(S-1 Here): As anticipated, Warby Parker has filed to go public via direct public listing, bypassing an IPO. Unlike other recent filings this year, which has seen a burst of DTC IPOs, Warby released its S-1, revealing its financial details for the first time. Some highlights:
Nearly eleven years ago, the then-41 year old musician rapped, “My favorite hue is Jay Z blue.” A lot can change over a decade: tastes, ownership of Tiffany & Co, or even the public awareness of a rare painting by famed artist Basquiat. At the center of LVMH’s controversial approach to realigning the brand with the core of influence (hip hop) is the role of Tiffany’s robin egg blue and a rare painting. Rachel Tashjian wrote on the petty controversy for GQ Magazine:
By employing the most famous couple in the world, and securing a painting by the most famous, or at least coolest, contemporary painter, Arnault is bidding to make Tiffany blue as lusted-after as Hermès orange—a global symbol of exclusivity and desire (and the rare French crown jewel not in the LVMH umbrella). [1]
Beyoncé Knowles Carter and her husband, Shawn “Jay Z” Carter are no strangers to Jean-Michel Basquiat. In fact, they own one of his vaunted paintings. A prized possession while the late artist roamed the streets of New York, today his works play a larger-than-life role in the idea of black artistry, success, and commercialization. Before his untimely passing, the artist was often angered by his lack of recognition in his own city – one that claims him today as one of its prized engineers of culture. But there is a specific culture that holds his influence even closer. There is a direct line between Basquiat, hip-hop culture, and the influence of the Carter family. It’s this pedigree, one of the most influential in all of consumerism, that the Arnault family tapped into for their reinvention of the Tiffany brand. Its suitability can be argued but its effectiveness cannot.
A never-before-seen Basquiat flooded Twitter feeds and, apparently, LinkedIn discussions on Monday morning. The reason for the release: a new Tiffany campaign starring Jay-Z and Beyoncé, who’s donning Balmain and the Tiffany Stone, posed next to the painting. The Basquiat’s backdrop is Tiffany’s robin egg blue.
The campaign sparked debate over whether or not the deceased artist would have supported his work being used in a luxury ad spot and in general generated buzz for the iconic brand, which was bought by LVMH last year and has been undergoing a rebranding to appeal to younger audiences. To do so, the company has leaned into hip-hop, hiring ambassadors like ASAP Rocky and tapping Nas to narrate ad spots already. The Bey and Jay campaign will last a year and mark a major new campaign for the brand.
Alexandre Arnault, the son of LVMH boss Bernard Arnault, was given the keys to Tiffany in January, becoming executive vice president of the company. At 29, his influence is critical in bridging the gap between the Tiffany of the Audrey Hepburn generation to the upcoming luxury consumer. There are some questions raised. Beyoncé and Jay-Z are among the biggest musicians in the world; they are not Gen Z-engineered TikTok stars but they do seem to own the keys to aspiration. And the reveal of a previously unknown Basquiat speaks to old money, not a new definition of luxury. But Gen Z is not necessarily the target, it’s the HENRY. As 2PM wrote in 2019, the HENRYs (high earners not rich yet) are an important demographic for brands to appeal to:
They gain from the association by maintaining relationships with valuable long-term consumers who may likely grow up-market. This directly and indirectly improves the lifetime value of the brand.
Evidenced by Tiffany’s campaign, which makes some strategic choices in switching up the jewelry brand’s approach without going too far outside of its comfort zone, the goal is not just to reach young people. It’s to reach “up and comers” with the means to become customers, if not now then very soon. Arnault wants Tiffany blue to be the envy of one of retail’s most critical consumer segments. But first, LVMH wanted us to know that it is Jay Z’s favorite blue. The Carter family has an otherworldly influence on the consumerism of the haves and the will haves. And this is what Tiffany & Co’s new management hopes to leverage.
By Web Smith | Editor: Hilary Milnes | Art by Christina Williams
A generation of young consumers deserve the credit for its role in how brands think about partnerships and messaging.
For today’s retailers, authentic engagement and depth can matter as much as reach when it comes to partnerships. This has become common practice in the world of modern brands and niche media outlets. But something bigger is taking shape. If there ever was a “trickle up” effect, this essay will serve as an example. One of the largest and most powerful media conglomerates in the world chose sincerity over cash, reach, and distribution.
Long gone are the days of no-brainer deals with Pepsi, Coca-Cola, and Nike. Today’s public figures are setting aside their reliance on major brands in favor of partnerships that are more true to themselves. Authenticity is at the center of this shift, and it’s opening wide doors for nascent brands to compete against their elder statesmen. In a recent essay on OLIPOP’s partnership with Olympian Gabrielle Thomas, 2PM highlighted this changing sentiment around brand partnership:
In speaking with the agency for this report, they emphasized how important Thomas’s ideals were to her product sponsorship selections. The partnership between OLIPOP and Thomas was a natural fit as it is reported that she was already an organic fan of the brand. [1]
Now, that’s trickling up to film studios, sports leagues, streaming networks, and music festivals, which all seem to be following the same wave of authenticity. Over the previous year, digitally native retailers have done a remarkable job of positioning themselves for these opportunities.
In the past year, Rowing Blazers partnered with dormant English retailer Warm & Wonderful to produce the Princess Diana jumpers as Netflix’s The Crown wowed viewers with an inspired depiction of the late humanitarian. Kim Kardashian’s influence and business acumen helped land Skims as the official underwear partner to the U.S. Olympic Commission’s athletes. Madhappy partnered with Lebron James’s remake of Space Jam, producing hoodies and crew neck sweaters that are now sold on the secondary market for $450 or more. And hot sauce CPG brand Truff’s partnership with one Taco Bell location in Southern California has permeated social media conversations well beyond the border.
While each of these are notable, none accomplished what Sanzo has so early in the company’s lifespan. A recent report by BEVNET began: “Though it may not be a household name, when it comes to marketing partnerships Sanzo is punching above its weight.” The praise was deserved. Founded in 2019 by Sandro Roco, a Queens-born Filipino American, the brand is one of the latest entrants into the white-hot “fizzy water” market. The cap table includes the likes of Away’s Jen Rubio, Adobe’s Scott Belsky, and as of recently Simu Liu, the star of Marvel’s Shang-Chi and The Legend of The Ten Rings. More on that last investor in a moment.
The Sanzo brand is emerging during a dynamic period for Asian Americans and Pacific Islanders. Its two years in existence have been wrought with senseless and indiscriminate violence towards Americans of Asian descent. The angry rhetoric and exclusion birthed such hashtags as #StopAsianHate, a tag that you will find spread by a handful of the most powerful investors and businesspeople including Jeremy Liew, Partner at Lightspeed Venture Partners.
The former executive at Bombfell and J.P. Morgan trader, Sandro Roco took a grassroots and hard-nosed approach to building Sanzo. In the beginning, you would find him hauling cases down the street, hoping to sample his way to omnichannel adoption by today’s most important retailers. It worked. While Asian Americans were being indiscriminately targeted in some of America’s biggest cities, Roco was positive and hopeful in his persistence to break through in an intensifying market. That often meant him doing the work at the street level with a dolly and cases of product. Take a moment to empathize with Roco’s cognitive load as scores of citizen-captured videos flooded social media by the day. He really wanted Sanzo to breakthrough the noise. And he found a way to do just that.
At the same time that indiscriminate violence was on the rise, the ‘easternizing’ of American culture accelerated. More commercial opportunities, once afforded almost exclusively to guys named Brad, were now afforded to actors, actresses, musicians, artists, and entrepreneurs of AAPI descent. This Roco quote from a recent Forbes article announcing Sanzo’s latest funding does a solid job of summarizing Sanzo’s appeal and the wave that may help it compete against larger, well-funded, and better equipped CPG conglomerates.
Back in mid-2018, we started to see what I describe as ‘easternizing’ of American culture with Crazy Rich Asians becoming the number-one film in the box office and K-pop getting a fever pitch. [2]
One of the national efforts to combat implicit and explicit bias towards AAPI citizens was the launch of Gold House. Founded in 2019, it was built to help Asian founders “overcome societal stereotypes” while elevating their work beyond what was customarily deemed their target market. Sandro credits Gold House for helping the Sanzo brand forge a relationship with Walt Disney Corporation, one that would later manifest into the Marvel Studios project. In a May 2021 NBC News report on the organization:
The nonprofit Gold House is best known for elevating films like Parasite and Crazy Rich Asians into epic blockbusters. But true representation of Asians isn’t just necessary in Hollywood; the organization is determined to see it in every industry, in every C-suite. [3]
The next big opportunity for Gold House was March 2021’s Raya and The Last Dragon, an animated feature by Disney Studios featuring Kelly Marie Tran, Sandra Oh, Gemma Chan, Daniel Dae Kim, and Awkwafina. The film grossed $122.7 million in the box office while simultaneously released on Disney+. Roco’s Sanzo brand was used as cross-promotion for the Disney picture and according to Roco, it was a profitable venture. He noted Disney’s positive role in partnering with an “unknown” for the project. Roco told 2PM:
It’s impossible to do anything in eight weeks with Disney. But they recognized that we are not Coca-Cola or General Mills. Together, we made it work.
He applauded his team’s hard work and diligence to make the latest partnership come alive. After the completion of the Raya partnership, Roco “shot his shot” and pitched a Shang-Chi collaboration. The green light came almost immediately. In the Sanzo founder’s conversation with BEVNET’s Martin Caballero, he added:
We’ve seen firsthand that both the Marvel and the Disney executive team have taken a more intentional approach to partner with brands that more authentically represent the messages of the films they are putting out there. They noted to us that the strength of our brand and the community that we bring in gives a certain level of authenticity.
In August, that green light became green money. Shang-Chi is one of Marvel Studios’ most highly-anticipated films as of late. Analysts predict that it has the potential to outperform Black Widow, despite the latter film’s star power of actress Scarlett Johansson in the starring role. Shang-Chi features rising stars Simu Liu, Awkwafina, Tony Leung Chiu-wai, and Fala Chen. The well-reviewed film pairs a relevant theme with a new slate of heroes and action formats that are new to the Marvel Cinematic Universe. The commentary around the film is not entirely new.
While smart merchandising partnerships like Sanzo’s deal are a highlight for the film, some argue that Marvel is not properly promoting the film due to the age-old idea that it may not resonate with a larger audience – a euphemism for white audiences. Though Disney was proven wrong by the global reception ($1.3 billion grossed) to Black Panther, this burden remains for AAPI actors to retread the same territory. In my many conversations with Sandro Roco, he cites the hidden market opportunity for products like Sanzo. He notes that Asians and their taste preferences represent over 60% of the world’s population. What Disney and Marvel Studios view as niche isn’t at all. In this way, Sanzo and Shang-Chi are running in parallel.
When the founder and his film-customized cans showed up for the red carpet debut of the film, he was welcomed with open arms by Shang-Chi‘s slate of stars. Gold House was right: there seemed to be an authentic appreciation for Sanzo’s story of resilience and comeuppance (the brand is now in Central Market, Whole Foods, Erewhon, and other retailers). There waiting for Sandro on the red carpet was Simu Liu, who became an investor in the brand after the deal was negotiated in April of 2021. The stuntman and movie star recently dominated social media conversations with Marvel’s release of one of the film’s fight scenes, an homage to Jackie Chan’s inventive use of his surroundings as weaponry.
Over just two years, Sandro Roco and his team have worked tirelessly to gain approval from an industry that is cold to outsiders. Now that the founder has momentum, a few key partnerships, and a superhero on his team, his fight to the top may be a little easier.
Sanzo has reported a sixfold increase in daily DTC sales and conversations that will surely lead to greater omnichannel opportunities. But before Sanzo won over merchandisers and national distribution, the brand won over Disney and Marvel. Other digitally-native retailers should take note of this momentous year in extraordinary partnerships.
By Web Smith | Editor: Hilary Milnes | Art by Alex Remy
Disclosure: Sanzo and Rowing Blazers are 2PM investments. Sadly, Madhappy isn’t.