FURNITURE

Kid Tested, Facebook Group Approved

When someone in retail mentions “the Nugget,” you know they’re not talking McDonald’s menu items. They’re referencing the rearrangeable foam block couches/playdate staples whose sales increased 250% in 2020—and whose inventory is a hot resale commodity.

Nugget’s not alone. Several brands make pastel furniture that’s part status item, part alternative to pulling out the iPad. Pottery Barn Kids carries foam block fort kits by Foamnasium; Wayfair hosts similar items by (questionably named) Children’s Factory. 

The splashiest non-Nugget entrant may be The Fort, a 12-piece magnetic foam set that takes the “couch” out of “couch fort.”

• The Fort raised $2.2 million within 10 hours of launching on Kickstarter in January. Founder Conor Lewis told Retail Brew that The Fort's fundraise passed $3 million over the weekend—that’s approximately 12,000 pre-orders.

Thanks to its internet famous fanbase, “Nugget has enjoyed being the go-to in this space almost by default,” Ryan Cocca, cofounder at Nugget, told Retail Brew. But “it would be silly to think that we would own a hundred percent of that forever.”

Why jump on play couches? Put simply, “[Play furniture] is a multifunctional way to get kids’ energy out inside, mixed with this scarcity mindset,” Lewis told Retail Brew. 

After all, no one can really outgrow a couch. So “[creating] an item that grows with the child is very appealing to parents,” Rebekah Kondrat, founder and principal at Kondrat Retail, told us. “Play furniture also encourages imaginary play and gets kids off of their screens, something many parents are concerned about, especially during the pandemic.”

Cushion culture 2.0

60,000+ strong Facebook fan groups are a moderator’s nightmare, but a dream for growing brands. So what are the furniture world’s breakout brands delivering next?

Not new products—yet. Despite all the attention, “we won’t come out with things that are low quality, just for the sake of coming up with things,” Nugget cofounder Hannah Fussell told us. 

• For now, Fussell said Nugget’s site instead recommends toys and games from like-minded brands.
• Cocca added that the runway for their brand and others is still long, given that there are few family-focused brands in DTC.  

Stores? Maybe. At The Fort, Lewis sees eventual retail placement as a strong play for “a visual product.” But Cocca said the strength of Nugget’s online community means building offline isn’t a priority.

When play furniture brands don’t want to build their own clubhouse, Kondrat told us there’s ample crossover opportunity with kids' apparel or toy brands. “If Rockets of Awesome does more pop-up shops, having a Nugget couch in the store could lead to customer acquisition since it's likely the same customer shopping at both brands,” she said. 

PRODUCTS

Pack Your Bags

Can an outdoor brand unseat Samsonite as frequent fliers’ preferred carry-on? Yeti’s trying to find out—it added new duffel bags and backpacks to its portfolio last week.

Yeti’s journey: The brand’s 2006 launch line-up—luxury, vacuum-insulated coolers and tumblers—mostly catered to outdoor enthusiasts. They’ve remained core customers, but Yeti has eyed expansion for several years.

• In 2017, it introduced duffels targeted at both its superfans and travelers in need of tougher bags.  
• Bags and luggage make sense for Yeti, because its customers often travel to reach their outdoorsy destinations, CEO Matt Reintjes told Fortune. 

Quality quantity: Yeti’s influence has only grown during the pandemic. Late last year, it crossed $1 billion in annual sales for the first time.

• In other firsts, more than half (53%) of the company’s revenue came from its DTC channel, with a boost from Amazon. 

The takeaway: Yeti likely anticipates people can’t wait to travel once lockdown measures are eased. Competition will be fierce, as luggage brands like SteamLine have the same idea.  

SPONSORED BY ASANA

Did We Need a Meeting for This?

Work sometimes feels more like an endless cycle of not-so-productive meetings, switching between apps, and following up on email threads, before we even get to the important stuff. 

So it’s no wonder that workers in the US waste 61% of their time on work about work, not on the skilled and strategic work they were hired to do. 

Asana's Anatomy of Work Index report covers the factors that have contributed to rising burnout. They surveyed 13,000+ global workers to find out what it will take for organizations, teams, and individuals to thrive in the year ahead. 

If there’s one more tab you gotta add to your browser, it’s Asana’s Anatomy of Work Index. You’ll discover the stats behind all that time we lose, why it happens, and how to get it back. 

Download the full report today. 

DATA

E-Comm Isn’t Everything

As the pandemic shuttered stores of all sizes, small businesses were encouraged to fire up Shopify and move online. It hasn’t worked for everyone, however. 

By the numbers: About a third (32%) of retailers reported sales declines since the start of the pandemic, according to a November–December Facebook survey of small business leaders, employees, and consumers.

The e-comm angle: About 97% of small retail businesses are making sales through digital channels, as opposed to 79% pre-pandemic. That’s more than all other small biz sectors Facebook surveyed. 

• The proportion of small retailers making >60% of their sales through digital channels nearly doubled during the pandemic. 
• The number making <60% of sales digitally (~60%) is roughly the same as it was pre-Covid. 

Francis Scialabba

One caveat: Not all businesses are convinced e-comm can recoup lost in-store sales. 32% of small retailers are still worried about cash flow and 9% are worried about demand, indicating a need for financial support to reopen or maintain operations. 

Bottom line: Many small retailers are not expecting to return to normal levels for a while, making the next government stimulus crucial. 

WHAT ELSE IS BREWING

• Activist investors made numerous nominations to Kohl’s board, per the WSJ.
• LVMH purchased a 50% stake in Jay-Z’s Champagne brand. 
• Healthy Roots Dolls inked a digital wholesale partnership with Target.
• Sweetgreen and Momofuku invested in Foxtrot, an upscale convenience store.
• Valentino faces a $207 million lawsuit for breaking the lease on its Manhattan flagship.
• TikTok is piloting an in-app marketplace, Modern Retail reports.

SPONSORED BY ORACLE NETSUITE

Let’s get physical and digital. While current events seemed to shift shopping online, brick-and-mortar sales made up most retail transactions in the last few years. Kind of crazy. With Oracle NetSuite, blending in-person and e-commerce shopping is just one way to evolve your retail biz. See what else you should do to adapt to what lies ahead. 

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Debate over the $15/hour minimum wage is heating up. 

• Amazon took out a full page ad in The New York Times advocating for the increase to align with current living standards. 
• On the flip side, Walmart CEO Doug McMillon recently said raising the minimum wage would limit opportunity among workers.

Other retailers have increased wages to get out ahead of the issue—some after public pressure, some of their own volition. 

Our question: Should all retailers increase their minimum wage to $15/hour? Cast your vote here.

SWAPPING SKUS

As more DTC brands moonlight as bloggers, we had to shout out our favorite in-house content of the week. The following brand bylines pull back the curtain on two major product strategies—with way more vulnerability than a press release. 

• Three Ships cofounder Connie Lo tracks each step in her brand’s journey to Target, from pitch to shelf placement. (Three Ships)
• Italic has a confession: It’s losing money on its Reddit-famous candles. (Italic)

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Inside Olive, the New Delivery Platform from Jet.com’s Cofounder
• Klarna Is Hosting Its First US Livestream Shopping Event
• H&M Wades into Sustainability Bonds