2PM - No. 365: It's a cascade of sorts. 🚨

Outdoor Voices looks to a new female founder to turn the brand around

DTC Brands / Fortune: On Sunday, the company announced that Ashley Merrill, founder and CEO of the women's sleepwear brand Lunya, will become chairperson of Outdoor Voices' board of directors. NaHCO3—the venture capital arm where Merrill serves as principal alongside her husband, Marc Merrill, the co-founder and former co-CEO of Riot Games—is making an investment in the company; Merrill declined to disclose the size of the deal. Haney, who resigned as CEO in February, remains on the company's board.

Editor's Note: This turning point is significant in that it represents a new power relationship for Outdoor Voices – and one that, if successful, could become a playbook for other DTC brands of varying sizes and successes. Moving away from the guidance of Mickey Drexler, who is staunched in traditional retail, and toward Merrill, part of the DTC era of retail, could prove to be a savvy shift for a brand that set off a significant trend in the activewear industry but has since lost its way. What Outdoor Voices is trying to be should look more like the innovative brand of the future that Haney originally pitched rather than looking like any other brand. 

2PM Data: Value of the sportswear market in the United States | Source: Grand View Research

Lululemon to buy Mirror, a fitness start-up, for $500 Million

DTC Fitness / New York Times: The $500 million purchase, which Lululemon announced on Monday, is the company’s first acquisition and follows its $1 million investment in Mirror last year. It’s a coup for Mirror and its chief executive, Brynn Putnam, a former New York City Ballet dancer who introduced the product in 2018 and has raised $72 million from investors. Mirror charges customers $39 a month to stream its live or on-demand classes.

Editor's Note: This is the perfect 2020 execution of “Linear Commerce." Not only will Mirror continue to cultivate community alongside Lululemon's, the in-home hardware becomes a marketing and sales channel for Lululemon’s apparel and lifestyle.

To understand this decision, re-read: On WFH and Community 

Consumers with means will do whatever they can to mitigate isolation. This means that it’s likely that DTC fitness critics will reluctantly adopt digital community fitness. In the long-term, digital communities may not replace premium gym experiences. There will always be a need for them. But in the interim, these DTC products will be good enough. Some semblance of community and camaraderie is better than none at all. Because there are no atheists in foxholes. We all want to believe in something.

Featured: Fortnite and the next Olympics

eSports / 2PM Feature: The Tokyo Olympics, which were supposed to start next month, have been postponed until 2021, thanks to covid-19. That delay offers a chance for reflection. The International Olympic Committee wants to make the games more popular with young people. To that end, it is introducing new events, such as skateboarding, surfing and climbing. Why not go further and let national teams compete at video games?

Mattress unicorn Casper accused of misleading investors

DTC Brands / Bloomberg: It’s the latest in a series of blows to the online mattress retailer, which went public at $12 a share in February. The stock closed at $13.50 on its first day out, for a market capitalization of less than half the $1.1 billion Casper was valued at in a private funding round last year. The bed-in-a-box startup ended Friday with a share price of $8.50 and a market value of $337.2 million.

Boomers, Gen X, Gen Y, and Gen Z explained

Sociology / Kasasa: A common source of confusion when labeling generations is their age. Generational cohorts are defined (loosely) by birth year, not current age. The reason is simple, generations get older in groups. If you think of all Millennials as college kids (18 - 22), then you are thinking of a stage in life and not a generation. Millennials are out of college and that life stage is now dominated by Gen Z.

CPG companies can't afford to miss out on the DTC wave

eCommerce / Digital Commerce 360: In the post-pandemic world, the need for direct to consumer (DTC) has accelerated tremendously as consumer shopping behaviors have shifted. With brands such as Pepsi and Kraft Heinz disrupting the industry and moving faster than ever before to mobilize their DTC strategies, the pressure is on for CPG companies to take action if they want to maintain relevance and thrive in the future.

How America got addicted to racist branding

Brand Equity / Guardian: How do we make advertising and branding less racist? For Jason Chambers, an associate professor of advertising at the University of Illinois, this question has driven his life's work. As reckonings around racism in the US grow, a new focus has emerged: decolonizing the American supermarket.

Editor's Note: I typically avoid topics like this for Monday letters but this outside perspective on America was worthwhile. 

The real cost of Amazon

eCommerce / Recode: At 5:30 every morning, Rosie, an Amazon worker at a fulfillment center in Staten Island, New York, checks her text messages to see if she’s received more bad news: yet another colleague infected with Covid-19, on top of the at least 50 people at her facility who she says have already gotten sick.

How beauty eCommerce will evolve over the next year

Retail / WWD: Dennis McEniry, president of online at the Estée Lauder Cos., says that a key trend to emerge from the crisis has been the adoption of video. People are watching and learning and participating, and it’s not slowing down. “The time spent on site has taken off in the last three months and is sustaining,” he says. “Sales on our brand-dot-coms are experiencing triple-digit growth, and a good portion of that is being driven by video and live-streaming.”

The phrases are interchangeable. There’s “DTC”, “DNVB”, “direct brands”, “challenger brands”, and “digitally-natives.” Some brands begin on the internet and move to wholesale. Some pursue wholesale formats, only to pivot to online retail in an effort to shore up margins. There is very little organizational consistency among the now thousands of DTC brands selling across platforms like Amazon, Adobe Cloud, Shopify, Magento, Alibaba, WooCommerce, and BigCommerce. From platform to sales strategy, they share little in common. The attribute that they do share is that they are all modern brands. They pursue customers where they are. They are well-designed, purposeful, and familiar.

👉🏽 Read the memo here