The Modern Retail Podcast

Sometimes, businesses start out as direct-to-consumer. Other times, they’re forced into it.That’s essentially what happened with Farmer’s Fridge, a company best known for its salad vending machines. Since 2013, the company has been growing its vending machine presence -- first in the Midwest, and then beyond. Its core customers were workers looking for quick and healthy lunches on the go. But the pandemic changed all of that.Over the last year, Farmer’s Fridge focused less on its vending machines as fewer people commuted to the office, and more on building out its own home delivery program. According to founder and CEO Luke Saunders, this pivot worked. Farmer’s Fridge now has three primary channels: vending machines, business-to-business and home delivery. This year is [about] getting back to growth,” said Saunders on the Modern Retail Podcast. “We’re doing [that] across all three channels.”For most of its life, Farmer’s Fridge didn’t need to spend much money on advertising. The vending machines were billboards unto themselves and sales grew pretty organically. But over the last year, the company has invested in some performance marketing. “That’s probably one of the biggest transformations for the businesses,” said Saunders. “Now we do a considerable amount of performance marketing for that delivery channel.”Things are now beginning to open back up and Farmer’s Fridge is going from defense mode to offense. While it grew its delivery network, it is now also ready to focus on its B-to-B and vending machine business.“It’s now an omnichannel business,” said Saunders. “The idea is we’re gonna bring the food to wherever the customers are.”

It’s tough transforming a local brand into a national name. But that’s what Oregon-based dairy company Tillamook is trying to do.Over the last few years, the company began an eastward expansion -- going beyond the Pacific Northwest as far as the East Coast. And, according to CEO Patrick Criteser, it seems to be working. In 2017, he said on the Modern Retail Podcast, 95% of Tillamook’s sales were made west of the Rocky Mountains. Today, “we’re about 10% to 15% east of the Rockies.” The dairy company added 4.6 million new households to its customer base this past year, most of which, Criteser said, were on the East Coast. Even during the pandemic, Tillamook was still able to grow.Tillamook launched in 1909 as a local dairy cooperative, and recently became a certified B corporation as well. Despite the company’s storied history, it’s never seen a year quite like 2020.According to Criteser, there were many demand spikes -- as well as supply chain hiccups. “There were certainly a lot of challenges in the last year,” he said, “but a lot of opportunity for us to play an important role in making sure the food supply stayed there and reliable for folks as they went to the grocery store.”One big change he noticed was the rise of home cooks testing out new ingredients. “We definitely saw people cooking more at home, certainly eating more at home [and] experimenting with ingredients.” These constant fluctuations meant Tillamook had to re-strategize throughout the year to handle the ebbs and flows. Ultimately, Criteser said, “it played out pretty well for us as a business.”With all that in the rearview mirror, the focus is now to continue expansion. “We’re a growth brand,” said Criteser, “and we’re continuing to gain new distribution and make sure that we can sell through that distribution and keep it.”

It’s been a good year to be a homewares brand.Indeed, cookware startup Caraway was a hot commodity during the pandemic. According to its founder and CEO Jordan Nathan, the company’s popularity created some headaches. Many items were out of stock more often than not in 2020, and supply chain issues continue to persist. But, “we were very fortunate to be on the right side of the equation,” Nathan said on the Modern Retail Podcast.According to Nathan, part of what made Caraway especially successful was its specific niche in the cookware space. Right now, there seem to be endless online brands hawking aesthetically pleasing pans. But, as Nathan described it, most cater to home chefs looking for professional-grade tools. Caraway instead focuses on people looking for good, sturdy equipment -- but not necessarily the restaurant stuff. “We really felt like there was this just massive gap,” he said.As a result, sales have been booming. Now, Caraway is trying to grow even faster. One way it’s been going about that is through retail partnerships. The brand has forged partnerships with a number of retailers and marketplaces, including Crate and Barrel, West Elm and Food52.In Nathan’s eyes, DTC is a great channel to start out -- but it’s imperative to find more eyeballs. When it comes to being available on other retailer’s shelves and websites, he said, “we very much see them as acquisition channels.” What’s more, he said, is that retail collaborations “give us the ability to offer different assortments than what’s on our website.”In a sense, it’s about catching customers’ eyes and then reeling them into the other sales channels.

Marc Rosen has worn many hats -- or, perhaps, pants -- at Levi’s.Today, he’s the president of the apparel brand’s Americas business. But he’s been at the company for seven years -- first joining to grow Levi’s e-commerce business. As such, he’s seen a lot of changes, both within the company and in retail as a whole. On the Modern Retail Podcast, Rosen spoke about what he’s been observing, as well as how his role at Levi’s has changed both over the years and during the pandemic.Thinking back to the retail landscape almost a decade ago, Rosen said, “I think almost everything has changed.”But, of course, many of the most drastic changes happened in the last year. And that also coincided with a new position for Rosen. Instead of just leading the online business, Rosen began overseeing all of Levi’s Americas business -- including wholesale -- in January of 2020. As such, the pandemic was certainly a crash course in navigating a new facet of the brand’s business.“The wholesale world, to some extent, for me was new,” he said. “It was really a learning experience about building that relationship.”Much of that learning experience was focused on figuring out where and how people were shopping. For example, while Levi’s is available in many brick and mortar stores, it also has wholesale relationships with online retailers. “Consumers moved so quickly into digital,” Rosen said, and the first part of the pandemic was working both inside Levi’s and with partners to try and navigate that shift.This also brought about a big change in how Levi’s as a company rolled out new products. For large companies, it’s hard to adopt a startup-like ethos of test and learn. But during a global pandemic, that’s all retailers were able to do. They had to adapt in an instant, launch and figure things out from there. The big lesson Rosen learned, he said, is “we can be a lot faster.” Instead of very slowly building something internally, more programs can see the light of day faster and be iterated upon.The pandemic, he said, brought about these lessons. Normally, he explained, “we probably would have built [out a new feature or program], and waited until it was perfect to roll it out. But in a pandemic, you don’t have that luxury.”

Google wants to make it crystal clear that it’s not a marketplace.True, people can buy things on Google, but it also lets sellers link out to other marketplaces. On the Modern Retail Podcast, Bill Ready, the company’s president of commerce and payments, discussed this important nuance. “We’re not a retailer, we’re not a marketplace,” he said. In his estimation, Google is about helping shoppers discover products (and sometimes letting them transact with in the platform). While the site looks and feels like a marketplace, he insisted that Google’s utility provides something markedly different.Google’s shopping capabilities have had quite the evolution. Its offerings have had fits and starts, to say the least. Currently, any merchant can upload products to be listed on Google’s shopping website. They can use Google’s commerce options -- called ‘Buy on Google’ -- or they can link out.Last year, the company made the decision to make its listings completely free. Before, merchants had to purchase an ad in order to surface on the platform. All these moves, according to Ready, are because of Google’s belief in the open web. But making product listings free also meant more merchants tried out the platform; the company saw 80% more listings in 2020 compared to the year before.The focus now, according to Ready, is to continue making services and products for merchants and get more brands comfortable with selling on Google. This includes testing out shoppable ad units on YouTube.Of course, continuing to grow the ad business is also important. And who remains a big advertiser on Google? Amazon. “We partner with retailers of every size, including the largest and you know, Amazon is a partner that we work with quite closely as well,” said Ready. “It can oftentimes be a good storyline to say ‘hey, is this a competitive thing?’ [but] it really is a return to first principles for Google.”

It’s been a crazy year for Ocean Spray.The 91-year-old cranberry product company not only saw an increase in sales over the last year, but went viral on TikTok. It saw increased demand in 2020, according to CEO Tom Hayes. “Ocean Spray as a category leader has probably disproportionately benefited [from the pandemic],” Hayes said on the Modern Retail Podcast.This episode was recorded live at last week’s Modern Retail Summit. There, Hayes gave a fireside chat -- talking about the company’s product development strategy and how it tried to ride the TikTok wave. Last year, a TikTok user named Nathan Apodaca videotaped himself on a skateboard listening to Fleetwood Mac while drinking Ocean Spray cranberry juice. It went viral, and the company’s products flew off the shelves.The Ocean Spray team was forced to react. Before going viral, Hayes said the company’s social media strategy was more traditional. “If I were to put a picture on it, it might be that Norman Rockwell Thanksgiving,” he said. Now the company is “trying to move the brand to be a little more edgy, and to be a little more attractive to the younger consumer.”TikTok aside, Ocean Spray has other big plans. It recently unveiled new products -- including a dried fruit snack and a caffeinated sparkling drink -- and is trying to establish itself as a category leader outside of just cranberry juice.

It’s been a big year for Crocs.The popular shoe brand, known for its ubiquitous plastic slip-ons, saw revenue grow 12.6% year-over-year, hitting $1.39 billion. E-commerce was a big driver of its business, growing 92%. About half of the company’s revenue comes from digital channels. According to the company’s president Michelle Poole, this success was thanks to the brand keeping its ear to the ground and remaining scrappy.“I’m most focused on how the brand comes to life across the globe, in all channels,” she said on the Modern Retail Podcast. Poole spoke about how the company dealt with all the changes brought on over the past year, as well as how it approaches large branding campaigns and influencers.Part of Crocs’ growth was thanks to its varied marketing campaigns. The company has unveiled a number of collaborations with companies like KFC and celebrities like Justin Bieber. These campaigns are a way to keep the shoe brand relevant. A few years ago, Crocs was less choosy when it came to celebrity partnerships. “At the beginning, we were just frankly, we were grateful to have someone to partner with,” said Poole. “And we’ve now really got the opportunity to be more strategic.”A Bieber-branded Croc isn’t Poole’s only focus. Currently, she’s thinking about international expansion. “We actually have three key markets that we’re really focused: China, Japan and Korea,” she said. “I would say that the playbook we are really focused on in Asia... is [to] really establish icon status.” This is how the company has approached growth in all its regions, she said. Poole added that “where it does need to be tailored is in our marketing strategy.” That is, the campaigns -- and influencers -- Crocs work with in Asia are slightly different than those in North America.Despite the recent growth, things haven’t been a walk in the park. For the last year, Poole said, Crocs was in defense mode. But now, she went on, “I think as we move out of Covid, [we] move back into I would say is offense mode.”

If you text the phone number on a can of the coffee drink Taika, chances are that a human will respond. This is by design.The company, which boasts a caffeinated canned drink that contains so-called adaptogens, launched in 2020 -- right when the pandemic hit. And it’s used a text-based branding strategy to help it connect with customers.Co-founder and CEO Michael Sharon joined the Modern Retail Podcast this week and spoke about how the company has been able to grow over the last year.Sharon’s background is in tech, hailing from companies like Facebook. His co-founder Kal Freese was a barista champion. Together, they are trying to build a coffee beverage that wasn’t tailored for snobs. “Most of the ways coffee is marketed, is focused on the origin -- like, where does this thing come from? Is it from Honduras? Is it from Guatemala?” said Sharon. “These are just marketing labels and definitions,” he said, adding that most people can’t tell the difference between coffees based on their country of origin.The thesis behind Taika, he explained, is “to focus on a destination.” That is, “how does the coffee make you feel, how’s it gonna make you feel after you drink it after you consume it?”The company also aims to have approachable marketing. That includes having a phone number prominently displayed on the can that people can text at anytime with product questions. While some companies, like Iris Nova, use text as a means for ordering. Sharon said that the SMS strategy was more about fostering a connection with Taika’s customers. Texting, he explained, “is a brand experience touchpoint for us more than anything.”In 2019, Taika began beta testing its selection. Then, the company focused predominately on selling to local businesses like co-working spaces and using those customers to get direct feedback. But when the pandemic hit, the coffee brand had to pivot. It launched both its DTC business, as well as started selling in retail stores around the country.After a rough month or so when the coronavirus first hit, Taika is now seeing the business take flight. According to Sharon, Taika has been growing around 30% month-over-month. He is forging new retail partnerships, but is also focused on growing the DTC channel, which currently represents 40% of its business.It’s a difficult but important channel to grow. “It’s really hard to scale beverage to DTC,” he said.

The Shazam for wine had quite a big year.Vivino, an app that lets users search for wines by taking a picture of the label and read customer reviews, raised $155 million last February. The app now has over 50 million users worldwide, and says it facilitated around $250 million in sales last year. Founder and CEO Heini Zachariassen joined the Modern Retail Podcast, and spoke about this newfound growth.The app is over ten years old, and only a few years back began adding commerce to the mix. Before getting users to transact, the first order of business was getting people to use it. “This is a land grab,” said Zachariassen. “We want to be the biggest wine app in the space.”In its early days, Vivino was focused on being an intuitive app that people would use for wine research. The idea was to build a user habit -- people would pull out the app while they were perusing bottles at the wine store. Commerce, said Zachariassen, would come later as it’s “a bit of a complex thing to do.” The focus at first, he said, was to “learn about the user.”But since 2016, the company has been building relationships with wine retailers to make it easier for Vivino users to buy wine. The pandemic, however, was when wine sales really began hitting their stride. Said Zachariassen, “2020 has been really a breakthrough for us.”With more people using Vivino to buy wine, the focus now is to find more app users -- and add more retail partners to the mix. Zachariassen said that this latest investment is about growing the 200-person team and putting marketing on the front burner. Now, he said, he wants to prove how big the online wine business can grow.“If this reaches scale, there is money to be made,” Zachariassen said. “This is a real business -- now we’re going to push the accelerator.”

Comfy clothes certainly had a moment last year.Indeed, as Sarah Rasmusen, chief customer officer at the apparel brand Lands’ End said, “it could not be a better time to be in the elastic waist business.” While the company’s revenue slightly dipped year-over-year according to its most recent earnings, online sales grew nearly 8% and the company is bullish about its products remaining in demand.Rasmusen joined the Modern Retail Podcast and spoke about how the decades-old company has been navigating the changing tides. It began as a catalog business, and even made the jump to online quite early. Lands’ End, in fact, launched its website the same month as Amazon. But in the mid-2000s, the apparel brand lost its way.Now, Rasmusen has spent the last four years trying to right the ship. That meant completely reimagining Lands’ End’s online experience, as well as testing out new ways to keep customers engaged. Indeed, last year the brand launched its own marketplace. Why would other brands want to list their products on Lands’ End? “It’s the pay to play equation,” she said. That is, on a site like Amazon a sandals brand will be competing against tens of thousands of other listing. But on a smaller site like Lands’ End, where people are there to buy similar items, there are much fewer.For now, the strategy is to continue building on earlier momentum. Digital innovation is a big part of that. “If you are not going to invest in your digital property,” said Rasmusen, “you fall behind.”