2PM - DTC Brands, Secondaries, and Swifties

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Secondaries (Read Here): It’s not farfetched to argue that brands are capable of attracting consumer attention and commerce in ways that resemble traditional media and entertainment companies. A Vuori yoga studio would be in high demand for daily classes. An LMNT trail run series would attract enthusiasts in a number of cities known for outdoor activity. Both of these venture-backed companies share more than fitness in common; they share tremendous secondary market interest.

Massive Update to the DTC Power List, presented by Bold Metrics. All categories of the list have been updated with major movement throughout the list.  Latest Update: 12/5. The latest updates include three new columns: (1) “Week over Week” (WoW) Change in Rank (2) Polled “Secondaries” Interest (3) Paid Traffic.

For the new feature on polled secondaries interest, we combined a poll (n=97) with internal data on this update’s top 250 brands to assess whether those polled and others would pursue an interest in secondary stock sales from employees, founders, and / or existing shareholders of the retailers mentioned. We weighted the poll as 90% of the the assessment and we plan on growing the list to the full 800+ in the coming weeks. We believe that interest in purchasing secondaries is a positive indicator for the current brand equity, potential brand equity, and current financial health of the retailers mentioned.

800+ Brands Measured

Why On is a sports megabrand in the making

Brand Equity / Vogue Business On's brand equity, rooted in its unique position within niche running clubs and its subsequent expansion into fashion and sports sectors globally, has significantly contributed to its financial success and stock price valuation. The Swiss activewear brand's strategy of elevating brand awareness, expanding direct-to-consumer retail, and diversifying into new categories while maintaining a focus on innovation and premium positioning has set it apart in a crowded market, enabling it to project doubling its net sales to $4 billion by 2026. 

Brand equity and pricing power

Brand Equity / Youtube Notes: This short primer on pricing power examined Liquid Death and how the founder and CEO created brand equity by intentionally choosing a controversial name, building a strong marketing machine, and attracting a loyal online following willing to pay a premium for their product. Liquid Death is noted as one of the DTC retailers with secondary stock sale interest on the DTC Power List as well as one of the handful of brands mentioned in the leading memo. 

Brand equity has the highest influence on 55+ shoppers

Brand Equity / Civic Science This report explores the shopping preferences and behaviors of different demographics, particularly focusing on U.S. adults, in the context of apparel and footwear purchases. The study underscores the importance of understanding brand equity patterns, especially for marketers looking to tailor their strategies to different consumer segments, highlighting key differences in shopping habits based on age and income levels. And here is a visual of this data by Insider Intelligence. 

Amazon launches Shopify app for Buy With Prime

Brand Equity / Marketplace Pulse The partnership between Amazon's Buy with Prime and Shopify represents strong brand equity for both companies, showcasing their influential positions in the e-commerce sector. This collaboration not only facilitates smoother operations for merchants on both platforms but also signifies a strategic alignment of two e-commerce giants, each leveraging their strengths to expand their influence and service offerings in the online retail space.

Tonal sues Chinese rival Speediance

Brand Equity / Fitt Who owns smart strength? Speediance, established in December 2020, has rapidly grown, raising nearly $10 million through funding rounds. It has launched innovative products like Gym Monster and Gym Pal, featuring advanced technology such as brushless direct-drive motors. As of July 2023, their monthly revenue exceeded $1.45 million, indicating strong market performance. Tonal has Lebron and quite a growing distribution to boot, however. 

The rise of Temu's Chinese parent will reshape eCommerce

Fastest Growing / WSJ Temu capitalizes on the rising price sensitivity among American consumers, offering goods at more affordable prices through discounts and rebates, which has given it a competitive edge over Alibaba. 

Temu embodies the emerging trend of 'direct from factory' retail, where Chinese eCommerce companies are bypassing traditional retail middlemen, offering significantly lower prices by shipping directly from factories. This strategy, combined with governmental support for Chinese companies expanding abroad, positions Temu advantageously in the competitive U.S. market. (From: The Modern Circulation System)

The nation’s companies are racing to enter the US

Fastest Growing / Bloomberg Chinese entrepreneurs are increasingly targeting overseas markets, particularly the U.S., as a strategic move away from the competitive and saturated home market. Companies like Shein and Temu, leveraging their country's robust manufacturing and supply chain capabilities, are tapping into the American consumers' growing preference for value-oriented products amidst rising living costs.

Also read: Where NATSEC Meets Commerce (Newsweek by 2PM) 

How Snoop Dogg went method to 'Give Up the Smoke'

Top DTCs (No. 39) / Los Angeles Mag "The Instagram post made headlines around the world, with longtime devotees crying, "Say it ain't so," the recovery community cheering on the rapper-turned-mogul and the sober-curious wondering if their lifelong romance with weed was destined to come to an end. As of Nov. 27, it had amassed 4.7 million likes."

Maude unveils exhibit at Museum of Sex in Miami

Top DTCs (No. 391) / WWD Maude is exploring 100 years of history at the new Museum of Sex.  The Museum of Sex previewed its second location in Miami on Friday and will open to the public in January 2024. The flagship opened in New York City in 2002.  Maude founder Éva Goicochea and creative director and actress Dakota Johnson have curated an exhibit.

How Vuori defied the DTC apocalypse

Top DTCs (No.14) / Fast Company  "But eight years later, Kudla is now grateful that investors weren’t eager to fund Vuori. It forced him to stay focused on profitability, rather than growth. By year two, Vuori was already in the black, which is very different from many other DTC brands, which have struggled to turn a profit."

Figs' transition from eCommerce to its first retail location

Top DTCs (No 27) / CSA The decision to open physical stores, such as the one in Century City Mall, is driven by a desire to enhance customer experience through in-person interactions and events, and to increase brand awareness, particularly in locations close to major healthcare institutions.