Morning Brew - ☕️ Personalization is here

Big dreams for Gen Z founders.
Morning Brew June 06, 2022

Retail Brew

Recharge

Happy Monday. Since we should never start the week by cutting corners, let’s ponder why Wendy’s burgers are square.

In today’s edition:

—Katishi Maake, Erin Cabrey, Jeena Sharma

GEN Z

Zoom zoom

Madison Semarjian and Ana Kannan Photos: Madison Semarjian and Ana Kannan

During her freshman year at Boston College, Madison Semarjian found herself in a predicament that many 18-year-olds find themselves in: not knowing what to wear on a first date. She turned to her best friend, whose advice was, “Why don’t you just wear what makes you feel like yourself?”

Easier said than done, Semarjian thought, but that question got her thinking about what influences the choices made by people in need of a great look. Semarjian is one of many young founders who are convinced that Gen Z wants a personalized shopping experience.

Retail Brew spoke to Semarjian, founder of fashion-curation app Mada, and Ana Kannan, founder of sustainability-focused apparel marketplace Toward, about challenges they’ve faced and the Gen Z consumer.

  • “I was…really interested at the time in all the innovations happening with AI in the retail industry,” Semarjian, now 24, told us. “I saw there [were] a lot of cool things happening, but no one was kind of really serving any real value yet. There were smart mirrors and all this cool stuff, but everything felt a little bit gimmicky.”

Cold calls, big dreams

When the Mada app went live in January 2020, the goal was to make personal style algorithmic. It matches shoppers with outfits for special occasions. It took three years of sending cold emails before Semarjian received responses during her senior year of college.

  • A turning point came when a mentor advised her to use her lack of experience as a selling point to convince brands of her vision.

And when Toward debuted in August 2021, 50+ brands used the platform, but Kannan, a now 23-year-old graduate of the University of Southern California, similarly labored to win over brands.

  • After a flurry of cold calls, Kannan and her team developed a “responsibilities framework”—a set of standards brands have to meet to sell on the platform, which informs a survey with 100+ questions for brands to prove they meet them.

Keep reading about how these Gen Z founders are dreaming big about the future of personalized retail.KM

        

RESALE

Showing up

Vivrelle Vivrelle

Vivrelle is renting out a new showroom for its luxury rental service in New York City’s NoMad neighborhood, the company announced today.

  • The 14,000-square-foot, members-only space is a store and social club, featuring its collection of thousands of handbags and accessories, alongside a bar and lounge.
  • The company previously operated a smaller Manhattan showroom—but co-founder Blake Geffen told Retail Brew the new space is “much more immersive and feels more on brand” for Vivrelle.

Lux life: Founded in 2018 by married couple Blake and Wayne Geffen, the platform reached profitability in its first six months in biz, according to the company. Vivrelle declined to disclose revenue, but said it notched triple-digit growth in 2020 and 2021.

  • Last year was a “blockbuster year” for the brand, Wayne noted. It scored $26 million in funding, and in November, introduced a $39 membership tier to widen its consumer base. Vivrelle declined to share its exact member count, but said it is in the “tens of thousands.”

Wayne said the showroom is aimed at creating a community for its consumers where they can browse inventory (with a “Soho House feel”), especially as consumers are increasingly valuing “experience over transaction.”

“The consumer has just changed, especially in a post-Covid environment where people are a combination of asset light, on demand, they value experience versus ownership,” Wayne said. “And even in the resale market, I think people are looking for what they want, when they want it, and how they want it and at a great value.”

Zoom out: Vivrelle is the latest luxury reseller to double down on a brick-and-mortar presence. The RealReal opened its 19th location in Los Angeles in February, and late last month, Fashionphile introduced its own 60,000-square-foot showroom and authentication center in New York City. The appointment-only space includes a climate-controlled storage space, featuring what the company says is the world’s largest collection of Hermès Birkin bags.—EC

        

TOGETHER WITH RECHARGE

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STRATEGY

Pledges and promises about climate change

a man in a suit making a "pledge" sign overlaid on a forest of trees Illustration: Dianna “Mick” McDougall, Photos: Getty Images

As concerns around climate change pick up pace, companies are doing everything they can to tell consumers they care about the environment. But are they genuine, or simply greenwashing? Marketing Brew’s Katie Hicks dug deeper.

Coca-Cola, for instance, vowed to cut down 25% of its greenhouse-gas emissions between 2025 and 2030, but was also ranked the world’s top plastic polluter in 2021 for the fourth year in a row by the NGO Break Free from Plastic, Katie wrote.

  • There’s also Amazon, which donated $1 million to One Tree Planted, but reportedly emitted 60.64 million metric tons of carbon dioxide and was also found to have been drastically undercounting those numbers, per the Center for Investigative Reporting’s publication Reveal, Katie noted.

Different strategies: Meanwhile, Just Egg, a vegan egg-alternative company, is encouraging politicians to sanction climate-change legislation. It also gave out free sandwiches around Washington, DC, highlighting that the company’s products were doing more to tackle climate change versus certain politicians.

  • It’s a wise strategy as consumers turn to brands to “help them enact their political will in the marketplace,” Neeru Paharia, associate professor of marketing at Georgetown University, told Katie. “You can’t really do much [as] a consumer or a citizen. So the change has to happen from either a government or a company.”

Read the full story on Marketing Brew here.JS

        

WHAT ELSE IS BREWING

  • Amazon will displace Walmart as the US’s biggest retailer by 2024, predicts a report; meanwhile, the CEO of Amazon’s consumer business is leaving.
  • Starbucks is looking to bring in someone from outside the company for its next CEO, says founder and interim CEO Howard Schultz.
  • Gap, Macy’s, and other stores are seeing sales wane as consumers move on from Covid staples like elastic-waisted clothing and housewares.
  • StockX is defending itself in a court filing against claims from Nike that it sold counterfeit sneakers.
  • Guinness and other imported beer is running dry at Russian bars.

FROM THE CREW

New from the Brew, Right Here Right Now candles are crafted to get you in the moment. Learning a new skill, dreaming up a new idea, making a big decision … the right time is always now. Each candle’s fragrance is designed for the present, whether you’re looking for creativity, calm, or energy. Limited quantities available. Shop now on the Morning Brew Store!

SWAPPING SKUS

Today’s top retail reads.

Prep work: Third-party sellers on Amazon are getting ready for Prime Day, which will come with a new set of challenges like fuel and inflation surcharges that went into effect in April. (ModernRetail)

For the kids: Plant-based milk has already captured adults, but now the industry is turning its attention to those who consume milk the most—children. (Bloomberg)

Stitch it up: Thanks to the viral #crochet hashtag on TikTok, crochet is back in style for the summer, and a handful of brands are making hay. (Glossy)

Sidekick is our spunky newsletter here to help you level up your career and your life. We’re serving up career advice, productivity hacks, and content recs—all in the smart, witty tone you’ve come to expect from the Brew. Check it out.

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Vacations are in full swing as temperatures soar and pandemic restrictions are eased across countries, and consumers are all too ready to travel.

  • 60% of people had domestic travel plans this year, while 27% had international travel plans, per a recent Expedia survey.
  • US consumers spent over $6.6 billion on airline tickets this February, a 6% uptick from February 2019, according to an Adobe survey of direct transactions on six leading US airlines.

Saddled with the image of a dreamy vacation are concerns about dreaded inflation. For those of us that appreciate shopping while traveling (and there are a lot of us), rising costs pose a significant challenge: to shop, or to drop shopping?

You tell us: To what extent do added costs change your shopping decisions while traveling? Cast your vote here.

Circling back: Recently, we asked if laws should mandate sustainability or labor issues in fashion—a timely debate as three fashion bills in New York now have to await sessions next year. A majority (57%) of respondents agreed that the industry should be held accountable, while a quarter said that the decision should be up to the retailers. About 18% believed that while there should be laws, the current bills are too sweeping.

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Written by Katishi Maake, Erin Cabrey, and Jeena Sharma

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