Member Exclusive   //   November 23, 2021  ■  6 min read

DTC Briefing: Forerunner’s Nicole Johnson on how the consumer psyche has evolved

By Anna Hensel
Illustration with a pan, a jar and underwear with tags spelling out D-T-C.
Illustration by Ivy Liu

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. 

When Forerunner partner Nicole Johnson joined the venture capital firm eight years ago, she was fresh off a consulting job in which, as she put it, she was tasked with trying to educate brick-and-mortar retailers “on this Warby Parker model.”

Johnson said that at Forerunner — which has invested in some of the most notable consumer startups over the past decade, ranging from Away to Stadium Goods to Oura — her focus has been on understanding the “consumer psyche — where the consumer is heading and why.” In the early days of Forerunner, Johnson said that consumers wanted more brands to meet them where they were — which was online and on their phones — which helped fuel the boom of digitally-native startups over the past eight years. Now, there’s such a glut of new brands that more shoppers want help filtering through which companies best align with their values, or carries the product with the best reviews. 

I spoke with Johnson about consumer trends she is excited about heading into 2022, and what’s top of mind for Forerunner’s portfolio companies. This interview has been edited for clarity and length.

What are the major ways that you feel like the consumer psyche has shifted since you first started at Forerunner?
Something that we are investing really heavily in going forward… is this idea of better for you. And better for you [creates] this unique intersection of retail and wellness with a ton of investment opportunities. Post-pandemic, you have this consumer who is ready to invest in themselves, is more attuned to their wellness needs than ever before. As we shift out of the pandemic, their value hierarchy has evolved from just being about this trio of price and quality and convenience and overall utility, to now they are prioritizing these more modern values like consuming things that are more clean, more sustainable, more community-oriented.

There is this big shift towards more thoughtful consumption. That’s why, during the pandemic, I backed a company called Thingtesting which is offering a destination for thoughtful consumers to discover and read reviews of thousands of trustworthy brands, these modern brands that people are discovering on the Internet and elsewhere.

It’s also why I invested in a company called Buffalo Market, which is a modern distributor of mission-driven food and beverage brands that are better for you or better for the planet. 

Of course this whole ‘better for you’ concept also ties intrinsically into all of this investing we are doing in the consumer care health space. Companies like Calibrate, Duos or Oura, they are all at this intersection of retail and wellness.

What do you feel like is top of mind for a lot of your portfolio companies right now — are there any particular challenges you feel like a lot of them are grappling with?
The supply chain [challenges] are real for the companies in our portfolio that touch physical products.  I would also say… the acquisition landscape continues to be a real challenge for companies. When we invest in companies, foundationally at the seed or Series A or Series B, a big part is understanding what their unfair marketing advantage is. It can’t just be that they are seizing a window on paid channels — it has to be something inherent to the product or their distribution or their positioning or their offline strategy or whatever it is that is less likely to be duplicated by the next best competitor. 

In practice, what does that look like? Is there a particular company you would point to as having this unfair marketing advantage?
One thing that we love is where there is a company with a model that’s playing into a longer tail of sellers with some influence — what you could consider [as similar to] social commerce elements. You can rely on the sellers to generate demand organically, by leveraging their own reach.

So a company like Curated, for example, in the Forerunner portfolio — they are a platform for high consideration purchases [where] the consumer can shop with an expert. Let’s say you are buying skis — you [might be working with] a former pro skier who has all of this incredible latent product knowledge, they will work with you to get the right product for you. Curated is able to lean on the influence of their stable of experts… they have their own influence and are able to tap into that to drive sales versus Curated needing to plow all of their dollars into Facebook and Google. 

Are there any particular roles that your portfolio companies are hiring for a lot right now or you feel like are really in demand?
It is a really tight talent market right now overall and culture is more important than ever for so many reasons — you have a consumer who has been through a lot, values have importantly come into the workplace and culture is just so top of mind.

It is a role that people have pulled forward in the startup journey and it is just in very high demand right now, [which] is a chief people officer. This person could have all different names or titles but it is someone to run and own people and culture. It is hard to come by — these people are out there, but there’s just more demand than ever for it. 

New store alert: Lalo 

A couple of weeks back, I wrote about PR pro Jesse Derris and restaurateur Will Guidara teaming up to launch a new retail agency called In Person. Last week, In Person’s first project — a store for Lalo  located in Noho — opened to the public. Lalo sells gear for babies and toddlers that incorporate popular modern design elements, such as a high chair in pastel-adjacent colors like grapefruit and sage green. Guidara also happens to be an investor in the company. 

Lalo co-founder Michael Wieder told me that he figured if Lalo’s store could show parents how happy and excited kids were to use Lalo products, they could win over a lot of new customers. So there’s a lot of elements in the store designed especially for Lalo’s youngest users, such as a cafe where kids can have a tea party or play with all-natural play dough. Lalo’s also carrying products from other popular kids brands, like Rockets of Awesome and Little Spoon, and plans to host classes and children’s programming.

“We wanted to create a personal experience that made [families] feel comfortable and relaxed,” said Wieder. 

What I’m reading

  • Shopify started testing out a search feature in its Shop app in July, but the e-commerce giant is still debating whether to roll it out further, Business Insider reports. 
  • In an interview with Retail Brew following Sweetgreen’s IPO, CEO Jonathan Neman spoke about the salad chain’s plans for expansion.
  • The Washington Post has an interactive feature on how much longer it’s taking to manufacture and ship four popular Christmas items due to supply chain delays. 

 What we’ve covered 

  • Rails is ramping up plans for international expansion. The apparel brand opened its first European store in Paris this July, and two London locations are in the works.
  • DavidsTea founder David Segal launched a new tea brand last week called Firebelly in partnership with Shopify president Harley Finkelstein. 
  • Secret Santa site Elfster is trying to build out an affiliate business, pitching itself as an alternative customer acquisition engine for brands hoping to be less reliant on leading social media platforms.