This is the latest installment of the DTC Briefing, a weekly Modern Retail+ column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. More from the series →
This is the latest installment of the DTC Briefing, a weekly Modern Retail column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. To receive it in your inbox every week, sign up here.
The holiday pop-up is back.
For the past two years, holiday pop-ups have been scrapped entirely, or were a much more muted affair. After 2020 was marked by stay-at-home orders, 2021 saw the outbreak of the Covid Omicron variant, which interrupted many events in December.
This year, the coast is clear for physical shopping, and direct-to-consumer brands are bringing back experiential pop-ups to drive holiday purchases. Younger brands that experienced record e-commerce growth during the pandemic are now laser-focused on reaching more new customers in person, especially during the all-important holiday season. Now that people have fewer concerns about shopping in-person, more startups are hosting pop-ups this year that are centered around events or experiences encouraging people to linger.
Spice brand Diaspora Co. is one such startup that experienced breakout growth during the pandemic’s at-home cooking boom, and in turn is embracing the pop-up this holiday season. The DTC brand has seen sales grow over 20x since 2019, according to founder Sana Javeri Kadri.
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Now, Diaspora is ready to get back to in-person events with a pop-up inspired by Indian spice markets. The pop-up is being hosted inside a Counter Culture Coffee location, in New York’s Soho neighborhood, and will run from Dec. 3 to Dec. 18. Diaspora will be hosting multiple events throughout the pop-ups duration, including a South Asian fashion night featuring a number of independent designers. Other vendors doing activations during Diaspora Co.’s pop-up include East Fork pottery and Malai Ice Cream.
According to the company, dozens of visitors waited in the rain for the pop-up to open on its first day. Opening weekend saw roughly 1,300 people in attendance, and over 800 chai samples were served on the first day. Over the opening weekend, approximately 34% of visitors made a purchase, Javeri Kadri told me.
“It’s incredible that we’ve been able to create as best a replication of that in a digital space as possible,” she said. “But we’ve always missed that sensory element of our customers being able to smell and taste our bright and powerful spices before they make a purchase.”
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Melissa Gonzalez, founder of experiential retail firm The Lionesque Group, an MG2 studio, said this year customers want to discover new products and interact with people during their holiday shopping. Gonzalez worked on two pop-ups this fall: glassware brand Waterford and fitness device startup Fiture, both of which opened their first pop-ups in the U.S.
“I think in 2021, brands were still cautiously optimistic — and while they turned to experiential design they didn’t fully dive back into in-store event planning,” Gonzalez said. On the other hand, this year’s pop-ups aren’t just about putting on creative concepts, she added, “but fully diving back into robust in-store programming, events that bring the community together and create immersive and engaging experiences.”
One example of a brand taking this approach is weighted blanket startup Bearaby, which created a pop-up space as an extension of its ongoing holiday campaign.
On Black Friday, Bearaby launched the #WeightOutBlackFriday campaign, which encourages shoppers to “stop before they shop” to get calm and relaxed. The physical space is in collaboration with Whalebone Shop in the West Village, and marks Bearaby’s first-ever pop-up in New York City,
As part of the pop-up, which runs through mid-January, visitors can sit in a Bearaby-covered bench to recharge during their shopping trips. Total resting minutes are collected through the brand’s “restometer,” with each minute generating a dollar donated to the National Alliance on Mental Illness. Bearaby received 11,000 “resting” participants both on its website and in-person. The idea follows two years of Bearaby-funded research conducted in partnership with Duke University, which found that Black Friday is one of the most stressful days of the year.
However, for a pandemic-born brand that’s never operated a store before, even opening a temporary pop-up can be a daunting task. As such, one approach brands are taking to ensure they drive as much foot traffic as possible is by partnering with other startups on pop-ups.
Masters of Good, is one such example. It’s a multi-brand pop-up that ran from Dec. 9 to Dec. 11 in New York City, featuring companies like espresso maker Terra Kaffe and CBD brand Remedy Plant Lab.
Terra Kaffe founder and CEO Sahand Dilmaghani said the holiday pop-up was a great way to show off the brand’s products “alongside other design-forward, sustainably like-minded brands.”
DTC women’s fashion brand Marcella was another participant at Master of Good, and used the weekend pop-up as a way to promote Marcella’s sustainability and social impact missions to new people. “With the holidays in full swing, it’s a good way to remind people that Marcella is the perfect gift for someone who is style-forward, but also cares about the impact of the brands they wear,” Siyana Huszar, co-founder and creative director of Marcella told me.
Planning an interactive pop-up has also resulted in new learnings for these brands. Diaspora Co.’s Javeri Kadri said the company first needed to smooth out its supply chain to be able to source and set aside enough inventory to host an in-person retail experience. “It’s been a real learning process for the whole team,” she said. Ultimately, Javeri Kadri said, the pop-up helped prove that people are more likely to convert when they smell and taste the brand’s spices and masalas. “I think the response to the pop-up thus far truly reflects our customers’ enthusiasm too,” she said.
“With so much uncertainty in the air — economic, political, etc. — [customers] also want something to escape to and feel good about,” Lionesque Group’s Gonzalez said. Furthermore, she added that there is increasingly more noise among digital brands .“So [a pop-up] gives people a way to step into ‘retail therapy’ again, and have an experience with a brand that feels deeper than something that’s just transactional,” Gonzalez said.
What I’m reading
- Business Insider continues reporting on the troubled behind-the-scenes operations at Something Navy. Influencer Arielle Charnas’ two-year-old brand has reportedly been struggling to generate sales and missing payments to suppliers.
- Los Angeles is quickly becoming a hub for DTC companies opening stores. As Retail Dive outlined, shopping destinations like Melrose Ave. and Abbot Kinney Boulevard are attracting digitally-native brands, ranging from Warby Parker to Skims.
- Shein is considering opening up its website and app to other apparel manufacturers, according to a report by The Wall Street Journal. The move would mark a departure for the fast fashion giant, which has exclusively sold its own labels to-date.
What we’ve covered
- Washington D.C.’s Georgetown area has emerged as a go-to location for direct-to-consumer brands. Most recently the neighborhood added a Glossier store to major local buzz.
- DTC brands like Calpak and Homethreads are using texts for live customer service. The trend shows e-commerce brands are finding ways to use SMS beyond promotional notifications.
- Cavu Ventures is increasingly investing in beauty startups, principal Jenna Jackson told Modern Retail. While Cavu is known primarily for backing food and beverage companies, the VC firm is adding buzzy beauty brands like Topicals and Necessaire to its portfolio.