A cohort of former Everlane employees, the Everlane Ex-Wives Club, released a four-part statement highlighting the company’s alleged toxic workplace. The company, which recently faced criticism over alleged union busting-related layoffs, said this is the first it's hearing of the accusations in the 14 testimonies.
Big brands are increasingly taking a stand and pulling back on Facebook advertising. Many DTCs likely find themselves in the uncomfortable position of agreeing with the move but unable to make such a pledge themselves. Growing brands rely on Facebook and Instagram for growth, and cutting that off could significantly hurt a company's bottom line.
Direct-to-consumer startup founders have found themselves in a number of unprecedented situations over the past three months -- from having to keep their company afloat while stores were closed to having employees confront them about racism within the company. Many of these same startups have also found themselves in hot water for how they responded to these situations. The issue at hand is simple: customers feel like these companies aren't practicing what they preach.
The coffee industry has had to grapple with the future of wholesale since the pandemic hit. However, it's also opened up new revenue streams. The combination of millions of customers working from home along with cafes operating at limited capacity forced roasters and distributors to quickly pivot to DTC.
While the first generation of DTC brands waited years to launch retail stores to build up their online business, newer DTC brands have been much more eager to launch stores within their first couple of years in business. Many of them are now cutting back on the number of stores they had planned to open in the next year or two. But they are also rethinking what it will take to get their customers to come to their stores, and where their customer will be.
Retail customer service lines have remained busy over the past couple of months, fielding questions about shipping delays, how to return items when stores are closed, and inquiries about sizing and material from first-time customers. A number of direct-to-consumers startups say they are seeing an uptick nonetheless and have had to change things up a bit.
Over the past two weeks, there's been a flood of direct-to-consumer startups issuing statements about steps they will take to better support the black community, and build more diverse companies. But venture capitalists have remained largely quiet. "People are scared -- even though they want to do the right thing, they're worried that people are going to inevitably drag them down with, 'well look at your website,'" said one consumer investor.
As existing commerce companies adapt to survive a global pandemic, Jimmy Wu actually launched one. His new company Cat Person sells cat food, toys, furniture and treats in a market that Wu sees as skewed toward dog owners. On the most recent episode of the Modern Retail Podcast, Wu talked about the pet food industry, launching a company during a pandemic and the overall DTC boom.
Reopening stores, even just for curbside pickup, isn't as easy as it looks. Companies are performing cost-benefit analyses -- taking into account inventory reallocation, store staffing logistics, and whether try-ons are necessary enough to justify opening up. The reality is that for many smaller brands, “curbside alone can’t cover costs to warrant a reopen as the virus wave continues,” explained Lunya CEO Ashley Merrill.
Apparel retailer Gap is having to make some budget cuts as the company is under tremendous financial stress due to the coronavirus. One of the victims is Hill City, its two-year-old men's athletic apparel brand. The company announced last week that it would be winding down Hill City in the coming months. "The financial impacts of covid-19 have required the company to ruthlessly prioritize and reduce operating expenses," a Gap spokesperson said.
Brands are now taking public stands in light of the past week's protests. But many of these so-called values based companies are still predominately white and haven't figured out how to make lasting internal change. Conversations are now beginning to happen, but some founders may be saying one thing and unconsciously doing another.
Running a radical, mission-driven brand can be tricky. East Fork Pottery's Connie Matisse explained at this week's Modern Retail+ Talk the need to integrate values throughout business decision, and why "not everyone needs to be your customers." Consistently defining your company and what you stand for is integral in finding and retaining customers, she said.
DTC startups have responded to events of the past week in a couple of ways. The first is by affirming their support for Black Lives Matter on social media, and pledging to fight against systemic injustice. Some brands followed that with pledges to donate to organizations like the NAACP Legal Defense and Educational Fund and the National Movement for Black Lives Matter. Now, the focus needs to shift to building diverse companies.
Running different channels requires skills and discipline. Brand consistency is key, especially when many channels are involved internationally and across different touch points. Ask “what are the reasons to come to the site and why is the experience special?” said Ugly Drinks CEO Hugh Thomas.
Over the past two months, digitally native startups have been some of the biggest beneficiaries of store closures. Part of this growth was due to the fact that shoppers had fewer options. Now, shoppers have more options as stores open back up in more states. The coming months will prove just how much of the growth direct-to-consumer brands experienced was a flash in the pan.
Advertisers, in a marketplace transformed by creativity gone remote, how much of your campaign content is still in-house versus UGC? How are you using data to make choices and effectively target your campaign content? Take this survey and get the full results plus a $5 Starbucks gift card.
The Amazon Advertising Strategies Virtual Forum is a series of presentations, workshops and talks taking place over three mornings that’ll help you navigate and survive our current crisis and the acceleration of e-commerce that has come with it.Register Now