Morning Brew - ☕ Venture on

Breaking down today’s tricky funding environment for beauty.
Morning Brew September 06, 2022

Retail Brew


Good afternoon! We can’t stop thinking about the opening of YouTube-famous MrBeast Burger, which drew thousands (yes, thousands!) of hungry burger-buyers to a mall in New Jersey this weekend. If you didn’t make it, we’re hoping you still had a great weekend.

In today’s edition:

—Erin Cabrey, Katishi Maake, Maeve Allsup


Beauty mark

Osea skincare products CAVU Venture Partners

Across categories, DTC CPG brands are facing tough times: Glossier has seen several waves of layoffs and shifted to a new wholesale strategy, while DTC alcohol startup Haus has been forced to shut down after Constellation Brands pulled out of its funding round. A-Frame Brands’s Ari Bloom even told us last month that “DTC alone is dead,” and an omnichannel presence may be increasingly crucial to secure funding.

CPG investment firm CAVU Venture Partners has “always really believed in an omnichannel approach to consumer,” Jenna Jackson, principal of growth at CAVU, told us. The firm, which was co-founded by Shark Tank alum Rohan Oza in 2015, has invested in some food, beverage, and wellness brands you might have heard of, like Vital Proteins, Beyond Meat, Oatly, and Poppi, with an average check size of $10–$50 million.

Since October 2020, it's been expanding in the beauty space, first with vegan skin-care brand Osea, followed by sustainable personal-care brand Nécessaire, an effort led by Jackson.

We talked with Jackson about the current funding environment for beauty brands, and whether a DTC-first strategy is still the go-to strategy for beauty brands. 

This interview has been edited and condensed for clarity.

There’s been a lot of talk about DTC CPG funding drying up and brands struggling to close those kinds of deals. Is that something that you’ve seen? We’re hearing some of those same things that before it was easier to raise as a DTC business and “omnichannel” was not a word that investors wanted to hear. And now it feels like “omnichannel” is the word they want to hear. And there’s less emphasis on DTC—we’re definitely hearing that.

Why do you feel like there’s been a larger shift in that direction now? A lot of those businesses have had a hard time scaling and finding profitability. And so a lot of the brands raised a lot of money and spent a lot of money to drive the consumer just to their site. And then again, with some of the tech changes—whether that’s iOS14, or some of the other things that have made it difficult—it’s made it harder to invest in those brands and see their ability to scale and to gain profitability.

Click here to read the full interview.EC



Do abandoned carts haunt your biz?


Roughly 70% of all online shopping carts are abandoned. Dun, dun, duuuun. But this eerie trend isn’t an unsolved mystery—it’s often caused by a confusing checkout process.

The solution? A seamless, one-click checkout experience that can boost conversions and revenue. If you crave more enlightening data on what stops customers from purchasing, dive into Bolt’s exclusive research.

Bolt surveyed shoppers about why they let carts languish before checkout, and their reasons were pretty eye-opening. The team channeled these thoughts into a host of insightful tips for retailers to help them avoid $$$-costing mistakes. Just in time for holiday sales, too.

Free the carts from their spooky shackles and download Bolt’s free report.



Holiday crunch

A computer decorated for the holidays Francis Scialabba

We’re past Labor Day, which means playoff baseball, the Hocus Pocus sequel, and the holiday shopping season are all quickly approaching. This year, however, some curveballs for retailers—inflation and unreliable inventory levels—could cause companies to swing and miss on revenue.

One way that retailers are trying to keep the bat on the ball is to increasingly move their holiday shopping up as a way to spread out promotions and sales, Ken Fenyo, president of research and advisory at Coresight Research, previously told Retail Brew.

“[Retailers should] start really thinking about how to create promotions, events, and other ways of drawing traffic—starting even as soon as October—to really try to spread the holiday season out, try to move inventory earlier in the season so you’re not caught when you get to early December having to do very aggressive promotion to try to clear out your inventory,” Fenyo said.

Click here to read some retailers’ approaches to the holiday shopping season.KM



Settling with Sephora

An open make-up compact with red blush sits on a black-and-white striped table, with a human eye appearing in the mirror of the compact. Illustration: Francis Scialabba, Photo: Ebby May/Getty Images

No amount of caked-on foundation and expensive eyeliner could hide Sephora from California’s attorney general. Last week, the company agreed to pay a $1.2 million fine for allegedly violating the California Consumer Privacy Act (CCPA). It’s the first enforcement and fine resulting from the law, and it has important implications that could be important for...the internet.

California accused Sephora of making that customer data available to third parties—which it did by sharing that data with commonly used web-analytics companies that run on its website—and failing to disclose the sale of personal info or provide an opt-out link on some browsers.

Wait, what? According to the settlement, under the CCPA, a sale is “the exchange of personal information for anything of value,” including third-party cookies and pixels, tech that companies can use to target and retarget ads to browsing customers.

California clearly considers companies using analytics and advertising services provided by Facebook or Google, for example, to be selling that data under the CCPA, Travis P. Brennan, shareholder and chair of Stradling Yocca Carlson and Rauth PC’s privacy and data security practice, said.

Doubling down: The Sephora investigation was part of an enforcement sweep of online retailers that began last June. California AG Rob Bonta tweeted that his office was “serving notices of CCPA violation to a number of other large online retailers,” and while Sephora is the first company to have been fined, it’s unlikely to be the last.

Read on to find out why the Sephora settlement may pose an issue for e-commerce sites using Google and Facebook’s analytics and advertising services.—MA




What’s stopping the shopping? Abandoned carts are a trillion-dollar problem in e-commerce…annually. Why are so many shoppers dipping out during checkout? Bolt’s research suggests issues like sticker shock and checkout hassles are to blame. Wanna avoid such common pitfalls before the holiday season? Read Bolt’s free report.



Today’s top retail reads.

Save time: This online watch-trading platform hopes it can make buying and selling pre-owned watches more community focused. (Financial Times)

Counting chickens: How an assortment of storefront animals (including pigeons, pigs, cats, and roosters) are helping small shops get ahead of the competition. “The customer gets an unforgettable experience, and the interaction can inspire customers to share their experience on social channels,” said digital strategy expert Lisa Apolinski. (the New York Times)

New age: A look at fashion’s current obsession with “stylish senior citizens,” from “coastal grandma” to “fancy grandma.” (Vogue)


Snag advanced ticket pricing for The SKU! This all-day event will cover the future of shopping, sustainability, customer loyalty, and omnichannel everything. You’ll hear experts from TikTok, Crocs, Harry’s Inc., and more. See you there!


  • Gavin Newsom signed a new law which will create a Fast Food Council for California.
  • Starbucks announced a new CEO: longtime consumer-products executive Laxman Narasimhan.
  • CVS said it has reached a deal to buy Signify Health for about $8 billion.
  • Alexander Wang announced new funding from two Chinese investors.


What happened in the world of retail this week in…1890 and beyond? Retail Brew takes you way, way, way back.

  • On September 5, 1934, the North Carolina governor called on the National Guard to stop a massive textile-worker strike.
  • On September 6, 2017, Amazon announced plans to open a fulfillment center on Staten Island, New York.
  • On September 8, 1965, the Delano Grape Strike began in Bakersfield, California.
  • On September 9, 1890, Colonel Harland Sanders, founder of Kentucky Fried Chicken, was born.


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Written by Erin Cabrey, Katishi Maake, and Maeve Allsup

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