. More people were stuck at home in 2020 and were buying nicer furniture. “We also saw people selling their products and looking to upgrade to more higher-end pieces,” she said. While many furniture companies have had supply chain issues due to logistics bottlenecks, AptDeco owns its fulfillment network and was able to mitigate much of that thanks to its delivery network. “We are logistics,” said Fagiri. “The reason why we own [delivery] is because we want to make sure we control the experience.” It’s these elements that have helped AptDeco grow. Now, with expansion on the horizon, the plan is to have it become more of a household name.
Sometimes, the best way to figure out product-market fit is to go on Craigslist. That’s what outdoor furniture brand Yardbird did in 2016 when it first launched. Co-founder Jay Dillon had spent some time in Hong Kong learning about outdoor furniture manufacturing. He brought back some items to Minneapolis and marketed them on Craigslist. “We sold about $100,000 within two weeks,” he said on the Modern Retail Podcast. Over the years, Yardbird has outgrown its scrappy online marketplace roots. The company has its own website, as well as seven showrooms around the country in cities like Minneapolis, Denver and Washington DC. More are slated to open this year, and Dillon said business has been consistently doubling year-over-year. But 2021 is certainly an interesting year -- especially after a pandemic. The outdoor furniture category saw a big boost, and many new competitors entered into the mix. Before 2020, many of Yardbird’s competitors were what Dillon described as “middlemen.” These were large furniture showrooms operating out of big cities like Chicago that sold most of their goods to big businesses like “ski shops in Colorado that are looking to offset their seasonality.” He added, “almost none of these guys are sourcing direct from factory.” But now new brands are emerging that, like Yardbird, take great pains to have connections with where the furniture is manufactured. “We view that it’s just largely great for the consumer,” said Dillon. Things are beginning to return to normal, and that could mean the outdoor furniture sales bonanza may begin to temper. Dillon, however, is optimistic because many people have changed the way they lived. Millennials are “moving to suburbs, and increasingly wanting to be outdoors,” he said. As long as that continues, that means more business for him.
A lot of changes have happened at Asheville, North Carolina-based East Fork Pottery over the last year. For one, its CMO and co-founder Connie Matisse became the brand’s CEO earlier this year. Her husband Alex had been chief executive since its launch in 2009, but the two decided that Alex would begin focusing on more longterm plans and Connie would become the day-to-day top leader. What’s more, the ceramics company grew during the pandemic -- and became profitable. “We are coming up on 11 months of consistent profitability, which is huge for us,” Matisse said on this week’s episode of the Modern Retail Podcast. But economics are only part of the equation for East Fork. Indeed, the brand has been trying to make its name known while remaining both transparent and true to the company’s core values. On the website, East Fork lists its values as compassion, equity, sincerity, accountability and adaptive tenacity. Much of that work involves making sure East Fork’s workplace is equitable, which has been a years-long process for Matisse. The company has had to rethink how it finds talent, for example; it was about “recognizing that our recruiting and hiring practices were not working as far as like fostering a truly inclusive and equitable culture,” said Matisse. Another part is telegraphing a transparent brand in an honest way. For Matisse, East Fork’s voice and ethos is an extension of her very being. “I don’t have a good filter, I’m getting better,” she said. “But that kind of lended itself quite easily to being really transparent, because it seems like the only thing to do.” East Fork began as a boutique pottery outfit and grew into a national brand. That came with a lot of growing pains. For one, it meant figuring out how to scale up production while not losing its identity. It also meant creating a business plan for a brand that began very organically. All this put together makes for a stressful -- but exciting -- time for Matisse. “I’ve been working on my staffing plan for [the next] one and three years,” she said. “I need to hire like 12 people in the next six months -- actually, completely overhaul, restructure, create a sales and marketing and like build a whole new company in a year. So I’m a little freaked out right now.”
It’s not easy launching a new brand -- and even harder doing it during a pandemic. But that’s what United Sodas of America did. The startup soda company hit U.S. shelves in 2020 and has been growing ever since. Co-founder and CEO Marisa Zupan joined the Modern Retail Podcast and talked about the past year’s trials and tribulations. When United Sodas launched in May of 2020, many stay at home orders were still in place. As a result, the company focused mainly on building out its online presence. Moreover, the brand launched with 12 different flavors. “We went in with open eyes knowing that that was a heavy lift,” Zupan said. But, it was a necessary risk to take, in her eyes. “If we wanted to create this brand that was all about variety, then we knew that we needed to make a decision about the product,” she said. “And we went to the extreme and said, okay, we’re going to do 12.” The company also tried to make as much of an initial splash as possible. At launch, Zupan garnered a fair amount of press -- with write-ups in outlets such as Fortune and Fast Company -- and went heavy on digital ads. This strategy worked, she said. “To be honest, the demand for us outpaced and our velocities outpaced the stock that we had,” said Zupan. The brand also ran a large out-of-home campaign last summer. “By the time that push was over,” said Zupan, “we actually ended up exceeding our sales goals based on what we wanted to spend.” Now, the focus is on keeping the momentum. While United Sodas started as DTC only its now expanding to retail nationally. It has focused on getting into local stores in large cities, including New York, Los Angeles and Dallas -- and is now working with broadline distribution partners to expand to retailers beyond those urban areas. Meanwhile, Zupan is thinking about ways to continue expanding both the company’s reach. That likely means increasing the SKU count beyond the 12 currently on the market. “We’ve been working behind the scenes on a product expansion that we’re really excited about for the next year,” Zupan said.
It’s been a crazy year for brands in the CPG space. That’s what Debbie Wei Mullin, founder and CEO of Copper Cow Coffee, said on this week’s episode of the Modern Retail Podcast. The home-brewed Vietnamese coffee company has been around since 2017 and has been growing over the years. But the pandemic changed some strategies, as well as many of its revenue channels. When Copper Cow first started out, it relied heavily on wholesale. It inked deals with both grocers the department stores as a way to get its name out. In those early days, it only had one SKU of pour-over coffee -- and 90% of Copper Cow’s revenue came from wholesale accounts, including Williams Sonoma and other high-end stores. Over the years, as Copper Cow built out its digital marketing and grew its product line, the revenue mix has changed. Today, only 20% of Copper Cow’s revenue comes from wholesale. The pandemic accelerated that revenue shift -- before the coronavirus first hit, department stores made up 50% of Copper Cow’s wholesale revenue. But when stay-at-home quarantines first began, that channel completely dried up. “We had purchase orders that were sitting on the dock,” Mullin said. Going forward, she said, “I don’t see [department stores] being a core part of the business.” But even with department stores closed, Mullin said wholesale revenue still spiked. “Our wholesale sales grew immensely, even even with the department stores falling off -- just because the grocery opportunity suddenly became much larger,” she said. Direct-to-consumer sales have also been growing -- the brand appeared on the show Shark Tank recently, which gave it a boost. For now, said Mullin, the focus is on growing -- both sales and Copper Cow’s SKUs. The e-commerce business, she said, was “the number one place for us to be able to really form community -- and to be able to experiment with our products.” With that, she went on, “we’re excited to be launching some new products, to be able to try out a lot of new exciting flavors.”
Last year, when razor startup Harry’s backed a cat food company, it was -- in part -- due to the work of Tehmina Haider. Haider is the head of Harry’s Lab, which both launches new CPG brands as well as invests in and acquires existing ones. Haider described the operation as being a “diversification engine.” She joined the Modern Retail Podcast and explained how she’s built out the program over the last three years. Haider’s background is in consumer investing, hailing from L Catterton where she helped fund brands in the beauty and personal care space. She joined Harry’s in 2018, around a year after Harry’s Lab first started. Her mandate was to take her past investing experience and put that toward the task of building out an expansive Harry’s umbrella. The idea, she said, is that “we, at Harry’s, can really help brands that are focused on the same things that we are: Disrupting categories and serving consumers better, scale and successfully grow.” So far, Harry’s Labs’ work has materialized in a variety of ways. The first company Harry’s Labs launched was Flamingo, a women’s body care brand. But the company also invested in Cat Person, a DTC cat food company. Harry’s Labs began as a way for the company to launch its own brands, but has evolved into a growing M&A engine. This work, of course, is easier said than done. Much of Haider’s day to day is finding the next big brand to either build or acquire. This, she said, is where her work differs from her investing past. While investors are focused primarily on the economics (something Harry’s, of course, is also focused on too), her team is also looking for companies that have long-term ambitions. She’s not trying invest in a company and make a quick profit. “We’re buying to own,” she said.
It’s good to have celebrity boosting your brand. That’s what self care wellness brand Asutra, which sells products like soaps, sleep aids and anti-aging serums, learned when Venus Williams reached out to the company asking how she could be involved. After some meetings, Williams became the chief brand officer and the company’s most prominent spokesperson. “She talks a lot about active self care and Asutra in the press and on social and makes big announcements for us,” said CEO Stephanie Morimoto on the Modern Retail Podcast. She added, “we obviously did not set out to have a celebrity partner -- we frankly would not have done it if Venus had not come to us.” Celebrity spokespeople aside, Asutra has had a wild few years. In 2018, Morimoto bought the company, which first launched in 2015. She described the original owners as “serial entrepreneurs” who put the business up for sale when she was looking for her next business venture. At the time, Asutra sold most of its products on Amazon, and she believed she could help transform it into a DTC wellness player. Part of that has been about rebranding the company as “active self care,” as she described it. Another big part has been on diversifying channels. “Our big focus as a team has been to diversify our revenue channels so that we’re not so reliant on Amazon,” Morimoto said. “Hopefully, depending on how a couple of retail partnerships go this year, we’ll probably go from 99% Amazon to about 60% Amazon -- with a good chunk coming from retail, and then also from what we consider DTC, which is our own website.” Retail has certainly been an interesting nut to crack. Asutra’s first major retail partnership was with CVS. While it gave the brand widespread distribution, Morimoto learned a few things about matching customers with products. “People mostly go to CVS to fulfill their prescriptions and use the pharmacy,” she said. So it was hard to catch shopper’s eyes when they weren’t necessarily thinking about self care products. But one recent retail partnership is proving to work better: Target. “We just launched in Target about a month ago, which has been awesome,” she said. “Target was really our holy grail goal.” Now, the focus is on making the Target partnerships work, as well as inking more retailers as well. Two new retailers Asutra is working with are Athleta and Grove Collaborative. But, for now, she’s thinking about making current partnerships work. “The rest of the year, we’re really focused on making Target a success so that we can continue to grow with Target over the next couple of years,” Morimoto said
Sometimes, businesses start out as direct-to-consumer. Other times, they’re forced into it. That’s essentially what happened with Farmer’s Fridge, a company best known for its salad vending machines. Since 2013, the company has been growing its vending machine presence -- first in the Midwest, and then beyond. Its core customers were workers looking for quick and healthy lunches on the go. But the pandemic changed all of that. Over the last year, Farmer’s Fridge focused less on its vending machines as fewer people commuted to the office, and more on building out its own home delivery program. According to founder and CEO Luke Saunders, this pivot worked. Farmer’s Fridge now has three primary channels: vending machines, business-to-business and home delivery. This year is [about] getting back to growth,” said Saunders on the Modern Retail Podcast. “We’re doing [that] across all three channels.” For most of its life, Farmer’s Fridge didn’t need to spend much money on advertising. The vending machines were billboards unto themselves and sales grew pretty organically. But over the last year, the company has invested in some performance marketing. “That’s probably one of the biggest transformations for the businesses,” said Saunders. “Now we do a considerable amount of performance marketing for that delivery channel.” Things are now beginning to open back up and Farmer’s Fridge is going from defense mode to offense. While it grew its delivery network, it is now also ready to focus on its B-to-B and vending machine business. “It’s now an omnichannel business,” said Saunders. “The idea is we’re gonna bring the food to wherever the customers are.”
It’s tough transforming a local brand into a national name. But that’s what Oregon-based dairy company Tillamook is trying to do. Over the last few years, the company began an eastward expansion -- going beyond the Pacific Northwest as far as the East Coast. And, according to CEO Patrick Criteser, it seems to be working. In 2017, he said on the Modern Retail Podcast, 95% of Tillamook’s sales were made west of the Rocky Mountains. Today, “we’re about 10% to 15% east of the Rockies.” The dairy company added 4.6 million new households to its customer base this past year, most of which, Criteser said, were on the East Coast. Even during the pandemic, Tillamook was still able to grow. Tillamook launched in 1909 as a local dairy cooperative, and recently became a certified B corporation as well. Despite the company’s storied history, it’s never seen a year quite like 2020. According to Criteser, there were many demand spikes -- as well as supply chain hiccups. “There were certainly a lot of challenges in the last year,” he said, “but a lot of opportunity for us to play an important role in making sure the food supply stayed there and reliable for folks as they went to the grocery store.” One big change he noticed was the rise of home cooks testing out new ingredients. “We definitely saw people cooking more at home, certainly eating more at home [and] experimenting with ingredients.” These constant fluctuations meant Tillamook had to re-strategize throughout the year to handle the ebbs and flows. Ultimately, Criteser said, “it played out pretty well for us as a business.” With all that in the rearview mirror, the focus is now to continue expansion. “We’re a growth brand,” said Criteser, “and we’re continuing to gain new distribution and make sure that we can sell through that distribution and keep it.”
It’s been a good year to be a homewares brand. Indeed, cookware startup Caraway was a hot commodity during the pandemic. According to its founder and CEO Jordan Nathan, the company’s popularity created some headaches. Many items were out of stock more often than not in 2020, and supply chain issues continue to persist. But, “we were very fortunate to be on the right side of the equation,” Nathan said on the Modern Retail Podcast. According to Nathan, part of what made Caraway especially successful was its specific niche in the cookware space. Right now, there seem to be endless online brands hawking aesthetically pleasing pans. But, as Nathan described it, most cater to home chefs looking for professional-grade tools. Caraway instead focuses on people looking for good, sturdy equipment -- but not necessarily the restaurant stuff. “We really felt like there was this just massive gap,” he said. As a result, sales have been booming. Now, Caraway is trying to grow even faster. One way it’s been going about that is through retail partnerships. The brand has forged partnerships with a number of retailers and marketplaces, including Crate and Barrel, West Elm and Food52. In Nathan’s eyes, DTC is a great channel to start out -- but it’s imperative to find more eyeballs. When it comes to being available on other retailer’s shelves and websites, he said, “we very much see them as acquisition channels.” What’s more, he said, is that retail collaborations “give us the ability to offer different assortments than what’s on our website.” In a sense, it’s about catching customers’ eyes and then reeling them into the other sales channels.
Marc Rosen has worn many hats -- or, perhaps, pants -- at Levi’s. Today, he’s the president of the apparel brand’s Americas business. But he’s been at the company for seven years -- first joining to grow Levi’s e-commerce business. As such, he’s seen a lot of changes, both within the company and in retail as a whole. On the Modern Retail Podcast, Rosen spoke about what he’s been observing, as well as how his role at Levi’s has changed both over the years and during the pandemic. Thinking back to the retail landscape almost a decade ago, Rosen said, “I think almost everything has changed.” But, of course, many of the most drastic changes happened in the last year. And that also coincided with a new position for Rosen. Instead of just leading the online business, Rosen began overseeing all of Levi’s Americas business -- including wholesale -- in January of 2020. As such, the pandemic was certainly a crash course in navigating a new facet of the brand’s business. “The wholesale world, to some extent, for me was new,” he said. “It was really a learning experience about building that relationship.” Much of that learning experience was focused on figuring out where and how people were shopping. For example, while Levi’s is available in many brick and mortar stores, it also has wholesale relationships with online retailers. “Consumers moved so quickly into digital,” Rosen said, and the first part of the pandemic was working both inside Levi’s and with partners to try and navigate that shift. This also brought about a big change in how Levi’s as a company rolled out new products. For large companies, it’s hard to adopt a startup-like ethos of test and learn. But during a global pandemic, that’s all retailers were able to do. They had to adapt in an instant, launch and figure things out from there. The big lesson Rosen learned, he said, is “we can be a lot faster.” Instead of very slowly building something internally, more programs can see the light of day faster and be iterated upon. The pandemic, he said, brought about these lessons. Normally, he explained, “we probably would have built [out a new feature or program], and waited until it was perfect to roll it out. But in a pandemic, you don’t have that luxury.”
Google wants to make it crystal clear that it’s not a marketplace. True, people can buy things on Google, but it also lets sellers link out to other marketplaces. On the Modern Retail Podcast, Bill Ready, the company’s president of commerce and payments, discussed this important nuance. “We’re not a retailer, we’re not a marketplace,” he said. In his estimation, Google is about helping shoppers discover products (and sometimes letting them transact with in the platform). While the site looks and feels like a marketplace, he insisted that Google’s utility provides something markedly different. Google’s shopping capabilities have had quite the evolution. Its offerings have had fits and starts, to say the least. Currently, any merchant can upload products to be listed on Google’s shopping website. They can use Google’s commerce options -- called ‘Buy on Google’ -- or they can link out. Last year, the company made the decision to make its listings completely free. Before, merchants had to purchase an ad in order to surface on the platform. All these moves, according to Ready, are because of Google’s belief in the open web. But making product listings free also meant more merchants tried out the platform; the company saw 80% more listings in 2020 compared to the year before. The focus now, according to Ready, is to continue making services and products for merchants and get more brands comfortable with selling on Google. This includes testing out shoppable ad units on YouTube. Of course, continuing to grow the ad business is also important. And who remains a big advertiser on Google? Amazon. “We partner with retailers of every size, including the largest and you know, Amazon is a partner that we work with quite closely as well,” said Ready. “It can oftentimes be a good storyline to say ‘hey, is this a competitive thing?’ [but] it really is a return to first principles for Google.”
It’s been a crazy year for Ocean Spray. The 91-year-old cranberry product company not only saw an increase in sales over the last year, but went viral on TikTok. It saw increased demand in 2020, according to CEO Tom Hayes. “Ocean Spray as a category leader has probably disproportionately benefited [from the pandemic],” Hayes said on the Modern Retail Podcast. This episode was recorded live at last week’s Modern Retail Summit. There, Hayes gave a fireside chat -- talking about the company’s product development strategy and how it tried to ride the TikTok wave. Last year, a TikTok user named Nathan Apodaca videotaped himself on a skateboard listening to Fleetwood Mac while drinking Ocean Spray cranberry juice. It went viral, and the company’s products flew off the shelves. The Ocean Spray team was forced to react. Before going viral, Hayes said the company’s social media strategy was more traditional. “If I were to put a picture on it, it might be that Norman Rockwell Thanksgiving,” he said. Now the company is “trying to move the brand to be a little more edgy, and to be a little more attractive to the younger consumer.” TikTok aside, Ocean Spray has other big plans. It recently unveiled new products -- including a dried fruit snack and a caffeinated sparkling drink -- and is trying to establish itself as a category leader outside of just cranberry juice.
It’s been a big year for Crocs. The popular shoe brand, known for its ubiquitous plastic slip-ons, saw revenue grow 12.6% year-over-year, hitting $1.39 billion. E-commerce was a big driver of its business, growing 92%. About half of the company’s revenue comes from digital channels. According to the company’s president Michelle Poole, this success was thanks to the brand keeping its ear to the ground and remaining scrappy. “I’m most focused on how the brand comes to life across the globe, in all channels,” she said on the Modern Retail Podcast. Poole spoke about how the company dealt with all the changes brought on over the past year, as well as how it approaches large branding campaigns and influencers. Part of Crocs’ growth was thanks to its varied marketing campaigns. The company has unveiled a number of collaborations with companies like KFC and celebrities like Justin Bieber. These campaigns are a way to keep the shoe brand relevant. A few years ago, Crocs was less choosy when it came to celebrity partnerships. “At the beginning, we were just frankly, we were grateful to have someone to partner with,” said Poole. “And we’ve now really got the opportunity to be more strategic.” A Bieber-branded Croc isn’t Poole’s only focus. Currently, she’s thinking about international expansion. “We actually have three key markets that we’re really focused: China, Japan and Korea,” she said. “I would say that the playbook we are really focused on in Asia... is [to] really establish icon status.” This is how the company has approached growth in all its regions, she said. Poole added that “where it does need to be tailored is in our marketing strategy.” That is, the campaigns -- and influencers -- Crocs work with in Asia are slightly different than those in North America. Despite the recent growth, things haven’t been a walk in the park. For the last year, Poole said, Crocs was in defense mode. But now, she went on, “I think as we move out of Covid, [we] move back into I would say is offense mode.”
If you text the phone number on a can of the coffee drink Taika, chances are that a human will respond. This is by design. The company, which boasts a caffeinated canned drink that contains so-called adaptogens, launched in 2020 -- right when the pandemic hit. And it’s used a text-based branding strategy to help it connect with customers. Co-founder and CEO Michael Sharon joined the Modern Retail Podcast this week and spoke about how the company has been able to grow over the last year. Sharon’s background is in tech, hailing from companies like Facebook. His co-founder Kal Freese was a barista champion. Together, they are trying to build a coffee beverage that wasn’t tailored for snobs. “Most of the ways coffee is marketed, is focused on the origin -- like, where does this thing come from? Is it from Honduras? Is it from Guatemala?” said Sharon. “These are just marketing labels and definitions,” he said, adding that most people can’t tell the difference between coffees based on their country of origin. The thesis behind Taika, he explained, is “to focus on a destination.” That is, “how does the coffee make you feel, how’s it gonna make you feel after you drink it after you consume it?” The company also aims to have approachable marketing. That includes having a phone number prominently displayed on the can that people can text at anytime with product questions. While some companies, like Iris Nova, use text as a means for ordering. Sharon said that the SMS strategy was more about fostering a connection with Taika’s customers. Texting, he explained, “is a brand experience touchpoint for us more than anything.” In 2019, Taika began beta testing its selection. Then, the company focused predominately on selling to local businesses like co-working spaces and using those customers to get direct feedback. But when the pandemic hit, the coffee brand had to pivot. It launched both its DTC business, as well as started selling in retail stores around the country. After a rough month or so when the coronavirus first hit, Taika is now seeing the business take flight. According to Sharon, Taika has been growing around 30% month-over-month. He is forging new retail partnerships, but is also focused on growing the DTC channel, which currently represents 40% of its business. It’s a difficult but important channel to grow. “It’s really hard to scale beverage to DTC,” he said.
The Shazam for wine had quite a big year. Vivino, an app that lets users search for wines by taking a picture of the label and read customer reviews, raised $155 million last February. The app now has over 50 million users worldwide, and says it facilitated around $250 million in sales last year. Founder and CEO Heini Zachariassen joined the Modern Retail Podcast, and spoke about this newfound growth. The app is over ten years old, and only a few years back began adding commerce to the mix. Before getting users to transact, the first order of business was getting people to use it. “This is a land grab,” said Zachariassen. “We want to be the biggest wine app in the space.” In its early days, Vivino was focused on being an intuitive app that people would use for wine research. The idea was to build a user habit -- people would pull out the app while they were perusing bottles at the wine store. Commerce, said Zachariassen, would come later as it’s “a bit of a complex thing to do.” The focus at first, he said, was to “learn about the user.” But since 2016, the company has been building relationships with wine retailers to make it easier for Vivino users to buy wine. The pandemic, however, was when wine sales really began hitting their stride. Said Zachariassen, “2020 has been really a breakthrough for us.” With more people using Vivino to buy wine, the focus now is to find more app users -- and add more retail partners to the mix. Zachariassen said that this latest investment is about growing the 200-person team and putting marketing on the front burner. Now, he said, he wants to prove how big the online wine business can grow. “If this reaches scale, there is money to be made,” Zachariassen said. “This is a real business -- now we’re going to push the accelerator.”
Comfy clothes certainly had a moment last year. Indeed, as Sarah Rasmusen, chief customer officer at the apparel brand Lands’ End said, “it could not be a better time to be in the elastic waist business.” While the company’s revenue slightly dipped year-over-year according to its most recent earnings, online sales grew nearly 8% and the company is bullish about its products remaining in demand. Rasmusen joined the Modern Retail Podcast and spoke about how the decades-old company has been navigating the changing tides. It began as a catalog business, and even made the jump to online quite early. Lands’ End, in fact, launched its website the same month as Amazon. But in the mid-2000s, the apparel brand lost its way. Now, Rasmusen has spent the last four years trying to right the ship. That meant completely reimagining Lands’ End’s online experience, as well as testing out new ways to keep customers engaged. Indeed, last year the brand launched its own marketplace. Why would other brands want to list their products on Lands’ End? “It’s the pay to play equation,” she said. That is, on a site like Amazon a sandals brand will be competing against tens of thousands of other listing. But on a smaller site like Lands’ End, where people are there to buy similar items, there are much fewer. For now, the strategy is to continue building on earlier momentum. Digital innovation is a big part of that. “If you are not going to invest in your digital property,” said Rasmusen, “you fall behind.”
It’s been a big year for online shopping -- not just for Amazon. The live auction site Tophatter, in fact, had a record year. The nine-year-old company saw sales grow 20% year-over-year (and said that were it not for supply chain bottlenecks, that growth would have been even higher). According to the company's president Andrew Blachman, Tophatter's focus on entertainment and discovery is what helped its popularity surge. Blachman joined the Modern Retail Podcast this week and spoke about all things digital commerce. More people are buying online, and customers are increasingly looking for new ways to discover items. Said Blachman, more people are open to entertainment-based commerce. This change has impacted how he's been building out the marketplace. Tophatter considers itself somewhat of a fun pastime for customers rather than a utility to buy necessary goods. Users scroll through its app or website (though most people use the app), which features thousands of low-cost auctions for random items. The average item costs around $10, but they go as low $1. It has hundreds of thousands of registered sellers, but only about 5,000 are usually active at a given time. The focus for the last year has been on perfecting the platform. While Tophatter has been around for over a decade, the company has gone in a few different directions that didn't work out. A few years ago, for example, the company tried to operate more like a traditional e-commerce platform by having sellers upload items for static prices, rather than risk selling them in an auction format where they could get undercut. "That was a huge mistake," said Blachman. Why? "While we gained a lot of inventory, or a lot of access to inventory from sellers that were afraid of risk and wanting to just price things at a fixed price, we lost their engagement," he said. Now, the company doesn't offer such a program. Instead, sellers are part of the auctions themselves, and Tophatter keeps them engaged by offering incentives -- like better product placement -- based on past performance. According to Blachman, the plan now is to continue growing while ensuring that it can handle all the back-end logistics. He also believes that user interest in the U.S. will only increase, as game-like commerce experiences continue to explode overseas. Right now, he's focused on getting more Americans on board. "It's a complex but a really fun business challenge," he said.
The coronavirus changed the way people shopped for groceries, and King Arthur Baking Company was no exception. The 230-year-old company had one of the hottest pandemic commodities: flour. And while it did face huge supply chain constraints early last year, King Arthur has been able to see historic sales growth and consumer behavior changes. On the Modern Retail Podcast, Bill Tine, vp of marketing, spoke about all the curveballs thrown at the company over the last year -- as well as why it decided to rebrand from a flour company to a baking company last summer King Arthur’s marketing approach was upended overnight when the country went into lockdown. Over the last five years, he said, the brand has “built out essentially our own media company.” It published recipes, partnered with influencers and focused on growing its audience. Some of that was in person at its own baking schools. While King Arthur’s marketing strategy didn’t necessarily change during coronavirus, the underlying system did. “When Covid hit and people really shifted their media consumption, we were a place to turn to because we had a lot of assets already in place,” Tine said. “We had a team internally of bakers that could create [content] at home with their iPhones. And I think having that in-house was something where we’re able to really react quickly.” Indeed, King Arthur’s website got over 60 million unique visits in 2020. Reacting quickly helped boost King Arthur’s sales. Most grocery stores sold out of essentials like flour during the early days of the pandemic. With that, more people bought all-purpose baking items on King Arthur’s website. The online business doubled over the last year, and Tine thinks that momentum is going to remain. For now, the focus is on staying relevant with its customers. “One of the things that we really hone in on and rely on is the consumer insight for what the consumer wants,” he said.
When the New York Times writes about your product, sales inevitably explode. That’s at least what high-end sofa company BenchMade Modern experienced. It was featured in a trend story in 2016 and then, in 2019, became highly rated on the newspaper’s review website the Wirecutter (it remains the site’s top choice). When the Wirecutter review hit, said founder Edgar Blazona, “our web numbers spiked.” Blazona joined the Modern Retail Podcast and spoke about how he’s grown his company over the years. This isn’t his first furniture foray. In the 2000s he began selling modern children’s furniture online on websites like Wayfair. But he decided to get into the sofa game in 2015. BenchMade Modern makes furniture that averages between $3,000 and $6,000. It focuses on having as short of a lead time as possible while still being custom made. Currently, its lead time time averages five weeks, but Blazona said it can be as low as three. Unsurprisingly, the last year was big for the company. Sales did nosedive in March, which caused BenchMade Modern to temporarily pivot to manufacturing PPE. But in May, things picked back up as people were stuck at home and in need of nicer furniture. According to Blazona, revenue went up 100% year-over-year in 2020. The focus now is on keeping this growth. Blazona said the company is still facing some supply chain hiccups, but he doesn’t think demand for furniture is going to dip post-pandemic. The company has slowly been adding new products like rugs and lighting. The strategy, he said, is “just fine-tuning all of that and adding these new categories so that we can be a little bit more of a one-stop-shop.”
Emilie Arel joined mattress brand Casper for a personal reason. “I have two little kids -- they both slept on a Casper before I worked at Casper,” she said. “The way I realized how great a Casper was, I would fall asleep on their bed every night.” 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.” Her first mandate as CCO was to tie all the business threads together. Casper has over 60 stores around the United States and is sold at retailers including Target, Nordstrom and Raymour and Flanigan. Wholesale specifically has been a real emphasis for Arel. True, Casper began as an online brand, but it needed the help of national chains to really grow. “The majority of beds in the United States are still bought in a trial location somewhere you can lay down in the bed,” she said. So Arel has spent the last year thinking about which retail partners would be best for Casper. One of the most important aspects of the wholesale retail experience, she said, is making sure every sales associate is armed with the proper training -- “so that they understand our product, and they understand our focus on sleep.” But Casper’s real focus right now is making a name for itself beyond just mattresses. The brand has launched a bunch of new sleep-associated products, including blankets and pillows. And Arel said Casper is seeing huge growth from these ancillary products. The intent now, she said, is to continue to launch new sleep products, while making more people -- not just hip millennials -- aware of the brand. “Soon we’ll be talking to consumers in a different way, with a slightly different voice,” she said.
Candice Matthews Brackeen is looking outside of typical Silicon Valley circles for the next billion-dollar company. She’s a general partner at Lightship Capital, which raised a $50 million fund last summer that’s focused on companies from the Midwest that have Black, Indigenous or People of Color (BIPoC) founders. “Right now we’re trying to build the best portfolio possible to return capital to the LPs,” she said on the Modern Retail Podcast. Matthews Brackeen first got the investing bug when she began working with startups in the Cincinnati area. She had difficulty raising money for her own company, and made a group for other Black entrepreneurs to talk shop. This group gave proof to how difficult the landscape was for non-white founders. With that, she launched an accelerator program five years ago. Slowly but surely, those experiences led helped Matthews Brackeen launch a venture capital fund. On the podcast, she talked about how the investing landscape has changed over the last year. Following last summer’s Black Lives Matters protest, funds like hers began to get more noticed. Institutional investors began reaching out looking for funds in which they can participate. “We’re not a social impact fund, but there are investors who are involved with us for a social impact reason,” she said. Part of her role as at Lightship involves helping both portfolio companies and other investors. Matthews Brackeen and her spouse, fellow Lightship co-founder Brian Brackeen, have spent weeks living nearby to founders to get a sense for their daily rhythms. They would have portfolio companies come out to Cincinnati or Miami and spend time together -- eating all meals together and spending most of the daylight hours working on business development. “I think that it’s important that we break down those barriers,” she said. “That’s the way that we grow relationships with our founders.” Over the years, Matthews Brackeen has also found herself to both a liaison and a teacher at both ends of the table. She’s instructed other VCs about their invisible biases, and coached founders about presentation styles. “Not only are we teaching our LPs, but we’re teaching our founders, like, how to have grace when people screw up,” she said. Ultimately, it’s about positioning Lightship as a fund that should be considered alongside every other top VC firm. “I want to be a VC,” she said. “I don’t want to be a Black VC.”
2020 was the year the Fly By Jing soared to new heights. The company, which is best known for its array of Chinese sauces, has taken the direct-to-consumer food world by storm. It’s been written about in major publications like the New York Times and Eater, and has become a popular pantry staple in many Instagram kitchen posts. Before the coronavirus first hit, founder Jing Gao told Modern Retail the company was growing around 30% month-over-month. Then the business exploded last spring thanks to pandemic stocking and heightened media attention. “We ended 2020 about 1000% up from 2019,” Gao said on the Modern Retail Podcast. On this episode, she spoke about how Fly By Jing started as a pop-up restaurant concept, her branding and marketing approach as well as what the company’s future plans are. “I feel like there’s an unspoken understanding between our customers and our brand,” she said. Fly By Jing first got off the ground because Gao had a core group of friends and followers who supported her vision. She raised an initial Kickstarter (“the highest-funded craft food project [on the platform],” in her words) and was able to grow the business in its first year as a result of this community. Now, Gao is putting herself more front and center. When Gao founded the brand, people knew her as Jenny -- an Anglicized version of her given name. And over a year after the company launched in 2018, she decided to go by Jing. For her, this was a way for her to present both herself and her brand in their true lights. When Fly By Jing rebranded last fall, Gao unveiled her new first name, making herself more of a focal point of the brand. The idea behind Fly By Jing is to be a food company that doesn’t try to fit within traditional U.S. brand parameters. So far, it’s worked. Demand outstripped supply for most of 2020. Gao’s current mission is to continue the growth by creating new programs and ways to keep customers engaged. Earlier this month, for example, Fly By Jing launched an OnlyFans account that lets people see pictures and videos of “hot noods.” For the founder, the most important part is to make sure she has a direct line to those who love her products. “We are putting a lot of thought into how do we create a real community around our biggest users,” she said.
Even during a pandemic, people still needed glasses. As a result, online eyewear brand Zenni Optical has been riding a rocket ship. After an initial slowdown in March due to supply chain constraints, Zenni says it saw record growth in 2020. With people stuck at home, the company received an influx of new customers trying to avoid going to the eye doctor. And since most were working from home, Zenni’s line of blue light blocking lenses grew at an unprecedented clip. According to chief product officer Bai Gan, this past year was “the beginning of a new era” for eyewear brands. He joined the Modern Retail Podcast this week and talked about why. Zenni, which was founded in 2003, makes very affordable eyewear -- glasses as cheap at $7. According to Gan, this is because the company uses a vertically integrated business model. Zenni owns much of its supply chain, meaning it cut out middlemen most other brands deal with daily. It owns a one million-square-foot manufacturing facility outside of Shanghai, and works directly with suppliers to get the best rates. For its first decade as a company, Zenni focused on creating this infrastructure. “Originally, we just focused on that core competency -- the backend,” said Gan. Now, Zenni is in hyper-growth and trying to make more people aware of its products. It wields, however, a double-edged sword. “It was a little bit harder to really communicate quality to customers when the price was so exceptionally low,” he said. As a result, over the last few years the company has been on a marketing blitz trying to introduce itself to more customers. One of Zenni’s big PR approaches is influencer marketing. The company has worked with online personalities and well-known designers -- including Rashida Jones and Coco and Breezy. On the podcast, Gan describe the brand’s “sector by sector” approach. This includes working with gaming personalities to evangelize Zenni’s blue light blocking lenses. According to Gan, the growth is only beginning. For years, online glasses sales stagnated, but the coronavirus changed all that. Now, he said, Zenni is trying to implement a growth strategy its slowly been building. “That vertically integrated business model,” he said, “now seems to be giving us a lot of edges over the competitors.”
2020 was a tough year for casual dress shirt brand Untuckit, but the company was able to adapt. While many retailers that catered to workwear completely changed their product lines to mesh better with the pandemic lifestyle, Untuckit opted to wait it out. “The decision was no -- no massive overhaul of our brand ethos was necessary,” said Aaron Sanandres, co-founder and CEO. Sanandres joined the Modern Retail Podcast and spoke about all the changes his company experienced. While Untuckit didn’t drastically change its strategy, it did make some smaller tweaks. Much of that had to do with marketing. The company has become known for casual dress shirts, but it has other products too. “We never really heavily marketed our non-core button-down shirt,” Sanandres said. The new focus, he said, “was shifting the messaging.” Fulfillment was another big change. While Untuckit began as a digital brand, it’s also opened up over 70 stores over the last few years. The company quickly made those locations fulfillment centers -- which Sanandres said was no easy feat. “I’m almost certain almost all DTC companies were late to the game when it comes to buy online pickup in store,” he said. Why? “The fact is, if you’re on Shopify, you will have a very difficult time executing a very clean [experience].” These changes -- along with many other -- meant that 2020 was a year of learning. Sanandres described it as humbling. His brand has been in growth mode for the last decade, but had to rethink priorities when stores closed and shopping patterns shifted. “I’m an optimist. I’m always seeing the glass half full opportunity that things are going to get better,” he said. “So this did test me a bit.” While Sanandres maintained that his company is still growing and healthy -- he said the business is still bigger than it was in 2019 -- he viewed this year and last as a way to rethink fundamentals. “Maybe it’s an opportunity really to rebalance the business,” he said.
It’s been a big year for online shopping -- online car shopping too. Last summer, for example, Edmunds.com reported that used car and truck sales were the highest they’ve been since 2007. And online used car retailer Carvana was able to ride that wave (or, perhaps, drive that used ’09 Camry). It reported year-over-year revenue growth of 41% at its third quarter earnings. According to chief brand officer Ryan Keeton, the nine-year-old company was able to use the momentum it built over the last decade to capitalize on retail shifts during the pandemic. Keeton joined the Modern Retail Podcast this week and discussed his company’s overall strategy. Carvana relies on a predominately contactless experience, which has worked during a pandemic. But beyond that, this past year’s strategy was about making sure the company was a household name. It was known to many as the online company that also had a car vending machine -- which some thought of as a marketing gimmick. But as Keeton described it, the vending machines are “a very low cast way for us to get our name out there.” In 2020 Carvana also focused more on inventory diversification. The company had for years relied on wholesale channels from which most other used car lots sourced as well. But over the last few years, Carvana began trying to buy cars directly from consumers. 2020 was the first year that the retailer really let that program hit its stride. When you buy inventory directly from customers, said Keeton, “you can really diversify that and find different vehicles that customers are looking for.” Which is to say that over the last 12 months, Carvana really tried to make itself stand apart from other used car sources. Part of that is continuing to double down on new inventory sources, as well as heavily marketing people all the time. “Our goal is to build a national brand,” said Keeton, “to change the way people buy and sell cars.”
Canteen Spirits was ready to take on the hard seltzer industry -- and then the coronavirus hit. The company launched in late 2019 and began 2020 expecting to grow to new heights. According to co-founder and CEO Brandon Cason, the first few months of the pandemic were hard when the country shut down and many channels slowed down. But things began to quickly ramp up once the first coronavirus peak subsided -- and the beverage brand is in growth mode once again. Canteen makes canned vodka-based sparkling beverages. Cason joined this week’s Modern Retail Podcast and described the year’s journey. According to Cason, Canteen hit on the right space at the right time. Most hard seltzers are malt-based, but many people have been seeking out similar drinks that are made from spirits. “We recognized that consumers wanted to elevate and go premium when it comes to what they’re drinking,” he said. In the third quarter of last year, things began to take off, with sales doubling month over month during that period. Now, Canteen is about to expand into a new area -- Tequila -- with a soon-to-launch sparkling beverage called Cantina. Cason has a history in both liquor and CPG -- hailing from both the sparkling water brand Waterloo and the vodka company Deep Eddy -- and thinks that with new types of beverages it’s better to be the disruptor. “Big companies are usually not as good at innovation as they are mergers and acquisitions,” he said. Which is to say that a big company like AB-InBev may only invest in making a brand new product if the market has already bore out the results. Even with this current success, Canteen has a lot of growth to do. For one, it’s yet to build out its DTC channel and has only been focusing on wholesale. In his view, growing a direct online presence is a mid- to later-stage step for a spirits startup -- getting retail traction was the most important first step. The company is also waiting until the world opens back up, so it can begin more heavily marketing in person. Events, he said, are “still just a big placeholder for us” -- for obvious reasons. But once the vaccine is deployed and people are socializing once again, “there are dollars ready to go.”
Healthcare and insurance aren’t the sexiest areas, but they are both ripe for disruption. That’s why Matt Gamache-Asselin, co-founder and CEO of Alto Pharmacy, decided to enter the space, as he said on the Modern Retail Podcast. The five-year-old company has raised over $350 million thus far and has been building digital pharmacy to compete with the likes of CVS and Walgreens. Pharmacies are a big umbrella to tackle. Gamache-Asselin estimated the entire industry to be worth half a trillion dollars. For him and his co-founder, the idea was to first and foremost fix one very big problem: health insurance. Rather than selling over-the-counter prescriptions or charging a concierge fee for healthcare services, Alto is quite simply an online pharmacy that works directly with insurance companies. He described going to the pharmacy to pick up a prescription as “an experience I think everyone would agree is bad -- if not at least kind of weird.” To figure out how to go about it, Alto bought a small pharmacy in the Bay Area and to understand the industry. He learned “how different operationally [pharmacies are] from retail,” he said. From there, the company launched its digital platform -- which is now available in five major U.S. cities, including San Francisco, Los Angeles and Seattle. On the program, Gamache-Asselin spoke about the overall pharmacy industry, and why he believes there’s so much room for improvement. He’s even excited about the big dogs coming in. “What I’m most excited about is the new entrants into the space,” he said, “especially a company like Amazon.” Why? In his words: “It can be a bit of a wedge to drive change -- which is clearly sorely needed.”
Lauren Picasso is both an athlete and an entrepreneur -- and she used both skillsets to help launch her company. Picasso is the founder and CEO of Cure Hydration, an electrolyte beverage that comes in powder form. She has a background in e-commerce, hailing from startups like Jet.com, but Cure was her first foray in beverages. On the Modern Retail Podcast, Picasso described the process of launching and growing Cure -- and the lessons she's learned. Picasso has grown the company over the last two years, using social media and national distribution. The products are both available online and in stores, including CVS, Walmart and Whole Foods. At launch, her strategy was to have Cure available in boutique retail environments, like high-end gyms. "Post-pandemic, I really shifted gears and focused more on essential retailers," she said. Now the company is trying to scale by attracting new influencers to rep the brand, adding new products to its portfolio and expanding to more stores. Right now, the business is about 60% wholesale and 40% DTC -- which she thinks is a good breakdown. Both have their pros and cons, but Cure's focus is on getting more people to trying the product and then convincing then -- of course -- to repeat the purchase. "Retail is a great to grow your business really quickly," she said. "But DTC is important for us for our loyal customers and that direct access to our customers."
It's an understatement to say that 2020 was a strange year. A global pandemic turned everything upside down, and retail was no exception. In this week’s episode of the Modern Retail Podcast, a few members of the editorial team take a look ahead at what 2021 may have in store for the retail industry. We cover quite a bit -- from a quiet time for IPOs to a bill targeting e-commerce companies. But the one tying bind is that things are very different from what they were a year ago.
It's easy to talk about retail doom and gloom, given a nearly year-long shutdown for brick-and-mortar stores and bankruptcy filings by many big name retailers. But Shopify president Harley Finkelstein is bullish on the sector's resilience and potential -- especially in e-commerce, which has grown by double digits in 2020 (even retail sales generally were up 6.6% in the January to November period this year, if you exclude gas, car and food services). "In many ways Shopify is a proxy for independent retail," Finkelstein said on the Modern Retail Podcast, adding that the four days from Black Friday to Cyber Monday this year generated $5 billion in sales on the platform. "And so what that tells me is consumers have completely shifted their buying preferences towards buying more from independent retailers and buying things from brands whose values reflect their own," he said. Shopify allows users to set up their own e-commerce websites. Last year, according to the Canadian company, it surpassed eBay as the second-biggest online retailer in the United States (behind Amazon, obviously). "Our philosophy is to create more value for the partners we capture for ourselves that keeps growing," Finkelstein said.
The pandemic has quickly changed the typical office chair shopper. It's no longer entire companies investing in ergonomic seating, but individuals working from home. "Most consumers have never had to think about this type of product purchase before," Herman Miller Retail president Debbie Propst said on the Modern Retail Podcast. "They've relied on procurement teams or ergonomic specialists who have decided what chair you sit on while you're working." Herman Miller Retail includes Herman Miller, Design Within Reach and HAY. Propst joined the company in January, overseeing a year of momentous change. "One of the things that we've done over the spring and summer months, specifically for the Design Within Reach brand, is really soften the way that we look and feel so that we can be more relatable," Propst said. "We used to showcase a lot of museum-like homes that don't look lived in. And we've used this time period to really transition into much more realistic, livable modern homes."
As the pandemic's third wave mounts, Clorox wipes are still a hot commodity -- the product's shortage is expected to last into the new year. That outsized demand has led to a bump in sales for the company overall, and a stock that's risen by a third this year. Clorox's general manager of DTC Jackson Jeyanayagam, who oversees new digital business ventures and brands for the CPG giant, said that the edge extended to hiring power. "Here I come at Clorox trying to sell someone to come from a Netflix, an Airbnb or Warby Parker or Peloton and come work for me at Clorox, which no one ever thinks of as DTC," Jeyanayagam said on the Modern Retail Podcast. "It's never easy to hire great talent. But it's not nearly the same as it was exactly 12 months ago." On this week's episode, he spoke about how he approaches hiring, what new ways Clorox is trying to build out its DTC channel as well as how the company is looking into new areas and product lines. Burt's Bees, a subsidiary owned by Clorox, recently launched a CBD line, for example, and it brought about a few unique challenges. Some marketing channels are unavailable to a hemp-based products, Jeyanayagam said, and the product line can only sell in 25 states. "It's very saturated despite that. There's a lot of noise, and there's a lot of bad players."
In Karla Gallardo's estimation, the world got tired of fast fashion just as the direct-to-consumer model was being proven out. "By 2010 there was fatigue, there was dissatisfaction with the quality," Galardo said on the Modern Retail Podcast. "A lot of of news was coming out in terms of the conditions of the factories where these products were made. There was an opportunity for something better right after that bubble burst." Gallardo co-founded Cuyana with Shilpa Shah in 2011. The idea was to do to fashion what Warby Parker did to glasses "The choice was really obvious back then. It was 'well, this worked in the frames vertical, can we can we do this on the accessories and apparel side?" But, over the years, the program has changed a great deal -- even more so as a result of the coronavirus.
With a pandemic driving its six brick-and-mortar stores to little use, lingerie company Adore Me has relied on a try-at-home model. "We basically send you a bunch of items, you decide what you keep, and you only pay for what you keep," Adore Me vp of growth Camille Kress said on the Modern Retail Podcast. At the height of the pandemic, half of the brand's new customers were shopping this way. "The key metric for this model is the 'keep rate.' You definitely want people to keep as much as possible, otherwise you're basically paying for shipping back and forth, which is really not the best use of your time or your money," Kress said. The company also seizes the mail-in relationship as a chance to send prospective customers products from other categories like swimwear and sleepwear ("anything that you could basically find right now in our assortment, which is not only intimates," Kress said). This direct connection the company has long fostered with customers has helped Adore Me launch brands beyond lingerie, like Joyja, a line of period-proof underwear. "We want to accompany women through all the different stages of their life," Kress said. "So we know that we're going to need something for their first period, then for their pregnancy, for menopause, and anything that comes in between." Looking at all of these stages, the company tries to find the next untapped market on which it can capitalize. "We're thinking that there's an appetite somewhere," Kress said.
GDP and unemployment are one set of statistics, but another way to measure the extent of the economic slowdown brought by the pandemic is a bit more mundane: Traffic. According to the maps and navigation app Waze, traffic was down around 70% in the early days of the pandemic. "It was like a light switch," Suzie Reider, a managing director of global ads at Waze, said on the Modern Retail Podcast. Within its app, the Google-owned company can offer ads for nearby businesses for drivers, including pins on the map and larger "takeover ads" filling the top third of a user's screen ("it doesn't actually play until you're stopped," Reider said). That part of the business suffered from the drop in traffic too, of course. "We saw a marked decline and decrease in our own advertising revenue in... it started in March," Reider said. "Then we saw these incredible, super exciting, quick gains as we started to move through the summer and then back into the fall." But recent signs indicate that the next wave of the pandemic may not to as harsh on the retail economy as it was earlier in the year. In France and the UK, where lockdowns have been reinstated, "you see immediate pausing of campaigns but you don't see the cancellations," Reider said. Waze Ads' biggest categories are quick serve, "casual dining," entertainment and gas, and it works with both big chains and with small businesses that can spend as little as $2 a day on ads. Before the pandemic, according to Fortune, the app had 130 million active monthly users around the world.
If you're going to ride behind another brand's success, Ikea isn't a bad choice. That's, in fact, what Semihandmade did. Semihandmade makes and sells cabinet doors for the giant retailer's fixtures, which can themselves be bought without the doors. For a small price increase, according to founder John McDonald, you get a big step up in quality. But even though business is good on that front -- Semihandmade has been profitable every year, according to McDonald -- he's looking to cannibalize his own market with Boxi, a soon-to-launch, more premium offering that can fit out a set of kitchen cabinets in its entirety. One big opportunity McDonald spots is the lack of name recognition beyond the top spot filled by Ikea. "There's Ikea in the U.S. and then there's 50 others made by the big guys," McDonald said on the Modern Retail Podcast. With Boxi, McDonald is starting with just a few types of cabinet doors. "You do four or five things great. And that's how we're able to be highly competitive in terms of pricing and high quality, but it's not for everybody. To me that's the clearest path to scale," he said. There's nobody else out there doing this, he claimed. Absolutely, there are cabinet companies. But they're faceless. There's Ikea in the U.S. and then there's 50 others made by the big guys. Part of what we want to do is be nontraditional, looking at what the other guys are doing and say 'we're not doing that.'
It's hard to find good coffee online, and roaster Blk & Bold found that to be a competitive advantage. The company saw huge growth over the last year, thanks to its placement on retail shelves at stores like Target -- as well as being a top-selling brand on Amazon. On the Modern Retail Podcast, which was recorded live during our Modern Retail Summit this week, co-founder and CEO Pernell Cezar Jr. spoke about how he has grown the company. Being on Amazon became a competitive advantage -- especially once the coronavirus hit. More people were buying groceries online, and supplies like coffee were selling out. Thanks to being on national shelves, he said, Blk & Bold was able to gain authority. "When we looked at Amazon and e-commerce we were allowing that authority we were able to gain by brick and mortar to tie that back into scaling and acquiring new consumers on e-comm," he said. Still, coffee is a hard business. "We were entering into the second highest commodity beverage space -- being coffee, right behind water," Cezar Jr. said. He approached growing the company by finding ways to differentiate. "When you are shopping in a coffee aisle in any grocery store, let's say excluding Whole Foods, there is not a premium assortment experience," he said. Ditto Amazon. The bet was that he could grow a coffee business by becoming a rarely-seen premium brand on those shelves. Cezar Jr. described how he was able to capitalize on all of these elements to grow the business. Amid a pandemic it grew from two people to twelve, and got a brand new warehouse as well. "Our whole business is can we convince these consumers that they can also make great quality coffee at home," he said.
Luxury retailers have historically been slow to go online. But in the age of coronavirus, digital remains one of the only viable channels. Kelly Kowal, chief platform officer at Farfetch, is one of the people heralding this transition. Farfetch offers both its own consumer-facing marketplace of luxury items as well as sells white labeled services to brands and retailers that want to create their own online experiences. Both sides of the business have been booming over the last few months, she said on the Modern Retail podcast. "We are seeing a lot of interest from brands and retailers now really understanding how important that e-commerce channel really is," she said. But the industry is certainly not static. Different regions are seeing varied demands. According to Kowal, that is tied to countries' health and safety. "China, as it's recovering, is doing really well," she said. "The Middle East is doing really well." The only consistent things she's observed is inconsistency. The markets that were once reliable, said Kowal, no longer are. The demand you see one day may be gone the next. Meanwhile, competition is only increasing. Amazon is beginning to launch its own luxury offerings, giving brands more choices for which platforms they should work with. "We're always watching the competition," said Kowal, adding that Farfetch has a head start. "The difference for us is that we already have 1,300 partners," she said. "We already have the best brands and the best retailers." Amazon may be big and powerful, but it's yet to forge the important partnerships. In Kowal's eyes, the key is collaboration. Brands and retailers in the luxury space aren't looking for quick marketplaces to drop inventory. "We really genuinely want to be partners," she said. "That's how we see these relationships."
Barbie is Mattel's most iconic brand, but the toy company has more than 400 others that CEO and president Richard Dickson is, in his own words, looking to revive. In an age where smartphones and games like Fortnite present stiff competition for analog toys, Dickson says the company needs to create media everywhere it can. "Continuing to be where our consumers are means, today, being everywhere," Dickson said on the Modern Retail Podcast. Mattel is producing short videos for YouTube, on its own and via collaborations with influencers. It also has a show on Netflix, and last year announced 22 animated and live-action TV programs last year. The likes of Nickelodeon are still huge for Mattel to reach young consumers, but YouTube Kids is the biggest growth spot, Dickson said. "I would call YouTube the one that has accelerated the most in the last several years." Mattel also recently launched a DTC platform named after the company's original name, Mattel Creations. This program will feature special edition Mattel collectibles -- aimed at a more adult audience. The hope is to figure out more ways to tap into direct sales (though Dickson is quick to note that Mattel loves all of its retail partners).
Some DTC founders pick a sector just because they spy an opportunity. Bloomscape founder Justin Mast said did that too with his direct-to-consumer plant company, Bloomscape, that he founded in 2018. But he had a bit of a leg up, as he's also a fifth-generation greenhouse grower. His parents met in a greenhouse, in fact. Bloomscape ships thousands of plants a week, including full-grown ones that only survive within a narrow set of conditions. "The thing we did differently was to say 'how do we do this for a six foot tall tropical plant?'" Mast said on the Modern Retail Podcast. "I want to be able to ship that to Boston in the dead of winter." Bloomscape ships even the most fragile of plants through an advanced system of storage in greenhouses, and through innovative shipping patents and soil mixes. The company has seen year over year growth, as well as a huge spike in demand over the last few months. This week, in fact, the company announced that it raised a $15 million Series B, and acquired the plant care app Vera. Mast said the app acquisition is a way to keep more customers invested in the vegetation they purchase. Mast sees the pandemic as an accelerant for the millennial generation's belated settling down. "We're now settling into our lives, starting to settle down into homes and get a little more inward with our lives," Mast said.
Thrive Market, which first launched in 2014, had been growing at a rate of 40% a year before the pandemic. Now, with new customers joining the membership-based online grocery service, that growth rate has more than doubled to 90% a year, according to the company's co-founder and CTO Sasha Siddhartha. "We were already a digital native experience, so there were lots of parts of the business that scaled naturally," Siddhartha said on the latest episode of the Modern Retail Podcast. Thrive Market was also already running on a largely remote workforce. That growth was in part charged by the fact that about half of the service's members are in the Midwest and Southeast, "which are areas that maybe traditionally are regarded as health food deserts," Siddhartha said. When the pandemic hit, customers in those regions were even less likely to make the lengthy trek to the kind of stores and products that would be much more common in a major metropolitan area.
Most companies use social media as a way to point consumers to the brand's website. In hot sauce company Truff's case, social media -- and TikTok, in particular -- is an endgame in itself. "They eventually become customers, but we don't tell them, you know 'go to our link and buy our sauce,'" Truff co-founder Nick Guillen said on the Modern Retail Podcast. "We don't want you to go to the link and buy. We want you to like our brand." Nick Guillen and Nick Ajluni co-founded the company in 2017 based on an Instagram handle -- @sauce -- that they got their hands on during their college years. But TikTok is where it's really at, said Guillen. "It's a completely new generation of user, of customer," he said. "You really have to immerse yourself in platform -- TikTok, for example -- [and] really try to understand the voice, the tone, the flow, the style of content, how people are talking, the trends. And then set the brand in the middle of all this and not lose sight of the brand." The Truff co-founders said their company is the biggest hot sauce brand on TikTok, with 69,000 followers and nearly one million likes as of this writing. Beyond its own production (first-person videos are especially in these days, Guillen said), Truff shares videos in which fans and followers -- some of them chefs -- use the sauce themselves. Like the name suggests, Truff sells three truffle-infused hot sauces. They ship them to customers as a direct-to-consumer company, though Truff is also available on Amazon -- "we look at Amazon as more of a retailer versus our competition," Guillen said -- and in stores ranging from Neiman Marcus to Wegmans.
Jonathan Wahl sees the boom in kitchenware companies as a good thing for the sector as a whole. "Seeing others recognize the same opportunity reaffirms that yes, we're on the right track," Wahl, who co-founded the cookware company Abbio last year with his brother, said on the Modern Retail Podcast. "In terms of competing, I believe that at the end of the day the best products are going to win out." That last bit is worth saying because Wahl sees a proliferation of low quality products in the market. "We're kind of still in what I'll call the 'Shopify effect,'" Wahl said. "It becomes very easy for brands with not very well considered, thought out products -- or inferior products -- to launch and try to establish some sort of market presence. I think that's happened in our space as it's happened in many others." Abbio only makes and sells five pieces of cookware, which as a set go for precisely $287. Wahl pointed to tremendous growth due to the coronavirus, in both sales and traffic to its site. "We were seeing consistent growth and were excited with our progress. Then came March, April, May and June. We boarded a little bit of a rocket ship," Wahl said. Half of its sales are direct-to-consumer, he added.
2020 hasn't been a good year to travel or go on vacation, and Americans are spending more on home improvements instead. Furniture brand Article was lucky enough to corner that market with a DTC model that eschews the need for expensive floorspace that has gone unused for several months this year. "We saw this perfect storm for us, where not only were we effectively reaching a whole lot more people who were super motivated to buy, but we also had this really compelling offering for them, because the competitive landscape had shifted so radically," Article director of marketing Duncan Blair said on the Modern Retail Podcast. The advantages have proven big enough for Blair to doubt the need for a company store in the future, of which he questions the efficacy in 2020. "It's such a contrived environment. You walk into the stores, [there are] hundreds of other people, you're kind of sitting awkwardly on this sofa in the middle of the showroom with people looking at you and sort of waiting around. It's not your space," Blair said. "There may not be a good reason for us to go into retail anytime soon." Speaking about the big picture for the company and the sector, Blair said he was confident that "we'll continue to grow as a share of e-commerce, and that e-commerce will continue to grow as a share of the overall furniture market. The question mark is: What is going to happen in the total furniture market over the next 18 months to three years?"
Sam Dennigan launched Strong Roots with a single item -- sweet potato fries -- in Ireland in 2015. The frozen vegetables company has since raised $18.3 million from private equity firm Goode Partners to expand into the U.S., where Dennigan is now based. His experience on both sides of the Atlantic helps him highlight some of the competitive differences among markets. "The key difference between the U.S. market and the U.K. and Irish market is the fact that private label is much stronger in natural foods in the U.K. and Ireland whereas brands lead the way with natural food in the U.S.," Dennigan said on the Modern Retail Podcast. The pandemic has proven to be a boon for staff productivity, he said, and has also forced the company to branch into making ready-to-eat dishes available for delivery. "That was in response to not being able to sample in stores. That's something that's not going to come back for some time with the risks around cross-contamination and infection," he said about his collaboration with Ghost Truck Kitchen in Jersey City. "We've pivoted into being a food service offering that you can order direct to the home through Uber Eats and Seamless and Door Dash."
Back when GT Dave, founder of GT's Living Food, single-handedly proved that there was a market for kombucha in the U.S., "probiotic" was hardly a buzzword. "Fortunately today, that hurdle or barrier is no longer there," Dave said on the Modern Retail Podcast. Kombucha is big business; sales exceeded $480 million in 2019, according to Nielsen. GT's Living Foods, which was founded in 1995, makes for a big piece of that pie -- 60% of it back in 2015, as he then told a profile writer. He wouldn't provide an update to that figure for 2020, but did speak to the challenges presented by the pandemic, especially early on. "There was a time where anything that was considered single serve, like our 16-ounce bottle, was basically dead," Dave said about March and April. In-store sales have since rebounded, and the company is taking its first steps in the direct-to-consumer space. "This quasi-subscription approach is something our fans have been waiting for a very long time and Covid kind of gave us that reason to explore it." GT's other strategies for surviving the downturn include emphasizing the product's possible health benefits (or at least, its healthful reputation) and communicating with retailers about their common interests in keeping supply flowing.
Blueland CEO Sarah Paiji Yoo wants you to know that when you pay for cleaning supplies at the grocery stores, you're mostly buying water. "Oftentimes consumers are paying really for a new plastic bottle -- and water, which we already have at home," Paiji Yoo said on the Modern Retail Podcast, which was recorded live during our Modern Retail Virtual Summit this week. Blueland sells concentrated tablets for consumers to mix their cleaning supplies on their own. The relatively tiny packaging is another differentiator compared to what you see from Ajax and Dove. "Existing CPG players were incentivized to have larger, bulkier packaging because this packaging really served as billboards in stores," Paiji Yoo said. Blueland goes the direct-to-consumer route, which Paiji Yoo considers to be the only route for products that depend on changing consumer behavior. Its appeal isn't just that it's a smaller, new kind of product; Blueland wants to eliminate single-use plastics. In the last two months it's expanded to the dishwasher and laundry categories (with a powder and tablets, respectively). The plastic films that keep your typical dishwashing pod together aren't all that good for the environment. "I think people think that because it dissolves that magically disappear. But unfortunately those plastic mulches enter our water systems," Paiji Yoo said. The pandemic has made consumers somewhat more likely to demote previous green concerns in exchange for effectiveness and availability, she said. But as a result of the crisis, she estimated, demand has been 4x what it would have been otherwise.
It took a trip to London for Emily Schildt to realize that American grocery stores could do better. "I came back personally really yearning for a grocery store experience like I had there," she said on the Modern Retail Podcast. "They were just beautiful spaces in which to shop -- gorgeous products, but really thoughtful display and design." Last year Schildt founded Pop Up Grocer, a traveling showcase of a few hundred products that sets up in U.S. cities for a month at a time. It had four locations to date; the next one opens in Brooklyn this October. Many of the goods, like cauliflower crust, are available at grocery stores already, but Schildt argues that they're buried in a mass of other items. Since the 90s, the average grocery store's number of items has mushroomed from 7,000 to between 40,000 and 50,000, according to a recent book on the topic. "It's a lot of cold outreach," she said about how she gets products that are worth the spotlight, many of which she finds on Instagram. A place at Pop Up Grocer helps show off brands that might otherwise remain obscure or have trouble selling online. "I think people find starting their own business so hard if they don't have all of the connections. And it's hard even if you do," Schildt said. Schildt talked about the company's move into ecommerce, plans to raise outside capital and her favorite place to shop for food in Paris.
Piggy banks aren't especially in vogue, but the idea behind them sticks. By saving up a little over the long haul, you can pool quite a bit of money — enough, in Reel's experience, to pay for a luxury handbag, furniture or some electronics. The personal finance app lets customers save up for specific items. Users pick something and commit to wiring Reel a few dollars a day for it, setting an enticing timeline into motion. Put aside $5 a day for 12 weeks, for instance, and Reel will take care of shipping you that Apple Watch you've had your eye on. It's a win-win situation, in CEO and co-founder Daniela Corrente's telling. Customers save responsibly for stuff that may have felt was outside their price range, and companies working with Reel create a new touchpoint for cost-concerned customers (the only loser might be credit card companies, which Corrente doesn't feel too bad about; she had her fair share of credit card debt in college). "Many of our customers have gotten their first luxury handbag through our website. So we're actually converting them and giving brands the opportunity to leverage our platform," Corrente said on the Modern Retail Podcast. The average customer, she added, has two or three "active reels" they're saving for. With the pandemic continuing to constrict people's social lives, purchases for fashion -- Reel's first vertical when it launched in 2016 -- have dipped. Meanwhile, the company accelerated its expansion to other categories. "Our priorities has humans have varied, because we're 24/7 at home now. A lot of us, we don't necessarily have a house that's fit to work from," Corrente said. "All of a sudden, [users are] investing more in making your house prettier, more accommodating for working from home, investing more in fitness from home... those have all been categories that have catapulted since this happened."
Closed spaces, mingling strangers and loud music to shout over -- bars seem purpose-built for spreading the coronavirus. According to Bacardi CMO John Burke, that means people will be doing their drinking, and less of it, at home. "This summer there'll be a lot more drinking out of home because people feel much more comfortable social distancing at home," Burke said on the Modern Retail Podcast. "We predicted that trend back in early April, and we've switched to producing quite a lot of our brands into ready-to-drink packaging." The only bright spot in a recent report by IWSR is indeed in the ready-to-drink category (like last summer's hit, White Claw) which the market analyst estimates will grow by more than a fifth this year in the U.S. Alcohol's popularity was on a downward trajectory even before the pandemic, and globally may not return to pre-coronavirus levels until 2024, according to the report. The latest slump only sharpens, according to Burke, a trend that Bacardi is prepared for: "the desire to drink less spirits and seek lower alcohol or no alcohol solutions. That's a trend that we expect to see massively amplified." Given how that expectation combined with the pandemic, Bacardi expanded the launch of a zero alcohol aperitif under its Martini label. "Despite disruption in the industry we'll deliver ahead of target for this year on that innovation," Burke said. Another silver lining is the growth of e-commerce for Bacardi's spirits, starting from an "abnormally low level" compared to other sectors. "In the last three months we've probably seen two years' development take place," Burke said. "The number of people who've had their first ecomm experience of buying liquor online is huge. That creates a permanent change in our industry structure."
Cleo Capital's Sarah Kunst thinks the investing landscape focuses a great deal on the top of Maslow's hierarchy of needs -- in plainspeak, that's stuff that isn't really essential. Or, in Kunst's words, the kind of product that answers the question: "what will make you feel better in the moment?" Her investments are in companies that supply basic needs. "There's the whole thing on the bottom: where you do you live, where do you eat, how do you feel loved?' Kunst said on the Modern Retail Podcast. That includes Zero, which calls itself "the first plastic-free grocery delivery service" -- and is available in the Bay Area only, for now -- and StyleSeat, which aims to help beauty professionals run and grow their personal businesses. Kunst also started a scout program -- "when a venture fund pays for you to angel invest" -- and Chrysalis, a fellowship for tech workers laid-off as a result of the coronavirus (and curious to start their own businesses). "This wasn't us flying everybody to a private island for six weeks, it was 'hey, we have a Slack channel,'" Kunst said. "When you provide space for people, a lot of creativity just kind of flourishes." "We didn't turn people into founders. We took people that we believed could be founders and we showed them that a lot of what was holding them back was that zero to one. Candidly, they didn't even need an idea. Not every person started their own company. A lot of them joined with other people," Kunst said.
Before the pandemic, the zero (or low) sugar beverage brand Sanzo had all the scrappy upstart charm and aesthetic of a DTC brand. But, it still sold mostly through wholesale -- 70 to 80%, in founder Sandro Roco's estimate. That's changed. "Since the pandemic, it's completely inverted, and even more extremely so," Roco said on the Modern Retail Podcast. "During this pandemic, if you're looking at CPG sales and specifically sparkling water, a lot more folks are willing to order sparkling water to their home than many other CPG categories." That's good for Sanzo, which sells 12-packs of "Asian-inspired sparkling water" online, where subscriptions are possible, but also through bodegas, grocery stores, and soon, 50 Whole Foods outlets in the Tri-State area. Depressed advertising costs at the start of the pandemic led the company to "dust off the DTC playbook pretty quickly," according to Roco. "I don't know that there will ever be an opportunity for a digital marketer like what we had in March and April," Roco said. "You had the combination of the powerful targeting that Facebook and Instagram have to offer -- which, obviously there's a whole other consumer conversation around data privacy and what not, but at least to a marketer, it's still a very robust advertising engine -- with also CPMs or ad rates that you've just never seen on this platform." Sanzo has also partnered with the Coca-Cola backed Iris Nova, through which it's benefitted from their text order platform.
Aishwarya Iyer started Brightland, an olive oil company, in 2018 with the idea of describing the products like wine and marketing it like a beauty brand. "Beauty leads the way in terms of talking about benefits, packaging -- the shine and glimmer that beauty's able to do, food just isn't able to do that. Maybe there are some standouts!" Iyer said on the Modern Retail Podcast. What's more, many DTC beauty brands rely on less traditional revenue channels, like big box retailers. Over the last few months, large wholesale sales have gone down for Brightland -- so it's had to focus much more on digital sales and smaller retail partnerships. "Everything's kind of moving back to this quote unquote normal place, save for the larger retailers still because they still probably have inventory on hand," Iyer said. Growing in wholesale's place are digital sales, according to Iyer, as well as and inbounds from gift box companies.
Business lost to the pandemic has rebounded for StockX, an online marketplace where people selling and buying items -- sneakers, mainly -- negotiate on a price before StockX provides authentication and shipping. "We've seen an incredible return to activity in the marketplace," StockX CMO Deena Bahri said on the Modern Retail Podcast. "By mid-April we started to see an incredible return back to normal -- and even better than normal -- shopping behaviors." That's the case even though the company cut its spending on "anything that's not directly attributable to measurable growth," Bahri said. StockX reduced its spending on linear TV and marketing at cultural events. "The more conservative stance on marketing spend has not had a negative impact on business, very fortunately," Bahri said. The Detroit-based company was founded in 2015 with an exclusive focus on sneakers. It's diversified into other streetwear, watches, trading cards and electronics. But shoes are still the main attraction. Sneakerheads and other consumers may even be turning to shoes as smart investments. A scrolling tape across the bottom of StockX's homepage announces which footwear is up or down in the market. "Our trend partners that we work with, and some of the things we've observed on our own, indicate that people are more prone during a time like this to spend on things that are investments, classics, items that will endure," Bahri said.
The professional world may have been disrupted by the coronavirus pandemic, but there is one thing that still powers our workday: coffee. The subscription-based Trade Coffee, for one, has seen its mail-in customer base go up by a factor of 10, alongside other food startups that have seen a bump in subscriptions. Earlier this year, company CMO Melissa Spencer Barnes told Modern Retail that the company was on track to ship its millionth bag of coffee sometime in 2020. It also started selling five pound bags -- the size roasters typically sell to office spaces -- as people drink more coffee at home. Launched in 2018, the company connects customers with their network of 55 roasters. It takes coffee seriously enough to borrow the language of dating apps, inviting subscribers to "get matched" with the best roasted beans for them. To bring customers in in the first place, Trade Coffee is focused on dominating SEO terms around the drink, and on creating useful content for people curious to learn more. "We see that our role as a brand but also as a growth tactic is in being the educational voice for coffee," Spencer Barnes said on the Modern Retail Podcast. "Surprisingly, there weren't that many incumbents in that space before." Trade Coffee is focused on how-tos and videos about the brewers that customers support. Next, it's looking to grow on YouTube. "That's where people are consuming content and nerding out, if you will, wanting to go down that rabbit hole. That's the nature of coffee. You get into it a little bit and then you want to keep going further."
As existing commerce companies adapt to survive a global pandemic, Jimmy Wu instead launched one. Cat Person sells cat food, toys, furniture and treats in a market that Wu sees as skewed toward dog owners. The coronavirus gave pause to Wu and his co-founder, Harry's alumnus Lambert Wang. "If we were in another category in another industry -- selling travel accessories, luxury fashion -- we probably would have made a harder decision" about delaying the brand's launch, Wu said on the Modern Retail Podcast. But more time at home has inevitably led to cat owners spending more time with their pets. "It felt like it actually was a good moment for us to launch, that people actually needed a service and products to help better connect and have a better relationship and interaction with their cat," Wu said. Since its start in late March, items like cat toys and treats have sold at three or four times the rate Wu first expected. Wu talked about why you won't find Cat Person on Amazon, his take on the DTC revolution and how the company's packaging itself can be turned into cat-pleasing objects.
Retail stores are slowly reopening, but Christiane Lemieux, founder of the DTC furniture brand The Inside, still thinks people will want to invest most in the place they're spending most of their time: the home. "What you will be doing is focusing your time and disposable spend on making your home into everything it should be -- not only for now, but for what the future of our lives is going to look like," Lemieux said on the Modern Retail Podcast (people are spending so much time in doors, in fact, that Lemieux thinks a baby boom will hit in January). The Inside meets its demand through a "made to order" model -- a piece of furniture isn't built until a customer buys it online. "I think 'made on demand' is the manufacturing of the future," said Lemieux. "It's so much better for the environment. There's no warehouses full of imported product just sitting there." In her case, it's also made the company more resistant to the supply chain disruptions roiling the world. "Having a domestic manufacturing base has allowed us to continue to produce even during this particular and very challenging situation." "We don't make anything until you place your order. There's people in my cohort who do the same thing with shampoo and vitamins. It's in every category at this point," Lemieux said. One or two of The Inside's factories still had to shut down -- one on the U.S.-Mexico border, the other in Illinois -- until the national policy that deemed manufacturers to be an essential service allowed them to operate again, according to Lemieux.
Looking to the past doesn't always work. For one, many current founders or CEOs were "still in high school" during the last economic crisis, according to Homebrew partner and co-founder Hunter Walk. For another, even for those entrepreneurs who survived the last global downturn, the big takeaways might not apply to current circumstances. "The answers from those entrepreneurs in 2008 may or not be the right answers for companies in 2020. But the questions they asked themselves might be the things that are evergreen. And so asking some of those questions of yourself as a founder who might be going through this the first time -- I think that's where it gets valuable," Walk said on the Modern Retail Podcast. Homebrew, the investment company Walk co-founded in 2013, has invested in companies ranging from the worlds of kids' clothing to aerospace technology and farming robots. Another evergreen spot for him is in the qualities of the founders he invests in, "which have remained consistent and help us do our job during a time like this," Walk said. "You ask yourself 'why is this founder working to solve this problem?' And if the answer is something that usually comes from a personal interest in the problem, a deep insight or connection, then when they hit a speed bump (or in this case a very large speed bump, from a global standpoint) they don't stop. They pause, maybe, and say 'OK, how do I have to rethink my business?' But they're not just doing this opportunistically. They're doing it because they couldn't imaging doing anything else."
For a time, Grove Collaborative was one of the rare places where you could order reasonably-priced hand sanitizer online. That availability wasn't for a lack of demand. "Demand had been building, and all of a sudden for a week it was off the charts. And we had a big decision to make that week," CEO Stuart Landesberg said on the Modern Retail Podcast. "Do we want to prioritize our existing customers or do we want to prioritize going after new customers? Grove ended up focusing on existing customers, and limiting orders on certain items, allowing it to stay under its maximum shipping time of four days. "We probably left a lot of money on the table by doing that, in the short term," Landesberg said. But he reckons that that kind of consistency for the eco-conscious home supplies company -- which hit unicorn status last year -- will allow it to thrive in the long term. "Having clear and virtuous values and then ruthlessly sticking to them is essential to creating 100-year brands," Landesberg said.
Coefficient Capital co-founder Franklin Isacson describes himself as a cautious investor, especially in times of uncertainty like today. That comes in handy during a time of crisis. For Isacson, this has been a good time particularly to invest in certain companies, especially in grocery and consumer goods that can weather a recession. "The new funds that are being deployed over the next 24, 36 months are likely to be very good vintages, much like the '09 and '10 funds were excellent vintages," Isacson said on the Modern Retail Podcast. Isacson lists four big lessons derived from 2008: rethinking how demand will be impacted ("consumers are going to trade down to private label during times like this"); creating backup in supply chains given the possibility of supplier bankruptcy; honesty in leadership about the uncertain times ahead; and liquidity. "Private capital markets are not always going to be there to fund your business even though you as a business might be doing well. Or even if they are, the terms just might not be as attractive," Isacson said.
Biossance president Catherine Gore has always considered skin care as medically significant, and believes customers will be more inclined to share that thinking as coronavirus lockdowns continue around the world. "Our skin is our largest organ, and it's also our first line of defense against outside aggressors," Gore said on the latest Glossy Beauty podcast. Education is a big part of Biossance's marketing strategy and value to customers. One of Biossance's central ingredients for skin care, for instance, is squalane, which it derives biochemically from sugar cane -- the larger cosmetics industry sourced a similar squalene (with an e) from a not-so-vegan source: shark liver. That makes a big difference for the typical customer who has more time to do her research, according to Gore: "What's actually driving her is a curiosity to do better for her own skin and the planet and to make better choices," she said.
If Nick Ling's latest brand launch wasn't so right for this moment, he would have delayed bringing it to market. "If I was launching a new brand I'd wait. There's just too much change in consumer behavior," Ling said on the Modern Retail Podcast. But Open Spaces, the second brand under the umbrella company Pattern (where Ling is CEO) is all about getting the most out of the place many consumers are stuck in these days. "How also do we help separate home into different activities, where now work is a much bigger activity at home than it used to be?" Ling said. Open Spaces makes and sells containers, racks and shelf risers (Pattern's first brand serves another domestic need: cooking). To help you figure out what you might be in the market for the company offers an online guide, including a listening exercise -- you'll need 10 minutes, headphones and pen and paper -- designed to make you want to stay a while.
Through this crisis, Burrow CEO Stephen Kuhl is sticking to a piece of advice he got back when the furniture store was just another startup at Y Combinator. "The advice we got then was 'just launch your first product. Get it out there into people's hands and you'll get feedback,' Kuhl said on the Modern Retail Podcast. That's what the company has done with a virtual design consultation program delivering an "in-store experience" to customers from their homes. It had been in development for a while, according to Kuhl, but the pandemic's halting effect on the economy made this the time for Burrow to see it through (Burrow has one store, now closed, in Manhattan). "Within 48 hours we stood up our V1 of this virtual design consultation program. And that was something where everybody who was involved in that dropped everything and jumped on it," Kuhl said. He added that Burrow has seen "a good amount of revenue" from the new program, especially considering it was a leap of faith. "We had no data to say this is definitely something we should spend our time and money on." Kuhl talked about Burrow's supply chains, pivoting its business and how "anybody that tells you that they know how to forecast their business in this is either lying or completely naive."
Americans may have more reason than ever to appreciate the comforts of home and the value of making theirs their own. But even a company like Parachute, a luxury linens and home goods company founded in 2014, is feeling the pinch from the downturn in retail. "Our [physical] retail is about 25% of our business -- but it's a profitable part of our business," the company's founder Ariel Kaye said on the Modern Retail Podcast. "And it's really also how we connect with our customers and build relationships." The brand is accelerating some of the shopping alternatives it had already been planning before the coronavirus pandemic. "We've been excited about buy online, pickup in store, and curbside pickup for a long time, but it was always one of those things that we thought we would get to," Kaye said. "We want to make sure that we can deliver the experience that we want our customers to have no matter where they are."
If Benjamin Witte talks about his beverage brand Recess as if it were a budding empire, it's because he's noticed the same broad ambitions among the sector's big players. "Red Bull is a media company for the action sports community that monetizes through selling cans," Witte said on the Modern Retail Podcast. "We're speaking to creatives, just like Red Bull is speaking to the action sports community, and Gatorade is speaking to athletics." To that end, Recess -- which sells fruity sparkling waters infused with that relaxing CBD -- is planning on rolling out compelling online content (without the help of influencers), merchandise, and "IRL experiences," Witte said. The company launched in late 2018, and the coronavirus crisis isn't exactly slowing it down. E-commerce sales are up 5x, according to Witte, though he conceded that retail is predictably down. "No one's in Manhattan. We have a huge part of our sales come from the lunch crowd, the office crowd, the coffee shop crowd. That's gone. We're also not in the Targets and Walmarts yet because of the regulatory [element]. So we don't benefit from that, which is a lot of where the foot traffic is." Witte talked about what CBD does for him, entering a retail sector without prior experience and why he looks to Disney instead of LaCroix.
Rhone CEO Nate Checketts said his company "saw the writing on the wall really quickly" in the early days of the coronavirus pandemic. Companies like his men’s activewear brand would soon be bloated with inventory and feel the pressure to boost e-commerce promotions. "If everybody's getting promotional all at once, that's going to shift customer demand away from us if we're continuing to operate at full price," Checketts said. "So I challenged our team in 24 hours to get a promotion ready and to be ready to effectively communicate to the customers about what steps and actions we were taking." That plan included an email newsletter that's actually useful to readers instead of just being a distress call -- and the rare discount on Rhone products. "We won't go deep, but you will see brands that will have to," Checketts said. "In some cases it might act as a clearing house to get non-serious players out, and that will present some opportunities. I do think that brands that I won't name but leaned so heavily into retail before they were really ready for it are in a lot of pain now," he added. Even on Rhone's e-commerce front, he said, "there's definitely been a demand impact, no question." Checketts talked about leadership values, what brick-and-mortar landlords should keep in mind and how he's staying honest with his employees.
When people go shopping for mattresses, according to Resident co-founder Eric Hutchinson, they often know more or less what kind they're after. "The person who wants a memory foam mattress opts into that category very quickly," Hutchinson said on the Modern Retail Podcast. "They say: 'I am looking for a memory foam mattress,' so they're doing the comparative shopping versus other memory foam brands." In other words, people don't go mattress shopping as much as they go "memory foam" or "traditional" mattress shopping, right out of the gate. "Once we understood that, the notion that we would have a portfolio of brands was pretty clear to us." That's why Resident, a DTC holding company formed last year, has four mattress brands to its name, giving it the ability to meet consumers even after they've written off certain mattress categories. The company is "right at the point of break even profitability," Hutchinson said, and it's expanding to other parts of the home furnishing shopper's list. "The idea is to have products that resonate with the consumer across the entire furnishing life cycle of a home," Hutchinson said. Obviously, the coronavirus pandemic poses problems for any consumer business's plans. "Uncertainty is the most difficult thing to manage to," Hutchinson said. But he added that although retail revenue plummeted "almost overnight," the DTC side of the business is strong. "Right now consumers are online, so we pivoted our business and really have been able to make up the ground that we lost to the retail," Hutchinson said. He talked about the "aspirational" vibe of new DTC companies' brick-and-mortar stores, surveying customers and what digitally-native really means in his book.
Much has been written about the Chinese consumer that shops abroad in stores. But there is a growing movement among customers in China that, through livestreaming apps like ShopShops, are shopping at stores outside China, just through their phones. ShopShops founder Liyia Wu explained the experience from the customer's perspective: "Open up your phone, and with a click of a button you can be [on] any street, anywhere, opening the doors of stores that are interesting." The app allows viewers to watch hosts -- experienced salespeople or fashion influencers -- as they display clothes and accessories, QVC-style, for several hours. Customers can buy what they see and interact with the host and other shoppers via a chat function. ShopShops then makes a commission on purchases. The four-year-old company, based in both New York and Beijing, also completes the last leg of delivery within China. "Everything is shipped to us in bulk. We help to facilitate that last mile," Wu said. In the future, Wu hopes to expand ShopShops to hosting livestreams in other languages and on social media platforms rather than just the app itself.
Shark Tank investor and co-founder of RSE Ventures Matt Higgins thinks a change is coming to the DTC playbook. "I think it's amazing that you can come along and challenge taboo thinking around ED, or you can go ahead and create an entirely new cereal brand, launch it right away and get scale. That's not going away," Higgins said on the Modern Retail Podcast. What is going away, he added, is the idea that digitally-native companies can stick solely to the online world and survive. "That part is not true, but it's kind of obvious, looking back," Higgins said. "You're going to go where the customer is." Higgins talked about his prescription for Casper, Harvard Business School's week-long course on the DTC model and how it's time for a brand affinity metric.
When it comes to financial technology, China has Silicon Valley beat. WeChat is a big part of that. What started as a messaging app in 2011 is now a mobile payments giant. "People use it for everything. For utilities, for gaming, obviously to communicate with their family and friends, and to do business," said Yiren Lu, a software engineer (at Google) and a writer who covers WeChat and Chinese technology. WeChat users can transfer money to their friends. But they can also pay for groceries, look through menus or place an order at a tea shop without standing in line or handling cash -- or a credit card. "There are hundreds of millions of Chinese people who were unbanked, who did not have bank accounts. It was a very cash-heavy society," Lu said. WeChat and its main competitor, Alibaba's AliPay, "basically became banks," Lu added. She chalks WeChat's success -- some 34% of China's data traffic goes through the Tencent-owned app -- to this quickly solved pain point, but also to the country's rejection of American tech companies. In 2009, "China basically kicked out all of the U.S. tech companies," Lu said. China's "Great Firewall" blocked Facebook, Google, Twitter and Vimeo that year. If China offers a rapidly growing middle class -- one with less "antipathy towards the idea of consumerism," as Lu put it -- it is Chinese companies that are getting to it first.
The direct-to-consumer model didn't exist when Ariane Goldman started her first clothing brand in the mid-2000s. But by the time her second company, Hatch, launched in 2011, "the only way to really start the business was DTC," Goldman said on the Modern Retail Podcast. Hatch makes clothes to be worn at all stages of pregnancy -- and before and after too -- sold both online at stores in New York and Los Angeles. "The genesis was really what didn't exist out there. I was pregnant with my first daughter and looking for something to make me feel better," Goldman said. "Why wasn't it there? If I needed it, there must be millions of other women that need it too." The company landed $5 million in Series A funding last year, but Goldman is wary of the inordinate amounts of cash being stuffed into the DTC market. "Why are these great ideas all of a sudden being beaten up by inflation and numbers and greed?" she asked. "Sometimes I find myself wondering what it's all worth if you're not actually building something." Goldman talked about the advantages (and inevitability) of going DTC, what she learned from her first clothing brand and Hatch's expansion into beauty products.
Studs co-founder and CEO Anna Harman recently got a second piercing in her ears. One place she looked at would have charged her $500. The other, which she went for, was a tattoo parlor. "And while the piercing experience was great -- they pierce with a needle, it was healthy and safe -- the overall environment was really not suited to me. I felt really personally out of place there," Harman said on the Modern Retail Podcast. She reached out to Lisa Bubbers, who would go on to co-found Studs -- a store that pierces your ears and sells you jewelry as well -- with her last year. "I said to Lisa 'wow, it feels like there's a real opportunity here to reinvent this experience end-to-end,'" Harman recalled. "We really thought the opportunity was to combine healthy and safe needle piercing with really accessibly-priced, fun jewelry in an environment that the customer was excited to spend time in." Studs has a flagship store in Soho and is taking advantage of trends in the world of brick-and-mortar. "How do you physically expand in a way that's not incredibly capital intensive?" Harman said. "You will likely see Studs do things like shop-in-shops and kiosks." Harman joined the Modern Retail Podcast to discuss the dreaded piercing gun, and what she's learning from both the direct-to-consumer zeitgeist and her time at a hedge fund.
Coulter Lewis got the idea for Sunday when he saw the state of his local Home Depot's lawn care aisle. "You can smell it before you get there," Lewis said on the Modern Retail Podcast. "It's pallets stacked high with bags of chemical fertilizer, covered in caution labels." That was in 2017, the year before he launched the company out of Boulder, Colorado. First, Sunday asks customers to ship it a bit of soil from their property. Then it analyzes that alongside pre-existing soil and weather data before sending a regimen of pesticide-free products for you to apply via pouches that attach to your hose. Customers pay on a subscription basis annually, receiving four boxes a year. Plot by plot, the company is hoping to eat big retailers' lunch; the outdoor lawn and garden sector brings in $13 billion in retail sales for Home Depot and Lowe's, Lewis said, and the grand total is more than thrice that). "We're really not about coastal millennials. That's not our focus at all," Lewis said. "We're appealing to a more mass market."
For the Body Shop, it's about selling where the customers are -- even if that means it's not necessarily on your own sites or in your stores. "Stores for us are the bread and butter of the business, the biggest portion of the business, and will always be," U.S. general manager, Andrea Blieden said on the Modern Retail Podcast. At the same time, being on Amazon has been a big boon to the business, mostly because that's where a significant part of new customers are. "I just don't think that you're moving Amazon shoppers off Amazon that much," Blieden said. "If you want to capitalize on the fact that over 30% of Americans are using Amazon, you gotta go there." Blieden talked about the changes brought about by L'Oréal's sale of the company to Natura & Co. in 2017, The Body Shop's investment in Amazon and what it's like working at a company that speaks out on social issues.
Lo & Sons launched as a direct-to-consumer brand in 2010. That's practically prehistoric as far as the recent crop of DTC companies is concerned. "We were kind of an accidental DTC company," co-founder of the brand, which makes high-end handbags, Derek Lo said on the Modern Retail Podcast. "We started before the term even existed." The idea to start a family business came from Derek Lo's mother, Helen Lo, who despite her frequent travels couldn't find a bag that was easy on her back. She started a blog about light-weight bags -- Derek's brother Jan helped set it up on Tumblr -- before convincing her sons to quit their jobs and give their own company a shot. The company became profitable in 2013, according to Lo, and it did so while eschewing the typical playbook of so many DTC brands that came after -- outside investment, millennial-focused subway ads and the inevitable expansion into brick-and-mortar stores. The company's independence has helped Lo & Sons survive, in Lo's estimation. "We want to be a brand like Patagonia that's going to be around for decades, that's making a positive impact on the world," Lo said. Lo talked about the company's origins, marketing strategy and product innovations -- like a separate compartment for shoes.
Iris Nova founder Zak Normandin is betting on a suite of "no or low" sugar drinks -- sparkling teas, seltzers and lemon juices -- and on a new way to sell them. "Every brand has a phone number," Normandin explained on the Modern Retail Podcast. "When you want to place an order for a product you just pull out your phone, you text the brand directly." His lemonade brand, Dirty Lemon, has sold more than 2 million bottles since its founding in 2015, and per Forbes, 90% of those sales happened via text. And Iris Nova now is growing more, thanks to a cash injection of $15 million from Coca-Cola -- to whom, he said, he's open to selling to. "I think that that's probably the best path forward for us unless we can get to a place where, very quickly, where the company is profitable," Normandin said. Normandin called his research into the Asian market "inspiration" for the text message payment system. "I found that in Asia it was probably the most exciting, just the speed at which the market is moving is much different than here in the States," Normandin said. He talked about the fading clout of influencers, the tough path forward for direct-to-consumer companies and the value of text robots (even if none has passed the Turing test) on this week's episode.
Roman launched in 2017 with a specific mission: Treating erectile dysfunction online, with doctor consultations and medication delivered right to customers. The company has raised $176 million in funding. It's also changed its name to Ro and turned Roman into just one of the the brands it owns, expanding its telemedicine offerings to also tackle nicotine addiction (with a brand called Zero), perimenopausal conditions (Rory) and more. "We really realized that we had built a platform that could treat and serve far greater needs than just that one condition area," said Will Flaherty, the company's vp of growth, on the Modern Retail Podcast. Flaherty talked about how Ro's differentiation lies in service over product, why TV is central to its strategy and more.
Rebecca Taylor dresses aim to land between the feminine and something more irreverent. "Back in the day there was cool people and feminine people, but they didn't really cross over," the company's president, Janice Sullivan, said on this week's Modern Retail Podcast. "In Rebecca Taylor, it's where that meets," she added. "It's okay now to be a feminine feminist. It wasn't, maybe, years ago." A year after the departure of its founder, the designer sells dresses in six of its own U.S. stores, and rents them out on both its own website and Rent the Runway. It also just launched a new program that will take older Rebecca Taylor clothing in exchange for credits and discounts for new. Sullivan talked about the shopping experience, the rental business and why not to worry about cannibalizing your own market.
Before startup founders woo thousands of customers, they often try to convince investors to get onboard with their company's mission. As a principal investor at Lerer Hippeau, an early-stage venture capital fund based in New York, Caitlin Strandberg is on the other side of the table. The fund has invested widely, including in DTC brands like Allbirds, Casper, Everlane and Lola. Strandberg joined the Modern Retail Podcast to talk about how the VC game has changed since the rebirth of direct-to-consumer companies, what she considers a waste of venture dollars and why early growth (in percentage, not in raw numbers) is key to gauging a company's potential.
This week, it's a look ahead at what 2020 may have in store for retail. Modern Retail reporters Cale Weissman and Anna Hensel join host Shareen Pathak for a roundtable discussion about the beats and developments they know so well, from how Walmart and Target will seek to challenge Amazon to whether venture funding for direct-to-consumer startups will dry up.
Michael Wieder, the co-founder of Lalo, is betting on the baby stroller market. "We know that you're putting your most precious belonging in our products," Wieder said on this week's episode of the Modern Retail Podcast. "They have to be safe, they have to look good, they have to be an extension of who you are. If you don't trust us, then why buy us?" Wieder and his co-founders Jane Daines and Greg Davidson saw the new-to-parenthood customer as one facing many first-time purchasing decisions without much information to go on. "You get to a stage in your life where you're forced to make hundreds and hundreds of purchasing decisions for products you've never used before. That's unlike anything else you shop for," Wieder said. After launching their stroller, The Daily, earlier this year, Lalo added a second direct-to-consumer product to their line-up: a high chair. Wieder joined the podcast to talk about how to challenge incumbent brands, the DTC business model, and Lalo's next moves as far as new products go.
For Helena Price Hambrecht the abundance of alcohol at every after-work event meant that hangovers seemed inevitable. "I knew that I had a problem. I knew that everyone else I knew had a problem where we were like 'god, are we supposed to do this forever and not die?" she said on this week's episode of the Modern Retail Podcast. "We're supposed to drink, drinking is part of life, but we all feel terrible. Why isn't there a better way to drink?'" She and her husband Woody Hambrecht founded Haus to try supplying that better way. The company's drinks are alcoholic, but only a bit more than the stuff you put in an Aperol Spritz -- the growing popularity of which proves the "demand for something lighter," Price Hambrecht said -- and other aperitifs. Millennials, the thinking goes, aren't drinking to get drunk. Haus' concoctions are also on the not-so-sweet (read: sugary) side, and are under the legal cutoff (24% ABV) for mailing bottles to customers. Price Hambrecht joined the inaugural episode of the Modern Retail Podcast to talk about founding Haus, focusing on PR at launch and what comes next for the direct-to-consumer industry.
Making Marketing is making some changes. Starting with our very next episode, we'll be the Modern Retail Podcast, bringing you conversations with people innovating in retail, including the oh-so-buzzy world of DTC. But before that, this episode rounds up a few highlights from Making Marketing's interviews in the past year: Kevin Lavelle, the founder of menswear brand Mizzen and Main "I’ve spoken with a couple VC firms. We had positive feedback, but one VC said she couldn’t see how we could [make] 10 times our revenue over the next 12-18 months, so they’re not interested. And it stuck with me. She was absolutely right." Rachel Drori, founder of the subscription frozen food company Daily Harvest "I have such issues with what I call the cycle of torching cash. What’s happening is that there’s so much VC money out there — anybody can raise — and then they can throw money at their problems." Joe Kudla, founder of athleisure brand Vuori "If you go straight to the VC community pre-revenue, they’re going to dictate terms often terms. You don’t want a VC running your business." Jed Berger, CMO at Foot Locker "I think that it’s an interesting time, and in many companies, there needs to be a redefinition of the role of the CMO, or marketing within the organization, or how it reports, or what its accountabilities are. The marketing industry is in for an evolution."
Equinox took the gym and turned it into a premium product. Now the company is looking to do the same with the fitness instruction videos you watch online -- think high-end camera work instead of vertical video shot on an iPhone, featuring some of their 6,000 instructors and full-fledged classes. Equinox Group is serious enough about it that they've put a new division of the company, Equinox Media, to the task. "We're really running a half fitness club, half production studio every single day," Equinox Media CEO Jason LaRose said on this week's episode of Making Marketing. In this, LaRose said, they're responding to trends among existing customers -- who in surveys say they want to spend more time with the brand -- and Americans as a whole. "When you see a $4 trillion wellness economy, when you see gym or club memberships at an all-time high in this country while you also see digital content going through the roof, I think you're on to something where you really need to follow the consumer." In this week’s episode of Making Marketing, LaRose talked about starting a content-making company from scratch, how stores today are more about marketing than bringing in revenue and why media will be a customer acquisition tool.
Working at the NFL gave Rhone CEO Nate Checketts a pretty good lay of the land as far as men's activewear went. And what he saw was a big hole in the supply-side of the market. "Lululemon was really leading the charge" in marketing premium workout clothes to women, he said. "And then you had all of these brands that were there going after the same customer." But no one seemed to be doing that for men. "If you were to look at the men's side -- at, call it a 40% price premium to the Nike, Under Armour, Reebok, Adidas of the world -- it was crickets. It was nobody." So Checketts co-founded Rhone, a clothing company meant to give guys threads that they can wear at the gym, in social settings or often both. In this week’s episode of Making Marketing, Checketts talked about just how far back the DTC model goes, why it's easier than ever to go small (but harder than ever to go big) and the tough standards venture capitalists often judge brands by.
Amazon doesn't just dominate the market for paperbacks and e-books. Through its subsidiary Audible, they've got the audiobook market (worth $2.1 billion, according to Bloomberg) cornered, too. They're also not limiting themselves to putting existing books on tape. "We want to give our customers experience beyond traditional audiobooks," said Audible CMO John Harrobin. The company's range of audio products -- like Audible-exclusive books and listenable stories from The New York Times -- means that "competition is anything that you can do when your eyes are occupied but when your mind is free." Many of Audible's subscribed listeners consume 80% of their content in just one format, whether e-book, print or audio. "But several people are choosing to listen to certain types of content via audio," said Harrobin. "For example, many people that are e-book readers listen to non-fiction on audio, because they do it in their commutes. It's not that escape moment for them where they're relaxing and reading." On this week’s episode of Making Marketing, Harrobin talked about how the company serves as both a platform and a creator of original content, the reason brands are so bent on selling "purpose" and a serendipitously-named Kentucky Derby contender.
Even in states that have legalized marijuana, opening a business that sells it can be hard. Some of it, according to Kristi Knoblich Palmer, the co-founder of Kiva Confections, which makes edible THC products, is just down to people not wanting cannabis retail in their backyards. For a time, even Instagram was skeptical of letting Kiva's products -- mints, gummies, and chocolates -- show up on their platform. "Our account kept getting shut down," said Knoblich Palmer, even though they were "keeping it informative, all about education -- and then you'd look at other pages that weren't getting shut down and weren't getting flagged, and they were racy and inappropriate." Still, her company's answer was to keep graduating marijuana's image. "We really have to act professionally and go above and beyond to make ourselves look professional, to act professionally, and to help overturn that stigma," said Knoblich Palmer, who launched Kiva in 2010. That starts with the packaging, where 95% of Kiva's brand image happens. "Having a beautiful package was the front door for the consumer," said Knoblich Palmer. "It had to step up the edibles category as a whole and really let edibles finally sit in a different part of the mind for consumers." Beyond that, down-to-the-milligram precision in THC dosage ("everybody had those college experiences" of having a bit too much) goes a long way in building trust with consumers. On this week’s episode of Making Marketing, Knoblich Palmer talked about the responsibility she feels when marketing a product that some people still oppose, how the company started in her kitchen, and what her vision for the company in five years is.
Reddit bills itself as "the front page of the internet" with more than 300 million average monthly active users. But from a marketer's perspective, much of it represents an untapped audience "We're very lucky in that we have seen our top-line awareness continue to grow year over year, largely organically," said Roxy Young, vp of marketing at Reddit. Next comes bridging what she calls "the relevance gap" -- convincing people who know about Reddit to browse and join the website. On this week's episode of Making Marketing, Young talked about how the company aims to bring some gender balance to its user base, the technical features it's still catching up on after last year's website redesign, and her own favorite subreddits.
Gin Lane was the ad agency behind some of the most well-known digitally native brands that have sprung up in the past few years. And co-founder Emmett Shine helped create the look, feel, and digital interfaces of modern brands like Harry's, Recess, and Sweetgreen. But then he wanted more. This summer, Gin Lane shut up shop. In its next iteration -- under the new name of Pattern -- Shine wants to now create what he calls the next generation of brands: It's not just about transactions, but building a relationship with customers. And -- though he doesn't want to "sound too New Age, wellness-y" -- helping them cope with the alienation common to modern life. "We all live in cities, we don't as much go to church, we don't have as many organized, civic things that we do." Shine said on this week's episode of the Making Marketing podcast, adding that in this age, brands are poised, and have a responsibility, to have a purpose in their customers' lives. The company's first product is a line of high-quality cookware called Equal Parts, which customers can get extra use out of through content via the company's coaching program to help people cook. "It's something that is just inherently positive," he said. "It makes you feel good to cook for yourself or for someone else."
MetLife is as opposite to a start-up as any company you can imagine. But that doesn't mean it shouldn't think like one, says the company's U.S. CMO, Hugh Dineen. "How does a 150 year old company stay in the game? It's the same thing in terms of how you think about marketing. Our customer is dynamic, and so must we be." Hugh Dineen joined Shareen Pathak on this week’s episode of Making Marketing to discuss the digital side of best in class marketers, why advertising is overblown, and how enlisting mid-sized influencers ("not the Kardashians") is the way to go.
When's the last time a shoe company made you feel all warm inside? Atoms is looking to do that. Its two founders moved from Pakistan to the United States to craft shoes with a personal touch, not solely in their customization -- they come in quarter sizes, and you can get slightly different measurements for each foot since "most people have shoe size difference between their left and right foot," co-founder Waqas Ali says -- but in the hand-written notes and other inviting customer engagement methods. Sidra Qasim and Waqas Ali joined Shareen Pathak on this week’s episode of Making Marketing to discuss how the couple plans to keep that personal touch as their company grows (it scored $8.1 million in Series A funding earlier this year).
At any given moment, millions of articles of clothing are coursing through ThredUp's logistics behemoth. Founded 10 years ago, the company will send you an empty bag for you to fill with clothes that you want to cash in on. Then they'll take them off of your hands to photograph, price, and ultimately sell online -- after which, of course, you pocket some consignment money. “The source of all of that amazing product are the closets across America. It turns out that people buy a lot of stuff, and even when they don't need to buy more, they buy more," said Anthony Marino, ThredUp's president (and formerly its CMO). "If you look at some recent statistics, in the United States, people buy on average 65 to 70 new items every year, and they wear them maybe 6 or 7 times and then never again.” Selling stuff through ThredUp, Anthony says, users can both experience the "life-changing magic of tidying up" so astutely promoted by Marie Kondo -- and feel like they're doing their part to reduce waste.
You'd be hard pressed to find a more beautifully packaged product than The Laundress's detergents. The company, which was acquired by Unilever in January for a reported $100 million, started off as a special-care laundry brand, and now makes a line of detergents and cleaning products. “We've had, since early on, women and men contact us about how we've saved their christening gown that's been in their family, or we saved a quilt of their grandmother's,” said Lindsey Boyd, co-founder of The Laundress, on this week’s episode of Making Marketing. Lindsey joined Shareen Pathak on this week’s episode of Making Marketing to discuss how to balance a brand's growth ambitions with reality, why retention is more important than acquisition, and what it means to be direct to consumer.
Direct-to-consumer is coming to furniture. The Inside, a one-year-old startup, is going down the path of companies like Burrow, by selling furniture online. The twist: It's also customized.
When Kara Goldin founded Hint in 2005, she was searching for a way to get herself to drink more water. Her solution: adding chopped fruit to pitchers of water, to offer flavor without the sweeteners of traditional flavored beverages. Thus, Hint was born. Now, almost 15 years later, Hint has become one of the largest independent, non-alcoholic drink companies in the U.S., boasting over $100 million in sales each year. The brand sells on Amazon and inside grocery stores, as well as through its own site. It's even launched new lines of products, such as kids' drinks and sunscreen. On this week's episode of Making Marketing, Shareen Pathak sits down with Goldin, to discuss turning a product into a company, avoiding too much reliance on a single platform and expanding the brand into new categories.
Amy Fuller, CMO of Accenture, is overseeing an expansive list of functions throughout the company, and she likes it that way. For a company that seems to offer an endless list of services to its clients, this isn’t much of a surprise. Accenture hosts an expansive offering of services, which include everything from strategy, technology, consulting, operations, and with its recent acquisition of ad agency, Droga5, it now boasts a strong creative services offering as well. On this week’s episode of Making Marketing, Shareen Pathak sits down with Fuller to dig deep into why B2B marketing is converging with consumer, and how the company thinks of in-housing and the role agencies play in the industry.
Rachel Drori started a company because she was hungry. But once the seeds of Daily Harvest were planted in her head, she dove in, and started trying to build a brand. Now, with a cushion of VC funding, Drori is looking towards the next evolution of her company. According to Drori, some of the funding will be used to build out the brand's content strategy and help them share their story. On this week's episode of Making Marketing, Shareen Pathak sits down with Drori, the brand's founder and CEO, to discuss how she built her business, why she worked with investors before taking funding and how she's pushing back against rising customer acquisition costs.
In the past few years, Foot Locker has been making headlines for its aggressive push to modernize, and according to the company's CMO, Jed Berger, that innovation has pushed their marketing department to start thinking about their customers in a new way. From investing in a handful of consumer startups, to rethinking their retail spaces, to launching their own incubator, the company has been working towards what it will be the next evolution of the retail industry. For Berger, this forward-thinking push means that how the company is marketing itself has to evolve as well. Now, Berger is getting involved in the products from the design stage to ensure that the consumer draw is built-in, and sees himself as more of a business partner, than a marketer. On this week's episode of Making Marketing, Shareen Pathak sits down with Berger to discuss the changing role of marketing at Foot Locker, why the company chose to incubate and invest in new brands and the shift of the overall marketing industry.
Electric toothbrush DTC brand Quip wants to grow up, and it is doing so by going beyond DTC. As is common with many direct-to-consumer brands looking to scale, Quip participated in a pop-up, took to the New York City subways, and recently began selling its products in Target stores (although refills can only be bought directly from their website). Now, following the acquisition of dental insurance brand Afora, Quip is looking to expand its offering into services. Quipcare, which will be rolling out this summer in New York City, has two options that will let customers partake in either a pay-as-you-go model which offers services at a discount or a $25-a-month model that resembles traditional dental insurance. When asked about how the company plans to balance two very different businesses -- products and healthcare -- Shane Pittson, Quip's vp of growth, said it's all part of the same ecosystem. Customers can pick-and-choose which parts they would like to subscribe to, or they can subscribe to the full Quip "universe." On this week's episode of Making Marketing, Shareen Pathak sits down with Pittson to discuss how Quip learned from its DTC peers in its early days, why its move into Target is part of an accessibility-focused mission and how it's working to control the brand experience in places where it doesn't have total control.
When sustainable bedding brand Buffy, launched in late 2017, it looked like the archetypical direct-to-consumer company: online presence, purpose-driven marketing and no middlemen. However, that didn't last very long. In one of their earliest rejections of the direct-to-consumer tropes, Buffy did not take any VC capital. Instead, the founders opted for a few angel investments, and bootstrapped the rest of its funding strategy. According to Paul Shaked, Buffy's co-founder and vp of growth, growing has been at the core of Buffy's mission since day one, so shortly after launch they moved into selling third-party on Amazon, and then into physical retail. Now that the company has reached a point of scale it is happy with, it is starting to explore non-Instagram and more non-digital forms of marketing as a way to continue growing. In this week's episode of Making Marketing, Shaked sits down with Shareen Pathak to discuss the many tropes of a DTC brand, Buffy's approach to marketing and why it's investing in its own editorial platform.
When David Wolfe co-founded premium mattress brand, Leesa in 2014, he already had almost two decades of experience in the DTC world. Throughout that time, he says, he's learned to keep an eye firmly planted on technology. In the years since its launch, Leesa has expanded beyond DTC -- it now sells in West Elm, on Amazon and on its own site. Now, Wolfe is focused on finding new, more efficient ways to market the company, going beyond what he calls "traditional" digital marketing channels. On this week's episode of Making Marketing, Shareen Pathak sits down with Wolfe to discuss how a brand purpose can be built authentically, why he's a big believer in video advertising and how he defines the word "omnichannel."
Vuori clothing, an athleisure brand launched in 2015, is a rarity: The company, which does do most of its business direct-to-consumer, has a healthy wholesale operation, a few physical stores of its own and has raised only a small angel funding round to date. The company's founder, Joe Kudla, joined Digiday on the Making Marketing podcast to talk about why it was important for his business to not go down the VC-funding route when it launched.
Burrow is a digital-born luxury furniture company, that, like most DTC brands, put most of its marketing eggs in the Facebook basket. But it soon realized that it can't simply rely on social media to drive sales. Burrow's head of intelligence, Alex Kubo joins us on this episode.
As the traditional lines of luxury blur, luxury marketers are competing for attention and consumer spend across categories. Lee Applbaum, CMO of the high-end spirits brands Patron Tequila and Grey Goose Vodka, part of Bacardi Global Brands Limited, is making a play for more of the luxury customer’s wallet. Applbaum discussed how platform partnerships can help the brand reach customers differently, how he thinks of marketing channels and more.
In the past year, the agency world has been rife with news of consolidation. Most executives have explained this as part of a longer-term plan to create less siloed organizational structures and pitching more efficient, integrated solutions to clients. Peter Sherman, executive vice president of Omnicom Group, doesn’t buy it. Sherman discusses the best path to consolidation, how consumer centricity has changed over the years and more.
Brand purpose has become the go-to phrase for chief marketing officers. Stephanie Buscemi, CMO at Salesforce, claims brand purpose is imperative for every brand and it’s even expected by the employees.
Shopify has emerged anew in the direct-to-consumer era. The 15-year-old e-commerce platform that powered the small business segment is worth $25 billion. Now, it's setting its sights on the larger brands. Hana Abaza, director of marketing at Shopify Plus, the division in Shopify that works with larger merchants, says the pitch is about distinguishing between control and ownership. Abaza discusses evolving as a platform to retain bigger brands as they grow, why the DTC companies are here to stay and more.
The direct-to-consumer era is changing consumer behavior and expectations across categories, be it retail or insurance. Liberty Mutual has felt this shift, and in its new products as well as marketing is attempting to change in line with those expectations. Emily Fink, CMO at Liberty Mutual, joins us on this episode.
The direct-to-consumer playbook at this point is well known: Launch online with one product, expand to physical stores, and stretch into new products and even categories. For Brooklinen, the online-born bedding brand, it's no different. The company, which made about $48 million in revenue last year and says it's on track to be a $100 million company, just experimented with a pop-up store in SoHo last year. It has also expanded to bath wear, with more to come soon. Founder and CEO Rich Fulop said it comes with taking a broader view of the category. He talks about the best marketing channels, building a creative team in-house and more.
In the last year, Athleta, the women's workout wear brand owned by Gap Inc., has taken its creative in-house for its content creation efforts. Athleta CMO Sheila Shekar Pollak discusses the marketing mix for the brand that is on its way to becoming a $1 billion business, the importance of in-store events, omnichannel marketing and more.
There is no lack of success stories in the direct-to-consumer markets. But there are also questions being asked of how long the industry can sustain itself. With a plethora of new brands launched every day, built on VC money with tall growth targets, it's fair to ask if a shakeout is coming. Kevin Lavelle, founder and CEO of Mizzen and Main, a brand that sells men’s performance wear dress shirts, thinks a carnage is it's on the cards. Lavelle talks about building a brand, advertising on platforms versus TV and what’s in the future of the DTC space.
A few months ago, Verizon launched Visible, a new brand that sits within the multi-billion dollar company. Launched invite-only, Visible is a digital-only phone carrier with no stores and e-commerce only service. And the telco brand is taking cues from direct-to-consumer brands. Minjae Ormes, CMO at Visible, discusses Visible’s strategy, the cues the company’s taken from Glossier and its own direct to consumer playbook.
As DTC brands grow up, they begin to look a lot like traditional brands. The challenge then, is differentiation. The solution: better data management. MM. LaFleur, the “bento box” pioneer of women’s workwear is one of those brands that uses data to differentiate itself. LaFleur discusses fighting the downward price push in the e-commerce space, how the bento box came about, diversifying customer acquisition channels and more.
Consultancies are turning into agencies as agencies grapple for a seat at the table. Alicia Hatch, CMO of Deloitte Digital, the $1 billion ad agency that sits within Deloitte, has insight into why consultancies are built for the modern CMO. On this week's episode of Making Marketing, Hatch discussed the pressures on today’s CMO, why Deloitte believes in having skin in the game, and why in-house doesn’t scare her.
Born online direct-to-consumer brands are increasingly turning to traditional physical retail models to find new places for growth. Mike Grillo, CEO at Gravity Products, thinks DTC is just a launch model and not a sustainable business model for the longer term. Grillo discussed the impending DTC shakeout, why it’s important not to depend on Facebook and why TV remains important.
Thirty Madison, the parent company behind men’s hair loss treatment Keeps and migraine treatment company Cove, which just raised a little over $15 million in funding, is using the wellness and health momentum in the DTC industry as it looks to disrupt a giant, $17 billion industry. Steven Gutentag, co-founder of Thirty Madison discussed how the launch and growth model works at the company.
At a time when brands everywhere are turning to digital marketing to connect with customers, American Express is taking a much more human approach. For Rutledge, her motto has always been, 'Customer first,' so it felt natural to try and find a way to incorporate them into their marketing strategy. From customer referral programs to taxi top ads that change based on your neighborhood, she believes that showing your customer that you really understand and want to take care of them is the best way to turn them into authentic brand ambassadors. On this week's episode of Making Marketing, Rutledge joins Digiday's Shareen Pathak to discuss turning your customers into your best marketers, why complicated messaging doesn't work and how fighting fraud strengthens C2B relationships.
For Shiv Singh, most of the industry's current problems come down to trust. That's the focus of the former PepsiCo and Visa marketing executive's new book, co-written with psychologist Rohini Luthra. The book, called "Savvy: Navigating Fake Companies, Fake Leaders and Fake News in the Post-Trust Era," is a deep dive into the business of marketing with a decidedly psychological bent. It focuses on disinformation campaigns in the Facebook era, the rise of fake news and what happens when people lose faith in institutions around them. On this week's episode of Making Marketing, Shareen Pathak sits down with Singh to discuss why brands today lack trust, the difference between brand purpose and brand equity and why he still likes Facebook.
One year old men's healthcare DTC brand is attempting to disrupt healthcare. The company, which is centered around removing the friction from treating common health issues such as erectile disfunction and hair loss, uses a combination of affordable product lines and education in an attempt to get men talking more freely about their health. They're also trying to branch out beyond men: Hims has also launched a female-focused counterpart, appropriately titled Hers, hopes to solve this issue of access to birth control and time spent waiting in line at the pharmacy. The products, paired with the opportunity to have 24-hour access to physicians, have helped Hims to raise about $100 million in funding, and, if the rumors are true, of a new round of funding may just raise the valuation to a whopping $1 billion. On this week's episode of Making Marketing, Shareen Pathak sits down with Hims founder and CEO, Andrew Dudum, to discuss using humor as a marketing strategy for touchy topics, the impending DTC bubble burst and making the move into female wellness.
Orange Theory, a fitness company founded in 2010, is now making $1 billion in revenue and is on track to open 2,500 studios by 2024. The brand is riding the wellness wave, which means more than just fitness. Kevin Keith, chief brand officer at Orange Theory, is focused on creating a strong brand message and differentiating. Keith revealed why being a lifestyle brand is not the goal, how wellness has permeated culture and whether a robot is going to take Kevin’s job.
Ro, a healthcare direct-to-consumer company that began with a product to treat erectile dysfunction, has a different set of marketing challenges to worry about compared to other DTC brands. Regulation in marketing pharmaceutical products differs from state to state. And because health remains a sensitive topic, establishing legitimacy remains a priority with prospective customers. Rob Schutz, CRO and co-founder at Ro, discussed using platforms for acquisition, TV advertising and more on this episode.
Late last year, Gap Inc. launched Hill City, an activewear line that is its version of Athleta, but for men. It's also the retail giant's new opportunity to keep growing in activewear. Eric Toda, head of marketing at Hill City, says the advantages of launching Hill City are to be seen for Gap but in the meantime, there’s a lot Hill City is learning from the retailer.
Born online, so-called DTC brands are growing up. Retailers that were once solely e-commerce are now turning to a more traditional playbook for growth. Rolling our physical retail stores is the first step in the way. Parachute, a digitally-born bed and bath brand, is on its way to launch 20 stores by 2020 and already has six stores in the U.S. On this episode, we chat with Parachute CMO Luke Droulez.
The road to in-house certainly isn’t smooth. As the industry gets more and more excited about brands building their internal agencies, a bit of a rude awakening came in December last year when Intel announced it would be shuttering its internal agency, Agency Inside. Teresa Herd, who led Agency Inside and is now the vp and global creative director at Intel, talks about building an in-house agency, how external agencies fit in and more on this week's episode of Making Marketing.
B-to-B marketing is not a bubble. The rise of influencers and direct-to-consumer businesses have presented marketers with new challenges with whom to market to and which tools and channels to use. Inside SAP, chief marketing officer Alicia Tillman is focused on extending the brand’s relevance from decision-maker to the everyday user.
Consolidation is the name of the game and one of the big players in the M&A space are consultancies. Karmarama CEO Ben Bilboul discusses the merits of being acquired by Accenture, why he is wary of holding companies and more.
On this episode of the Making Marketing by Digiday, we recap the big themes that emerged for marketers this year, from agency consolidation to marketing evolving as a driver of business.
For GoPro, it never considered itself as solely a camera maker. Rather, it was a media brand, according to founder Nick Woodman. He discusses reshaping the brand over the years, how GoPro’s media team operates differently and more.
Big mergers resulting in new entities like Wunderman Thompson and VMLY&R have set the tone for 2019: It’s going to be the year of consolidation. Anne Bologna, chief strategy officer at Hearst-owned agency iCrossing, says there is too much continued pressure on agencies — a talent war with the duopoly and continuing competition has made agencies lose their confidence, and forget their craft. Bologna discusses why consolidation is necessary, how agencies are trying to be everything for clients and more on this episode.
The big shift in this year has been in the marketers’ demands from an agency. It’s not just about the advertising anymore. Agencies are increasingly being called on to solve business problems -- and it's showing. Mike Sheldon, Chairman and CEO of Deutsch North America has witnessed exactly that in pitch meetings. Sheldon discusses learning new skills, the allure of consultancies and in-house agencies and more consolidation in 2019 on this episode.
Blockchain and AI are IBM's big bets to take the company back on the top as a leader in innovation and technology. Michelle Peluso, chief marketing officer at IBM, discusses how the technologies will change the craft of marketing.
There's a lot of talk around "nimbleness" inside big companies. But the legacy internal red tape stands in the way of operations and the lessons of traditional marketing behavior are difficult to unlearn. That's been the responsibility of Pete Blackshaw, Nestlé’s Global Head of Digital Innovation Service & Service Models, who has spent the last few years working on changing up the company's internal makeup so it can move faster. Blackshaw discusses the ease and difficulty of being a direct-to-consumer brand, his upcoming new job at Cintrifuse and more.
Instagram has long been touted as a haven for direct-to-consumer brands. The case has been the same for Rothy’s, a women’s shoe brand that recently surged in popularity after actress and royal family member Meghan Markle, wore the label on the day of her pregnancy announcement. But as the DTC market gets more and more saturated and that starts to reflect on Instagram, there's also potentially a tipping point where it ceases to make sense as a medium. Cooper discusses opening retail stores, finding new growth paths, investing in TV and more.
Cannabis has succeeded in going from being stigmatized by society to now capturing the imagination of retailers, investors and consumers. MedMen, a publicly traded company out of California, is at the forefront of the developing cannabis industry. Standing in the way of its retail strategy are big hurdles like hyperlocal compliance issues, inconsistent regulations that differ state by state and the stigmatization associated with cannabis itself. David Dancer, the newly appointed CMO at MedMen, talks about hyperlocal marketing, working with influencers and figuring out cannabis marketing.
The agency world is shrinking. Alex Leikikh, global CEO at MullenLowe Group, thinks there is an oversupply of agencies in the U.S. market. He believes that as more clients start to go in-house, there will be more mergers and more agencies will go out of business. MullenLowe Group is also a result of a merger that happened over three years ago. In our latest episode, Leikikh discusses management lessons he learned, the importance of bundling creative and media talent together and more.
Citi has doubled down on music as it tries to become a more emotional part of its customers' lives, Citi’s Global Consumer CMO Jennifer Breithaupt said in the latest episode of Making Marketing. Breithaupt discusses how experiential made Citi’s marketing more effective, doing market-mix modeling and more.
Independent agencies are having a moment in the competitive advertising agency landscape, but it's not all rosy. On this episode of Making Marketing, Neil Heymann, Droga5's new chief creative officer, discussed how tough it is to be an indie creative agency these days, with client demands that keep changing in a market where it feels like nobody cares about creativity anymore.
Last week, Midwest digital shop VML was merged with old-school legacy agency Y&R, one of the first moves under WPP's new CEO, Mark Read. It's part of a larger plan to create a slimmer, less siloed holding company that's better suited to face the challenges of the industry. The global CEO of now named VMLY&R, Jon Cook, says a consolidation in the industry was long overdue -- and this is just the beginning.
When it comes to lifestyle brands, Equinox makes a pretty good case for itself. What started out as a luxury gym has evolved into a hospitality brand, talent agency, digital magazine, and more. Leading the lifestyle charge is CMO Vimla Black Gupta, who believes that her role is all about understanding her customer as a whole. On this week's episode of Making Marketing, Black Gupta sat down to talk with us about the Equinox lifestyle, the art of mastering your own data, and how they expanded into a talent agency and hospitality brand.
In 1977, Robert Greenberg, also known as Bob, and his brother, Richard, decided to combine both their creative powers and initials to create R/GA. Since its creation over 40 years ago, R/GA has evolved many times, and that, according to Bob, played a major part in keeping it successful. On this episode of Making Marketing, Bob sat down to talk with us about the origins of R/GA, its near-constant evolution, and why people are so scared of change in the industry.
In the Spring of 2017, Verizon brought on Andrew McKechnie to run its new, in-house creative agency after a long career at Apple and a handful of other agencies. In this episode, McKechnie talks about why creatives actually do want to work with brands, the in-house difference, and why staying true to the brand is especially important when working with outside agencies.
Jonnie Cahill, the new CMO for Heineken USA, is charged with marketing one of the world's largest beer brands in one of the largest beer markets. In this episode, Cahill discusses Heineken's global focus, the specific challenges of the U.S. beer market, and the importance of knowing your customer.
Since joining Publicis Groupe as global chief creative earlier this year, Nick Law, a longtime agency veteran, has been on a mission to help reinvent the agency holding company. On this episode, Law discusses how the internet has changed the way that ad agencies operate, how Publicis plans to stay relevant and why he steers clear of "big ideas."
Susan Schiekofer, Chief Digital Investment Officer at Group M, runs digital investments at the world's largest media agency where her focus is purely on the brands. On this episode Schiekofer discusses the ins and outs of the pitch process, helping the clients to understand that good brand safety costs money,finding success on social media and the importance of keeping content away from fraud and fake news.
Adapt or die. It’s something most business say they practice but rarely do. An exception is Tracy Wong, the founder of Wongdoody, a 25-year-old creative agency whose acquisition by Indian IT and consulting giant Infosys was announced in April. On this episode, he discusses changing models, being irrelevant, democratic cultures and more. This episode of Making Marketing was originally published on June 7, 2018
Eric Hippeau, managing partner at Lerer Hippeau Ventures, has invested in many entrepreneurial projects over the years. When looking for his next investment, one of the first things Hippeau considers is the passion and life experience of its founders. He joins us for a conversation on the Making Marketing podcast by Digiday.
Nick Brien, CEO of the Dentsu Aegis Network, talks about holding the agencies to a higher standard on accountability, the impending consultancy competition and procurement.
Yogiraj Graham is the global director of the creative content labs at Intel. Through its in-house shop, Agency Inside, Intel has for years exercised comparatively firm control over its marketing. Yogi leads Intel’s team of 111 people globally, that serves the Intel brand. On this week’s episode, he discusses the road to going in-house, including the hard parts and the easier ones.
Aditi Javeri Gokhale, the CMO of Northwestern Mutual, crafted her own job description as the first-ever CMO of the company and overhaul Northwestern Mutual’s brand awareness and practices. On this episode, she discusses her plan of action and where the “quiet brand” is switching into action.
Tham Khai Meng is Ogilvy's worldwide chief creative officer. He thinks 'Westworld' is right. What is the difference between fake and real anymore? AI is blurring out all the definitions. On this episode, he discusses how the tech world has aggressively changed the playbook for agencies and the lessons that he has learned.
Companies have to be more than buildings -- they have to stand for something. It’s a tall order, especially if you sell products like toothpaste or deodorant. On this week’s episode of Starting Out, Anheuser-Busch U.S. CMO Marcel Marcondes discusses his mission to make it happen.
Richard Edelman, president and CEO of Edelman, inherited the family business from his father 40 years ago. Since then, he has expanded the company to 29 different countries, while remaining independent and family-held. Edelman discusses growth, challenges and marketing challenges in this episode of Starting Out: Cannes Edition.
Adapt or die. It’s something most business say they practice but rarely do. An exception is Tracy Wong, the founder of Wongdoody, a 25-year-old creative agency whose acquisition by Indian IT and consulting giant Infosys was announced in April. On this episode, he discusses changing models, being irrelevant, democratic cultures and more.
In the year of the pivot to reality, marketers are rethinking their reliance on agencies and relationships with platforms. The General Data Protection Regulation has forced companies to reconsider business approaches, but good businesses are resilient. Antonio Lucio, HP's chief marketing officer, prizes resilience. On this episode of Starting Out, Lucio discusses championing diversity, the role of marketing in driving the business and more.
As managing director of Wieden+Kennedy, Neal Arthur is an independent spirit who grew up as the only black kid in his California neighborhood. At Wieden and Kennedy, his independence found a home. On today’s episode, Arthur talks about stumbling into advertising, and how the independence at Wieden+Kennedy fuels tough creative decisions.
Andrew McKechnie is the chief creative officer at Verizon, where he’s building the company’s in-house agency, 140. McKechnie, who last served as global group creative director at Apple, spent years on the agency side, which he says left him frustrated and more convinced than ever that the agency model as it stands is careening toward irrelevance. On this episode of Starting Out, McKechnie discusses his path to the industry, the problem with ego in advertising and the future of agencies.
PJ Pereira is the founder and creative chairman of Pereira & O'Dell. He also wrote a trilogy of West African myths. On this episode of Starting Out, Pereira discusses how writing helps maintain his business and creative acumen, and he talks about the pressure he felt to assimilate into America.
Nancy Reyes is the managing director of TBWA\Chiat\Day in New York. Reyes grew up in Long Island City in New York amid rundown houses and warehouses. Her mother was a housekeeper, and her father drove taxis. On this episode of Starting Out, Reyes discusses her path to becoming a leader who values working for everything in life.
Mark Tutssel is the executive chairman at Leo Burnett. Early on, he learned to watch people to understand them and the value of their attention. On this episode of Starting Out, Tutssel talks about the cruel yet kind decision of an agency executive in Bristol, England, that led him to London and a lesson he learned in a cab.
Christian Juhl is the global CEO at Essence. Juhl, who majored in political science in college, sees modern work as being inherently political -- from running a company to building consensus and avoiding factions. On this episode of Starting Out, he discusses how he went from beginning his career during the dot-com bust to landing at a scrappy office at Essence.
GE CMO Linda Boff has been in business for years. As a manager, she has developed what she calls a "spidey sense" about hiring. On this episode of Starting Out, Boff discusses how this sense has helped her decide which candidates to take chances on.
John Osborn recently made a major leap when he moved to media agency OMD after 25 years at creative shop BBDO. But the seemingly sharp turn in his career was the result of an organized mind. On this episode of Starting Out, Osborn discusses being an over-programmer, obsessively charting out his career path, which began -- like many kids -- with mowing lawns.
From college dropout to the worldwide CEO of Ogilvy & Mather, John Seifert’s career seems like the plot of a movie. Seifert joined the agency for a summer job during his sophomore year at the University of Southern California 38 years ago -- and never left. On this episode of Starting Out, Seifert discusses his path to one of the largest agencies in the world.
Michael Lebowitz is the founder and CEO of creative agency Big Spaceship, which has grown to over 100 employees since he started it in 2000. In this episode of Starting Out, Lebowitz talks about the importance of creating a framework for creativity and his path to founding a company.
Jeff Dachis is the founder of diabetes management app One Drop and co-founder of Razorfish. On this episode of Starting Out, Dachis discusses his career path, from his days of being a self-described provocateur in downtown New York to starting a new venture after being diagnosed with diabetes.
Michael Kahn went from multiple entrepreneurial stints to a long-term leadership role at Performics before arriving at DigitasLBi as its global brand president. In this episode of Starting Out, Kahn discusses the challenges of switching gears from short-term to long-term leadership.
Gerry Graf is the chief creative officer and a founder at creative agency Barton F. Graf, who’s worked at major creative shops like Goodby Silverstein & Partners, BBDO and Saatchi & Saatchi. On this episode of Starting Out, Graf discusses how rejection — a fact of life in advertising — has marked his career and more.
Jonathan Nelson is the CEO at Omnicom Digital, a global marketing and communications holding company that employs about 84,000 people around the world. Nelson is a true veteran of digital. He founded Organic in 1983 and has seen some serious highs and serious lows in the business of advertising -- including having his staff quit after delivering on their first big assignment. What happened after, and more, on this episode of Starting Out.
McCann Worldgroup CEO Harris Diamond has taken the IPG network to new heights since he came on board in 2012. In this episode of Starting Out, Diamond talks about work-life balance and an important lesson he learned in management.
Jason Stein, founder and CEO of marketing service agency Laundry Service and media company Cycle, pushed himself to the extreme while founding two companies and learned to step back and lead once they were established. On this week’s Starting Out, Stein talks about what it takes to succeed in the early days of a business and continuing to reinforce its culture and values.
Longtime agency veteran Ian Schafer recently announced his exit from the agency business following a midlife crisis that motivated him to try something new. On this week’s Starting Out, Schafer talks about learning to manage a business and pivoting to a new chapter.
Marc Pritchard, chief brand officer at Procter & Gamble, made waves in the marketing industry by starting a conversation about unconscious racial bias, a step aligned with the principles that define his leadership -- humility and transparency. On this week’s Starting Out, Pritchard talks about having a role model in his father, his career path from a cafe busboy to an executive position at P&G and why it's important to discuss unconscious bias.
This year, Digiday launched a new podcast called “Starting Out." We invited some of the biggest names in marketing to share the secrets of their leadership and success. Here are the five best pieces of advice that our guests swear by.
Tina Sharkey, co-founder and CEO of Brandless, thought she would follow in her mother's footsteps and run a fashion company. But after graduation, her plans changed -- thanks to her mother. On this week’s Starting Out, Sharkey talks about growing up in a business setting around her mother and an informational interview that changed her career path.
Eric Hippeau, managing partner at Lerer Hippeau Ventures, has invested in many entrepreneurial projects. For him, an important part of deciding whether to say yes to a team is to look for educational or experiential diversity in the founders' backgrounds. On this week’s Starting Out, Hippeau talks about adapting to different cultures while growing up in different countries and how that informs his business decisions today. Below are excerpts in Hippeau's own words, edited for clarity.
Wendy Clark, CEO of DDB North America, has won many awards during her years of leadership in the agency world. For her, it boils down to being a doer -- something that her upbringing and her love for volunteering at nonprofits have fostered. On this week’s Starting Out, Clark talks about growing up as a British-born American working hard and a plan for her second act.
David Sable, Y&R global CEO and chairman of the board, is a pillar of the Madison Avenue set. The former Wunderman executive is known for his love of magic tricks and showmanship -- something that's been ingrained in him from the start. On this week's Starting Out, Sable talks about growing up as a rabbi's son, paleontology as a career choice and how he's climbed the ladder.
On this week's Starting Out, Rei Inamoto details his childhood in Japan, his experience as a twin and his five-year plan.
360i Chairman Bryan Wiener has a pretty simple formula for success: old-fashioned hard work. Wiener, who has had a long career in the ad business and watched the digital ad industry quite literally grow up, joined this week's Starting Out to talk about his first job, his "shitty mentors" and what it's like to put everything on the line for a company you love.
Jaime Robinson is one of the industry's best-known creatives. The former Wieden+Kennedy executive now runs her own shop, Joan, which she co-founded last year with former Refinery29 exec Lisa Clunie. But she sees her job -- and that of anyone in advertising -- pretty simply: It's about entertaining people. On this week's Starting Out, Robinson talks about her first job, her first advertising job and the importance of finding the right business partner.
Shelina Janmohamed is the vp at ad agency Ogilvy Noor, Ogilvy's Islamic consultancy, where she teaches brands how to sell to the Muslim customer. This aligns seamlessly with her personal brand as the author of "Love in a Headscarf," a book that began as a passion project in the form of a blog. In this week’s episode of Starting Out, Janmohamed discusses starting her blog after the 2005 London bombings and how coming from a diverse background often means explaining what it’s like being in her shoes.
Katrina Craigwell, GE Digital head of marketing innovation, has become a force in the marketing industry for her championship of women and women of color in the field. In this week’s edition of Starting Out, Craigwell, a Canada native, tells us how she’s risen to the top by following in the footsteps of her mother, Jacqueline, and why sometimes being good at what you do is simply about being present.
Dany Lennon has done it all: From music to advertising to agency life, Lennon, now the founder of recruiting and coaching company Creative Register, is fondly known among agency executives as the “original connecter.” She’s placed some of advertising’s greatest talents in their professional jobs, and coached them through their careers. In this week’s edition of Starting Out, she discusses the role instinct has played in her own long career in the industry.
Jeff Goodby, the chairman at Goodby Silverstein and Partners, has built a storied career in advertising. Goodby founded the agency along with Rich Silverstein, who he met at Ogilvy in the early 1980s. The agency has grown, kept growing, and more recently shrunk way down. On this week’s Starting Out, Goodby reflects on what it means to fire people.
On the first episode, Sarah Thompson, the global CEO of Droga5, joined us to discuss the value of keeping it simple and what it’s like to try land a job in the hyperconnected world of advertising without connections.
Starting Out is Digiday’s latest podcast. A show where we find out how the industry’s biggest movers and shakers made it, what’s their special power and what makes them tick. Starting Out will talk shop but also throwback to how it all began. Subscribe now and tell a friend.