The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Why Consumer Brands Must Embrace Physical Retail To Avoid Inflated Online CACs, How To Alter Fund Strategy When Investing In Consumer Retail & Why The Era of The 1,000 Store Brand Is Over with Brendan Wallace, Founder and Managing Partner @ Fifth Wa

May 6, 2019
Brendan Wallace, Co-founder and Managing Partner at Fifth Wall, dives into the evolving landscape of consumer retail and the necessity for brands to embrace physical spaces. He discusses how digitally native brands risk inflated costs if they stay online-only and how the era of the 1,000-store brand may be behind us. Brendan shares insight on retail’s current state and its intersection with technology, highlighting vital omni-channel strategies for success. He also addresses the complex dynamics of Amazon's influence on emerging brands.
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INSIGHT

Retail's Reality

  • While "retail apocalypse" is a popular narrative, data shows retail is a $6T market, growing for almost a decade.
  • E-commerce represents 15% of US retail sales; 85% still occurs offline.
INSIGHT

DNVB Asymptote

  • Digitally native brands (DNVBs) hit an asymptote where online customer acquisition becomes inefficient.
  • This pushes DNVBs to physical retail for broader reach.
ADVICE

Offline Expansion Advice

  • When expanding offline, DNVBs should focus on site selection, staffing, and store design.
  • Leverage expertise from traditional retailers or retail real estate owners in these areas.
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