After months of stocking up on essentials, summer is proving to be a bright spot for struggling industries like apparel. Swimwear is an example in which brands with a dedicated following are reframing what their merchandise is used for. It can also mark a turning point for other stunted travel-related categories.
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.
Stitch Fix has long maintained that its business model is a blend of art and data science, with its stylists, who represent the artistic side of the company, ultimately deciding which clothes to send to clients. But 11 current and former stylists Modern Retail spoke with said they felt like the artistic side of the company has been devalued, following the announcement earlier this month that Stitch Fix was laying of 1,400 of its California stylists between now and the fall.
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.
While big players like Grubhub and Doordash try to get every restaurant in the United States on their platform, smaller companies like Chowbus are doing things a little differently. Instead, they go narrow and deep; Chowbus only features Chinese restaurants, building a more loyal user base. It may present a new blueprint for food delivery apps.
As the apparel industry struggles to return to its pre-covid level of sales some secondhand clothing startups have been thriving as shoppers become more price conscious. ThredUp released its annual report on the state of secondhand clothing, and said that from mid-March to the end of May, its weekly gross transaction volume has grown 20% compared to the same time period last year. And it's not the only secondhand clothing startup seeing growth.
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.
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.
United Sodas of America unveiled its line of 12 flavors of low-calorie soda last May, which came after two years of development. At the most recent Modern Retail+ Talk, co-founder and CEO Marisa Zupan said the compant surpassed forecast sales by 5x over the past month. “Learning about people’s behavior at their delivery preference was valuable during this period,” she said.
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.
Startups catering to office-based employers are rethinking their services to fit the new workplace. Solutions for socially distant workplace designs is proving to be a major opportunity for some businesses. From health workstation partitions to individually packaged kitchen staples, here are some of the ways companies have changed their services to offer social distancing service.
Startups with products that have been in-demand during the stay at home orders over the past few months are using the opportunity to introduce their products to a national audience. It's a tricky time for retailers to advertise right now, but for those who are confident in their messaging, there's a better chance that they can get viewers to remember them as other companies pull back.
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.
With restaurants closed, high-end establishments are offering what could be considered the antidote to Blue Apron. These meal kits aim to offer finer dining options with a possibly more sustainable business model than other meal kit predecessors. Whether or not these restaurants keep offering them once establishments reopen remains to be seen.
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.
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