2PM - No 683: DTC, No More.

A. Direct-to-Consumer (DTC) Counterpoint / Inc: The challenge for today's founders is no longer launching your startup, Dubin says. It's breaking through the noise and gaining awareness in an increasingly crowded market, where online advertising often seems restricted to platforms like Facebook, Google, and Amazon. "You're not only competing with people in your category for eyeballs," Dubin said. "You're competing against beef jerky, steak knives, exercise balls, and everything else."

Editor's Note: CPG, or consumer packaged goods, is a game of volume and distribution. What Dubin is saying here makes sense but - I warn - it depends on the product category. According to the statistical data, personal care sales only accounted for 7.39% of e-tail sales in 2020. Of course direct-to-consumer-only is not the right way to build enterprise-levels of market share for personal care products. It's for this reason that Harry's, Native, Schmidt's, Bevel, Flamingo, and others have emerged as favorites in stores like Target. But for other categories, DTC or "DTC + owned stores" is the a key to long-term viability.

Several weeks ago, I opined on this very issue. I'll expand here. A CPG brand should build distribution as fast as possible, as Dubin stated. They will want 80+% wholesale vs.  20% DTC or less. Whereas, an apparel retailer should focus on DTC channels as much as possible. These brands want their sales to be 10% wholesale vs. 90% DTC. CPG consumers look for familiarity in physical aisles. Fashion and accessories consumers look for narrative and depth of storytelling, often best told by the owned retail experience. 

2PM Data: personal care sales as percentage of total retail eCommerce sales

DTC companies need 'something beyond a good product'

B. DTC Brands / Glossy: They have to have values that are aligned with new consumer preferences and, in some cases, very strong content marketing, as well as a distribution advantage.

Why should DTC brands sell to Nordstrom?

C. DTC Brands / RetailWire: For Nordstrom, brand partnerships have become less transactional, more collaborative and more transparent. Peter Nordstrom, president and chief brand officer, said, “We used to feel like we had this proprietary secretive information that we couldn’t possibly share, but it feels like the more that we’ve been kind of open kimono on stuff as we collaborate, it really only comes back to benefit us.”

The Girls' Night In team is closing its virtual membership group

Community / Washingtonian: Perhaps it became too popular too quickly. “Soon, the membership outgrew the number of staffing and resources it truly needed to thrive and slowly, it became clear over these last few months that The Lounge was no longer a sustainable model for us operationally or financially,” Ramos wrote. “Continuing to grow our membership is a decision I made in light of all the stresses and unexpected turns of this pandemic, and I take full responsibility for the effects.”

Editor's Note: Best of luck to Alisha. Community building is not easy, especially during the confines of the previous year's rigors. 

Luxury fashion brands poised to join the NFT party

Linear Commerce / Vogue Business: While each new day brings another breathless story on a new non-fungible token (NFT) record sale, the luxury fashion world has remained relatively quiet. But that’s about to change. Fashion brands have been studying the wild, wacky world of blockchain and all its creative and business possibilities. Now they are poised to jump in.

Archives: Art, Science, and Economics Meet 

Clubhouse, Spaces and the Audioverse

Audio / Coin Labs: Twitter and Clubhouse are horizontal attention marketplaces or HAMs after all. The best social audio creators have every incentive to multi-tenant both CH and Twitter and any other social audio app in order to build the biggest audience possible. Monetization opportunities will inevitably follow as platforms scramble to keep this creator supply engaged on their app.

UBS predicts 80,000 stores will close in the U.S. by 2026

Retail Real Estate / CNBC: UBS is estimating that about 80,000 retail stores, which is 9% of total stores, will shut across the country by 2026. That assumes e-commerce sales rise to represent 27% of total retail sales by then, up from 18% today.

Editor's Note: no one could have predicted this. 

The Archives: The Lying Mall Owner

The mall of today is in peril. The top 10% of Class A malls are in position to survive, thrive even. These are the developments that can tolerate lower foot traffic. Why? Average order value (AOV) is higher in these locations and volume matters much less than it does in lower Class A and Class B/C malls.

Revenge of the Winklevii

Blockchain / Forbes: The Winklevii, as they are widely known, have emerged as leaders of a technological movement whose core operating principle involves digitizing the records of all assets globally, decentralizing control and cutting out gatekeepers—including Facebook.

The biggest sneaker company you've never heard of is capitalizing on China's Nike and Adidas boycotts

Brands / Fortune: Anta pounced, taking the blowback against Nike and Adidas as an opportunity to tout its homegrown credentials to Chinese consumers revved up on nationalist fervor.

The TikTok star who hates TikTok

Social Media / Air Mail: What “Page Six” once was to the entertainment industry — something to be feared and loathed — so are the tea pages and “shade rooms” that cover social media to influencers. 

The ghosts of Brooks Brothers

Retail / New York Times: The bones of Brooks Brothers stores are scattered across 100,000 square feet here in a warehouse near the Massachusetts border, mixed in with a sea of cardboard boxes and junk.

The power of third-party data has diminished. With more restrictions, data collected from external sources with no connection to the consumer is becoming harder to acquire. Newsletter audiences may fill that void.

The importance of first-party identifiers has steadily risen over the years as web browsers evolved to emphasize consumer privacy. Then, Apple rolled out an iOS 14 update that requires all apps to earn explicit permission from users to track their data, bringing marketers’ fears to a fever pitch. IDFA, or identifiers for advertisers, are used to measure and target advertising efficacy on a user level across any mobile device. Marketing performance agencies like Tinuiti estimate that IDFA will drop from 70% to 10% in light of Apple’s new privacy measures.

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