Tag: Core

There is a subtle trend bubbling beneath the Rothys and Veja’s of urban dwelling millennials. There is a rise in 20 and 30-something workers who choose to take mental health days off from work, citing burnout. CBD-based goods are commonplace throughout specialty retailers’ checkout lines. Meditation apps and hardware are tipping into the mainstream. Rather than the consumption of more and more goods, high-earning millennials are choosing to take time off instead. This shift in priority is in-line with another: the boom of companies pursuing valuation arbitrage by identifying new paths to growth. WeWork, perhaps the case study par excellence of this business cycle crashed –  on demand  – with the help of an angry, financially-free NYU Professor with nothing to lose.

Two trends lead this report: (1) the shift towards mental minimalism and (2) the shift away from the business cycle of more. In a January report in BuzzFeed News, the first of the two began to pick up steam in the mainstream media:

So what now? Should I meditate more, negotiate for more time off, delegate tasks within my relationship, perform acts of self-care, and institute timers on my social media? How, in other words, can I optimize myself to get those mundane tasks done and theoretically cure my burnout? As millennials have aged into our thirties, that’s the question we keep asking — and keep failing to adequately answer. But maybe that’s because it’s the wrong question altogether. [1]

Each daily task, job, extracurricular event, and hobby shares many of the same traits with one another. Bigger, more, faster, more, better, and more. Rarely is any daily occurrence simple, small, or inconsequential. And it’s beginning to show. If you’re reading this, you’re likely thriving in an environment where you Peloton or Tonal before work, Uber Black while answering emails on $2,000 MacBooks, micro-dose to become “limitless,” intermittently fast to optimize for your fitness, and then work twelve hour days to pay for those $3,500 monthly leases. Frankly, we are all burnt out. And there is a connection; brands are beginning to reflect the empathy towards this behavioral undercurrent.

It’s easy to understand, then, why so many of us are so angry. The WeWork’s of the world were built on an ethos of positive vibes and unity — replete with what tech analyst Ranjan Roy calls “high-minded, burning man-esque self-actualization language” that, today, feels offensively out of sync with people’s lived realities. So why would Pattern, or any company that applies a superficial layer of burnout-conscious buzzwords to its products, be different? [2]

Consumer psychology involves the interest in lifestyle, behavior, and habit. It’s an all-encompassing study that considers our idiosyncrasies, our temperaments, and even our subtle personality traits. These are the variables that influence our behaviors as consumers. Psychographic segmentation is the analysis of a consumer cohort’s lifestyle with the intent to create a detailed profile. [3]

Pattern Brands, the group behind Gin Lane (RIP), is at the forefront of this trend identification. The legendary creative agency that developed the mold for millennial consumption by advising Hims, Harrys, Dia & Co, Ayr, Bonobos, Shinola, Stadium Goods, and Rockets of Awesome is pulling back on the messaging that influenced the “business cycle of more.” With a bit of hindsight, it makes sense that Recess and Haus were two of Gin Lane’s final DTC projects. It’s as if they were telegraphing their plans to focus on a new era of messaging by concluding their successful run with two “mindful” brands.

What does this mean for DTC brands?

In the last months, Everlane launched its impact-free shoe, Allbirds released a Rothy’s look-alike, Rhone launched a credible competitor to Mizzen+Main and Ministry. And Away began laying the groundwork for a consumer packaged goods (CPG) operation. It was once common for brands to believe that they could build a defensible growth path by identifying one product-need and one consumer identity. [4]

Scale fast, scale there, scale now. This is the executive mantra of many of today’s top digitally brands. Many product manufacturers began with a single, key product. They then expanded into a growth path befitting that of a traditional category brand. Though, most DTCs have done so prematurely. In contrast, successful traditional brands expanded beyond their initial focus after a decade or more in business.  In this era of retail, the move from product-to-category happens in just a few years. Founders hire product talent to stay atop a growing diversity of SKUs – many of which were barely intended upon the start. Imagine a shoe company designing luggage or a luggage company designing dress shirts, for instance. For a generation of consumers, the business cycle of more isn’t just student loans, rising rents, or WeWork’s demise. It’s also representative of the brands that we consume. Every brand seems to be out to get bigger, faster, and stronger – a subsconscious reminder that we are to do the same. This is beginning to change.

In a recent conversation between AdWeek’s Ann-Marie Alcántara and I, we discussed these concepts in a marathon of off-the-record discussion. To combat the hyper-growth narrative required to achieve venture funding, the early stages of  today’s upstart brand would resemble more of a publisher or community than a retailer. The rationale is simple: a customer is fleeting, a community lasts. This is most often reflected by brands with stronger organic presences. Brooklinen is the example of the hour.

Brooklinen: A “Bedroom” Brand

No longer just a bedding brand, Brooklinen wants to own the bedroom much like Away aims to own travel. Their strategies diverge from there. Brooklinen is in a class of digitally native bedding companies to include: Parachute Home, Buffy, and Hill House Home Inc. Founded in 2014, the company reported nearly $60 million in 2018 sales; the wife-husband duo has only raised $10 million to date, a capital constraint that likely influenced their growth path from product company to category presence. In this case, capital constraint proved an effective growth mechanism.

In contrast with many of today’s top digitally native brands, cofounders Rich and Vicki Fulop shunned the traditional “category expansion” playbook in favor of a two-way marketplace format that compliments the aforementioned trend undercurrents.  Consumers will reward the brands that offer value without trying to do it all. As such, the launch of the Spaces marketplace gained wide media attention thanks to savvy messaging from the founding team and public relations work by Ogilvy’s Lindsey Martinez, Brooklinen’s public relations firm on record.

Spaces will feature 100 products by 12 partner brands (in addition to the total 89 products created by Brooklinen). Designers will include some independent artisans, as well as recognized brands such as Simply Framed, The Sill, Floyd and Dims, among others. [5]

The launch piqued the curiosity of a number of industry observers who weren’t yet familiar with Brooklinen’s marketplace partner RevCascade or the SaaS company’s tech stack. Rather than expanding beyond the brand’s 89 SKUs by developing or white labeling other in-category products, Brooklinen partnered with RevCascade to launch a two-sided marketplace. With a monthly average of 600,000 – 650,000 visitors with purchase intent, offering complimentary products from fashionable brands like The Sill accomplishes a few things: it monetizes existing traffic while rounding out the consumer’s interpretation of how Brooklinen fits within their lives.

Brooklinen expanding to a marketplace isn’t necessarily a new concept, according to Web Smith, the founder of retail research platform and community 2PM. It’s what Smith calls linear commerce, in which a brand uses an existing audience to monetize further revenue, growth and traffic. [6]

Is Brooklinen any less of a category brand than Casper? The short answer is no. In fact, the market may reward the bedding company for its two-way market strategy. RevCascade provided the tools necessary for Brooklinen to launch a hybrid marketplace that featured (1) wholesale (2) direct (3) and drop-shipped merchandise. In this way, Brooklinen’s approach is reflective of the Law of Linear Commerce.

With so many new brands in different categories, it’s difficult for any company to “cut through the clutter,” Fulop said.

Brooklinen’s founding team paired an existing audience (of 600k MAU) with an additional commerce opportunity. In their case, they did so without any additional hiring, development, or marketing hindrances associated with new product launches. With their approach, they offer new products while maintaining their focus on the production of quality textiles.

In a comment to 2PM: Josh Wexler, cofounder of RevCascade:

RevCascade enables any retailer, eCommerce merchant, or publisher to launch their own curated marketplace or dropship program to elevate their brand, better serve their consumers, and generate new revenue with zero inventory risk. Brooklinen’s approved brands (aka sellers or suppliers) use RevCascade’s “onboarding wizard” to create their profile, upload inventory, and set shipping preferences. In parallel, by leveraging RevCascade’s automated Shopify integration for product data, inventory updates, and transaction data, Brooklinen was able to launch their marketplace in less than 30 days

Anchored by a strong affinity for the company’s core products, Brooklinen gained a competitive advantage by both measures: DTC and marketplace. Consider Verishop, a popular, well-led, and well-capitalized marketplace that launched in July of 2019:

[table id=49 /]

Whether we are discussing Pattern Brands’ approach to remedying burnout culture or the cycle of more’s influence on an ever-crowded market of high-growth brands, Brooklinen’s partnership with RevCascade may serve as a path forward for many of their counterparts. Consumers have grown weary of companies that are looking to grow for the sake of growth. To these consumers, it’s a reminder of their own fast-paced, high-pressured lives.

Consumerism will always exist in some form or the other, but the clutter of brands looking to grow to the next milestone may fall out of grace with many. From Marie Kondo to Core Meditation, clutter culture has become a catalyst for burnout remedies. Experiences that provide ease, value, and simplicity will be rewarded in today’s market. It is a brand’s responsibility to contribute to the solution and not to the cycle of more.

Read the No. 336 curation here.

Report by Web Smith and edited by Tracey Wallace | About 2PM