BEAUTY

Slathering on the competition

This year, a wave of DTC brands hopes we’ll take the Mark Zuckerberg approach to applying SPF—even though the suncare category has plenty of coverage.

In April, DTC skincare brand Native released its first sunscreen; one month later, two DTC suncare labels with upbeat branding, Bask and Vacation, hit the market. Tennis player Naomi Osaka is releasing a suncare and skincare brand, Kinló, later this fall. 

• Bask and Vacation have similar missions to make the category “fun”: the former with playful Gen Z aesthetics and the latter with a retro resort vibe. 
• Kinló, meanwhile, aims to serve shoppers of color—who historically haven’t had as many tailored options in suncare. 

Room for more? There are only so many beach bags left to fill, even as summer travel and adjacent spending rebounds. The US suncare market, expected to reach $2.6+ billion by 2025, per ResearchAndMarkets data, is still dominated by brands like Neutrogena and Coppertone. Then there are DTC brands that got a head start on disrupting sunscreen (Supergoop!, Lumasol). 

• Picky, a US skincare product database, houses roughly 4,000 sunscreen or SPF items, per VP Michael He.

Michael Huffstetler, CEO at Bask, isn’t sweating it. Incumbents are “stodgy and commoditized,” he told Retail Brew. “They're not willing to change because they're protected by all these supply chain and industry moats.”

E-comm advantages: Huffstetler and the team behind Vacation both pointed out that some bigger brands aren’t selling DTC, despite last year’s e-comm surge. Product pages on Coppertone’s website, for example, redirect users to Amazon.

• CPGiants including Edgewell (owner of Banana Boat) and Beiersdorf AG (owner of Coppertone) couldn’t comment on our story. 

Investors, for their part, are swatching new sunscreens: According to Pitchbook data shared with Retail Brew, 10 sunscreen brands secured $28.5 million in venture capital funding last year, up from six deals in 2019 totaling $10 million. 

• Last summer, Vacation raised $1.2 million in its first round, while in May 2020, Black Girl Sunscreen raised $1 million. 
• Bask debuted with $800,000 in angel investments.  

Tan(gent) lines 

The teams behind new suncare players recognize they need store shelf space to compete with bigger companies. But they’re entering locations most shoppers encounter when they head OOO. 

• Bask will be sold at stores in vacation hotspots like Charleston, the Hamptons, and Nantucket, while Vacation is securing partnerships with hotels in getaway locales. 

Looking ahead...challenging Big CPG’s suncare now could spark acquisition activity later, Beauty Independent editor Claire McCormack told Retail Brew. If DTC brands can make good on their suncare bravado, she said, larger companies may snap them up instead of undertaking an in-house rebrand. 

It’s already happened at SC Johnson: The firm acquired Sun Bum for $400 million in 2019. And it left Sun Bum’s aesthetic alone.—HL

MALLS

High score

Electric Gamebox thinks it can one-up real-world shopping. 

The London-based startup, which creates interactive gaming centers for malls, yesterday announced an $11 million Series A2 funding round. Count mall giant Brookfield Asset Management, via its Retail Revitalization program, among the investors.  

• The funding will fuel Electric Gamebox’s expansion in the US and UK, including 100 new locations in the next two years and 1,000+ by 2026; it currently has four. 
• Brookfield plans to level up malls with game rooms in cities like Chicago, Houston, and LA in 2021.

Reset button: “Malls have to reinvent themselves and create new drivers,” Electric Gamebox cofounder and CEO Will Dean told Retail Brew. “Location-based entertainment businesses see that the days of the traditional bowling alleys and movie theaters are over.”

• US mall traffic is rebounding, but it still needs help. Visits were up 86% in March from the prior year, according to Placer.ai data, but down 24% versus March 2019. 
• Electric Gamebox opened a new spot in Dallas’s Grandscape Mall last December—pandemic in progress—and has so far attracted 10,000+ customers. 

Gen Z especially is looking to do more than shop. “[Younger consumers] are so focused on entertainment and anything around gamification. That’s what’s important to them,” Alvarez & Marsal Consumer and Retail Group’s Kristin Kohler Burrows told us. 

Role reversal: Fortnite creator Epic Games recently bought a floundering mall for $95 million to develop into its new HQ.—JG

SPONSORED BY YOTPO

“Text me later” — Your Customers

It’s time to scrap the sign spinners you hired: E-commerce customers are increasingly shifting to mobile. Ergo, your customers want to hear from you via text. 

If you want to build an SMS marketing strategy accordingly, dive into this e-book from Yotpo. It covers the key elements of SMS marketing, including: 

• How to engage shoppers
• How to personalize mobile experiences 
• How to tie SMS strategy together with other channels 

Yotpo’s e-book also answers your nagging questions, like “Is this channel really of value?” and “Are other brands using SMS marketing?” and “Do the kids still say ‘on fleek’ or was my nephew messing with me?” 

Jk on that last one, but not jk that this guide is packed with insights and statistics on the state of SMS marketing in e-comm. 

Check out Yotpo’s e-book here.

E-COMM

Are you still shopping?

We don’t know when season four of Stranger Things will come out, but expect some branded swag when it drops. 

With help from Shopify, Netflix yesterday debuted an online store to sell its own limited-edition merch. 

E-comm and chill: Netflix.shop is the result of a concerted effort on the streamer’s part to move into retail and evolve into a fully fledged entertainment company like Disney, Eric Haggstrom, eMarketer senior forecasting analyst, told Retail Brew. 

• Fan-made T-shirts and the like have been around for years, but Netflix recently elevated its partnerships with retailers like Walmart and Sephora to sell licensed products. 

Netflix isn’t skipping ahead of those deals with its online store. “Practically speaking, the revenue will come more from those partners around the world in terms of sheer footprint and number of locations and magnitude,” Josh Simon, Netflix’s VP of consumer products, told The New York Times. 

On demand: What Netflix can speed up is production. By partnering with Shopify, Haggstrom told us, Netflix “probably can be pretty quick with how they’re selling these items”—which is vital given how fast things go viral.

Off site: And despite the Disney talk, Netflix isn’t diving into brick and mortar, The NYT noted. 

• Though in March, Disney did say it would shutter 60 stores this year.—KM   

WHAT ELSE IS BREWING…

• McDonald’s was the target of a cyberattack.  
• Klarna is valued at $45.6 billion after a SoftBank-led funding round. 
• Consumer prices in May rose at the fastest rate since August 2008. 
• Jeweler Alex and Ani filed for Chapter 11 bankruptcy.
• Shopify has introduced a buy now, pay later option with Affirm. 

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SWAPPING SKUS

Today’s top retail longreads.

Touchy subjects: DTC brands are tackling taboos and removing the stigma around period products, sex toys, toilet plungers, and acne. But what happens when the novelty runs dry? (Retail Dive)

Cart theory: A look into the simple shopping cart as cultural artifact, essential tool, and test of character. (NYT)

Ultra-fast fashion: Online-only e-tailers are taking over social media feeds and wallets, while traditional retailers struggle to keep up. (Modern Retail) 

FRIEND OR FAUX?

For today’s edition: Blame the shoe, not the game. There were so many wacky collabs in footwear that we had to include them all. Can you spot the fake below?

1. The first Yeezy Gap shoe is styled with a collage of Kanye West’s face. 
2. Crocs and Balenciaga have collabed on a pair of stilettos. 
3. In-N-Out Burger released a slip-on shoe inspired by its famous drink cup.
4. Disney and Marvel teamed up with Lucky Charms to release, yes, Loki Charms. 

ICYMI

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

• How the pandemic changed the retail workforce
• Pattern pivots to DTC holding company
• Testing Amazon One, Amazon’s palm payments system

FRIEND OR FAUX? ANSWER

Kanye does love Kanye, but not that much (maybe).