The U.S. depends on small businesses. More than half the people in the country either own or work for a small business, and those companies create about two out of every three new jobs annually, according to the U.S. Small Business Administration. Retail was responsible for a little over 35% of small business employment as of 2017.
In recent years, large chains started to take the lessons of independent companies and apply them at scale. The most impactful of those decisions may have been bringing down the square footage of brick-and-mortar locations. At the same time, independent retailers started to experiment with solutions that used to only be available to mass marketers or large national chains. For example, as technology improves and becomes more affordable, small businesses are able to deploy savvy payment solutions, delivery mechanisms and other operational improvements.
The pandemic has impacted the trajectory of small businesses, pressuring many of them and particularly squeezing stores that were deemed non-essential during periods of required closures early on in the crisis. Small retailers tried some of the same pivots their national competitors did in response — shifting where possible to e-commerce or piloting new delivery options — but the challenges of scale and competition that have always plagued those retailers haven't evaporated. And in many cases the ongoing uncertainty pinched small retailers further by disrupting cash flow, employment and normal business.
This trendline profiles small business leaders, delves into news impacting the space and explores several topics facing small retailers as disruptions from the pandemic, e-commerce and broader economic trends continue to bedevil operations.
Small and mighty: How independent retailers navigated the 2020 holidays
Indie players' challenges mimic those of larger retailers. But, small businesses found creative solutions for customers during an unpredictable season.
By: Kaarin Vembar• Published Dec. 7, 2020
Amina Ahmad has had trouble with wax.
Ahmad is the founder of Handmade Habitat, a small business that makes natural soy wax candles and beauty goods based out of Washington, D.C.
In recent years, Ahmad said, the price of raw materials that go into her products has dramatically jumped. When the Trump administration took office in 2016, "you could probably get a box of wax for like $52 for 50 pounds, and now it is $72," she said. "We can't up our prices to match what our margins were before. A lot of it is because we use soy wax," she explained, naming one of the products that got caught up in a tariff showdown in recent years.
"Soy really caused the price to jump a lot, and then because of the pandemic it's jumped even more," Ahmad said. Materials that used to be easy to procure were hard to obtain because of supply chain issues, and because everyone seemed to be reaching for the same products. One of the basic jars she used for her candles was out of stock for close to three months.
The onset of COVID-19 may be seen as the moment where all of retail changed. But, focusing on problems foisted on the industry due to a health crisis isn't the entire story. The pandemic mostly sped up complex issues that were already in motion for big and small businesses alike.
As independent retailers moved into the holiday season, their pain points in many ways mimicked those of larger retailers. But, with thin margins, pandemic guidelines that were in flux and challenges that the larger public did not fully understand, there was a lot on the line for small businesses in 2020.
Solutions on a smaller scale
Independent companies are a force in the United States. There are 31.7 million small businesses, employing nearly 61 million people or over 47% of the workforce, according to the U.S. Small Business Administration Office of Advocacy's 2020 Small Business Profile. Additionally, small businesses created 1.6 million net jobs in 2019, with firms with fewer than 20 employees representing the largest gains.
All of those small businesses faced the same problems as big-box stores when COVID-19 hit the U.S. last spring. Most had to close, thus pausing operations. Larger and smaller businesses had to quickly shift to a changing retail landscape. For many small businesses, it was the first time they had to adapt operations to digital.
When Benita Smith, owner of gift boutique Adorned Abode in Tacoma, Washington, temporarily closed in March she didn't have a website. In the months following she quickly moved to launch an e-commerce channel.
Smith also created additional services for her customers including curbside pickup and home delivery. Customers were able to book private shopping appointments in her store and Smith scheduled virtual shopping where she helped customers find the perfect gift.
Smith wasn't alone in this approach. According to a survey of small businesses by Bluehost, 48% of small business owners launched an online store in the last 11 months. Small business faced unique challenges in 2020 when consumer shifted shopping online, said Suhaib Zaheer, general manager and senior vice president of Bluehost in emailed comments. "Traditional advertising and foot traffic [were] not as effective ... compared to previous years, causing small business owners to acquire new customers and sales online."
That's a lot of operational change in less than a year, but Smith accomplished on a small scale what other larger retailers also rolled out in the past few months. In its Q3 earnings, Target reported that same-day services including Order Pick Up, Drive Up and Shipt grew 217% in the quarter. Best Buy leveraged its brick-and-mortar stores for fulfillment of e-commerce orders and was able to provide next-day delivery of online orders for more than 90% of its customers during the season. Neiman Marcus upped its digital offerings last summer by allowing customers to make appointments for in-store shopping or curbside pickup or work with a stylist via video.
The digital efforts worked. For Smith, adding e-commerce specifically opened up a local audience that previously did not come to the physical store. "A lot of people who are local who follow me on social media with commenting and supporting had never been to the shop," she said. "When the shop went online they put orders in for shipments and delivery. So it kind of showed me that there was a part of the population that it was not convenient for them to come out — whether or not they had to deal with parking or traffic or that sort of stuff."
The shipping conundrum
Shipping was inevitably going to be a pain point going into holiday 2020. As consumers largely stayed away from in-store shopping due to a late-year surge in COVID-19 cases, e-commerce ramped up to take its place. Going into the shopping season, a Salesforce study found that 47% of consumers said they were more interested in shopping online in 2020 than the previous holiday season, and eMarketer predicted that online sales would increase nearly 36% to reach more than $190 billion.
Thanksgiving weekend saw the proliferation of e-commerce sales play out while foot traffic dropped precipitously. Black Friday online sales hit $9 billion, an increase of nearly 22% from last year, while Cyber Monday claimed a record-breaking $10.8 billion, according to data from Adobe Analytics. Small businesses saw a 501% increase in online sales on that day.
All of that online shopping meant a dramatic increase in packages that need to be delivered, and large retailers ran into problems early. Over the summer, major delivery companies announced peak surcharges, anticipating the upcoming holiday season. FedEx said in a July earnings call that peak surcharges are now a new normal, as the pandemic drastically moved its parcel volumes away from B2B and to more costly B2C deliveries. Around the same time, UPS also released a similar notice of increased charges for the season. To complicate shipping further, mid-season The Wall Street Journal reported that UPS imposed restrictions and instructed drivers not to pick up packages from retailers including Gap, Nike, L.L. Bean and Macy's.
While legacy players continue to encounter shipping headaches, the same applies to smaller retailers who find themselves also riding a wave of orders. Smith started shipping this April. "I feel like I'm spending a lot of time and energy on trying to get the shipping right," she said and she takes care to wrap up items for her clients so products look good and arrive at their destination safely. But, part of the challenge for small businesses is how to package and ship efficiently — an area where large companies struggle, too.
An additional challenge is managing shoppers' expectations for how fast items can arrive at a destination, especially in a season that experienced such high delivery traffic. "Shipping is not something that small business or anybody can control," Handmade Habitat's Ahmad said. "Shipping is something we don't have any power over. Once it leaves the studio, I cannot control what happens with it. Because honestly a lot of the times USPS is really overloaded this time of year."
The power of community
While all of retail pushes hard to make the holiday successful, small businesses have something that many larger chains do not: the power of a local community.
Purchasing items via e-commerce tends to be a practical and efficient route, but the channel hasn't mastered the magic of discovery and personalized experiences. Shoppers typically have to know what they are shopping for before they hop on Amazon, for example, versus stumbling into the perfect gift.
"Many consumers are shopping local or online [last] year due to the pandemic, which opens a window for smaller retailers to get some of the consumer attention that was previously reserved for malls and larger shopping centers," said Natalie Kotlyar, national leader of BDO's retail and consumer products practice. "In order to have a strong holiday season, essential retailers must also focus on the holiday shopper in an attempt to convert them to future buyers of their essential products. Smaller retailers tend to offer better customer service and more unique, handmade gift-type products, so they'll have the upper hand there."
Both Smith and Ahmad saw their own local communities rally around them in 2020. "Our community is ride or die," said Smith, referring to how independent retailers in her area market and support each other. "I feel like our local community, they may have different wants and needs than the online community. ... For our local community, they really want to know that it's sourced locally and that a maker has made it or a smaller business. Whereas online, people are just searching. Sometimes people aren't always that invested in where things came from."
Ahmad, too, found that even though her products were carried in more than 50 stores throughout the U.S., most of her online orders were shipped to D.C. and the surrounding states of Maryland and Virginia. When stores that carried her products closed in the spring, her customers found her online. "Feeling that community support has been really great," she said.
"For me this year it's more about community than just a crazy retail cycle, like the late-stage capitalism mindset that most retailers are going to be in," Ahmad said. "It's a weird year, it's a crazy year. It's dumb to pretend like things are normal. And if there is one thing that we can do it's we can pay it forward."
Article top image credit: Courtesy of Handmade Habitat
Nearly a third of small retailers still can't pay their rent
By: Daphne Howland• Published April 21, 2021
With some factors finally tilting in their favor after a brutal pandemic year, more retailers are showing some signs of recovery, with 31% of small retailers still unable to pay their rent this month, according to an April rent report from Alignable, an online referral network for small businesses.
That's down from 50% in March, the highest for smaller retailers this year, according to the report. The picture is decidedly even worse for minority-owned businesses, as it has been: 53% couldn't pay their full rent in April, though it's an improvement from 67% in March.
The stress has meant closing up shop: Worldwide, more than 97% of the 2.4 million merchants that shuttered for good last year were retailers, restaurants and hospitality businesses with fewer than five locations, according to research from IHL Group.
The pandemic relief packages provided by the federal government in 2020 and early 2021 had some provisions to support smaller businesses reeling from the pandemic. But the decision in most jurisdictions to allow "essential businesses" to remain open disproportionately hurt independent retailers, especially those outside Europe and North America that didn't receive such relief, according to IHL President Greg Buzek.
Some jurisdictions took more drastic measures than others, as when city officials in Portland, Maine, in 2020 briefly forbadenonessential businesses of all sizes to conduct curbside, delivery or mail order, under threat of hefty fines and loss of their business license.
"While the pandemic has been challenging to companies of all size, it has been particularly devastating to the smallest companies worldwide," Buzek said in a statement. "As governments defined 'essential vs non-essential' companies, they unwittingly oversaw the largest transfer of retail wealth ever from smaller to larger companies."
The COVID-19 era has been rough for retailers with brick-and-mortar stores, especially the many smaller businesses that had to scramble to launch services like e-commerce and curbside pickup. But many are finding their landlords, eager to retain tenants, to be more amenable to rent breaks and other lease concessions. If they can hang on, smaller retailers may also find plummeting rents in cities for both commercial and residential properties, which could signal a revival as coveted Gen Z consumers move in, according to recent research from Placer.ai.
Article top image credit: Daphne Howland/Retail Dive
Super Saturday is your last chance for holiday sales. Here's how to make the most of it.
Super Saturday, the last Saturday before Christmas, is a critical day for business owners who want to end the year with a bang. Because it’s too late for most online purchases to arrive in the mail, brick and mortar reigns supreme on Super Saturday. And because it’s before the expected after-Christmas sales, retailers can push to move merchandise before discounting it for the new year.
While its proximity to record-breaking days like Cyber 5 (Black Friday to Cyber Monday) might have retailers wondering if it’s worth investing additional resources into, the two shopping periods work hand-in-hand with one another. A solid Cyber 5 strategy is key to the holiday season, and a strong Super Saturday complements that strategy by giving retailers a boost through the end of the year.
4 tactics to boost Super Saturday sales
1. Offer curbside pickup and same-day buy online, pick up in store
Super Saturday is a tight squeeze for delivery, driving the brick and mortar energy of the day. But some shoppers might not feel comfortable coming in-store, and others might be used to the convenience of curbside pickup. When retailers give customers a choice, they secure holiday sales instead of sending them to a competitor.
"This year the omnichannel experience is even more important. Making sure all inventory is available to be sold through all channels is key," advises Hillary Senko Cullum, Wholesale and Retail Consultant at HSC Advisors. "Be ready to meet your customer where they are, whether that is online, at the curb or if they want to come in and shop in person."
2. Send exclusive, segmented email offers
To make the most of an email list at this time of year, start by analyzing customer buying patterns, suggests Gilad Rom, the CEO of Huan, a retailer of smart tags for pets. "Create a segmented email marketing list highlighting your last-minute holiday promotions and offers. Target customers who haven’t shopped with you in a while with a 'we miss you' email campaign."
Super Saturday is also a great day to move inventory as the year comes to a close. Creating exclusive bundles that you don't regularly offer and advertising them by email to your most loyal customers can help you repackage inventory that has been sitting on your shelves for too long.
3. Show up on social media—however you can
Being seen on social media is another way to support a Super Saturday push. If the budget exists, paid social media advertising increases brand visibility to a wider audience.
But if a retailer can’t budget for ads, there are other options.
"If you don’t have the budget for ads or if you want to make an organic push, then show up on social media and utilize video," suggests Jacqueline Snyder, co-founder of small business coaching platform and popular podcast, The Product Boss. "Go live and give a wide shot of all the amazing products in your store. Or go live and share specific products just like home shopping networks. You can also keep it simple and post videos and pictures of products in your stories and posts. If you have a Facebook presence and community, I’d advise doing the same."
4. Personalize the experience
This is an area where smaller retailers can thrive, especially in a year where local shopping is bigger than ever. One survey found 70% of Americans are making an effort to support their local businesses this year.
Greeting a customer by their name and knowing their purchase history makes shopping local stand out compared to big box stores. Retailers can set their employees up for success with point of sale software that collects customer profiles and purchase histories so they can make personalized recommendations. That familiar touch will cut through the otherwise hectic Super Saturday for customers.
Make the most of your Super Saturday sales
Projected sales totals for the 2021 holiday season stand at $1.093 trillion—from the early-bird September shoppers to the last-minute Super Saturday gifts. Retailers who are prepared can make the most of the holidays and boost their business going into the new year.
By working off of the momentum of an effective Cyber 5 strategy, retailers can reuse many tactics and promotions originally created for those dates and repackage them with a last-minute shopping holiday spin.
Article top image credit: Andrea Piacquadio / Pexels
Fred Segal is dead. Long live Fred Segal.
The man who gave retail some of its most worthy concepts died this year at 87, but his eponymous store in many ways is just getting started.
By: Daphne Howland• Published Sept. 8, 2021
After decades of inspired merchandising that made its mark on the landscape and culture of Los Angeles, helped define "California cool," brought new designers and brands into the mainstream and, ultimately, revolutionized the retail industry, Fred Segal died in 2021 at the age of 87.
Segal himself hadn't owned his eponymous retailer for many years, but the store and his many innovations carried on. His ideas from years ago include shop-in-shops, new designer and brand incubations, pop-up shops and brand collaborations. But it's not just that those concepts are now indelible features in retail. It's also that Fred Segal — the concept, the retailer, the brand — lives on. A couple of iconic Fred Segal locations remain fixtures of Malibu and West Hollywood; the name and logo are still name-dropped in popular culture to signify laid-back Southern California luxe. In many ways, though, under new ownership, Fred Segal is also just getting started.
Jeff Lotman, the founder of brand licensing company Global Icons, which bought Fred Segal in 2019, sees plenty in Fred Segal's past on which to base a comeback. The company this year revived 80s sportswear favorite Camp Beverly Hills, for example, and the response so far has exceeded expectations, Lotman said by phone.
"Because we're 60 years old, we have this authenticity," he said. "We play in the 60s, we play in the 70s, we play in the 80s, we play in the 90s. And there have been so many brands that have been birthed at Fred. You look at Kate Spade, you look at Juicy [Couture], you look at Hard Candy, you look at Origins ... all these brands started at Fred Segal. Things that have been go-to words today, the pop-up, collaboration, Fred was doing for the longest time. It's about being true to who you are, and when you have that ability, that's exciting."
Incubation is back at Fred Segal, through a nationwide contest dubbed Season Zero. The first round was held in cooperation with the Black in Fashion Council, with a grand prize of $10,000, mentorship and a showcase pop-up at Fred Segal, and second and third runner-up prizes of $5,000 each.
Without Fred Segal himself running things in recent years, the retailer was somewhat frozen in time. But neglect has had some advantages in a way. While apparel chains like Gap, Banana Republic, Victoria's Secret and others are scaling back their overblown footprints and exiting faltering malls, Fred Segal is expanding. Lotman envisions maxing out at about five or six stores in the U.S., perhaps getting into amenable markets like Miami, Houston or Dallas; in addition to its stores in California, Fred Segal just opened in Las Vegas.
"It's about being true to who you are, and when you have that ability, that's exciting."
CEO of Global Icons and owner of Fred Segal
In Asia, however, Lotman sees the potential for "a couple hundred" physical locations, based on research that affinity for Los Angeles and the Southern California vibe is "sky high" in places like China and Japan. The company recently opened a store in Korea.
"And the homerun for us is going to be e-commerce," Lotman said. "In the same way that we rotate brands very quickly in our store, giving them a moment, we're going do the same thing online at the same time."
Private label, one approach that Fred Segal didn't really take, is also now in focus, Lotman said, adding that a new knitwear sub-brand is set to debut in 2021.
"We have a really unique dichotomy of customers that we're able to find, because we're crossing multi-generations of people and kids," he said. "We're getting the kids that love it and then you get the 35 to almost 55 that experienced [reviving trends], and then you're getting this mother-daughter, father-son kind of thing that's going on. It's great because it almost resets the clock on the brand."
Article top image credit: Courtesy of Fred Segal
Etsy will buy the 'Etsy of Brazil' for $217M
By: Daphne Howland• Published June 28, 2021
Continuing a measured yet ambitious expansion just after snapping up resale favorite Depop, Etsy in late June 2021 announced an agreement to acquire Elo7, a privately held artisanal e-marketplace in Brazil, for $217 million in cash.
Elo7, whose CEO Carlos Curioni called Etsy "an inspiration and a reference for us," will remain headquartered in Sāo Paulo and run by Curioni's team as a stand-alone company, the companies said. Elo7's marketplace has about 1.9 million active buyers and about 56,000 active sellers, and most of its 8 million or so items are made to order, per the press release.
Brazil runs Latin America's largest economy and "has developed into a sizeable e-commerce market, consistently posting double-digit growth rates in the mid-teens between 2015 and 2017," according to J.P. Morgan research. The country is among the emerging markets making "the most significant shifts to online activities," per Qualtrics research.
Amazon is already taking part. In June 2021, the e-commerce giant, which has first- and third-party operations in Brazil, opened its marketplace there to outside sellers, according to international payments firm dLocal.
Calling Elo7 "the 'Etsy of Brazil,' with a purpose and business model similar to our own," Etsy CEO Josh Silverman said in a statement that the deal "will establish a foothold for us in Latin America, an underpenetrated ecommerce region where Etsy currently does not have a meaningful customer base."
But the move also reflects Etsy's targeted expansion, a stark contrast to Amazon's "everything store" approach. As with its recently announced $1.6 billion acquisition of resale site Depop and its $275 million acquisition of musical gear marketplace Reverb in 2019, Etsy is preserving those sites' branding and other unique aspects.
Article top image credit: Courtesy of Etsy
Powell's Books has had enough of Amazon
The Portland, Oregon, bookstore has been a marketplace seller from the get-go, but is now calling it quits and staking a claim for independents.
By: Daphne Howland• Published Oct. 1, 2020
Emily Powell, proprietor of Powell's Books in Portland, Oregon, founded by her grandfather and previously helmed by her father, celebrated Independent Bookstore Day this summer by pulling the plug on a major source of sales — Amazon's marketplace.
It's going to pinch, she said in an interview by video conference call. In addition to its fourbrick-and-mortar locations, the retailer runs its own website, where it sells both new and used titles and merchandise like games — all, until recently, available through its Amazon portal as well — and enjoys a loyal following in Oregon and beyond. Like all independent bookstores, however, even large ones like itself, it's dwarfed by Amazon, which last year rang up $160.4 billion in product sales. That doesn't even include its cloud services and other revenue streams like marketplace seller fees, which brought total 2019 net sales to $280.5 billion.
Powell's began doing business via the internet even before Amazon launched. At first, selling used inventory through the fledgling Amazon marketplace seemed like an innovation and a smart addition. Two decades on, however, even after finding success and expanding the assortment sold through the marketplace, the drawbacks weighed on the indie store.
Not least of them is taking part in fueling Amazon's dominance. These days the e-commerce giant, which itself started out as a bookseller a quarter century ago, controls the lion's share of U.S. book sales. According to figures from book audience research firm Codex, released by email Sept. 18, Amazon's total unit share in book sales stands at 53%; in online sales of all books that rises to 72%, with share of e-books at 76% (with its Kindle e-book reader moving more than its online print business) and online sales of print books at 69%.
"We were actually online before Amazon, we've been in this game for quite a while, but the head start didn't get us anywhere particularly," Powell said. "Along the way you try things, including selling our used inventory on the Amazon marketplace. Over the years it became clear how costly it was to our business. It takes a toll on our business and our ability to focus. Any time you're increasingly dependent on a sales channel that has their own goals — that sometimes supports their sellers but sometimes not, that is not always in your best interest and not always clear — is worrisomeover time."
Marketplace sales move 60% of the goods purchased through Amazon's site, and in 2019 brought Amazon $54 billion in seller fees. Powell said the company no longer wants to contribute to Amazon's bottom line, but, more importantly, to the way it undermines indie retailers like hers.
Despite the loss of the Amazon channel, the company may have picked a good moment to go it alone. While Amazon is obviously a huge player in the space, consumers get their books from a variety of places, including libraries and yard sales, and are loyal to their local stores, even if they shop at Amazon, according to Codex CEOPeter Hildick-Smith. Codex's research indicates that during the pandemic shoppers have made a concerted effort to frequent their local booksellers, which in many places instituted curbside pickup or shipping options.
"We had expected Amazon to pick up a lot of market share in the pandemic, but because they de-prioritized books and focused on groceries and essentials, that prevented them from getting any kind of a windfall in books," Hildick-Smith said by phone. "Powell's is among the top 25 or so independent booksellers in the country. I think people have their loyalties pretty well defined in the book-buying space right now, and if that solidifies, that could be a long-term trend. People understand that these are their neighbors, and local jobs."
Amazon's share of book sales ticked up again from the early days of the pandemic, probably because fulfillment times improved, according to Codex. Powell isn't surprised, or deterred.
"Amazon's going to be fine, they don't need our help," she said. "The ones who need your help are local businesses. Shopping locally and shopping within your community makes a really long-term difference. We see it very clearly in Portland, which is built with the idea of a walkable community, with stores and restaurants. We wanted to renew that message to our community at this time, but it's not easy."
Article top image credit: Courtesy of Powell's Books
Google introduces Black-owned business distinction in its Shopping tab
Black-owned companies can add the distinction to their businesses through the Google Merchant Help Center. The company rolled out the feature to all U.S. shoppers over the following few months. Google said that searches for Black-owned businesses spiked 600% in 2020 compared to 2019. The company also noticed users searching for "Black-owned bookstores," "Black-owned beauty supply," "Black-owned restaurants" and similar terms.
Following nationwide racial justice protests over the summer of 2020, many local communities have made a conscious effort to support Black-owned businesses. The tech giant responded to the demand by adding its Black-owned business designation to its Google Search and Maps tools in July 2020 to help consumers find Black businesses.
But despite this growing interest, a June 2020 report from the National Bureau of Economic Research found that 41% of Black-owned businesses closed during the COVID-19 pandemic. To assist these merchants, Google has partnered with the Opportunity Finance Network to provide $30 million in loans and grants to Black-owned businesses and community lenders.
In light of the 2020 Black Lives Matter protests, other Black-owned beauty brands were thrust into the spotlight, pushing retailers to highlight Black cosmetic companies and beauty brands to create Black-centered campaigns. That effort continued into 2021, with Ipsy committing $7 million to develop and promote Black-owned cosmetics brands.
As Google focuses on helping Black entrepreneurs survive the COVID-19 pandemic, other companies have provided funding and other resources to assist merchants in transitioning into e-commerce. Both eBay and Facebook dedicated $100 million toward supporting small businesses affected by the coronavirus pandemic.
Article top image credit: Courtesy of Google
A former J. Crew store employee is now one of its star collaborators
Blackstock & Weber Founder Chris Echevarria, who as a store employee once caught Mickey Drexler's attention, sees the classic men's loafer as an ideal canvas.
By: Daphne Howland• Published Sept. 24, 2021
What does a brand that once helped define American style do when its fans drift away and the younger generation takes little notice of it?
If you're Gap, you might turn to a fashion-minded hip-hop superstar, who once rapped about stealing from you when he worked in one of your stores as a youth, in order to surf his notoriety. If you're J. Crew, you might turn to a free-thinking, fashion-minded designer, who once made an impression on your chief executive when he worked in one of your stores as a youth, in a quest to find your next chapter.
"I don't know much about what Kanye's goal may be with the Gap collab," said Chris Echevarria, who started his DTC menswear company, Brooklyn-based Blackstock & Weber, in 2018. "But my goal, as somebody who's lesser known, is to be able to amplify ourselves through J. Crew's platform, as I give J. Crew something that they probably wouldn't have done, just through the eyes of a younger company that has a different perspective on where American menswear might be going at this point in time."
When Echevarria was still an undergraduate at the Fashion Institute of Technology, he worked at the J. Crew Liquor Store, a concept in Manhattan that recently closed, and caught the attention of J. Crew's then-CEO Mickey Drexler. Eventually Drexler tapped him to help out with the brand's In Good Company effort, where J. Crew explores collaborations, to help scout potential brand partners.
"We started having conversations about what I liked and the things that I saw on the market, and would have just off-the-cuff conversations," he said by phone. "He would stop into the store because it was his baby. I left there with a friend in Mickey and several people that worked for the company, so even while I was in school I was able to kind of create a stamp on that period of menswear that felt really important, before I even really got my feet wet in New York City."
The J. Crew collaboration features the men's loafers that are the cornerstone of Blackstock & Weber's assortment. The first iteration was released Friday, with another coming in mid-October; each pair retails for $345. Echevarria landed on the classic footwear as the ideal canvas for an updated shoe that could step away from the ubiquity of sneakers, while nodding to the way sneakers and streetwear are embedded in the culture.
"I wanted to not only provide those black and brown classics for people, but show them that the shoe is just as versatile as, say, your favorite sneaker," he said. "One of my favorite sneakers is the Air Force One. The Nike Air Force One has a deep history of media play, or color play. It's hundreds of colors, spanning years and years and years, just on this one silhouette. You can get them in white or black, and those are your staples. It's just a really good base."
He also leveraged streetwear's drops sales approach. Blackstock & Weber regularly releases its fresh takes on the loafer at noon on a Friday, and they sell out by 12:30. The retailer has forged several collaborations with other brands, "J. Crew being one of them," he said. "And those operators drop releases as well. So we've kind of created this thing where we are the people that have sort of reinstituted and made the loafer cool again."
Echevarria's faith in the staying power of an old-fashioned shoereflects his belief that brands have ceded their own power to shape and reshape fashion. Elements of his designs, including the quality and sustainability of the fabric, reflect what's important to him, beyond their utility in marketing.
"One of the things that we've gotten away from in retail in general is being the people that show the way, as opposed to being a brand or a company that follows," he said. "Like when a brand starts to make one thing, and then others kind of try to shove themselves through the door before it closes. The thing that's really important here is that when I decided I wanted to do a loafer, my head instantly went to — how do I contextualize this differently from how people already know it? My goal is more about the contextualizing of what I view as staple menswear. So whether that be a loafer, whether that be a suit, whether that be a damn T-shirt, you know, how can I make this in a way that I could be proud of."
Echevarria remains undaunted by the serious challenges in his category, in part because he has spurred sales of a shoe that some men may have previously only seen in childhood, perhaps visiting their grandfathers or watching "Mister Rogers' Neighborhood."
"One of the things I love is seeing people that probably would never wear loafers, the comments or emails that I get saying, 'You prompted me to buy my first pair of loafers,'" he said. "Those are the things that I it do for. And I think those are the things that really make the difference in this industry, if we're going to carry menswear forward. We have to tell the story in a different way. Just as Ralph [Lauren] told the story in a different way, just as Tommy [Hilfiger] told the story in a different way. I'm going to tell this story in a different way, for our generation."
Article top image credit: Courtesy of Blackstock & Weber
5 signs that retail is going to be OK
The industry took a beating in 2020. Challenges remain, but here are a few indications of retailers' strength.
By: Daphne Howland• Published May 12, 2021
2020 was a challenge like no other for the retail industry. COVID-19 upended people's existence worldwide, threatening human life and undermining the global economy. Job and wage losses took a toll. Even those able to stay healthy and financially secure have faced disruptions to daily life, upsetting work, school and other routines.
All of this has had implications for retailers. Specialized retailers and department stores were forced to close for months while grocers and mass merchants were allowed to stay open as essential businesses. But for all of them, supply and demand were undependable in 2020. Meanwhile, nervous consumers have expected stores to be clean and safe or to offer e-commerce and pickup services even if they hadn't before.
Thankfully, in the U.S., the federal government came through a number of times, pumping trillions of dollars into the economy, much of it directly into consumers' pockets. At the start of the year, consumer confidence was on the rebound, reaching a high in April 2021 not seen since February 2020, according to The Conference Board. (The delta variant has since threatened consumer confidence again.)
Several challenges remain, however, and they're not minor.
That starts with the fact that the pandemic isn't over. Further, the consumer remains under pressure. Despite improvement, the employment picture is cloudy, with millions of Americans still out of work, according to the ADP Research Institute, and hiring unexpectedly weak in April 2021, according to the U.S. Labor Department. The pre-pandemic wealth gap and middle class fragility haven't eased, while pandemic-era anxiety around health and money lingers. Finally, to the extent the pandemic does recede, there is fresh competition for shoppers' dollars from services, with Morgan Stanley research finding that more than 30% of consumers have plans to spend more on travel and leisure.
Nevertheless, there are five strong indicators that retail will be okay.
1. Retail sales have risen through most of the pandemic
Except for March and April 2020, when, for most of those weeks, retailers selling discretionary goods were shut in an effort to stem the spread of the coronavirus, retail sales in 2020, as tracked by Retail Dive, rose each monthcompared to 2019. In 2021, they have fairly soared year over year (as tracked by Retail Dive), even in the early months that are mostly unaffected by pandemic-related comparisons — 13% in January, 7.8% in February and 28.5% in March. That blockbuster result reflects the bounce from the lows a year ago when stores were closed, and what many economists are daring to call an emergingrecovery for retail.
"Consumer spending in March 2021 has recovered to or exceeded spending in February 2020 — prior to the onset of the pandemic and related containment measures — in all categories except food and drink establishments," Cailin Birch, global economist at The Economist Intelligence Unit, said in a statement. "We continue to expect restaurants and bars, and other entertainment and hospitality venues, to be the slowest retail businesses to recover from the crisis. Overall, however, the March data highlighted the strength of the consumer recovery in the U.S."
The bodes well for the rest of year, provided that the pandemic truly recedes.
2. It may be a new day for clothing sales
All kinds of apparel retailers — department stores, specialty mall stores, off-price stores — watched sales plummet during the pandemic.
With employees and their children stuck at home, both for work and play, there wasn't much need for a wardrobe. Retailers scrambled to offer comfy garments and shoes and outdoor gear, the only segments that seemed to have much appeal. Clothing and accessories sales plunged nearly 90% in May 2020.
That appears to be changing in a big way. Wells Fargo analysts in spring 2021 found store traffic up, inventory lean and margins expanding.
"I have to tell you, sales are so robust, we're trending so well," Shawn Grain Carter, professor of fashion business management at Fashion Institute of Technology, said by phone. "Now of course comps against a pandemic is like a joke. However, we're accelerating and it's only going to get stronger because people have such pent-up demand. I had said around December, the consumer is two-thirds of the GDP, and if you think that they're not ready to spend money... They are, and it's not just stimulus checks — people are just tired of being home."
Things are looking up in 2021, however, with store openings now outpacing closings, according to Coresight Research. All told, U.S. retailers had plans for 3,344 new stores as of March 2021, by Coresight's count, up 39.5% compared to the same point in 2020 and above the 2,649 that Coresight says will close. That's a new trend; in recent years, closures have far surpassed openings.
The expansion reflects the financial pressure felt by the U.S. consumer, considering that these openings are dominated by discounters like Dollar General, which has plans for 1,000 new locations in 2021, along with Dollar Tree, Family Dollar, Five Below, Big Lots and Burlington.
4. The industry's recovery is broad-based
Moody's Investors Service upgraded its outlook for the retail industry thanks to what is looking like a strong economy in the U.S. and the effect of expanding vaccines, both of which will help get consumers out and spending.
Those analysts now expect retailers' operating profit in the aggregate to grow a "robust" 10% to 12% in 2021.
While 2021 remains a year of unknowns, at least so far, National Retail Federation Chief Economist Jack Kleinhenz similarly noted the boost that vaccines and a stronger economy are giving the consumer.
"While there is a great deal of uncertainty about how fast and far this economy will grow in 2021, surveys show an increase in individuals being vaccinated, more willingness to receive a vaccination, increased spending intentions and comfort with resuming pre-pandemic behaviors like shopping, travel and family gatherings," Kleinhenz said in a statement. "This feel-better situation will likely translate into higher levels of household spending."
5. Retailers have evolved
Most businesses and consumers are eager to get back to normal. But many retailers stand to benefit longer term from changes forced by the pandemic. Many landlords, for example, are now open to more favorable lease terms, and in some areas rents are falling.
Many shifts that retailers made themselves also hold promise beyond the pandemic. Well-managed inventory, for example, has led to fewer markdowns and wider margins; that story at Victoria's Secret may have actually arrested that brand's free-fall.
While it's not great news for the mall, several retailers have taken the opportunity to retool their footprints, with retailers as diverse as Gap and Macy's heading instead to less expensive strip centers that attract more shoppers. Many are also rethinking flagships, moving toward neighborhood-based concepts with the potential of creating more meaningful connections to customers and their communities. Neighborhood shopping areas in general have emerged as optimal locations for stores.
More retailers, even smaller, local businesses, found ways to sell online and fulfill orders via delivery or pickup, investments that will likely pay off even after the pandemic is over.
"The ripple effects of the pandemic will be felt for some time and serve as a powerful illustration of the need for consumer-facing companies to be agile, resilient, and responsive to change," Oliver Wright, senior managing director and head of Accenture's global consumer goods industry group, said in a statement. "Born out of disaster and necessity comes opportunity; the pandemic has sparked a new wave of innovation."
Article top image credit: andresr via Getty Images
As collectors seek out luxury watches, Tiny Jewel Box expands showrooms
The Washington, D.C., business has expanded its Patek Philippe showroom and an additional Rolex space will open in 2021 to cater to growing demand.
By: Kaarin Vembar• Published July 12, 2021
The Tiny Jewel Box is growing.
The family-owned business, which has occupied a space in Washington, D.C's retail landscape since 1930, has a rich connection with its city of residence. The company has worked with presidents, first ladies, foreign dignitaries, superstars, tourists and everyday customers.
It also weathered a pandemic and came out the other end to a skyrocketing luxury watch business.
In June 2021, the retailer opened up a 1,000-square-foot space in its store dedicated to Swiss watchmaking luxury brand Patek Philippe. And with another dedicated space to Rolex opening in early 2022, this storied retailer is becoming a global touchpoint for luxury watch collectors.
Would you buy a $33,000 watch?
To understand Tiny Jewel Box's excitement about its expansion, you have to understand what drives people to buy luxury watches. According to McKinsey & Company, the watch business had combined annual sales of over $49 billion in 2019. That segment of the market, along with fine jewelry, "represent meaningful cultural assets that have for centuries reflected human preoccupations with creativity, status, symbolism and self-expression," per the company's State of Fashion: Watches and Jewelry report.
One of the peak examples of watchmaking within the luxury market is Patek Philippe. Founded in 1839, the company is the last independent, family-owned Genevan watch manufacturer.
And collectors of the brand seriously love Patek Philippe. They revel in the craftsmanship, the elusiveness of its products, the pursuit of collecting, the ability to visually show off success and the luxuriousness of wearing the equivalent of a sports car on their wrist.
"People love setting their watches, playing with their watches, understanding the functionality of watches. There's a kind of connectedness to it that people develop," said Matthew Rosenheim, president of Tiny Jewel Box. "There's a real broad, growing culture of watch enthusiasts out there. So customers … love to come to the store and just sit with us, and talk watches and share their own passion. So we do that all day long."
And, that obsession over craftsmanship (and the bragging rights that come with ownership) comes at a price. The entry-levelprice point for a Patek Philippe is just under $20,000, with the average price point around $44,000, Rosenheim explained. And it can go higher than that — over a million dollars. "Those watches are generally not seen by the public," he said.
But, Patek Philippe is a specific kind of brand that is going to gain repeat collectors, according to Charlotte Sheridan, director of The Small Biz Expert. While some people may buy a once-in-a-lifetime indulgence piece, Patek Philippe "tends to be the second thing that people buy after they bought their own Rolex." It involves what Sheridan calls "regular treaters" that often buy luxury pieces, rather than as a one-off statement piece.
And Patek Philippe knows how to sway desire and keep its collectors guessing. The company recently discontinued the Nautilus 5711 — its most enticing, coveted watch. The timepiece, which sold for over $33,000, was rumored to have a waitlist of up to 10 years. The news flummoxed watch collectors. "The willingness to walk away from this mega-successful watch to bring focus to the breadth of what they're doing is a perfect example of long-term thinking that really shocked the watch market," Rosenheim said.
The style is currently being resold for around $100,000 on platforms like eBay. So, while some fashion products like handbags may go out of style, luxury watches have far longer staying power. "They actually increase in value as time goes on, and they become rarer," Sheridan said.
But a big reason why some collectors can't get enough Patek Philippe? It's a great way to diversify their portfolios. "It's one that's different," Sheridan said regarding investing in luxury watches. "We see the same with fine wines. There's someone [who's] got enough money to invest. They want to invest in something that's interesting — and an alternative to stocks or shares and bricks and mortar."
Expansion during a pandemic
Throughout Tiny Jewel Box's history, the company resided in a couple of locations in D.C., ultimately landing in 2015 at a busy corner at the crossroads of Connecticut Avenue and M Street, NW. The retailer went from 1,500 square feet to nearly 12,500, which enabled it to expand its designer jewelry and watch collections. At that time, Rosenheim explained, "the watch brands were demanding this global, consistent brand presence." So, even then, "a lot of the move was about watches."
By 2016, Tiny Jewel Box became an authorized dealer of Patek Philippe. The brand had an in-store showroom space of 200 square feet for four years. Discussions to expand the partnership started in late 2019 and lasted about two years, resulting in a build out of the Patek Philippe portion of the store in 2021.
But, like many small businesses that were deemed nonessential during the roughest days of the pandemic, Tiny Jewel Box had to temporarily shut its doors in mid-March of 2020, only to reopen at the end of June of that year. Yet, the company still had its eyes set on the future. Because while a global economy was reacting to the pandemic, the luxury space was still growing.
"Prior to the pandemic, the demand far outstripped supply," Rosenheim said. "Demand never abated during the pandemic. If anything, it got stronger."
During 2020, affluent customers still were seeking ways to celebrate occasions and commemorate milestones, and many marked those events by looking to the luxury watch market since they couldn't do things like travel. "But the truth is, the demand for Patek as well as for Rolex is really stronger than it's ever been probably in the history of the brands," Rosenheim said.
While Tiny Jewel Box saw increased interest in its luxury brands, the overall watch market has taken a spill during the pandemic, experiencing a 25% to 30% revenue decline. The segment is expected to rebound between now and 2025, with a modest 1% to 3% increase per year, but with luxury and ultra-luxury players continuing to drive growth. Additionally, McKinsey forecasts that around $2.4 billion in revenue will transfer from retailers to watchmakers as direct-to-consumer options increase in popularity, thereby cutting out traditional retailers. Ultra-luxury watch segments (defined as products over $30,000) could expand DTC sales from 20% in 2019 up to 30% in the next four years.
There are exceptions to this projection, though. Two companies are named by McKinsey as being exempt to the upcoming trend: Patek Philippe and Rolex. Those companies "remain outliers to the DTC wave," the analysts wrote, "and are not expected to change that position."
That means that Tiny Jewel Box, with its expanded Patek Philippe offering and upcoming build out of Rolex, is well suited to do what it does best: build personal relationships with shoppers and collectors. Their product offerings are projected to remain largely untouched by larger DTC growth.
Meanwhile, Tiny Jewel Box is trying to keep up with customer demand.
"I think the appreciation for fine watchmaking in the United States has a lot of room to grow," said Rosenheim. "We have a real collector's culture that is evolving in this country. And, a fine Swiss watch is an aspirational product to someone one who got their first promotion or their first job."
Article top image credit: Courtesy of Tiny Jewel Box
9 emerging DTCs to watch in 2021
A lot has changed since Warby Parker and Dollar Shave Club entered the scene. In an increasingly crowded space, brands need to find what sets them apart.
By: Caroline Jansen• Published March 30, 2021
When Warby Parker and Dollar Shave Club entered the market in 2010 and 2011, respectively, the so-called first class of DTC darlings was born.
DTC was almost "a synonym for the internet," said Emmett Shine, co-founder of multi-brand consumer goods company Pattern (formerly branding agency Gin Lane).
In the decade since, consumer appetite for buying online and through direct-to-consumer models hasn't slowed down. In 2020, e-commerce soared to $795 billion, up32.4% year over year, according to eMarketer data.
"I think you'll see those traditional players lean into the model more and more," Michael Felice, a principal in the consumer and media practice of Kearney, said.
The pandemic has actually helped fuel growth for direct-to-consumer brands as consumers were forced to shop online virtually overnight when businesses temporarily shut their doors and individuals became warier of trips they made outside their homes. It's also presented an opportunity for brands to attract a new set of customers who may not have opted to shop online previously.
"Everybody went online. Even our consumer base, which tended to be millennials, for the first time had 70-year-olds," Monika Kochhar, CEO and co-founder of SmartGift, said.
But the pandemic also introduced some new obstacles these brands will have to face. Over the last year, buy online, pick up in store really became mainstream. Everyone from Lowe's and At Home to Macy's, and even DTC brands like Casper, were touting their BOPIS features to consumers.
"COVID really did create a whole new baseline online behavior," Kochhar said. "I want to buy online, but I want to pick it up today." The challenge that creates for retailers, however, is having to spend more on things like last-mile delivery and increased fulfillment capacity. The heightened expectations from consumers around fulfillment come on top of problems many DTC brands already faced before the pandemic around shipping and logistics.
Brands entering the scene now not only are faced with the challenges of those first digitally native companies but also more competition, increased scrutiny to uphold their values and a constantly changing playbook for success.
How DTC is changing
While digitally native brands were born online — and some initially even swore they wouldn't venture away from the channel — the limitations of selling exclusively through e-commerce are becoming ever more apparent.
Among the few DTC brands that have entered the public markets, many have failed to reach profitability while at the same time continued to spend more and more on their marketing budgets to acquire customers.
To combat this, brands have turned to physical retail, whether through pop-ups and owned leases or, in some cases, partnerships with traditional retailers — causing brands to walk back on that original notion of "cutting out the middleman."
Many brands have landed in Target, Walmart and Nordstrom, and those traditional retailers are actually more receptive than ever to form those brand partnerships, according to Kochhar. "They realize the voice of the customers," she said. "There's a movement there, and they're all trying to capture the movement."
For Eric Prum, co-founder of Very Great — a company that oversees three DTC brands: Wild One, W&P and Courant — the need to operate as an omnichannel business was present from the start.
"In general, I think it's critical that while we do have a digital-first mentality, actually, for some of our business, the majority is actually B2B," Prum said.
To that end, Prum points to W&P as being a brand that has a beautiful website, a big focus on DTC and a strong emphasis on its digital community, "but we're actually bigger with our B2B relationships with Crate and Barrel, Sur la Table, Williams Sonoma, West Elm than we actually are on our own website."
Other DTC brands also launched as "pure plays" in the sense that they focused on one key product. However, in order to retain and broaden their customer bases, they've needed to expand their assortment. For example, Casper — which sells mattresses, a relatively infrequent purchase — has moved into other product categories, launching a smart nightlight, dog beds and CBD gummies, among other things.
For some of the brands featured in our list — which sell in categories benefiting from circumstances brought on by the pandemic — a return to "normal" may result in adjacent category expansions.
"How they continue to differentiate themselves versus another makeup brand or another cookware brand that capitalizes on an influencer or a movement within an industry will be critical for them to succeed," Felice said.
What consumers are looking for now
Not only is the channel in which consumers shop changing, but the decisions behind those purchases are as well.
"I think people want to support businesses that they feel an affinity to. They liked the story, they liked the branding, they liked the quality of the product, they liked what a business stands for. I think people do vote with their wallet," Shine said. "E-commerce is just continuing to grow and dominate in forms of commerce in many ways that America is actually behind. I think there's a ton of room to go and grow, and I think that the innovations will just continue."
Consumers, especially those of the younger generations, have been more vocal about wanting to shop with brands that are more environmentally friendly and take a stand on issues that matter to them. This behavior has resulted in a shift in language around companies' branding.
"It seems that the voice has changed. The voice has become much more purposeful, much more driven by causes. That shift really did happen over the last, I would say almost three to four years, with the rising levels of consumer consciousness around fast fashion or fast food," Kochhar said.
"For the longest time — and I was in the markets for a long time — everything was about quarterly revenue," she added. "Every company is just forced to trade decisions that are three-month-long decisions just because of earnings pressure. But now, I think the consumer's voice is actually getting them to say that, 'You know, we actually want to make a change and this is really what we stand for.'"
And the pandemic, which caused many to feel a strong sense of isolation, may have heightened consumers' longing for a sense of community within the brands they shop.
"We've lost a lot of our people connection and our inert ability to want to be around others, and be lifted up by others," Felice said. "I think sometimes we feel we can express that through the brands we use, which show our uniqueness, our creativity and our curated selves. Finding that in a brand means that not only am I thinking that I think the product is unique, but I want the brand to speak almost like me."
But as these brands shift to more cause-driven branding and foster a community of trusting consumers, they're being held to a higher standard to actually uphold the missions they tout on social media.
"There's definitely the ability to hold brands accountable," Prum said. "If their business strategy ratchets up to a retailer like Target, Target can take notice and not carry that brand. You can't fake certain things when it comes to sustainability."
"I think people want to support businesses that they feel an affinity to. They liked the story, they liked the branding, they liked the quality of the product, they liked what a business stands for. I think people do vote with their wallet."
Co-founder of Pattern
But from the investor side, brands are being held more financially accountable to achieve long-term growth. Previously, there was a notion for DTC brands to "grow at all costs." But now, investors are looking for more sustainable and profitable growth.
"The barriers to entry for new brands are the lowest they've ever been. But the barriers to success and scale are increasing daily," Felice said, adding that "as more people flood the market, they'll be looking to gauge faster exits and more profitable growth than just rewarding pure out top-line growth."
Prum says success lies in having fundamentally sound business economics related to supply chain, profitability and securing that first purchase.
"In the Casper, Warby, Harry's days, there maybe was that value in customer acquisition and the idea that it was going to lead to some great outcome. But I'm not sure there has been a really great outcome yet," Prum said. "The investment community is more eyes wide open than ever."
How to succeed in today's environment
Creating a brand online has never been easier, which has made the DTC space saturated with competition.
Brands must differentiate themselves and resonate with consumers to succeed, and doing that comes down to a couple of things.
Bringing on board people that understand the "unsexy" aspects of a business like SEO, paid marketing and retargeting will make a huge difference, Shine said. But ultimately, it boils down to testing a product and making sure it works for consumers.
The biggest things SmartGift's Kochhar looks for in potential clients and partners are: personalization, which can be a brand providing more colors, styles, fits, sizes; community and a brand that "attentively voices their overarching values because that's what consumers want"; and how quickly a brand goes from a product mindset to an overarching industry narrative.
To the latter point, Kochhar points to mattress brands that have been able to shift from pushing out a sleep narrative to a holistic living narrative.
As more brands continue to enter the market Retail Dive took a look at nine emerging DTC brands to keep an eye on in the year ahead:
1. Spark Grills
Before founding Spark Grills, Ben West spent years designing high-efficiency charcoal and wood cookstoves in developing countries, including Rwanda, where 30% of Rwandans use one of Spark's cookstoves, according to the company. It was then that he discovered a newfound appreciation for cooking with these materials.
In the U.S., however, the majority of consumers (61%) own a gas grill, according to data released by Statista in April 2020. While charcoal offers that unmistakable smoky flavor, propane is quicker to start and easier to control the temperature as food cooks.
But through Spark Grills, West is hoping to marry the ease gas offers with the richer flavors of charcoal. The Spark Grill promises to ignite instantly, control temperatures up to 900 degrees Fahrenheit and provide information to users through an app on their phone.
Along with its namesake product, the company developed the Briq, which ignites instantly, is hot within minutes and is made of natural wood and charcoal to impose a smoky flavor.
The brand has garnered the attention of consumers over the past year: Visits to its website grew 64% from the first half of 2020 to the second half, reaching an average of 7,600 monthly U.S. visits in the back half of the year, according to SimilarWeb data shared with Retail Dive.
Comparatively, website visits to The Home Depot grew 20.5%, Lowe's (18%), Weber (17.5%) and Ace Hardware (10.3%).
But Spark Grills has also dedicated part of its business to serving others: The brand said with every grill purchased, the company will fund the placement of a locally designed and manufactured cookstove to a family in Ghana.
The brand has raised $12.3 million in funding since its inception in 2017 and is valued at $15.3 million as of March 2021, according to PitchBook.
2. Great Jones
Sierra Tishgart and Maddy Moelis founded cookware brand Great Jones in 2018 after they "struggled to find the right kitchen tools."
And the retailer appears to be benefiting from pandemic-induced trends of consumers cooking more at home. U.S. dollar sales on small appliances increased 29% in 2020 from 2019 and on housewares, increased 25% year over year, according to the NPD Group.
The company is ranked No. 4 out of 15 on SimilarWeb's Top Growing DTC Brands of 2020 list, falling just behind skincare brand Youth to the People, electronics brand Nonda and intimates brand Cuup.
The brand's average monthly website visits in 2020 grew 401% from 2019, according to SimilarWeb, notching over 95,000 average visits per month.
The pet segment — which has historically remained unscathed during times of economic uncertainty — has also emerged as one of the few beneficiaries of the past year.
This has meant a boost for pet supplies newcomer Wild One.
Over the 12 months leading up to March 2021, the brand grew its Instagram following by more than 100% to 103,019, and its Facebook following by over 240% year over year, according to data tracked by Charm.io.
Charm.io also gave the brand a 93.01 growth score and a 63.65 success score on a scale of 100, as of March 26.
Over the past year, Wild One's average monthly website traffic increased 101.5% from the first half of 2020 to the second half. At the same time, Pet Supplies Plus' website traffic grew 37.8%, followed by Petco (34.5%), Chewy (28.6%) and PetSmart (25.4%).
Wild One, founded in 2018, sits under Very Great's umbrella of brands, which also includes W&P and Courant.
The brand has forged retail partnerships with Nordstrom and, most recently, with Target on more than 1,000 in-store placements.
Searching for an easier way to shop for paint, Clare launched to reimagine the buying experience by providing "designer-curated colors, technology to guide you, mess-free paint swatches, and the highest-quality paint and supplies, delivered."
Founder Nicole Gibbons, an interior designer, wanted to make painting a room a more convenient and easy experience.
And as consumers hunkered down in their homes this past year, brands like Clare appeared to benefit from people investing more in their personal spaces.
Average monthly website visits to Clare increased 117.7% from the first half of 2020 to the second half, according to SimilarWeb. Meanwhile at Sherwin-Williams, visits grew 25.4%, Home Depot (20.5%), Lowe's (18%) and Ace Hardware (10.3%).
Clare received a growth score of 90.23 and a success score of 52.83 on a scale of 100 from Charm.io, as of March 26.
The brand has raised $4.25 million since incorporating in 2017 and has a post valuation of $7 million as of March 2021, according to PitchBook.
Mented entered the scene in 2015 after founders Amanda Johnson and KJ Miller struggled to find the "perfect nude lipstick."
From its original nude lipsticks, the brand has expanded into pigmented eyeshadows and blushes to help every woman "find herself in the world of beauty, no matter her skin tone."
Mented landed on SimilarWeb's fastest growing DTC brands of 2020, ranked No. 10, and recorded a 312% year-over-year growth in its average monthly website visits in 2020.
The beauty brand saw website traffic increase 41.7% from the first half of 2020 to the second half when it reported 491,900 average monthly visits. Its competitors in the beauty space saw less substantial growth in terms of website traffic from H1 2020 to H2 2020: Ulta was up 35.1%, followed by Sephora (20.1%), Glossier (11.7%) and Sally Beauty (down 8.5%).
The brand was selected as one of the brands QVC and HSN featured in 2019's "The Big Find," a search the retailers kicked off to find innovative products and brands.
Mented has raised $4.2 million to date and is valued at $8.7 million as of March 2021, according to PitchBook.
6. Olive & June
Sarah Gibson Tuttle left a career in finance, where she worked as an equity sales trader at JP Morgan and Morgan Stanley, and moved out west to Los Angeles.
After failing to find an adequate nail salon, Tuttle set out to provide customers with personalized service at an approachable price point. And thus, Olive & June was born.
The brand is different from typical DTCs in that it initially opened up a physical location to provide nail services to customers.
The product, however, is also sold directly through its website, which appears to have benefited from salons closing at the start of the pandemic.
From the first half of 2020 to the second half, website traffic grew 234.2% while notching an average of 332,400 visits per month in the back half of the year.
Olive & June in 2019 forged a partnership with Target to sell its products in stores and online.
As of March 2021, the brand has raised $6 million since its founding in 2013, according to PitchBook.
Amid the highly sexualized styles associated with the lingerie sector for years, one DTC brand wanted to break through and redefine what the industry defines as "sexy."
Parade, founded in 2018 by Cami Téllez, is a size-inclusive underwear brand that's baked sustainability and sexual education into its mission.
"Sexiness isn't one-dimensional — it's a voice, it's a feeling, it's a technicolor mirror that reflects whoever is holding it," the company said. "[W]e're rewriting the American underwear story—in full-spectrum color."
The brand pushes out cause-driven messaging across its platforms, vowing to donate 1% of its profits to support Planned Parenthood and using sustainable materials that are good for both consumers and the environment.
And Parade appears to be resonating with consumers: The brand's average monthly website visits grew a whopping 245.8% from the first half of 2020 to the second half, according to SimilarWeb. Comparatively, traffic to Victoria's Secret's website grew 39.6% during the same period.
The brand, which in July 2020 snapped up $3 million in a funding round led by Vice Ventures, has raised $7.5 million as of March 2021, according to PitchBook.
As the pandemic took hold, certain products became top-of-mind for consumers: toilet paper, disinfectant wipes and hand sanitizer.
For Touchland, founded in 2018 by Andrea Lisbona, it meant the brand could really hit its stride.
The company, which specializes in hand sanitizing products, has raised $1.5 million as of March 2021, according to PitchBook, and was valued at $11.5 million at that time.
Touchland also dedicates 5% of its profits to send hand sanitizing products to "developing countries where there's water scarcity and many kids die every day from diarrheal diseases caused by a lack of safe water, sanitation and basic hygiene," the company said.
FaceTory, a Korean beauty-inspired company, launched in 2016 with the goal of making skincare approachable, functional and affordable.
The brand seemingly benefited from the increased popularity in the skincare and personal care categories this past year. FaceTory's average monthly website traffic in the first half of 2020 to the second half grew 8.8%, compared to declines of 0.1% and 8.5% at Birchbox and Sally Beauty's websites in the same period, according to SimilarWeb.
"FaceTory has noticed an upward trend in men entering the beauty scene," co-founder Chan Ho Park said in a statement at the time. "Whether it be fashion, makeup, skincare, or Kbeauty, men are now having a huge influence in the once predominantly female industry. But even with this upward trend, there are not very many products or resources tailored specifically towards men's skin types and skin concerns."
The brand has raised $1.7 million and is valued at $2.2 million as of March 2021, according to PitchBook.
Article top image credit: Courtesy of Touchland
The state of small business in retail
The U.S. depends on small businesses. More than half the people in the country either own or work for a small business, and the retail industry is responsible for a little over 35% of small business employment.
included in this trendline
How small retailers cope with pandemic disruptions
What online shoppers are looking for right now
The role of mobile apps in small business
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.
Davide SavenijeEditor-in-Chief at Industry Dive.