No. 275: YouTube goes commerce

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Pictured: YouTube sensation “Lucas the Spider”

YouTube creators have been frustrated with the platform’s ad operations, as of late. YouTube legend and videographer Casey Niestat has nearly 10 million YouTube subscribers, the embattled Pewdiepie has 64 million, the famed MKBHD has 6.5 million, and Logan Paul has nearly 18 million (and an eight figure online store). In addition to the proceeds driven by advertising to an audience of those respective magnitudes, creators have been increasingly reliant upon merchandising for a steady stream of revenue. In a flash, a YouTube creator showed the world just how powerful an online retail operation can be for creators.

Joshua Slice is a former Disney employee and, currently, the creator and animator of the Lucas the Spider YouTube phenomenon. With a relatively smaller community of 2.4 million YouTube subscribers, the first 18 days of his embedded store achieved an astounding open. The creator of Lucas the Spider, launched a Kickstarter-esque campaign on Teespring (in addition to a full store). The plushie product sold around 60,000 units, netting Joshua $1 million in profit in just 18 days. This 60,000 unit tally was one of twenty available SKUs.

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Teespring’s integration provides in-line eCommerce for creators

In June 5’s Member Brief No. 16: Patreon’s Signal, our research led me to the following conclusion:

We believe that Patreon’s acquisition of Kit signals a potential uptick in M&A and partnership activity throughout the creator space. Kickstarter acquired Drip in March of 2016 and will likely pursue a merchandising solution for its stable of creators to mirror Patreon. YouTube is positioning its platform to compete with Patreon, Instagram, and Shopify, as well.

According to Tech Crunch’s June 5, 2018 article:

The deal also could help Patreon stay ahead of YouTube and Facebook, which are encroaching on its subscription patronage model. Patreon now has 2 million patrons backing 100,000 creators. It paid out $350 million over its first five years through 2017, and expects to send creators another $300 million in 2018, while taking a 5 percent cut.

Twenty days later and revisiting the Member Brief seems a bit prescient. With the newly announced partnership between YouTube and Teespring, Patreon’s most recent move is already behind the curve. The acquisition of Kit didn’t move Patreon any closer to shipping merchandise for its over 100,000 partners.

Patreon is well-positioned to be the leader in one-stop-shops of monetization for content creators. Kit can be a transformative partner for them, intensifying YouTube and other creator networks’ need to bolster their revenue operations. Commerce will become an increasingly important platform tool in a race to stay competitive for top creators. Activity over the next six to twelve months will determine which creator networks seek out the services of the aforementioned merchandising logistics companies: through partnership, by way of a joint venture, or through an out-right acquisition.

Resumo do membro nº 16: Sinal do Patreon

Prior to this eCommerce rollout, YouTube recently launched the same type of membership service that Patreon offers its creators. What does this mean for creator-based platforms? Patreon’s M&A signaled a period of consolidation and will continue to lead to the siloing of services for top creators. According to Byron Jones of the Music Network, “During the tests, Teespring reported an 82% success rate for YouTube users and an average 25% rise in item sales for each.”

Track the growing merch database

The initial numbers are gaudy and Teespring’s PR has been persistent. Their recent success has sent ripples across the industry. And to be fair, it was an enormous win for them because newer YouTube creators will now be incentivized to remain loyal to YouTube’s offerings.  It’s more than likely that some of YouTube’s creators will consider shifting from other storefronts to YouTube’s Teespring offering. It’s even possible that creators like Logan Paul (who has a sophisticated eCommerce operation in place) will consider testing inline retail on their YouTube channels.

But this partnership is clearly a shot across the bow for Instagram and Patreon. While Instagram is all-in on Shopify’s seamless integration and growing into YouTube’s space, Patreon is still in need of a merchandising partner and an exclusive creative partner that can help them in the short term. Consolidation will continue.

Leia mais sobre o assunto aqui.

Por Web Smith e Meghan Terwilliger | About 2PM

No. 274: O merchandising virou moda

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Cofundadores da Everybody.World

A palavra mercadoria é sinônimo de descartável. Ou pelo menos costumava ser. Na história principal da 2PM, Quartzy discute as mudanças demográficas que influenciaram os tipos de produtos que as marcas de luxo vendem. Já se foi o tempo em que as famosas casas de moda, como a Gucci, se concentravam apenas na moda de luxo tradicional. Hoje, seus produtos refletem uma afinidade com calças de moletom, tênis e padrões modernos de camisetas.

Isso se estendeu ao setor de mercadorias. Os jovens da geração do milênio e da geração Z usam produtos como uma declaração de moda e o luxo adotou essa tendência crescente. Para os fornecedores de produtos, isso significa que a estética da American Apparel / LA Apparel deu lugar a novos padrões, estilos e definições de inclusão.

Recentemente, a 2PM mergulhou fundo nos tipos de campanhas de merchandising que estão fazendo com que o conceito de mercadoria deixe de ser descartável e passe a ser de luxo. Nesse briefing arquivado, exploramos tudo, desde as plataformas usadas até os padrões e espaços em branco preferidos das camisetas.

Resumo do membro nº 11: Mega Merch 101

A mídia social e a normalização de marcas nativas digitalmente verticais permitiram que artistas e influenciadores criassem marcas de varejo on-line como principal fonte de receita. Neste relatório, detalharemos as práticas recomendadas, incluindo alguns insights do trabalho de nosso editor com um determinado criador do YouTube.

A Bain Capital divulgou um relatório de 2017 sobre o luxo global que enfatizou essa mudança impulsionada pelos consumidores da geração do milênio. Aqui está um trecho importante:

O estado de espírito da geração do milênio: o sucesso na próxima década exige que as marcas voltem a se concentrar em seus clientes para melhor prever e atender às suas necessidades. A geração mais jovem será fundamental, pois a geração do milênio e a geração Z representarão 45% do mercado global de bens de luxo pessoais até 2025. Ainda assim, ao analisar os comportamentos, é mais correto falar sobre um "estado mental da geração do milênio", que está cada vez mais permeando todas as gerações e, portanto, é mais um fenômeno psicográfico do que puramente demográfico.

Leia o restante aqui.

Para resumir a Bain Capital, a interpretação da Geração Z sobre a moda de luxo se espalhou por todo o setor. Isso afetou o setor de consumo de calçados, acessórios e vestuário. Há fornecedores de mercadorias que estão bem posicionados nesse aspecto.

A Business of Fashion escreveu um artigo recente sobre os dois fundadores da Everybody.World. O artigo fez um trabalho magistral ao explicar como um fornecedor de mercadorias criou uma marca direta ao consumidor que alimentou seu negócio de atacado de alto crescimento. Trabalhando com uma seleção selecionada que representa o zeitgeist. Isso inclui: colaboradores de estilo, designers gráficos, uma linha de produtos básicos bem projetada e o item básico que se tornou a referência para os comerciantes de festivais.

A qualidade também se tornou cada vez mais importante à medida que os produtos dos shows evoluíram de souvenir para uma declaração de moda, ressaltada por peças semelhantes a produtos lançados por marcas de luxo como Gucci, Balenciaga e Vetements. "A demanda é absolutamente maior do que quando comecei a fazer isso há seis anos", disse Allen, que forneceu cerca de 70.000 peças de produtos para o Coachella Valley Music and Arts Festival de 2018. "E as expectativas para o produto em si são definitivamente maiores."

É por isso que, este ano, Allen foi além das típicas empresas de camisetas "em branco" - como Gildan, Bella Canvas e Hanes - para aumentar a oferta do Coachella.

Leia mais aqui (desbloqueado)

As cofundadorasIris Alonzo e Carolina Crespo fizeram um trabalho extraordinário de posicionamento da marca Everybody.World, criando um forte negócio direto ao consumidor. Algo com o qual o diretor da LA Apparel, Dov Charney, está tendo problemas, nesta segunda vez. Devido ao sucesso que tiveram com a venda por atacado de sua famosa "trash tee" por US$ 2,90/unidade, a tração do atacado permitiu que os dois fundadores desenvolvessem um negócio substancial, de margem mais alta, direto ao consumidor. Seu principal veículo tem sido a base orientada pelo zeitgeist e colaborações inesperadas com colaboradores (até mesmo Virgil Abloh está listado no site).

No segundo trimestre, os lançamentos de mercadorias se tornaram uma parte importante da narrativa do criador. A apresentação de Beyoncé no Coachella e seu subsequente lançamento de comércio eletrônico foram estudados no Member Brief nº 11. E acima, você verá lançamentos de mercadorias de alto nível, incluindo: Kanye West, Kid Cudi e Nas.

Como os criadores continuam a enfatizar o merchandising como uma extensão de sua arte (e de seus negócios), é imperativo que os fornecedores observem as mudanças no significado do luxo e como os consumidores da Geração Z começaram a moldar o setor de mercadorias que virou moda. Por enquanto, as camisetas não são mais um acessório para vestir. E, atualmente, não se trata apenas do que está na camiseta. Os padrões e o caimento são mais importantes do que nunca.

Os blanks não são mais vistos como produtos de commodity para um segmento crescente de compradores americanos. Na verdade, o setor está fornecendo um componente essencial da identidade de moda da Geração Z. Há vários fornecedores que estão bem posicionados para crescer com os consumidores americanos mais jovens.

Leia mais sobre o assunto aqui.

Por Web Smith | About 2PM

Nota do editor: o próximo banco de dados do 2PM (a ser lançado em 21 de junho) incluirá os mais notáveis fornecedores de merchandising, incluindo a "Blank" de Pittsburgh, Pensilvânia, administrada por Michelle Sharp. Este será um banco de dados crescente. Associe-se à associação executiva para ter acesso. 

No. 273: Modern Luxe Doesn’t Bend

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Pictured: Outdoor Voices, from our Open Letter to DNVB CEOs

In November of 2016, Lean Luxe’s Paul Munford penned somewhat of a scripture to upstart modern luxury brands: promotion-heavy retailers will not last. There are few takeaways from “The Downward Spiral” that are worth mentioning as recent economic reports suggest that the retail apocalypse is coming to an end, a great sign for aspirational DNVBs that are looking to expand into physical retail.

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We are in a time of unprecedented retail brand launches, collaborations, acquisitions, and re-imaginations – much of which is online-first. This begs the question, what will separate the winners from the commodities? There are early and permanent decisions that determine a brand’s trajectory. For every Mizzen + Main or Ministry of Supply, there is a State and Liberty. For every Outdoor Voices, there is a Bandier. And for every Away, there is a Raden. Each decision matters. And no decision matters more than pricing and a brand’s promotional tendencies.

Here are the top ten takeaways from some of Munford’s best work:

  • No maneuver in retail appears to be as easy to roll out, yet no strategy is as detrimental to a retailer’s long term prospects as the heavy discount. It is a palliative pill: wonderful for the consumer in the short run, but ultimately bad for both business and shoppers over time. It commoditizes the brand, forcing companies to differentiate on price. 
  • The second problem, also related to scale, is systemic to the industry itself: The need to constantly add more and more products at regular intervals, flooding the marketplace with goods that are newer, but rarely better.
  • The lure of the discount, then, becomes too hard to resist. It provides a short term boost to the bottom line and the illusion of growth, but at the expense of brand reputation and sustainable profit — two vital arteries for a business’s overall health.
  • Modern luxury companies have figured out the formula, and it’s remarkably simple: create less merchandise than will sell (and predict, if possible, the sell-through rate, with pre-orders), keep demand high. Embrace the waiting list, as Everlane, Glossier, Caraa, and Alala, among others, often do. 
  • Never discount; preserve the standing of the brand. These tactics certainly do not work, however, or at least for very long, if product standards are below par.
  • Hermes, for instance, is notorious for never slashing prices. Its products carry a prestige because of that, and there is always a demand, no matter how frivolous the item. And they certainly are not above testing the limits of consumer devotion: It has even gone so far as to repackage its cutting floor leather scraps to sell them as high-priced gift boxes.
  • That opposition to discounting would come from founders within the emerging modern luxury industry is no coincidence. For one, it displays the trademark sense of calm confidence in the product that this group is quickly becoming known for. 
  • As for Mr. Preysman, the full price mantra feeds into his mission to constantly refine the product, to make it better, and push it ever closer to perfection according to the standards of the brand.
  • Surprisingly, rejecting the discount is also quite consumer-centric. The eternally-wise Ben Franklin said it best, of course, when he offered this observation: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
  • It takes superb maturity and a great deal of resilience to fight the urge for the temporary discount boost at the expense of preserving a long term reputation. 

Maturity, patience, grit, and perhaps temporary poverty are keys to developing the types of brands that grow to compete with age old legends and fierce (but hopefully friendly) rivals. In 2013, Brooks Brothers commented on Mizzen + Main’s influence on the shirting industry for the New York Times:

While Brooks Brothers experimented with “performance” shirts akin to Mizzen & Main’s, [Brooks Brothers’ spokesman] Mr. Blee said that customers preferred the general wearability of conventional all-cotton. The stretch fibers felt synthetic to them. Although a range of Brooks Brothers oxford shirts have moisture-wicking properties, he said, “We are known as a natural-fiber house: 100 percent cotton, 100 percent cashmere.”

Just five years later, Brooks Brothers is launching a competitor to compete in a menswear world that is being re-defined by technical fabrics and other innovations.

Mizzen+Main on Twitter

we’re old enough to remember when Brooks Brothers laughed at performance menswear: https://t.co/5hBzcUHAEx https://t.co/xCN29dVk81

I remember the joy of that article hitting the newsstands on December 18, 2013. Not because of the notoriety that it would provide but because it had been over a year and half and we really needed the sales. We stood firm on our price while we built allegiances and Kevin worked feverishly to improve the product. And the company lasted. What Lavelle and team has done today is nothing short of spectacular. And it has allowed the brand to stand, eye to eye, in the same clubs and on the same courses as the company that invented the polo shirt (sorry, Ralph).

To achieve growth and longevity, branding cannot be viewed as a soft skill. Price cannot be viewed as an arbitrary number to manipulate. The five forces must always be considered. And patience must be paramount because great brands start slowly. In the age of modern luxury DNVB’s this is as important as the products themselves.

Read more: An Open Letter to DNVB CEOs (Issue No. 254)

Read the rest of Issue No. 273 here.

Por Web Smith e Meghan Terwilliger | About 2PM