The Modern Retail Podcast

In Karla Gallardo's estimation, the world got tired of fast fashion just as the direct-to-consumer model was being proven out."By 2010 there was fatigue, there was dissatisfaction with the quality," Galardo said on the Modern Retail Podcast. "A lot of of news was coming out in terms of the conditions of the factories where these products were made. There was an opportunity for something better right after that bubble burst."Gallardo co-founded Cuyana with Shilpa Shah in 2011. The idea was to do to fashion what Warby Parker did to glasses "The choice was really obvious back then. It was 'well, this worked in the frames vertical, can we can we do this on the accessories and apparel side?"But, over the years, the program has changed a great deal -- even more so as a result of the coronavirus.

With a pandemic driving its six brick-and-mortar stores to little use, lingerie company Adore Me has relied on a try-at-home model."We basically send you a bunch of items, you decide what you keep, and you only pay for what you keep," Adore Me vp of growth Camille Kress said on the Modern Retail Podcast.At the height of the pandemic, half of the brand's new customers were shopping this way. "The key metric for this model is the 'keep rate.' You definitely want people to keep as much as possible, otherwise you're basically paying for shipping back and forth, which is really not the best use of your time or your money," Kress said.The company also seizes the mail-in relationship as a chance to send prospective customers products from other categories like swimwear and sleepwear ("anything that you could basically find right now in our assortment, which is not only intimates," Kress said).This direct connection the company has long fostered with customers has helped Adore Me launch brands beyond lingerie, like Joyja, a line of period-proof underwear. "We want to accompany women through all the different stages of their life," Kress said. "So we know that we're going to need something for their first period, then for their pregnancy, for menopause, and anything that comes in between."Looking at all of these stages, the company tries to find the next untapped market on which it can capitalize. "We're thinking that there's an appetite somewhere," Kress said.

GDP and unemployment are one set of statistics, but another way to measure the extent of the economic slowdown brought by the pandemic is a bit more mundane: Traffic.According to the maps and navigation app Waze, traffic was down around 70% in the early days of the pandemic."It was like a light switch," Suzie Reider, a managing director of global ads at Waze, said on the Modern Retail Podcast.Within its app, the Google-owned company can offer ads for nearby businesses for drivers, including pins on the map and larger "takeover ads" filling the top third of a user's screen ("it doesn't actually play until you're stopped," Reider said).That part of the business suffered from the drop in traffic too, of course."We saw a marked decline and decrease in our own advertising revenue in... it started in March," Reider said. "Then we saw these incredible, super exciting, quick gains as we started to move through the summer and then back into the fall."But recent signs indicate that the next wave of the pandemic may not to as harsh on the retail economy as it was earlier in the year. In France and the UK, where lockdowns have been reinstated, "you see immediate pausing of campaigns but you don't see the cancellations," Reider said.Waze Ads' biggest categories are quick serve, "casual dining," entertainment and gas, and it works with both big chains and with small businesses that can spend as little as $2 a day on ads.Before the pandemic, according to Fortune, the app had 130 million active monthly users around the world.

If you're going to ride behind another brand's success, Ikea isn't a bad choice. That's, in fact, what Semihandmade did.Semihandmade makes and sells cabinet doors for the giant retailer's fixtures, which can themselves be bought without the doors. For a small price increase, according to founder John McDonald, you get a big step up in quality.But even though business is good on that front -- Semihandmade has been profitable every year, according to McDonald -- he's looking to cannibalize his own market with Boxi, a soon-to-launch, more premium offering that can fit out a set of kitchen cabinets in its entirety.One big opportunity McDonald spots is the lack of name recognition beyond the top spot filled by Ikea. "There's Ikea in the U.S. and then there's 50 others made by the big guys," McDonald said on the Modern Retail Podcast.With Boxi, McDonald is starting with just a few types of cabinet doors. "You do four or five things great. And that's how we're able to be highly competitive in terms of pricing and high quality, but it's not for everybody. To me that's the clearest path to scale," he said.There's nobody else out there doing this, he claimed. Absolutely, there are cabinet companies. But they're faceless. There's Ikea in the U.S. and then there's 50 others made by the big guys. Part of what we want to do is be nontraditional, looking at what the other guys are doing and say 'we're not doing that.'

It's hard to find good coffee online, and roaster Blk & Bold found that to be a competitive advantage.The company saw huge growth over the last year, thanks to its placement on retail shelves at stores like Target -- as well as being a top-selling brand on Amazon. On the Modern Retail Podcast, which was recorded live during our Modern Retail Summit this week, co-founder and CEO Pernell Cezar Jr. spoke about how he has grown the company.Being on Amazon became a competitive advantage -- especially once the coronavirus hit. More people were buying groceries online, and supplies like coffee were selling out. Thanks to being on national shelves, he said, Blk & Bold was able to gain authority. "When we looked at Amazon and e-commerce we were allowing that authority we were able to gain by brick and mortar to tie that back into scaling and acquiring new consumers on e-comm," he said.Still, coffee is a hard business. "We were entering into the second highest commodity beverage space -- being coffee, right behind water," Cezar Jr. said. He approached growing the company by finding ways to differentiate. "When you are shopping in a coffee aisle in any grocery store, let's say excluding Whole Foods, there is not a premium assortment experience," he said. Ditto Amazon. The bet was that he could grow a coffee business by becoming a rarely-seen premium brand on those shelves. Cezar Jr. described how he was able to capitalize on all of these elements to grow the business. Amid a pandemic it grew from two people to twelve, and got a brand new warehouse as well. "Our whole business is can we convince these consumers that they can also make great quality coffee at home," he said. 

Luxury retailers have historically been slow to go online. But in the age of coronavirus, digital remains one of the only viable channels.Kelly Kowal, chief platform officer at Farfetch, is one of the people heralding this transition. Farfetch offers both its own consumer-facing marketplace of luxury items as well as sells white labeled services to brands and retailers that want to create their own online experiences. Both sides of the business have been booming over the last few months, she said on the Modern Retail podcast. "We are seeing a lot of interest from brands and retailers now really understanding how important that e-commerce channel really is," she said.But the industry is certainly not static. Different regions are seeing varied demands. According to Kowal, that is tied to countries' health and safety. "China, as it's recovering, is doing really well," she said. "The Middle East is doing really well." The only consistent things she's observed is inconsistency. The markets that were once reliable, said Kowal, no longer are. The demand you see one day may be gone the next.Meanwhile, competition is only increasing. Amazon is beginning to launch its own luxury offerings, giving brands more choices for which platforms they should work with. "We're always watching the competition," said Kowal, adding that Farfetch has a head start. "The difference for us is that we already have 1,300 partners," she said. "We already have the best brands and the best retailers." Amazon may be big and powerful, but it's yet to forge the important partnerships.In Kowal's eyes, the key is collaboration. Brands and retailers in the luxury space aren't looking for quick marketplaces to drop inventory. "We really genuinely want to be partners," she said. "That's how we see these relationships."

Barbie is Mattel's most iconic brand, but the toy company has more than 400 others that CEO and president Richard Dickson is, in his own words, looking to revive.In an age where smartphones and games like Fortnite present stiff competition for analog toys, Dickson says the company needs to create media everywhere it can."Continuing to be where our consumers are means, today, being everywhere," Dickson said on the Modern Retail Podcast. Mattel is producing short videos for YouTube, on its own and via collaborations with influencers. It also has a show on Netflix, and last year announced 22 animated and live-action TV programs last year.The likes of Nickelodeon are still huge for Mattel to reach young consumers, but YouTube Kids is the biggest growth spot, Dickson said. "I would call YouTube the one that has accelerated the most in the last several years."Mattel also recently launched a DTC platform named after the company's original name, Mattel Creations. This program will feature special edition Mattel collectibles -- aimed at a more adult audience. The hope is to figure out more ways to tap into direct sales (though Dickson is quick to note that Mattel loves all of its retail partners). 

Some DTC founders pick a sector just because they spy an opportunity. Bloomscape founder Justin Mast said did that too with his direct-to-consumer plant company, Bloomscape, that he founded in 2018. But he had a bit of a leg up, as he's also a fifth-generation greenhouse grower. His parents met in a greenhouse, in fact.Bloomscape ships thousands of plants a week, including full-grown ones that only survive within a narrow set of conditions. "The thing we did differently was to say 'how do we do this for a six foot tall tropical plant?'" Mast said on the Modern Retail Podcast. "I want to be able to ship that to Boston in the dead of winter."Bloomscape ships even the most fragile of plants through an advanced system of storage in greenhouses, and through innovative shipping patents and soil mixes. The company has seen year over year growth, as well as a huge spike in demand over the last few months. This week, in fact, the company announced that it raised a $15 million Series B, and acquired the plant care app Vera. Mast said the app acquisition is a way to keep more customers invested in the vegetation they purchase.Mast sees the pandemic as an accelerant for the millennial generation's belated settling down. "We're now settling into our lives, starting to settle down into homes and get a little more inward with our lives," Mast said.

Thrive Market, which first launched in 2014, had been growing at a rate of 40% a year before the pandemic. Now, with new customers joining the membership-based online grocery service, that growth rate has more than doubled to 90% a year, according to the company's co-founder and CTO Sasha Siddhartha."We were already a digital native experience, so there were lots of parts of the business that scaled naturally," Siddhartha said on the latest episode of the Modern Retail Podcast. Thrive Market was also already running on a largely remote workforce.That growth was in part charged by the fact that about half of the service's members are in the Midwest and Southeast, "which are areas that maybe traditionally are regarded as health food deserts," Siddhartha said. When the pandemic hit, customers in those regions were even less likely to make the lengthy trek to the kind of stores and products that would be much more common in a major metropolitan area.

Most companies use social media as a way to point consumers to the brand's website. In hot sauce company Truff's case, social media -- and TikTok, in particular -- is an endgame in itself."They eventually become customers, but we don't tell them, you know 'go to our link and buy our sauce,'" Truff co-founder Nick Guillen said on the Modern Retail Podcast. "We don't want you to go to the link and buy. We want you to like our brand."Nick Guillen and Nick Ajluni co-founded the company in 2017 based on an Instagram handle -- @sauce -- that they got their hands on during their college years.But TikTok is where it's really at, said Guillen. "It's a completely new generation of user, of customer," he said. "You really have to immerse yourself in platform -- TikTok, for example -- [and] really try to understand the voice, the tone, the flow, the style of content, how people are talking, the trends. And then set the brand in the middle of all this and not lose sight of the brand."The Truff co-founders said their company is the biggest hot sauce brand on TikTok, with 69,000 followers and nearly one million likes as of this writing. Beyond its own production (first-person videos are especially in these days, Guillen said), Truff shares videos in which fans and followers -- some of them chefs -- use the sauce themselves.Like the name suggests, Truff sells three truffle-infused hot sauces. They ship them to customers as a direct-to-consumer company, though Truff is also available on Amazon -- "we look at Amazon as more of a retailer versus our competition," Guillen said -- and in stores ranging from Neiman Marcus to Wegmans.