DTC

Certified V Corp

My online shopping starts with a deep Google search and Instagram comment sweep to confirm where I really want to spend. Now, there’s a marketplace that wants to do some of that vetting for me. 

Introducing The Verticale, a dropship marketplace for 50 values-driven brands that launched this week. Founder and CEO Jaclyn Grauman described it to Retail Brew as “Net-a-Porter but evolved for the Allbirds generation of consumers.” 

• All brands listed on The Verticale have to meet strict values criteria spanning product materials, founder diversity, and community impact.
• Those brand stories are repurposed into on-site content to draw in shoppers—along with e-comm gold standards like free shipping and returns. 

Bar = raised. “Candidly, it did take us some time as a team to work through the category definitions and criteria, and yes, we did have to bump brands out of the mix as a result,” Grauman said. 

What a brand wants 

The Verticale isn’t the first online marketplace targeting extremely online brands and folks with a minor in shopping ethics. So what convinced companies to join this brandwagon? 

Missions first. “We've spoken with founders of about 100+ DTC brands,” Grauman told me. “When you ask them to identify the problem with existing retailers you get the same answer every time: the loss of their brand story.”

Measured growth. Veronica Armstrong, CEO of luxury candle brand Isle de Nature, said that The Verticale’s “sustainable and believable customer acquisition and scale-up strategy” drove her interest in the platform. “While The Verticale is not our first marketplace experience, it is one of the newer marketplaces I am most bullish on,” she told Retail Brew. 

Nice neighbors. Caraway, a nontoxic cookware brand, sells across nearly a dozen sites. But founder Jordan Nathan told me a DTC focus makes a difference.

• “Many direct-to-consumer brands share the same customer demographic,” he said. “Being able to leverage a marketplace like The Verticale where customers can add all those same products to a single checkout experience is a great opportunity.” 

Looking ahead...The Verticale is currently bootstrapped, but investors could come calling. Retail investors are eager to back DTC-driven marketplaces, Modern Retail reports.

But first, The Verticale needs to make shoppers as enthusiastic as its partner brands. Values or no values, that’s a challenge in an era with So. Many. Online. Options.

E-COMM

Speaking of Marketplaces...

If a corner pharmacy takes its vitamins and adapts to e-commerce, it could grow up to become a stealth unicorn.

That’s the Pharmapacks story, at least. The Bronx pharmacy-turned-digital marketplace received a $250+ million investment from The Carlyle Group yesterday, bringing its valuation to $1.1 billion.  

Pharmapacks has a 2020 advantage as an online purveyor of all things bathroom medicine cabinet. But it had already generated $250 million in sales last year, through...

• Strategic partnerships with a mix of household CPG distributors and emerging brands.
• Cozying up to Amazon, Walmart, and eBay, where it acts as a third-party seller.

Looking ahead…Pharmapacks will use its new backing to expand 1) West Coast logistics and 2) stockpile-able categories like food and pet supplies. CEO Andrew Vagenas predicts the site will reach $1 billion in sales within two years. 

SPONSORED BY MAGENTO

Huzzah for Hybrid

Here at the Brew, we like to think of ourselves as a sort of hybrid—part informative, part hilarious, and part Neanderthal—no, seriously, we heard something like 1% DNA is possible. 

So, when we found out Magento Commerce could help merchants and retailers meet the corresponding demands of both B2C and B2B markets, we knew this sort of hybrid power was worth talking about.

Hybrid as a digital commerce solution provides engaging, shoppable experiences for your customers.

The list of hybrid benefits goes on and on: 

• Diversify revenue streams
• Reduce operating costs and complexity
• Flexibly adopt new strategies and business models
• Distinguish your brand from competitors

But to paint the full picture, we gotta go hybrid again and not just tell you how great it is, but actually show you. 

Magento put together this interactive simulation to let you experience their commerce technology suite firsthand.

Go hybrid right here.

LUXURY

Expensive With Expensive-er Taste

There’s a lot you can disguise under a Burberry trench coat—a bootleg watch boutique, 58 weasels—but weak margins aren’t so easy to hide. 

Burberry said yesterday it’s waging a campaign to cut discounts after reporting a better than expected 6% comparable sales decline in Q2.

• Immediate sales could take a hit without markdowns, but execs said it’ll improve profitability.
• Burberry’s also culling its inventory at third-party vendors to bring a sense of exclusivity back.

History repeating. Burberry has promised to raise its prices, and thereby gain brand value, since 2017—but earlier hikes weren’t high enough. 

The price isn’t right 

You'd be forgiven for wondering why Burberry would start intiatives that make it even harder to sell handbags during an already hard year. Boston Consulting Group projected luxury sales could fall 29% this year. But Burberry’s Vogue collage peers—Louis Vuitton, Chanel—quietly raised their prices throughout the spring. 

The difference: Those brands also want to protect their margins, but unlike Burberry, they rarely (if ever) discounted to begin with. 

WHAT ELSE IS BREWING

• Walmart is opening “pop-up” fulfillment centers to meet holiday demand.
• DoorDash is going public.
• Asos is waiving fees for small businesses to list items on its marketplace.
• Instagram Shop is moving to the app’s homepage. 
• Alibaba reported U.S. brands were top-sellers during Singles’ Day 2020.
• Jil Sander for Uniqlo is back.

SWAPPING SKUS

A recent WSJ article alleges that some people are sick of their sweatpants. For my fellow elastic waistband fans, here are two thoughtful reads on the WFH wardrobe revolution.  

• Clothing brand Alex Mill launched in 2012 to modernize uniform dressing. Designer Somsack Sikhounmuong explains how the brand’s staying true to its mission in a dressed-down world. (New Consumer)
• High heels: You can guess how it’s going, but do you know how it started? (Quartz Weekly Obsession)

FRIEND OR FAUX?

Three retail headlines below are true; one’s a Retail Brew invention. Can you spot the fake?

1. Whole Foods and Progressive partner for Thanksgiving turkey insurance.
2. Party City debuts customizable holiday stocking piñatas. 
3. Dog parents can give their pets the gift of a Prada puppy raincoat.
4. Kid parents will pay up to $10,000 for a used Nugget foam coach.

Keep reading for the answer.

ICYMI

Catch up on this week’s top Retail Brew stories.

• A Closer Look at Ulta’s Target Partnership
• Instagram’s Quietly Testing Push Notifications for Shopping
• Early Black Friday Sales Aren’t All Resonating

FRIEND OR FAUX? ANSWER

2. Nope, Party City is not offering customized piñatas this holiday season. But there *is* a DTC brand for that.