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Recapping The SKU.
Morning Brew October 28, 2022

Retail Brew

Rosenthal & Rosenthal

Happy Friday, but maybe not so much for Amazon which, while posting positive Q3 earnings (thanks to your Prime Day hauls), is also expected to make $0 in profits this holiday season…unless of course we all decide to go way over our holiday-gifting budgets this year.

In today’s edition:

—Maeve Allsup, Andrew Adam Newman, Katie Hicks

RETAIL

Replay

A person walks across a floor emblazoned with the logo of Retail Brew's The SKU Retail Brew’s The SKU, photograph by Kristoffer Tripplar

If you couldn’t make it to our first annual Retail Brew summit, we’re here to give you the TL;DR.

Retail executives, founders, and industry experts joined us in New York for discussions about everything from sustainable growth to sustainability.

We talked cupcake-scented deodorant, OnlyFans (yes, really!), and the magic of the Dyson Airwrap.

Here are our top takeaways from the day’s discussions:

Everyone is thinking about staying relevant and increasing engagement.

Social media strategies, successes, and failures were among the most discussed topics at the summit. We heard from founders and marketing executives alike about their attempts to increase engagement and stay relevant with younger consumers.

  • Jing Gao, founder of condiment brand Fly By Jing, got creative by starting an OnlyFans account. “We were like, ‘Wouldn’t it be funny if we send people ‘noods,’ like recipes of noodles?’” she explained. “I created that OnlyFans, and did ASMR where people slurp noodles, and exclusive Jing content. It’s really just a fun thing that we did that created a lot of buzz.”

Customer loyalty is king. It can also be tricky to achieve.

Closely connected to customer engagement is customer loyalty. Executives from Sam’s Club and Athletic Greens weighed in on their businesses’ membership models, while JCPenney’s chief marketing officer John Aylward taught us the alphabet.

Just kidding. But he did make the distinction between Loyalty (capital L) and loyalty (lowercase l).

Brick and mortar isn’t dead.

We took our newsletter offline and made it in person for this week’s event, but we certainly aren’t the only ones with physical locations on the brain.

Hill House Home founder Nell Diamond said that for her brand, the future is “all brick and mortar.” She said her popup store in Nantucket earlier this year received 1,000 visitors each day, and offered her customers a new shopping experience.

Keep reading here.—MA

        

TOGETHER WITH ROSENTHAL & ROSENTHAL

Grow your own way

Rosenthal & Rosenthal

Businesses are like plants: Both need unique conditions to help them grow best. Some plants need to bask in sunlight for 8 hours a day; others thrive in shady corners. And some businesses need factoring to flourish, while others need a boost with purchase order financing.

Fortunately, Rosenthal provides customized financial solutions to businesses that meet their specific needs. As the largest privately held factor and finance company in the US, they partner with companies across industries and sectors: fashion, food and beverage, even consumer tech.

Their newest division, Pipeline, focuses on high-growth D2C and e-commerce businesses. With Rosenthal’s working capital solutions, brands can grow quicker than bamboo—without giving up equity or diluting ownership.

Learn how Rosenthal can help you grow your business.

SUSTAINABILITY

Foam improvement

A square-shaped piece of Cruz Foam, which resembles Styrofoam. Cruz Foam

If anyone appreciates a bit of cushioning, it’s a company that makes protective packaging materials, which is why Cruz Foam, an environmentally friendly alternative to Styrofoam, is celebrating landing $18 million in Series A Funding.

Sea foam: Cruz Foam, which draws its name from its headquarters in Santa Cruz, California, was founded in 2017 by John Felts, its CEO, and Marco Rolandi, its chief science officer.

Felts, a surfer, is disgusted not just by floating plastic waste, but also by drilling rigs near Santa Barbara.

“When I used to come home from surfing, I used to literally have to scrape black tar off of my feet with a knife because it was so prevalent in the ocean,” he told us.

Expanded polystyrene—often generically referred to as the DuPont brand Styrofoam—is petroleum-based and famously slow at biodegrading.

And it’s increasingly falling out of favor with lawmakers.

  • Maryland, Maine, Vermont, New York, and New Jersey have banned polystyrene, with a ban in Colorado to come in 2024.
  • A California law requires a 25% reduction across all plastic packaging, and mandates packaging be recyclable, reusable, refillable, or compostable by 2032.

Retail companies are particularly interested in reducing their carbon footprints.

  • 71% of retail executives are making ESG a priority, compared to 64% of executives across all industries, according to a Harris Poll.

Shell yeah: Cruz Foam is made primarily from chitin, a component in the shells of shrimp and other crustaceans, a fishery waste product in abundance throughout the country since the shellfish are harvested off of many US coasts, Felts said. The material’s ubiquity means that it can be made regionally near where it’s being used, rather than incurring the environmental impact of long-distance shipping.

Keep reading here.—AAN

        

DTC

Sample opportunity

Sample opportunity Iryna Veklich/Getty Images

“There was a time not too long ago when in-store shopping—let alone sampling—was unthinkable. Even online brands seem to be thinking in IRL terms now,” writes Marketing Brew’s Katie Hicks:

In addition to opening permanent locations, DTC pop-ups and partnerships with larger retailers are also emerging. Take Glossier, which will soon be in Sephora after years of being sold strictly on its own site. By 2024, market-research company Forrester predicts that 72% of US retail sales will occur in brick-and-mortar stores. The main reason? Customers want to test products IRL.
That’s why, experts told us, DTC brands seem to be embracing the power of the product sample.

Read about some of them, including Pop Up Grocer, Gorillas, and Three Ships Beauty, here on Marketing Brew.

        

TOGETHER WITH BAZAARVOICE

Bazaarvoice

What do consumers want? More content! If your brand needs help adapting to the booming demand for quality user-generated content, join Bazaarvoice’s content supply chain master class. Learn how to activate an efficient, effective content system that powers consistent e-commerce growth. Register here.

SWAPPING SKUS

Today’s top retail reads.

Alternative solutions: As energy bills rise, consumers turn to buying air fryers, slow cookers, microwaves, and electric blankets to curb their power use. (The Guardian)

Parting ways: Breaking up with a celebrity is tougher for a brand than it looks, as bureaucracy and contract language can hamper the decision-making process. (the Wall Street Journal)

Fresh perspectives: At Lagos Fashion Week, young designers from across the African continent make a case for sustainability. (Vogue Business)

WHAT ELSE IS BREWING

  • US worker pay and benefits were up in Q3 despite inflation.
  • Revlon is reportedly considering sale offers as a way to move past bankruptcy.
  • Shein is on track to notch $24 billion in revenue this year, putting it in close proximity to the likes of H&M and Zara.
  • Employees at a joint Starbucks and Amazon Go store in midtown Manhattan have filed a petition for a union election.

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

  1. Two Californians are suing Barilla for misleading customers into believing all of its pasta is made in Italy.
  2. A casket company is using Taylor Swift’s latest song to promote its product and is even offering fans a discount on its coffins.
  3. A Napa-based winery will pay people $325 a day to tour and do tastings at every vineyard in the country.
  4. Suspects have been arrested for allegedly stealing $9 million worth of frozen meat.

Keep reading for the answer.

FRIEND OR FAUX? ANSWER

Well, you may not get paid to do wine tastings, but at least it’s Friday?

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Written by Maeve Allsup, Andrew Adam Newman, and Katie Hicks

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