The Modern Retail Podcast

Retail stores are slowly reopening, but Christiane Lemieux, founder of the DTC furniture brand The Inside, still thinks people will want to invest most in the place they're spending most of their time: the home."What you will be doing is focusing your time and disposable spend on making your home into everything it should be -- not only for now, but for what the future of our lives is going to look like," Lemieux said on the Modern Retail Podcast (people are spending so much time in doors, in fact, that Lemieux thinks a baby boom will hit in January).The Inside meets its demand through a "made to order" model -- a piece of furniture isn't built until a customer buys it online."I think 'made on demand' is the manufacturing of the future," said Lemieux. "It's so much better for the environment. There's no warehouses full of imported product just sitting there."In her case, it's also made the company more resistant to the supply chain disruptions roiling the world. "Having a domestic manufacturing base has allowed us to continue to produce even during this particular and very challenging situation.""We don't make anything until you place your order. There's people in my cohort who do the same thing with shampoo and vitamins. It's in every category at this point," Lemieux said.One or two of The Inside's factories still had to shut down -- one on the U.S.-Mexico border, the other in Illinois -- until the national policy that deemed manufacturers to be an essential service allowed them to operate again, according to Lemieux.

Looking to the past doesn't always work. For one, many current founders or CEOs were "still in high school" during the last economic crisis, according to Homebrew partner and co-founder Hunter Walk.For another, even for those entrepreneurs who survived the last global downturn, the big takeaways might not apply to current circumstances. "The answers from those entrepreneurs in 2008 may or not be the right answers for companies in 2020. But the questions they asked themselves might be the things that are evergreen. And so asking some of those questions of yourself as a founder who might be going through this the first time -- I think that's where it gets valuable," Walk said on the Modern Retail Podcast.Homebrew, the investment company Walk co-founded in 2013, has invested in companies ranging from the worlds of kids' clothing to aerospace technology and farming robots.Another evergreen spot for him is in the qualities of the founders he invests in, "which have remained consistent and help us do our job during a time like this," Walk said."You ask yourself 'why is this founder working to solve this problem?' And if the answer is something that usually comes from a personal interest in the problem, a deep insight or connection, then when they hit a speed bump (or in this case a very large speed bump, from a global standpoint) they don't stop. They pause, maybe, and say 'OK, how do I have to rethink my business?' But they're not just doing this opportunistically. They're doing it because they couldn't imaging doing anything else."

For a time, Grove Collaborative was one of the rare places where you could order reasonably-priced hand sanitizer online.That availability wasn't for a lack of demand. "Demand had been building, and all of a sudden for a week it was off the charts. And we had a big decision to make that week," CEO Stuart Landesberg said on the Modern Retail Podcast. "Do we want to prioritize our existing customers or do we want to prioritize going after new customers?Grove ended up focusing on existing customers, and limiting orders on certain items, allowing it to stay under its maximum shipping time of four days."We probably left a lot of money on the table by doing that, in the short term," Landesberg said. But he reckons that that kind of consistency for the eco-conscious home supplies company -- which hit unicorn status last year -- will allow it to thrive in the long term."Having clear and virtuous values and then ruthlessly sticking to them is essential to creating 100-year brands," Landesberg said.

Coefficient Capital co-founder Franklin Isacson describes himself as a cautious investor, especially in times of uncertainty like today. That comes in handy during a time of crisis.For Isacson, this has been a good time particularly to invest in certain companies, especially in grocery and consumer goods that can weather a recession."The new funds that are being deployed over the next 24, 36 months are likely to be very good vintages, much like the '09 and '10 funds were excellent vintages," Isacson said on the Modern Retail Podcast.Isacson lists four big lessons derived from 2008: rethinking how demand will be impacted ("consumers are going to trade down to private label during times like this"); creating backup in supply chains given the possibility of supplier bankruptcy; honesty in leadership about the uncertain times ahead; and liquidity. "Private capital markets are not always going to be there to fund your business even though you as a business might be doing well. Or even if they are, the terms just might not be as attractive," Isacson said.

Biossance president Catherine Gore has always considered skin care as medically significant, and believes customers will be more inclined to share that thinking as coronavirus lockdowns continue around the world. "Our skin is our largest organ, and it's also our first line of defense against outside aggressors," Gore said on the latest Glossy Beauty podcast.Education is a big part of Biossance's marketing strategy and value to customers. One of Biossance's central ingredients for skin care, for instance, is squalane, which it derives biochemically from sugar cane -- the larger cosmetics industry sourced a similar squalene (with an e) from a not-so-vegan source: shark liver.That makes a big difference for the typical customer who has more time to do her research, according to Gore: "What's actually driving her is a curiosity to do better for her own skin and the planet and to make better choices," she said.

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.