2PM - Fixing That DTC's Short Interest

Membership Brief Temporarily Unlocked. Staying ahead of emerging trends is paramount. By harnessing the power of data and insights, we can anticipate 10 key beliefs that are more likely to materialize (than not) in the retail, service, and technology spaces, guiding businesses in their strategic decision-making and adaptation to the evolving market dynamics.

• Belief No. 1: Grocery becomes the biggest eCommerce category by 2025
• Belief No. 2: Dollar General builds a renown retail media network by 2025
• Belief No. 3: McDonald’s China will be bigger than McDonald’s America by 2026
• Belief No. 4: The DTC beef industry crashes in 2025
• Belief No. 5: Tesla’s chief competitor will be BMW by 2025
• Belief No. 6: Nike will have to fend off Lululemon
• Belief No. 7: Higher education returns to a path of exclusivity by 2026
• Belief No. 8: India will be America’s third most important retail marketplace
• Belief No. 9: The Great Firewall of China comes crashing down
• Belief No. 10: The asset management firm / longevity club hybrid emerges by 2026

You can read the explanations or summaries for each here. 

Tesla's sales drop, a sign that its grip on the E.V. market Is slipping

Belief No. 5 / Perspective: In the above essay, here was one of ten bold predictions: "BMW’s impending launch of a new line of battery-powered cars, boasting advanced features like improved energy storage and innovative digital displays, positions the company as a formidable contender against Tesla." In Europe, established carmakers like Volkswagen and BMW have introduced more compelling battery-powered models. And in the United States, sales of electric cars are not growing as fast as they were a year ago.

Lululemon launches recycled polyester anorak

Belief No. 6 / Perspective: In the above essay, here was one of ten bold predictions: "A significant step in this direction would be Lululemon acquiring Ministry of Supply, a company at the forefront of sustainable and technical fabric innovations. It’s my belief that this would help Lululemon gain credibility and operational traction in its sustainability pursuits." The partnership (with Samsaro Eco) and product launch mark another step toward Lululemon’s goal of creating a circular ecosystem by 2030.

Archives (9/2023) on this key topic (Microplastics): "When Lululemon made a minority investment in Australian startup Samsara Eco in mid-May, the move was a significant nod to the industry’s changing approach to sustainable apparel. The multi-year commitment marked Lululemon’s first step into the recycling domain, showcasing a shift towards using enzymes to recycle old textiles into new ones." 

Amazon removes 'Just Walk Out' tech from Amazon Fresh stores

Retail Dive / Excerpt: The news that Amazon Fresh stores will no longer use Just Walk Out technology was first reported by The Information, which covers technology and the tech industry. The publication also reported that Just Walk Out employs people in India, who work behind the scenes to monitor shopping activity, according to multiple media outlets citing The Information.

Express could file for bankruptcy soon

QZ / Excerpt: Bloomberg, citing unnamed sources, reports that the company is requesting cash from its lenders to help it pay for a potential Chapter 11 bankruptcy proceeding. Express could file for bankruptcy as early as next week, people with knowledge of the private negotiations told Bloomberg, noting that plans have not been finalized and could change.

Archives (12/2022) on this key topic (40% Off Everything): At Express.com, the company is advertising “40% off of everything.” At UpWest, you receive 25% off when you spend $100. Typical enough. But at Vuori, you just buy the clothes at full price. One quick snapshot of a brand’s viability is whether or not they see the need to rely on sales promotions to continue sales momentum.

Shein doubles profits as it awaits IPO approval

The Guardian / Excerpt: Shein partly benefits from sending goods directly to shoppers, including to the UK and US, from China so they attract fewer taxes. The tactic has proved controversial, prompting calls for a change in tax rules.

The Substack-ification of Beauty

Excerpt / BOF: “I think the newsletter format can push the beauty media forward in terms of proving what readers want, which is not TikTok trend coverage.” DeFino told me. “Beauty readers are smarter than that, they want better than that, they deserve better than that.” They’re willing to pay for it, too.

Fourth Update to the DTC Power List, presented by Bold Metrics. All brands are updated with the secondary interest poll. The fourth update of 2024 sees some major movers: Vitaly (+118), Little Sleepies (+110), Dai (+100), Hydrow (+61), Pattern Brands (+54), 5.11 Tactical (+29), Chubbie (+28), Dude Wipes (-66), Arthur Ashe (-46), and Parade (-71).

800+ Brands Measured

Levi's 'rewiring' for DTC, takes Q1 restructuring hit

WWD / Excerpt: “We’re feeling really good about the consumer, especially the consumer as it relates to our key category,” Gass said in an interview. “The denim category here in the U.S. was actually flat after a couple years of volatility. Importantly we grew market share, three points in men’s, one point in women’s, which is exciting.”

How '90s nostalgia is helping brands boost sales

Fortune / Excerpt: For Osea Malibu, the ’90s homage boils down to honoring its heritage and getting the message out about its 28-year history of “living the exact same truth” as a clean beauty brand, even though the term hadn’t been coined at the time of the brand’s founding, Palmer said.

Archives (7/2022) on this key topic (New Nostalgia): A wave of nostalgia for the 1990s may take on a life of its own beyond the TV screen. Consumers are leaving 80s nostalgia behind for 90s lore, and the 1990s was the last decade before the internet began its dominance over media and commerce.

Addressing Solo Brands short interest. Solo Brands has a funnel problem, not a marketing problem. Here’s how the company can address its short interest, distribution strategy, and marketing effectiveness in one foul swoop.

From its start as a relatively unknown brand in the outskirts of Dallas, Texas, Solo Brands has emerged as a paragon of how to conduct business, cultivate brands, and secure liquidity for stakeholders in the modern era. Founded in 2010 and now trading with a market capitalization hovering around $200 million (down from a $2b+ market cap), Solo Brands still represents an extraordinary saga of strategic growth and financial astuteness. This journey from a nascent Solo Stove to a conglomerate of outdoor lifestyle brands like IcyBreeze Cooling, Chubbies, Oru Kayak, and others have been marred by evolving market dynamics and consumer needs, setting a high bar and a tall order for a DTC brand turned legacy brand-hopeful.

Despite Solo Brands’ innovative achievements, recognized by its No. 2 ranking on Fast Company’s list of the World’s Most Innovative Companies of 2024 in the Consumer Goods category, it has faced notable challenges in marketing and financial performance. The company’s recent recalibration of its revenue outlook, attributing the revision to marketing challenges, underscores the complexities of transforming brand awareness into actual sales.

Even a high-profile campaign with Snoop Dogg, while successful in generating buzz, did not translate as expected into immediate sales, revealing the intricate balance between brand visibility and consumer purchase behavior.
 

Continue @ 2PM

The future of malls in California is about to look very different

Joel Mayer, an executive at Lowe, said we no longer live in a “siloed world.” People want to be able to shop, eat and be entertained — and even live and work — all in one place.

Archives (2/2021) on this key topic (Mall Owner): The Wall Street darling is currently fighting along three fronts as another luxury mall landlord is pulling out of the United States altogether: Retail Dive recently reported the impending sale of Westfield’s 28 properties. Simon Property Group is likely negotiating the purchase of a number of them.

JPMorgan to let advertisers target customers based on spending

QZ / Excerpt: Chase is joining the ranks of other major players in retail media, including Amazon Advertising, Walmart Connect, as well as lesser known platforms offered by Home Depot and Best Buy.

Editor's Note: Why does this feel slightly more dystopian?