Member Brief: Direct to Consumer Luxe

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On Tesla’s Model 3 and the Target One demographic. In June of 2018, The Atlantic published an article that articulated a macroeconomic trend that I’ve long felt was a credible undercurrent in retail. There is this cohort of consumers that isn’t quite 1%, yet isn’t quite middle class. These consumers are young executives, they are doctors, lawyers, bankers. The Atlantic goes on to illustrate the data behind their assertion that we are living in what progressive economists are beginning to call “Gilded Age 2.0.” And while politics can influence economic conclusions, there are conclusions that cannot be argued: retail is polarizing its consumer targets.

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Issue No. 174: Reshaping eCommerce

10 Startups That Are Reshaping eCommerce in 2017

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Company: Affirm
Funding: $520M
Why? A widely trusted financing partner, I use them for our own eComm ops.

Company: OpenDoor
Funding: $320M
Why? Real estate as eCommerce removes bias and promotes intelligent transaction.

Company: Yeti
Funding: $67M
Why? Yeti is reportedly targeting an IPO at around $5B in 2017.

Company: Hollar
Funding: $47.5M
Why? America needs a reimagining of the dollar store.

Company: Gametime
Funding: $33M
Why? They did $50M+ in gross sales in 2016.

Company: Dia & Co
Funding: $25M
Why? Plus size clothing for the women who deserve to look their very best.

Company: TheSkimm
Funding: $16.4M
Why? They are the future of women’s eCommerce and most don’t know that yet.

Company: Away
Funding: $11M
Why? Us travelers all need smart suitcases.

Company: Mizzen+Main
Funding: $7M
Why? The company is set up to become a household name by next Christmas.

Company: Rogue
Funding: $0
Why? Quite possible the biggest eCommerce company that the industry “knowers” do not know.

Want to reach me? Email me at web@2pml.com or ping me at @web.

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Issue No. 172B: The Boost

Graphic of The Week: Adidas v Nike v Under Armour

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The first link of the day points to a recent article by Daniel Roberts, of Yahoo Finance, who does a wonderful job of explaining the influence and execution behind Adidas’ resurgence. Matt Powell of the NPD Group, who is fervently against the Kanye theory is cited several times in the article but he provides a meaning full perspective – as always.

As it relates to the macroeconomy of shoe wear and athleisure, here is another insightful bit from Matt:

E-commerce, which is already a force in the industry, will continue to rise. According to NPD research, one-in-four athletic shoes were sold online last year. Over time I expect that contribution to rise to two-in-five. The physical limitations of brick-and-mortar stores will continue to drive this growth.

Retailers will quickly figure out that ‘buy online, pick up in store’ will be another way to leverage e-commerce to help save physical stores. Retailers will use this additional store visit to create add-on sales. (Read more at this link)

Additionally, since today’s email was so late, it allowed me to include a link to commentary on Nike’s earnings call which led to a 3+ % stock jump today. Despite Yahoo’s praise of Adidas, the German brand is nowhere near out of the woods. Just today, I visited a specialty running store and saw, for the first time, the Nike International collection. This is Nike’s attempt at high fashion athleisure – a space that Adidas was primed to rule within. There are several forces at play here: changes in eCommerce behavior, shifts in athleisure appeal, the shift from the athletic shoe to the lifestyle shoes, and frankly, the commoditization / normalization of synthetic fibers in clothing. Every athletic brand wants to be a fashion label and every fashion label wants an athleisure arm. 

See more of the issue here.