The Modern Retail Podcast

"International foods are having a moment," said Miguel Leal, co-founder and CEO of Somos Foods.Indeed, that's the thesis of his startup, which makes Mexican food products currently sold in over 6,000 stores including Whole Foods and H-E-B. The company has been around for two years and sells products like chips, salsas as well as rice and bean packs. It first started as an online brand but quickly realized that the way to grow a brand like his is by zeroing in on grocery distribution."Life was definitely pointing us into retail," Leal said on the Modern Retail Podcast. On the show, he spoke about the state of both CPG startups and why international foods are becoming an increasingly popular area for national grocery retailers.Leal knows a thing or two about national retail. He and his co-founders all worked together at Kind -- in fact, Kind founder Daniel Lubetzky is one of Sonos's co-founders. Leal also worked as the chief marketing officer at both Cholula and Diamond Foods.This background helped him realize that there was white space for a premium Mexican food brand. While high-end Mexican restaurants have risen the ranks in U.S. culture over the last year, "it was the same canned beans and fluorescent yellow hard shell tacos at grocery store."Thus, Somos aims to be a step above Old El Paso. So far, the idea seems to be working. Somos continues to expand into new national retailers as well as expand its product portfolio. Most recently, it launched a salsa macha condiment."We have some big retail announcements coming soon over the summer, another big one in the fall, and then by the end of the year," he said. "But we also have some really exciting products coming into the market."

On this week's Modern Retail Rundown, we discuss why Amazon is not including shopping app Temu in its competitive pricing algorithm. Then, a look into the state of food delivery apps in the wake of reported layoffs at Grubhub. Finally, we look into the news that Instant Brands -- the maker of the Instant Pot -- is filing for bankruptcy.News cited:https://www.reuters.com/business/retail-consumer/price-war-amazon-excludes-rival-temu-competitive-price-checks-2023-06-13/https://www.wsj.com/articles/grubhub-to-lay-off-about-15-of-staff-85e87595https://www.fastcompany.com/90892020/doordash-q1-earnings-2023https://www.nytimes.com/2023/06/15/business/instant-brands-bankruptcy.html

Athleticwear brand Legends wants to be the Lululemon of professional sports.The company -- which sells products like basketball shorts, swim trunks and athletic tees -- launched in 2019 with a slew of professional athlete investors. Since then, the company has brought on more influencers to its program and -- thanks to these partners -- has seen sales consistently grow, even though it hasn't focused much on organic marketing. In 2020, the company made about $10 million, and that grew the following year to about $16 million.This year, said co-founder and CEO Scott Hochstadt, the focus is on really growing the business. "We're at a point where we've we've built the brand," he said. He's hired a crack team of retail and marketing operators who are "ready to accelerate things and scale it out." He joined the Modern Retail Podcast this week and talked about the growth strategy behind Legends.Hochstadt knows a thing or two about sports and celebrities. After playing lacrosse in college, he brought the sport to the West Coast and ended up launching a lacrosse lifestyle brand that he ultimately sold. Then, with a business partner who was working with big sports stars Kobe Bryant at the time, Legends was born."We have the biggest athletes in the world training with us in this spot," said Hochstadt, "and I have the factories and I have the design capabilities to build products for these guys." And so, Legends launched with the help of quarterback Baker Mayfield and NBA stars Steve Nash and Matt Barnes, among others.The white space that Hochstadt saw was a premium sportswear company that speaks to a certain type of athlete. "Vuori is more lifestyle yoga," he said. "Lulu is your wife's brand that makes men's products now."For the first couple of years, Legends held individual activations to get the word out. For example, it would sponsor shows with celebrities and hold drops of limited-edition apparel. This helped establish the brand as something more on the elite tier.But the focus now is on going from small brand major athletes like to a mainstream name."We spent a couple of years just building out the team, building out the products and building out the brand," said Hochstadt. "Now the team is in place, and… this will be our biggest growth year."

In this week’s episode of the Modern Retail Rundown, our staff dissects all various changes and announcements coming out of the retail industry.First we start with the news that Nike is walking back the decision to sever ties with previous wholesale partners like DSW and Macy’s. Next, an announcement of GameStop CEO’s firing — and replacement with board member Ryan Cohen as executive chairman — has rattled up the company’s passionate shareholders. Lastly is a look at fresh M&A news in the DTC space, with the acquisition of cookware brand Great Jones.The Modern Retail Rundown is released every Saturday morning.

Kids' apparel brand Hanna Andersson is four decades old but in the midst of a huge business transformation.In 2019, it decided to close all of its stores and focus solely on its online business. The company says this strategic shift has helped stay focus and grow in new ways."We're 100% direct to consumer and are frankly much more profitable because of that -- and, honestly, much more attuned to our customers in anticipating their needs," said Aimée Lapic, CEO of Hanna Andersson.She joined the Modern Retail Podcast this week and dove into her strategic mandates and the areas of growth she's most excited about.Lapic has worked in retail for a long time now. She worked at both Gap and Banana Republic, helping lead their early online experiences and marketing strategies. She then moved to the tech sector at places like Pandora and GoPro. But she came back to apparel last summer when she accepted the role of CEO at Hanna Andersson."Honestly one of the reasons why this is such a fun moment for me is that it is full circle from how I started my career in apparel," she said.With nearly a year under her belt, Lapic has been focused on launching new initiatives. For example, the apparel brand -- most well-known for its pajamas -- has expanded into children's athletic wear. Beyond that, Hanna Andersson also launched a peer-to-peer resale program. That first began earlier this year with 2,500 listings and has already expanded to over 17,000, according to Lapic.But one of her big focuses has been on tapping into the brand's already robust community. Parents have bought Hanna Andersson for years -- Lapic said she's spoken with new moms who wore the clothes themselves as children. But much of this hasn't been fostered by the brand itself."There has been a very strong community for many years of Hanna customers that love our brand, that speak on behalf of the brand, that hasn't actually been fostered by the brand," she said. Lapic now is trying to find ways to tap into these brand enthusiasts and have them be a bigger part of research and the company's overall retention efforts.As Lapic sees it, there are a bunch of new initiatives afoot, but the goal is on one big thing. "We have done a lot of work, really focusing the team on what's going to make a big difference in the brand and the growth story," she said. "First and foremost, it's all about building this brand awareness."

This week's Modern Retail Rundown starts out with an analysis on why digital fast fashion players like Shein and Temu lose money on orders despite their popularity. Next, recent earnings reports show that dollar store chains like Dollar General and Dollar Tree are struggling as customers cut back on spending. Finally, we take a look at big companies like PepsiCo. continuously raising prices to increase profits, even as product demand declines.Stories cited: https://www.wsj.com/articles/fast-fashions-curious-comeback-8a5516c5 https://www.wired.com/story/temu-is-losing-millions-of-dollars-to-send-you-cheap-socks/ https://www.cnbc.com/2023/06/01/dollar-general-dg-q1-earnings-report-2023.html https://www.cnbc.com/2023/05/25/dollar-tree-dltr-earnings-q1-2023.html https://www.nytimes.com/2023/05/30/business/economy/inflation-companies-profits-higher-prices.html

Collars & Co is trying to create a new category that's one part casual and one part dressy.The two-year-old apparel startup makes a collared polo shirt, along with other items, and targets predominately well-to-do males. It first got its start on TikTok, but an appearance and subsequent deal on Shark Tank led to a huge increase in sales."We saw about a 400% increase in the number of visitors," the night after the episode aired, said Justin Baer, founder and CEO of Collars & Co. "I think I attached about $200,000 to $250,000 in revenue that week." Baer joined the Modern Retail Podcast and dove into how he's growing his clothing brand.Despite the sales spike, Shark Tank was just one helpful marketing moment. Baer, now, is focused on the long game. That includes investing in digital media as best as possible and even launching new retail concepts. For example, Collars & Co is going to open its first store in Chicago this month.One of the big reasons the company is opening a store is because physical retail speaks directly to the customer Collars & Co targets. Our customer tends to be slightly older -- it's an older gentleman that's 35 to 65," said Baer. "And not all of them are on Instagram buying clothes online."With that, the Chicago store is a test to see if the model can work. "We definitely want the store to be profitable. It doesn't have to be that profitable, because it's not the main driver," he said. "And it's going to be a fraction of the revenue that we're doing DTC."Another big focus for the brand is on finding more customers. While it's seen huge growth, Baer thinks there's more digital marketing to be done. "Facebook is still the best, but we try a lot of different things," he said. "We're trying a lot of different angles, newsletters, a lot of different online platforms." That being said, Baer said he initially got the company off the ground by showing off his first product on TikTok.And while other brands test out new types of advertising like TV, Baer is still bullish on digital being a primary driver for his brand. "I think digital is still going to be 95% of our ad budget this year," he said.

This week's Modern Retail Rundown begins with a discussion about why retailers like URBN and Kohl's are thriving while other apparel players are struggling at the moment. Next is an overview of Meta’s record $1.3 billion privacy lawsuit filed by European Union regulators, as a means to crack down on Facebook's user data sharing. Lastly, we talk about how TikTok Shop is generating buzz among live commerce audiences in Southeast Asia.

Parachute doesn't look or feel anything like a Bed Bath & Beyond, but founder and CEO Ariel Kaye thinks her brand represents the next wave of home goods retailers.The stores are certainly smaller and more curated -- and they are focused much more on the experiential than pure conversion. But Parachute is focused on utilizing its growing store base as a way to bring in more customers and become a household name.Kaye joined Modern Retail to speak about her company's ambitions and strategies. Physical retail plays a big role in this. She spoke live at an event hosted at Parachute's new flagship store in Manhattan."Last year, we doubled our store footprint," she said. "We went from 12 stores to 24 stores -- this is our 27th that opened last week. And, we just see retail as, like, this is the eyes and ears for the customer."Parachute launched in 2014 with the idea that bedding shouldn't be considered a mindless purchase. "These are aesthetic products that can completely transform a space, and they were they were [treated as] upsell opportunities -- they weren't actual products that any brand was focusing on," Kaye said.The bet seemed to work -- Parachute has grown from its California roots over the last nine years. While the pandemic put a stop to any store openings, the last year was when the company began to put retail expansion into overdrive. But Parachute's stores are as much about community as they are about sales, according to Kaye."We really do want to just educate people and get people excited about the product," she said. But that does lead to better loyalty; Kaye said, "people that shop in-store first are our best-performing customers."Now is an especially interesting time to be in home goods. With Bed Bath & Beyond's bankruptcy, it leaves other players an opportunity to pounce. But Kaye also sees legacy retailer's demise as a lesson for other founders."This happens in almost every category and industry," she said. "It's part of the reason why it's so important to continue evolving and growing with your customer and keeping your eye on what the next version of what you're building looks like."

Earnings season has arrived — and the Modern Retail Rundown dove into all the details. On this week's show, in which the Modern Retail staff discuss the week's biggest industry headlines, we looked at the results of Home Depot, Target and Walmart -- and what they mean for the year ahead. Then, we talk about some new numbers revealed about Instacart's advertising business. Lastly, we discuss Shein's most recent funding.