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May 16 2017

No. 217: "Blank"

This is issue no. 217. The last issue had a 47.16% open rate with a 6.15% of you wanted to learn about the startup that is deemed the Airbnb of eCommerce warehousing. Twiggle, eCommerce search propelled by the neural net, raised $15M and you should keep them on your radar.

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Today's Top Intelligence (12 Reads)
Vice and Lululemon’s Brand Innovation
The Takeaway: What can a brand stand for these days? Social justice is problematic (see Pepsi’s Kendall Jenner ad), and sex doesn’t sell the way it used to (for the 2017 Pirelli calendar, the formerly oiled-up models went makeup-free). So last year, when Lululemon, the athleisure pioneer, decided that it wanted to be known for something bigger than sumptuous yoga pants, Duke Stump, an executive vice-president at the company, interviewed dozens of advertising and marketing agencies.

Note: 2PM has covered how companies should avoid brand activism. There are exceptions, however. We are seeing more startups who possess elements of activism as a part of their brand's authentic voice. See startups like: Cotton Bureau, Outdoor Voices, and Glossier. 
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The Takeaway: The reason isn’t the bullet-point moats that are talked about in headlines, and it isn’t the culture of innovation or Bezos’s vision as CEO (though I do think Amazon’s culture is incredible and Bezos is the most impressive CEO out there). 
The Takeaway: When co-founder and co-CEO Neil Blumenthal started to research the optical industry, he discovered that a single company--Luxottica--owned dozens of well-known brands, from Oakley and Persol to Pearle Vision and LensCrafters. Speaking onstage at Inc.'s GrowCo Conference in New Orleans on Wednesday, Blumenthal said he realized that he was going up against a Goliath. 
The Takeaway: The eCommerce platform has enabled companies to exploit opportunities cross border without the need to set up a big physical presence in these regions. “We are finding that increasingly, retailers are looking towards fast-growing foreign markets such as China, where it is predicted that half the country’s population will be buying foreign products online by 2020,” he says.
The Takeaway: The founders of Glossier and Outdoor Voices, Emily Weiss and Tyler Haney, respectively, spoke at TechCrunch Disrupt in New York today about how they’re taking a bite out of the massive beauty and apparel industries. Key to both startups’ success? A digital-first, and friendly, approach to everything from sales to product development.
The Takeaway: For Nordstrom, bringing goop and other brands through pop-ups can help drive traffic to the retailer's flagship stores, which have been facing sales declines from weakened spending and online competition, along with other department stores.
The Takeaway: To illustrate, look to the other end of the spectrum. New upstart brands, which tend to be more agile and in tune with trends and their customers, usually start by selling direct-to-consumer online. In order to penetrate the mass market, many eventually open physical showrooms to cater to those who desire an omnichannel experience. Consumers still want to hold and feel the product without committing to a purchase.
The Takeaway: Target has been battered by Amazon’s online ecommerce business as well as the forays into that space by arch-rival Wal Mart. They have attempted to remain focused on their brick and mortar operations despite these challenges, and their plan may not be working. Investors have been turned off by the firm’s own negative profit outlook. The stock is down, while Amazon and Wal-Mart soar.
The Takeaway: Total retail mortgage debt is at about $572 billion, according to Frederick Cannon, analyst at Keefe, Bruyette & Woods. Almost half of that or $271 billion represents bank loans, $136 billion is securitized in commercial mortgage-backed securities or CMBs, $94 billion is at life insurance companies, and the rest are in business development companies or BDCs and CMB real-estate investment trusts.
The Takeaway: The Saks Wellery is by far the most ambitious of the bunch; it includes 22 different shops with spaces dedicated and designed for each partner. There’s an entire studio set aside for the classes, and the build-outs reflect the look and feel of each brand or fitness program that’s participating. And unlike Grokker at Bloomingdale’s and Goop at Nordstrom, it’ll be open for a while.
The Takeaway: Since being what used to be called a “tastemaker” became a job, and word-of-mouth tips became known as “influencer marketing,” attention has been focused largely on the risks to brands in linking up with individuals. See, for example, the lesson of PewDiePie, a YouTube star who had signed deals with Disney and Google and then was discovered to have made anti-Semitic statements. (The corporate brands cut all ties, not surprisingly.)
The Takeaway: Amazon says it has fulfillment centers that specialize in handling large items and will offer delivery services for heavy or bulky products. Some products can even be delivered in one or two days in certain cities, Taneja said.
From a recent J.P. Morgan deck on eComm growth.
"Blank" presented by Cotton Bureau
One step closer to becoming a DNVB. Last covered in Issue No. 203, Cotton Bureau is one-step closer to filling a void left behind by American Apparel's bankruptcy. They've begun manufacturing a new type of tee for all shapes and sizes. It's called "Blank" and it has the potential to solve a gaping sourcing issue in a major fashion segment.

Led by Michelle Sharp, Cotton Bureau is inching closer to launching their Kickstarter and they are welcoming apparel testers and participants in their upcoming video shoot with the team at Sandwich.

Started from the bottom, now we’re…somewhere in the middle.

If you're interested in helping the Cotton Bureau team's launch into manufacturing, let me know. I am huge fan of their growing, Pittsburgh-based team and the more that you learn about them, the more you'll say the same.

- @web 
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