The Modern Retail Podcast

If Nick Ling's latest brand launch wasn't so right for this moment, he would have delayed bringing it to market."If I was launching a new brand I'd wait. There's just too much change in consumer behavior," Ling said on the Modern Retail Podcast.But Open Spaces, the second brand under the umbrella company Pattern (where Ling is CEO) is all about getting the most out of the place many consumers are stuck in these days."How also do we help separate home into different activities, where now work is a much bigger activity at home than it used to be?" Ling said.Open Spaces makes and sells containers, racks and shelf risers (Pattern's first brand serves another domestic need: cooking). To help you figure out what you might be in the market for the company offers an online guide, including a listening exercise -- you'll need 10 minutes, headphones and pen and paper -- designed to make you want to stay a while.

Through this crisis, Burrow CEO Stephen Kuhl is sticking to a piece of advice he got back when the furniture store was just another startup at Y Combinator."The advice we got then was 'just launch your first product. Get it out there into people's hands and you'll get feedback,' Kuhl said on the Modern Retail Podcast.That's what the company has done with a virtual design consultation program delivering an "in-store experience" to customers from their homes.It had been in development for a while, according to Kuhl, but the pandemic's halting effect on the economy made this the time for Burrow to see it through (Burrow has one store, now closed, in Manhattan). "Within 48 hours we stood up our V1 of this virtual design consultation program. And that was something where everybody who was involved in that dropped everything and jumped on it," Kuhl said.He added that Burrow has seen "a good amount of revenue" from the new program, especially considering it was a leap of faith. "We had no data to say this is definitely something we should spend our time and money on."Kuhl talked about Burrow's supply chains, pivoting its business and how "anybody that tells you that they know how to forecast their business in this is either lying or completely naive."

Americans may have more reason than ever to appreciate the comforts of home and the value of making theirs their own.But even a company like Parachute, a luxury linens and home goods company founded in 2014, is feeling the pinch from the downturn in retail."Our [physical] retail is about 25% of our business -- but it's a profitable part of our business," the company's founder Ariel Kaye said on the Modern Retail Podcast. "And it's really also how we connect with our customers and build relationships."The brand is accelerating some of the shopping alternatives it had already been planning before the coronavirus pandemic."We've been excited about buy online, pickup in store, and curbside pickup for a long time, but it was always one of those things that we thought we would get to," Kaye said. "We want to make sure that we can deliver the experience that we want our customers to have no matter where they are."

If Benjamin Witte talks about his beverage brand Recess as if it were a budding empire, it's because he's noticed the same broad ambitions among the sector's big players."Red Bull is a media company for the action sports community that monetizes through selling cans," Witte said on the Modern Retail Podcast. "We're speaking to creatives, just like Red Bull is speaking to the action sports community, and Gatorade is speaking to athletics."To that end, Recess -- which sells fruity sparkling waters infused with that relaxing CBD -- is planning on rolling out compelling online content (without the help of influencers), merchandise, and "IRL experiences," Witte said.The company launched in late 2018, and the coronavirus crisis isn't exactly slowing it down. E-commerce sales are up 5x, according to Witte, though he conceded that retail is predictably down. "No one's in Manhattan. We have a huge part of our sales come from the lunch crowd, the office crowd, the coffee shop crowd. That's gone. We're also not in the Targets and Walmarts yet because of the regulatory [element]. So we don't benefit from that, which is a lot of where the foot traffic is."Witte talked about what CBD does for him, entering a retail sector without prior experience and why he looks to Disney instead of LaCroix.

Rhone CEO Nate Checketts said his company "saw the writing on the wall really quickly" in the early days of the coronavirus pandemic.Companies like his men’s activewear brand would soon be bloated with inventory and feel the pressure to boost e-commerce promotions."If everybody's getting promotional all at once, that's going to shift customer demand away from us if we're continuing to operate at full price," Checketts said. "So I challenged our team in 24 hours to get a promotion ready and to be ready to effectively communicate to the customers about what steps and actions we were taking."That plan included an email newsletter that's actually useful to readers instead of just being a distress call -- and the rare discount on Rhone products. "We won't go deep, but you will see brands that will have to," Checketts said."In some cases it might act as a clearing house to get non-serious players out, and that will present some opportunities. I do think that brands that I won't name but leaned so heavily into retail before they were really ready for it are in a lot of pain now," he added.Even on Rhone's e-commerce front, he said, "there's definitely been a demand impact, no question."Checketts talked about leadership values, what brick-and-mortar landlords should keep in mind and how he's staying honest with his employees.

When people go shopping for mattresses, according to Resident co-founder Eric Hutchinson, they often know more or less what kind they're after."The person who wants a memory foam mattress opts into that category very quickly," Hutchinson said on the Modern Retail Podcast. "They say: 'I am looking for a memory foam mattress,' so they're doing the comparative shopping versus other memory foam brands."In other words, people don't go mattress shopping as much as they go "memory foam" or "traditional" mattress shopping, right out of the gate. "Once we understood that, the notion that we would have a portfolio of brands was pretty clear to us."That's why Resident, a DTC holding company formed last year, has four mattress brands to its name, giving it the ability to meet consumers even after they've written off certain mattress categories. The company is "right at the point of break even profitability," Hutchinson said, and it's expanding to other parts of the home furnishing shopper's list."The idea is to have products that resonate with the consumer across the entire furnishing life cycle of a home," Hutchinson said.Obviously, the coronavirus pandemic poses problems for any consumer business's plans. "Uncertainty is the most difficult thing to manage to," Hutchinson said. But he added that although retail revenue plummeted "almost overnight," the DTC side of the business is strong."Right now consumers are online, so we pivoted our business and really have been able to make up the ground that we lost to the retail," Hutchinson said. He talked about the "aspirational" vibe of new DTC companies' brick-and-mortar stores, surveying customers and what digitally-native really means in his book.

Much has been written about the Chinese consumer that shops abroad in stores. But there is a growing movement among customers in China that, through livestreaming apps like ShopShops, are shopping at stores outside China, just through their phones.ShopShops founder Liyia Wu explained the experience from the customer's perspective: "Open up your phone, and with a click of a button you can be [on] any street, anywhere, opening the doors of stores that are interesting."The app allows viewers to watch hosts -- experienced salespeople or fashion influencers -- as they display clothes and accessories, QVC-style, for several hours. Customers can buy what they see and interact with the host and other shoppers via a chat function. ShopShops then makes a commission on purchases.The four-year-old company, based in both New York and Beijing, also completes the last leg of delivery within China. "Everything is shipped to us in bulk. We help to facilitate that last mile," Wu said.In the future, Wu hopes to expand ShopShops to hosting livestreams in other languages and on social media platforms rather than just the app itself.

Shark Tank investor and co-founder of RSE Ventures Matt Higgins thinks a change is coming to the DTC playbook."I think it's amazing that you can come along and challenge taboo thinking around ED, or you can go ahead and create an entirely new cereal brand, launch it right away and get scale. That's not going away," Higgins said on the Modern Retail Podcast.What is going away, he added, is the idea that digitally-native companies can stick solely to the online world and survive. "That part is not true, but it's kind of obvious, looking back," Higgins said. "You're going to go where the customer is."Higgins talked about his prescription for Casper, Harvard Business School's week-long course on the DTC model and how it's time for a brand affinity metric.

When it comes to financial technology, China has Silicon Valley beat. WeChat is a big part of that.What started as a messaging app in 2011 is now a mobile payments giant. "People use it for everything. For utilities, for gaming, obviously to communicate with their family and friends, and to do business," said Yiren Lu, a software engineer (at Google) and a writer who covers WeChat and Chinese technology.WeChat users can transfer money to their friends. But they can also pay for groceries, look through menus or place an order at a tea shop without standing in line or handling cash -- or a credit card."There are hundreds of millions of Chinese people who were unbanked, who did not have bank accounts. It was a very cash-heavy society," Lu said. WeChat and its main competitor, Alibaba's AliPay, "basically became banks," Lu added.She chalks WeChat's success -- some 34% of China's data traffic goes through the Tencent-owned app -- to this quickly solved pain point, but also to the country's rejection of American tech companies.In 2009, "China basically kicked out all of the U.S. tech companies," Lu said. China's "Great Firewall" blocked Facebook, Google, Twitter and Vimeo that year.If China offers a rapidly growing middle class -- one with less "antipathy towards the idea of consumerism," as Lu put it -- it is Chinese companies that are getting to it first.

The direct-to-consumer model didn't exist when Ariane Goldman started her first clothing brand in the mid-2000s. But by the time her second company, Hatch, launched in 2011, "the only way to really start the business was DTC," Goldman said on the Modern Retail Podcast.Hatch makes clothes to be worn at all stages of pregnancy -- and before and after too -- sold both online at stores in New York and Los Angeles."The genesis was really what didn't exist out there. I was pregnant with my first daughter and looking for something to make me feel better," Goldman said. "Why wasn't it there? If I needed it, there must be millions of other women that need it too."The company landed $5 million in Series A funding last year, but Goldman is wary of the inordinate amounts of cash being stuffed into the DTC market."Why are these great ideas all of a sudden being beaten up by inflation and numbers and greed?" she asked. "Sometimes I find myself wondering what it's all worth if you're not actually building something."Goldman talked about the advantages (and inevitability) of going DTC, what she learned from her first clothing brand and Hatch's expansion into beauty products.