The Modern Retail Podcast

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.

Jonathan Wahl sees the boom in kitchenware companies as a good thing for the sector as a whole."Seeing others recognize the same opportunity reaffirms that yes, we're on the right track," Wahl, who co-founded the cookware company Abbio last year with his brother, said on the Modern Retail Podcast. "In terms of competing, I believe that at the end of the day the best products are going to win out."That last bit is worth saying because Wahl sees a proliferation of low quality products in the market."We're kind of still in what I'll call the 'Shopify effect,'" Wahl said. "It becomes very easy for brands with not very well considered, thought out products -- or inferior products -- to launch and try to establish some sort of market presence. I think that's happened in our space as it's happened in many others."Abbio only makes and sells five pieces of cookware, which as a set go for precisely $287.Wahl pointed to tremendous growth due to the coronavirus, in both sales and traffic to its site. "We were seeing consistent growth and were excited with our progress. Then came March, April, May and June. We boarded a little bit of a rocket ship," Wahl said. Half of its sales are direct-to-consumer, he added.

2020 hasn't been a good year to travel or go on vacation, and Americans are spending more on home improvements instead.Furniture brand Article was lucky enough to corner that market with a DTC model that eschews the need for expensive floorspace that has gone unused for several months this year."We saw this perfect storm for us, where not only were we effectively reaching a whole lot more people who were super motivated to buy, but we also had this really compelling offering for them, because the competitive landscape had shifted so radically," Article director of marketing Duncan Blair said on the Modern Retail Podcast.The advantages have proven big enough for Blair to doubt the need for a company store in the future, of which he questions the efficacy in 2020. "It's such a contrived environment. You walk into the stores, [there are] hundreds of other people, you're kind of sitting awkwardly on this sofa in the middle of the showroom with people looking at you and sort of waiting around. It's not your space," Blair said. "There may not be a good reason for us to go into retail anytime soon."Speaking about the big picture for the company and the sector, Blair said he was confident that "we'll continue to grow as a share of e-commerce, and that e-commerce will continue to grow as a share of the overall furniture market. The question mark is: What is going to happen in the total furniture market over the next 18 months to three years?"

Sam Dennigan launched Strong Roots with a single item -- sweet potato fries -- in Ireland in 2015.The frozen vegetables company has since raised $18.3 million from private equity firm Goode Partners to expand into the U.S., where Dennigan is now based. His experience on both sides of the Atlantic helps him highlight some of the competitive differences among markets."The key difference between the U.S. market and the U.K. and Irish market is the fact that private label is much stronger in natural foods in the U.K. and Ireland whereas brands lead the way with natural food in the U.S.," Dennigan said on the Modern Retail Podcast.The pandemic has proven to be a boon for staff productivity, he said, and has also forced the company to branch into making ready-to-eat dishes available for delivery."That was in response to not being able to sample in stores. That's something that's not going to come back for some time with the risks around cross-contamination and infection," he said about his collaboration with Ghost Truck Kitchen in Jersey City. "We've pivoted into being a food service offering that you can order direct to the home through Uber Eats and Seamless and Door Dash."

Back when GT Dave, founder of GT's Living Food, single-handedly proved that there was a market for kombucha in the U.S., "probiotic" was hardly a buzzword. "Fortunately today, that hurdle or barrier is no longer there," Dave said on the Modern Retail Podcast.Kombucha is big business; sales exceeded $480 million in 2019, according to Nielsen. GT's Living Foods, which was founded in 1995, makes for a big piece of that pie -- 60% of it back in 2015, as he then <a href="https://www.inc.com/magazine/201503/tom-foster/the-king-of-kombucha.html">told a profile writer</a>.He wouldn't provide an update to that figure for 2020, but did speak to the challenges presented by the pandemic, especially early on. "There was a time where anything that was considered single serve, like our 16-ounce bottle, was basically dead," Dave said about March and April.In-store sales have since rebounded, and the company is taking its first steps in the direct-to-consumer space. "This quasi-subscription approach is something our fans have been waiting for a very long time and Covid kind of gave us that reason to explore it."GT's other strategies for surviving the downturn include emphasizing the product's possible health benefits (or at least, its <a href="https://www.nytimes.com/2019/10/16/style/self-care/kombucha-benefits.html">healthful reputation</a>) and communicating with retailers about their common interests in keeping supply flowing.