This is issue no. 231. The last issue had a 42.78% open rate with a 🔥 11.87% of you reading up on what has been one of the most argued links that I've posted. Pixlee curated a top 25 listof digitally vertical native brands for 2017.
Speaking of DNVB's, Tracksmithis in the news for leading the trend back to vintage.
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Data: As Farfetch’s newly appointed chief marketing officer, John Veichmanis is at the helm of a small army of 130 creatives, data scientists, editors and artificial intelligence specialists on the marketing team at the company’s London headquarters.
Veichmanis, formerly the company’s svp of digital marketing, took over the post at the beginning of June from former CMO Stephanie Horton. Now, he’s in charge of guiding Farfetch’s marketing strategy as the company pushes for profitability and preps itself for a forthcoming IPO, which is expected to be valued anywhere from $1.5 billion to $5 billion.
Retail: There’s a word for this: commodification. It’s when a market is so competitive products become nearly indistinguishable, so they primarily compete on price. Think of the difference between a blank white t-shirt and a Rick Owens “unstable” tee. There a million options for the first, so the price ceiling is low. Rick Owens’ tee, on the other hand, is much more unique, so it’s able to command higher prices.
Media Eats PR (Part 1): Today, Cycle Media is an “umbrella” organization that includes Laundry Service, and has pivoted into being a media company that creates video content and sells ads alongside it. It’s focused on quality, according to Stein, and not reach, recognizing reach as a commodity. Stein argues that the company can do a lot more — from creation to distribution — for less, under one roof.
Media Eats PR (Part 2): Bloomberg’s not alone in pursuing this strategy. Atlantic Media Strategies, whose strategy group is headed by McKinsey veteran Jean Ellen Cowgill, has more than doubled its head count in the past two years, and its strategy and consulting practice is the fastest-growing source of revenue at Atlantic Media. Virtue, Vice’s 450-person colossus of an agency, has grown so large in the past year that it now occupies its own building, separate from the rest of Vice Media’s Williamsburg headquarters.
Media: Amazon continues to make moves that support the idea that it could turn the duopoly into a triopoly. Case in point: Facebook and YouTube get most of the attention from publishers trying to develop video businesses, but for the past year, Amazon has built a platform that offers publishers another place to distribute videos and the chance to make money from the start.
eCommerce: Wayfair's hamper (left) is $15.55 while Amazon's hamper (right) is $15.99. The dimensions are similar (Amazon's is one inch taller) and both are collapsible. But Wayfair's has more style than the utilitarian Amazon one, and I loved the cream handles and finish. When I looked at it just yesterday, Wayfair's hamper was actually $19, so if you don't need something immediately, it's a good idea to check back on the prices to see if they go down. Even for $4 more, I still would've chosen Wayfair's for its look.
eCommerce: The cost of the meal kit service was the number one factor for both potential and ex-customers by a wide margin. Not liking the recipes (13%) and unavailability in their area (15%) were the second biggest factors for those who canceled their service and those who have never tried a meal kit service.
International eCommerce: And what he was saying was look at this new information highway because it is a disruption and an infrastructure all of its own. More importantly, Kenya has embraced the internet economy. Soon every Kenyan will own a smartphone. Mobile money is a Kenyan phenomenon. Sportspesa came out of nowhere. The ingredients for baking a high velocity internet economy are all in place. Whether the rate cap law is reversed or not is now by the by. The digital disruption is upon us.
The Takeaway: Change often creates bursts of opportunity. Huge opportunity, yes. But businesses and their investors need more than slippery bursts to succeed. They need endurance. And endurance resides in long-term bets. Things you can pour energy and capital into today with a reasonable chance of still bearing fruit ten years from now. Which tend to be things that are stable in time.
Media: In a recent study, social media marketing firm Mediakix looked at 12 top influencers who maintain a dual presence on Instagram and Snapchat. The firm found that over a 30-day period, those accounts overwhelmingly preferred Instagram Stories to Snapchat, posting 25 percent more on the former than the latter.
eCommerce: But in their zeal to keep bots away, sites also have to make sure they don't inadvertently block humans. For instance, Zeifman says, “if you are running 50 times a second, it’s clear you’re not a browser.” The seller site must be able to make these determinations almost immediately, and order requests from both humans and bots come flowing in upon the online release of a shoe.
Media: Hackathons are becoming an increasingly common practice for fashion brands and publications alike, taking a cue from Silicon Valley culture. Though the Condé Nast event catered to all publications — not just its fashion and beauty brands, such as Vogue, Allure and GQ — its impact has been wide-reaching. Last year’s winning team created an API that helps with SEO optimization that is now used by every publication at Condé Nast.
eCommerce: But more and more high-end brands are turning to self-operated e-commerce in response to the many fake goods that abound in the market and the desire to control the retail experience from start to finish. Digital consultancy L2 noted that the resurgence of spending domestically in China has made the digital investment all the more pressing.
Retail: Now almost all of Wal-Mart’s 4,700 U.S. stores have a Cash360 machine, making thousands of positions obsolete. Most of the employees in those positions moved into store jobs to improve service, said a Wal-Mart spokesman. More than 500 have left the company. The store accountant displaced last August is now a greeter at the front door, where she still earns $13 an hour.
After issue number 230's feature on Pixlee's DNVB round up, I received no less than twenty-seven emails from readers seeking clarification on the list.
For one, I would have made a few additions and deletions to the list. But it's also important that we narrow down the meaning of what the industry means by DNVB. In issue number 228, I highlight differing distribution strategies.
Under the startup umbrella, there are retailers and vertical brands.The difference between the two depends upon the company's level of exposure. By all accounts, Andy Dunn is the godfather of the vertical commerce business and in May 2016, he wrote the penultimate piece on the online retail business.
Two paras stood out:
The digitally-native vertical brand is way more customer intimate than it’s competition. The data is better because every transaction and interaction is captured. You don’t have to combine data across businesses, because it’s all one business. You are not blind to your wholesale business, because you don’t have a big wholesale business. It’s one CRM. It’s one store, where everybody knows your name.
While born digitally, the DNVB need not end up digital-only. This means the brand can extend offline. Usually its offline incarnation is through its own experiential physical retail, or highly selective partnerships. In nearly all cases of partnerships, the brand controls its external distribution versus being controlled by it. Any offline retail is not about warehousing product, it’s about marketing the brand and delivering great one to one customer service. It may be pop-ups. It may be permanent locations. It may be installs at existing retailers.
There are numerous arguments for being a retailer, the first being a retailer's hundreds or thousands of touch points. Many of the finest brands on earth fall under this category. But as I mentioned in 228, DNVB's are data-driven with eCommerce as the core competency. These strategies cannot be more different; one strategist employs a data scientist and the other strategist employs of VP of Sales.