The Modern Retail Podcast

In Karla Gallardo's estimation, the world got tired of fast fashion just as the direct-to-consumer model was being proven out. "By 2010 there was fatigue, there was dissatisfaction with the quality," Galardo said on the Modern Retail Podcast. "A lot of of news was coming out in terms of the conditions of the factories where these products were made. There was an opportunity for something better right after that bubble burst." Gallardo co-founded Cuyana with Shilpa Shah in 2011. The idea was to do to fashion what Warby Parker did to glasses "The choice was really obvious back then. It was 'well, this worked in the frames vertical, can we can we do this on the accessories and apparel side?" But, over the years, the program has changed a great deal -- even more so as a result of the coronavirus.

With a pandemic driving its six brick-and-mortar stores to little use, lingerie company Adore Me has relied on a try-at-home model. "We basically send you a bunch of items, you decide what you keep, and you only pay for what you keep," Adore Me vp of growth Camille Kress said on the Modern Retail Podcast. At the height of the pandemic, half of the brand's new customers were shopping this way. "The key metric for this model is the 'keep rate.' You definitely want people to keep as much as possible, otherwise you're basically paying for shipping back and forth, which is really not the best use of your time or your money," Kress said. The company also seizes the mail-in relationship as a chance to send prospective customers products from other categories like swimwear and sleepwear ("anything that you could basically find right now in our assortment, which is not only intimates," Kress said). This direct connection the company has long fostered with customers has helped Adore Me launch brands beyond lingerie, like Joyja, a line of period-proof underwear. "We want to accompany women through all the different stages of their life," Kress said. "So we know that we're going to need something for their first period, then for their pregnancy, for menopause, and anything that comes in between." Looking at all of these stages, the company tries to find the next untapped market on which it can capitalize. "We're thinking that there's an appetite somewhere," Kress said.

GDP and unemployment are one set of statistics, but another way to measure the extent of the economic slowdown brought by the pandemic is a bit more mundane: Traffic. According to the maps and navigation app Waze, traffic was down around 70% in the early days of the pandemic. "It was like a light switch," Suzie Reider, a managing director of global ads at Waze, said on the Modern Retail Podcast. Within its app, the Google-owned company can offer ads for nearby businesses for drivers, including pins on the map and larger "takeover ads" filling the top third of a user's screen ("it doesn't actually play until you're stopped," Reider said). That part of the business suffered from the drop in traffic too, of course. "We saw a marked decline and decrease in our own advertising revenue in... it started in March," Reider said. "Then we saw these incredible, super exciting, quick gains as we started to move through the summer and then back into the fall." But recent signs indicate that the next wave of the pandemic may not to as harsh on the retail economy as it was earlier in the year. In France and the UK, where lockdowns have been reinstated, "you see immediate pausing of campaigns but you don't see the cancellations," Reider said. Waze Ads' biggest categories are quick serve, "casual dining," entertainment and gas, and it works with both big chains and with small businesses that can spend as little as $2 a day on ads. Before the pandemic, according to Fortune, the app had 130 million active monthly users around the world.

If you're going to ride behind another brand's success, Ikea isn't a bad choice. That's, in fact, what Semihandmade did. Semihandmade makes and sells cabinet doors for the giant retailer's fixtures, which can themselves be bought without the doors. For a small price increase, according to founder John McDonald, you get a big step up in quality. But even though business is good on that front -- Semihandmade has been profitable every year, according to McDonald -- he's looking to cannibalize his own market with Boxi, a soon-to-launch, more premium offering that can fit out a set of kitchen cabinets in its entirety. One big opportunity McDonald spots is the lack of name recognition beyond the top spot filled by Ikea. "There's Ikea in the U.S. and then there's 50 others made by the big guys," McDonald said on the Modern Retail Podcast. With Boxi, McDonald is starting with just a few types of cabinet doors. "You do four or five things great. And that's how we're able to be highly competitive in terms of pricing and high quality, but it's not for everybody. To me that's the clearest path to scale," he said. There's nobody else out there doing this, he claimed. Absolutely, there are cabinet companies. But they're faceless. There's Ikea in the U.S. and then there's 50 others made by the big guys. Part of what we want to do is be nontraditional, looking at what the other guys are doing and say 'we're not doing that.'

It's hard to find good coffee online, and roaster Blk & Bold found that to be a competitive advantage. The company saw huge growth over the last year, thanks to its placement on retail shelves at stores like Target -- as well as being a top-selling brand on Amazon. On the Modern Retail Podcast, which was recorded live during our Modern Retail Summit this week, co-founder and CEO Pernell Cezar Jr. spoke about how he has grown the company. Being on Amazon became a competitive advantage -- especially once the coronavirus hit. More people were buying groceries online, and supplies like coffee were selling out. Thanks to being on national shelves, he said, Blk & Bold was able to gain authority. "When we looked at Amazon and e-commerce we were allowing that authority we were able to gain by brick and mortar to tie that back into scaling and acquiring new consumers on e-comm," he said. Still, coffee is a hard business. "We were entering into the second highest commodity beverage space -- being coffee, right behind water," Cezar Jr. said. He approached growing the company by finding ways to differentiate. "When you are shopping in a coffee aisle in any grocery store, let's say excluding Whole Foods, there is not a premium assortment experience," he said. Ditto Amazon. The bet was that he could grow a coffee business by becoming a rarely-seen premium brand on those shelves. Cezar Jr. described how he was able to capitalize on all of these elements to grow the business. Amid a pandemic it grew from two people to twelve, and got a brand new warehouse as well. "Our whole business is can we convince these consumers that they can also make great quality coffee at home," he said.

Luxury retailers have historically been slow to go online. But in the age of coronavirus, digital remains one of the only viable channels. Kelly Kowal, chief platform officer at Farfetch, is one of the people heralding this transition. Farfetch offers both its own consumer-facing marketplace of luxury items as well as sells white labeled services to brands and retailers that want to create their own online experiences. Both sides of the business have been booming over the last few months, she said on the Modern Retail podcast. "We are seeing a lot of interest from brands and retailers now really understanding how important that e-commerce channel really is," she said. But the industry is certainly not static. Different regions are seeing varied demands. According to Kowal, that is tied to countries' health and safety. "China, as it's recovering, is doing really well," she said. "The Middle East is doing really well." The only consistent things she's observed is inconsistency. The markets that were once reliable, said Kowal, no longer are. The demand you see one day may be gone the next. Meanwhile, competition is only increasing. Amazon is beginning to launch its own luxury offerings, giving brands more choices for which platforms they should work with. "We're always watching the competition," said Kowal, adding that Farfetch has a head start. "The difference for us is that we already have 1,300 partners," she said. "We already have the best brands and the best retailers." Amazon may be big and powerful, but it's yet to forge the important partnerships. In Kowal's eyes, the key is collaboration. Brands and retailers in the luxury space aren't looking for quick marketplaces to drop inventory. "We really genuinely want to be partners," she said. "That's how we see these relationships."

Barbie is Mattel's most iconic brand, but the toy company has more than 400 others that CEO and president Richard Dickson is, in his own words, looking to revive. In an age where smartphones and games like Fortnite present stiff competition for analog toys, Dickson says the company needs to create media everywhere it can. "Continuing to be where our consumers are means, today, being everywhere," Dickson said on the Modern Retail Podcast. Mattel is producing short videos for YouTube, on its own and via collaborations with influencers. It also has a show on Netflix, and last year announced 22 animated and live-action TV programs last year. The likes of Nickelodeon are still huge for Mattel to reach young consumers, but YouTube Kids is the biggest growth spot, Dickson said. "I would call YouTube the one that has accelerated the most in the last several years." Mattel also recently launched a DTC platform named after the company's original name, Mattel Creations. This program will feature special edition Mattel collectibles -- aimed at a more adult audience. The hope is to figure out more ways to tap into direct sales (though Dickson is quick to note that Mattel loves all of its retail partners).

Some DTC founders pick a sector just because they spy an opportunity. Bloomscape founder Justin Mast said did that too with his direct-to-consumer plant company, Bloomscape, that he founded in 2018. But he had a bit of a leg up, as he's also a fifth-generation greenhouse grower. His parents met in a greenhouse, in fact. Bloomscape ships thousands of plants a week, including full-grown ones that only survive within a narrow set of conditions. "The thing we did differently was to say 'how do we do this for a six foot tall tropical plant?'" Mast said on the Modern Retail Podcast. "I want to be able to ship that to Boston in the dead of winter." Bloomscape ships even the most fragile of plants through an advanced system of storage in greenhouses, and through innovative shipping patents and soil mixes. The company has seen year over year growth, as well as a huge spike in demand over the last few months. This week, in fact, the company announced that it raised a $15 million Series B, and acquired the plant care app Vera. Mast said the app acquisition is a way to keep more customers invested in the vegetation they purchase. Mast sees the pandemic as an accelerant for the millennial generation's belated settling down. "We're now settling into our lives, starting to settle down into homes and get a little more inward with our lives," Mast said.

Thrive Market, which first launched in 2014, had been growing at a rate of 40% a year before the pandemic. Now, with new customers joining the membership-based online grocery service, that growth rate has more than doubled to 90% a year, according to the company's co-founder and CTO Sasha Siddhartha. "We were already a digital native experience, so there were lots of parts of the business that scaled naturally," Siddhartha said on the latest episode of the Modern Retail Podcast. Thrive Market was also already running on a largely remote workforce. That growth was in part charged by the fact that about half of the service's members are in the Midwest and Southeast, "which are areas that maybe traditionally are regarded as health food deserts," Siddhartha said. When the pandemic hit, customers in those regions were even less likely to make the lengthy trek to the kind of stores and products that would be much more common in a major metropolitan area.

Most companies use social media as a way to point consumers to the brand's website. In hot sauce company Truff's case, social media -- and TikTok, in particular -- is an endgame in itself. "They eventually become customers, but we don't tell them, you know 'go to our link and buy our sauce,'" Truff co-founder Nick Guillen said on the Modern Retail Podcast. "We don't want you to go to the link and buy. We want you to like our brand." Nick Guillen and Nick Ajluni co-founded the company in 2017 based on an Instagram handle -- @sauce -- that they got their hands on during their college years. But TikTok is where it's really at, said Guillen. "It's a completely new generation of user, of customer," he said. "You really have to immerse yourself in platform -- TikTok, for example -- [and] really try to understand the voice, the tone, the flow, the style of content, how people are talking, the trends. And then set the brand in the middle of all this and not lose sight of the brand." The Truff co-founders said their company is the biggest hot sauce brand on TikTok, with 69,000 followers and nearly one million likes as of this writing. Beyond its own production (first-person videos are especially in these days, Guillen said), Truff shares videos in which fans and followers -- some of them chefs -- use the sauce themselves. Like the name suggests, Truff sells three truffle-infused hot sauces. They ship them to customers as a direct-to-consumer company, though Truff is also available on Amazon -- "we look at Amazon as more of a retailer versus our competition," Guillen said -- and in stores ranging from Neiman Marcus to Wegmans.

Jonathan Wahl sees the boom in kitchenware companies as a good thing for the sector as a whole. "Seeing others recognize the same opportunity reaffirms that yes, we're on the right track," Wahl, who co-founded the cookware company Abbio last year with his brother, said on the Modern Retail Podcast. "In terms of competing, I believe that at the end of the day the best products are going to win out." That last bit is worth saying because Wahl sees a proliferation of low quality products in the market. "We're kind of still in what I'll call the 'Shopify effect,'" Wahl said. "It becomes very easy for brands with not very well considered, thought out products -- or inferior products -- to launch and try to establish some sort of market presence. I think that's happened in our space as it's happened in many others." Abbio only makes and sells five pieces of cookware, which as a set go for precisely $287. Wahl pointed to tremendous growth due to the coronavirus, in both sales and traffic to its site. "We were seeing consistent growth and were excited with our progress. Then came March, April, May and June. We boarded a little bit of a rocket ship," Wahl said. Half of its sales are direct-to-consumer, he added.

2020 hasn't been a good year to travel or go on vacation, and Americans are spending more on home improvements instead. Furniture brand Article was lucky enough to corner that market with a DTC model that eschews the need for expensive floorspace that has gone unused for several months this year. "We saw this perfect storm for us, where not only were we effectively reaching a whole lot more people who were super motivated to buy, but we also had this really compelling offering for them, because the competitive landscape had shifted so radically," Article director of marketing Duncan Blair said on the Modern Retail Podcast. The advantages have proven big enough for Blair to doubt the need for a company store in the future, of which he questions the efficacy in 2020. "It's such a contrived environment. You walk into the stores, [there are] hundreds of other people, you're kind of sitting awkwardly on this sofa in the middle of the showroom with people looking at you and sort of waiting around. It's not your space," Blair said. "There may not be a good reason for us to go into retail anytime soon." Speaking about the big picture for the company and the sector, Blair said he was confident that "we'll continue to grow as a share of e-commerce, and that e-commerce will continue to grow as a share of the overall furniture market. The question mark is: What is going to happen in the total furniture market over the next 18 months to three years?"

Sam Dennigan launched Strong Roots with a single item -- sweet potato fries -- in Ireland in 2015. The frozen vegetables company has since raised $18.3 million from private equity firm Goode Partners to expand into the U.S., where Dennigan is now based. His experience on both sides of the Atlantic helps him highlight some of the competitive differences among markets. "The key difference between the U.S. market and the U.K. and Irish market is the fact that private label is much stronger in natural foods in the U.K. and Ireland whereas brands lead the way with natural food in the U.S.," Dennigan said on the Modern Retail Podcast. The pandemic has proven to be a boon for staff productivity, he said, and has also forced the company to branch into making ready-to-eat dishes available for delivery. "That was in response to not being able to sample in stores. That's something that's not going to come back for some time with the risks around cross-contamination and infection," he said about his collaboration with Ghost Truck Kitchen in Jersey City. "We've pivoted into being a food service offering that you can order direct to the home through Uber Eats and Seamless and Door Dash."

Back when GT Dave, founder of GT's Living Food, single-handedly proved that there was a market for kombucha in the U.S., "probiotic" was hardly a buzzword. "Fortunately today, that hurdle or barrier is no longer there," Dave said on the Modern Retail Podcast. Kombucha is big business; sales exceeded $480 million in 2019, according to Nielsen. GT's Living Foods, which was founded in 1995, makes for a big piece of that pie -- 60% of it back in 2015, as he then <a href="https://www.inc.com/magazine/201503/tom-foster/the-king-of-kombucha.html">told a profile writer</a>. He wouldn't provide an update to that figure for 2020, but did speak to the challenges presented by the pandemic, especially early on. "There was a time where anything that was considered single serve, like our 16-ounce bottle, was basically dead," Dave said about March and April. In-store sales have since rebounded, and the company is taking its first steps in the direct-to-consumer space. "This quasi-subscription approach is something our fans have been waiting for a very long time and Covid kind of gave us that reason to explore it." GT's other strategies for surviving the downturn include emphasizing the product's possible health benefits (or at least, its <a href="https://www.nytimes.com/2019/10/16/style/self-care/kombucha-benefits.html">healthful reputation</a>) and communicating with retailers about their common interests in keeping supply flowing.

Blueland CEO Sarah Paiji Yoo wants you to know that when you pay for cleaning supplies at the grocery stores, you're mostly buying water. "Oftentimes consumers are paying really for a new plastic bottle -- and water, which we already have at home," Paiji Yoo said on the Modern Retail Podcast, which was recorded live during our Modern Retail Virtual Summit this week. Blueland sells concentrated tablets for consumers to mix their cleaning supplies on their own. The relatively tiny packaging is another differentiator compared to what you see from Ajax and Dove. "Existing CPG players were incentivized to have larger, bulkier packaging because this packaging really served as billboards in stores," Paiji Yoo said. Blueland goes the direct-to-consumer route, which Paiji Yoo considers to be the only route for products that depend on changing consumer behavior. Its appeal isn't just that it's a smaller, new kind of product; Blueland wants to eliminate single-use plastics. In the last two months it's expanded to the dishwasher and laundry categories (with a powder and tablets, respectively). The plastic films that keep your typical dishwashing pod together aren't all that good for the environment. "I think people think that because it dissolves that magically disappear. But unfortunately those plastic mulches enter our water systems," Paiji Yoo said. The pandemic has made consumers somewhat more likely to demote previous green concerns in exchange for effectiveness and availability, she said. But as a result of the crisis, she estimated, demand has been 4x what it would have been otherwise.

It took a trip to London for Emily Schildt to realize that American grocery stores could do better. "I came back personally really yearning for a grocery store experience like I had there," she said on the Modern Retail Podcast. "They were just beautiful spaces in which to shop -- gorgeous products, but really thoughtful display and design." Last year Schildt founded Pop Up Grocer, a traveling showcase of a few hundred products that sets up in U.S. cities for a month at a time. It had four locations to date; the next one opens in Brooklyn this October. Many of the goods, like cauliflower crust, are available at grocery stores already, but Schildt argues that they're buried in a mass of other items. Since the 90s, the average grocery store's number of items has mushroomed from 7,000 to between 40,000 and 50,000, according to a recent book on the topic. "It's a lot of cold outreach," she said about how she gets products that are worth the spotlight, many of which she finds on Instagram. A place at Pop Up Grocer helps show off brands that might otherwise remain obscure or have trouble selling online. "I think people find starting their own business so hard if they don't have all of the connections. And it's hard even if you do," Schildt said. Schildt talked about the company's move into ecommerce, plans to raise outside capital and her favorite place to shop for food in Paris.

Piggy banks aren't especially in vogue, but the idea behind them sticks. By saving up a little over the long haul, you can pool quite a bit of money — enough, in Reel's experience, to pay for a luxury handbag, furniture or some electronics. The personal finance app lets customers save up for specific items. Users pick something and commit to wiring Reel a few dollars a day for it, setting an enticing timeline into motion. Put aside $5 a day for 12 weeks, for instance, and Reel will take care of shipping you that Apple Watch you've had your eye on. It's a win-win situation, in CEO and co-founder Daniela Corrente's telling. Customers save responsibly for stuff that may have felt was outside their price range, and companies working with Reel create a new touchpoint for cost-concerned customers (the only loser might be credit card companies, which Corrente doesn't feel too bad about; she had her fair share of credit card debt in college). "Many of our customers have gotten their first luxury handbag through our website. So we're actually converting them and giving brands the opportunity to leverage our platform," Corrente said on the Modern Retail Podcast. The average customer, she added, has two or three "active reels" they're saving for. With the pandemic continuing to constrict people's social lives, purchases for fashion -- Reel's first vertical when it launched in 2016 -- have dipped. Meanwhile, the company accelerated its expansion to other categories. "Our priorities has humans have varied, because we're 24/7 at home now. A lot of us, we don't necessarily have a house that's fit to work from," Corrente said. "All of a sudden, [users are] investing more in making your house prettier, more accommodating for working from home, investing more in fitness from home... those have all been categories that have catapulted since this happened."

Closed spaces, mingling strangers and loud music to shout over -- bars seem purpose-built for spreading the coronavirus. According to Bacardi CMO John Burke, that means people will be doing their drinking, and less of it, at home. "This summer there'll be a lot more drinking out of home because people feel much more comfortable social distancing at home," Burke said on the Modern Retail Podcast. "We predicted that trend back in early April, and we've switched to producing quite a lot of our brands into ready-to-drink packaging." The only bright spot in a recent report by IWSR is indeed in the ready-to-drink category (like last summer's hit, White Claw) which the market analyst estimates will grow by more than a fifth this year in the U.S. Alcohol's popularity was on a downward trajectory even before the pandemic, and globally may not return to pre-coronavirus levels until 2024, according to the report. The latest slump only sharpens, according to Burke, a trend that Bacardi is prepared for: "the desire to drink less spirits and seek lower alcohol or no alcohol solutions. That's a trend that we expect to see massively amplified." Given how that expectation combined with the pandemic, Bacardi expanded the launch of a zero alcohol aperitif under its Martini label. "Despite disruption in the industry we'll deliver ahead of target for this year on that innovation," Burke said. Another silver lining is the growth of e-commerce for Bacardi's spirits, starting from an "abnormally low level" compared to other sectors. "In the last three months we've probably seen two years' development take place," Burke said. "The number of people who've had their first ecomm experience of buying liquor online is huge. That creates a permanent change in our industry structure."

Cleo Capital's Sarah Kunst thinks the investing landscape focuses a great deal on the top of Maslow's hierarchy of needs -- in plainspeak, that's stuff that isn't really essential. Or, in Kunst's words, the kind of product that answers the question: "what will make you feel better in the moment?" Her investments are in companies that supply basic needs. "There's the whole thing on the bottom: where you do you live, where do you eat, how do you feel loved?' Kunst said on the Modern Retail Podcast. That includes Zero, which calls itself "the first plastic-free grocery delivery service" -- and is available in the Bay Area only, for now -- and StyleSeat, which aims to help beauty professionals run and grow their personal businesses. Kunst also started a scout program -- "when a venture fund pays for you to angel invest" -- and Chrysalis, a fellowship for tech workers laid-off as a result of the coronavirus (and curious to start their own businesses). "This wasn't us flying everybody to a private island for six weeks, it was 'hey, we have a Slack channel,'" Kunst said. "When you provide space for people, a lot of creativity just kind of flourishes." "We didn't turn people into founders. We took people that we believed could be founders and we showed them that a lot of what was holding them back was that zero to one. Candidly, they didn't even need an idea. Not every person started their own company. A lot of them joined with other people," Kunst said.

Before the pandemic, the zero (or low) sugar beverage brand Sanzo had all the scrappy upstart charm and aesthetic of a DTC brand. But, it still sold mostly through wholesale -- 70 to 80%, in founder Sandro Roco's estimate. That's changed. "Since the pandemic, it's completely inverted, and even more extremely so," Roco said on the Modern Retail Podcast. "During this pandemic, if you're looking at CPG sales and specifically sparkling water, a lot more folks are willing to order sparkling water to their home than many other CPG categories." That's good for Sanzo, which sells 12-packs of "Asian-inspired sparkling water" online, where subscriptions are possible, but also through bodegas, grocery stores, and soon, 50 Whole Foods outlets in the Tri-State area. Depressed advertising costs at the start of the pandemic led the company to "dust off the DTC playbook pretty quickly," according to Roco. "I don't know that there will ever be an opportunity for a digital marketer like what we had in March and April," Roco said. "You had the combination of the powerful targeting that Facebook and Instagram have to offer -- which, obviously there's a whole other consumer conversation around data privacy and what not, but at least to a marketer, it's still a very robust advertising engine -- with also CPMs or ad rates that you've just never seen on this platform." Sanzo has also partnered with the Coca-Cola backed Iris Nova, through which it's benefitted from their text order platform.

Aishwarya Iyer started Brightland, an olive oil company, in 2018 with the idea of describing the products like wine and marketing it like a beauty brand. "Beauty leads the way in terms of talking about benefits, packaging -- the shine and glimmer that beauty's able to do, food just isn't able to do that. Maybe there are some standouts!" Iyer said on the Modern Retail Podcast. What's more, many DTC beauty brands rely on less traditional revenue channels, like big box retailers. Over the last few months, large wholesale sales have gone down for Brightland -- so it's had to focus much more on digital sales and smaller retail partnerships. "Everything's kind of moving back to this quote unquote normal place, save for the larger retailers still because they still probably have inventory on hand," Iyer said. Growing in wholesale's place are digital sales, according to Iyer, as well as and inbounds from gift box companies.

Business lost to the pandemic has rebounded for StockX, an online marketplace where people selling and buying items -- sneakers, mainly -- negotiate on a price before StockX provides authentication and shipping. "We've seen an incredible return to activity in the marketplace," StockX CMO Deena Bahri said on the Modern Retail Podcast. "By mid-April we started to see an incredible return back to normal -- and even better than normal -- shopping behaviors." That's the case even though the company cut its spending on "anything that's not directly attributable to measurable growth," Bahri said. StockX reduced its spending on linear TV and marketing at cultural events. "The more conservative stance on marketing spend has not had a negative impact on business, very fortunately," Bahri said. The Detroit-based company was founded in 2015 with an exclusive focus on sneakers. It's diversified into other streetwear, watches, trading cards and electronics. But shoes are still the main attraction. Sneakerheads and other consumers may even be turning to shoes as smart investments. A scrolling tape across the bottom of StockX's homepage announces which footwear is up or down in the market. "Our trend partners that we work with, and some of the things we've observed on our own, indicate that people are more prone during a time like this to spend on things that are investments, classics, items that will endure," Bahri said.

The professional world may have been disrupted by the coronavirus pandemic, but there is one thing that still powers our workday: coffee. The subscription-based Trade Coffee, for one, has seen its mail-in customer base go up by a factor of 10, alongside other food startups that have seen a bump in subscriptions. Earlier this year, company CMO Melissa Spencer Barnes told Modern Retail that the company was on track to ship its millionth bag of coffee sometime in 2020. It also started selling five pound bags -- the size roasters typically sell to office spaces -- as people drink more coffee at home. Launched in 2018, the company connects customers with their network of 55 roasters. It takes coffee seriously enough to borrow the language of dating apps, inviting subscribers to "get matched" with the best roasted beans for them. To bring customers in in the first place, Trade Coffee is focused on dominating SEO terms around the drink, and on creating useful content for people curious to learn more. "We see that our role as a brand but also as a growth tactic is in being the educational voice for coffee," Spencer Barnes said on the Modern Retail Podcast. "Surprisingly, there weren't that many incumbents in that space before." Trade Coffee is focused on how-tos and videos about the brewers that customers support. Next, it's looking to grow on YouTube. "That's where people are consuming content and nerding out, if you will, wanting to go down that rabbit hole. That's the nature of coffee. You get into it a little bit and then you want to keep going further."

As existing commerce companies adapt to survive a global pandemic, Jimmy Wu instead launched one. Cat Person sells cat food, toys, furniture and treats in a market that Wu sees as skewed toward dog owners. The coronavirus gave pause to Wu and his co-founder, Harry's alumnus Lambert Wang. "If we were in another category in another industry -- selling travel accessories, luxury fashion -- we probably would have made a harder decision" about delaying the brand's launch, Wu said on the Modern Retail Podcast. But more time at home has inevitably led to cat owners spending more time with their pets. "It felt like it actually was a good moment for us to launch, that people actually needed a service and products to help better connect and have a better relationship and interaction with their cat," Wu said. Since its start in late March, items like cat toys and treats have sold at three or four times the rate Wu first expected. Wu talked about why you won't find Cat Person on Amazon, his take on the DTC revolution and how the company's packaging itself can be turned into cat-pleasing objects.

Retail stores are slowly reopening, but Christiane Lemieux, founder of the DTC furniture brand The Inside, still thinks people will want to invest most in the place they're spending most of their time: the home. "What you will be doing is focusing your time and disposable spend on making your home into everything it should be -- not only for now, but for what the future of our lives is going to look like," Lemieux said on the Modern Retail Podcast (people are spending so much time in doors, in fact, that Lemieux thinks a baby boom will hit in January). The Inside meets its demand through a "made to order" model -- a piece of furniture isn't built until a customer buys it online. "I think 'made on demand' is the manufacturing of the future," said Lemieux. "It's so much better for the environment. There's no warehouses full of imported product just sitting there." In her case, it's also made the company more resistant to the supply chain disruptions roiling the world. "Having a domestic manufacturing base has allowed us to continue to produce even during this particular and very challenging situation." "We don't make anything until you place your order. There's people in my cohort who do the same thing with shampoo and vitamins. It's in every category at this point," Lemieux said. One or two of The Inside's factories still had to shut down -- one on the U.S.-Mexico border, the other in Illinois -- until the national policy that deemed manufacturers to be an essential service allowed them to operate again, according to Lemieux.

Looking to the past doesn't always work. For one, many current founders or CEOs were "still in high school" during the last economic crisis, according to Homebrew partner and co-founder Hunter Walk. For another, even for those entrepreneurs who survived the last global downturn, the big takeaways might not apply to current circumstances. "The answers from those entrepreneurs in 2008 may or not be the right answers for companies in 2020. But the questions they asked themselves might be the things that are evergreen. And so asking some of those questions of yourself as a founder who might be going through this the first time -- I think that's where it gets valuable," Walk said on the Modern Retail Podcast. Homebrew, the investment company Walk co-founded in 2013, has invested in companies ranging from the worlds of kids' clothing to aerospace technology and farming robots. Another evergreen spot for him is in the qualities of the founders he invests in, "which have remained consistent and help us do our job during a time like this," Walk said. "You ask yourself 'why is this founder working to solve this problem?' And if the answer is something that usually comes from a personal interest in the problem, a deep insight or connection, then when they hit a speed bump (or in this case a very large speed bump, from a global standpoint) they don't stop. They pause, maybe, and say 'OK, how do I have to rethink my business?' But they're not just doing this opportunistically. They're doing it because they couldn't imaging doing anything else."

For a time, Grove Collaborative was one of the rare places where you could order reasonably-priced hand sanitizer online. That availability wasn't for a lack of demand. "Demand had been building, and all of a sudden for a week it was off the charts. And we had a big decision to make that week," CEO Stuart Landesberg said on the Modern Retail Podcast. "Do we want to prioritize our existing customers or do we want to prioritize going after new customers? Grove ended up focusing on existing customers, and limiting orders on certain items, allowing it to stay under its maximum shipping time of four days. "We probably left a lot of money on the table by doing that, in the short term," Landesberg said. But he reckons that that kind of consistency for the eco-conscious home supplies company -- which hit unicorn status last year -- will allow it to thrive in the long term. "Having clear and virtuous values and then ruthlessly sticking to them is essential to creating 100-year brands," Landesberg said.

Coefficient Capital co-founder Franklin Isacson describes himself as a cautious investor, especially in times of uncertainty like today. That comes in handy during a time of crisis. For Isacson, this has been a good time particularly to invest in certain companies, especially in grocery and consumer goods that can weather a recession. "The new funds that are being deployed over the next 24, 36 months are likely to be very good vintages, much like the '09 and '10 funds were excellent vintages," Isacson said on the Modern Retail Podcast. Isacson lists four big lessons derived from 2008: rethinking how demand will be impacted ("consumers are going to trade down to private label during times like this"); creating backup in supply chains given the possibility of supplier bankruptcy; honesty in leadership about the uncertain times ahead; and liquidity. "Private capital markets are not always going to be there to fund your business even though you as a business might be doing well. Or even if they are, the terms just might not be as attractive," Isacson said.

Biossance president Catherine Gore has always considered skin care as medically significant, and believes customers will be more inclined to share that thinking as coronavirus lockdowns continue around the world. "Our skin is our largest organ, and it's also our first line of defense against outside aggressors," Gore said on the latest Glossy Beauty podcast. Education is a big part of Biossance's marketing strategy and value to customers. One of Biossance's central ingredients for skin care, for instance, is squalane, which it derives biochemically from sugar cane -- the larger cosmetics industry sourced a similar squalene (with an e) from a not-so-vegan source: shark liver. That makes a big difference for the typical customer who has more time to do her research, according to Gore: "What's actually driving her is a curiosity to do better for her own skin and the planet and to make better choices," she said.

If Nick Ling's latest brand launch wasn't so right for this moment, he would have delayed bringing it to market. "If I was launching a new brand I'd wait. There's just too much change in consumer behavior," Ling said on the Modern Retail Podcast. But Open Spaces, the second brand under the umbrella company Pattern (where Ling is CEO) is all about getting the most out of the place many consumers are stuck in these days. "How also do we help separate home into different activities, where now work is a much bigger activity at home than it used to be?" Ling said. Open Spaces makes and sells containers, racks and shelf risers (Pattern's first brand serves another domestic need: cooking). To help you figure out what you might be in the market for the company offers an online guide, including a listening exercise -- you'll need 10 minutes, headphones and pen and paper -- designed to make you want to stay a while.

Through this crisis, Burrow CEO Stephen Kuhl is sticking to a piece of advice he got back when the furniture store was just another startup at Y Combinator. "The advice we got then was 'just launch your first product. Get it out there into people's hands and you'll get feedback,' Kuhl said on the Modern Retail Podcast. That's what the company has done with a virtual design consultation program delivering an "in-store experience" to customers from their homes. It had been in development for a while, according to Kuhl, but the pandemic's halting effect on the economy made this the time for Burrow to see it through (Burrow has one store, now closed, in Manhattan). "Within 48 hours we stood up our V1 of this virtual design consultation program. And that was something where everybody who was involved in that dropped everything and jumped on it," Kuhl said. He added that Burrow has seen "a good amount of revenue" from the new program, especially considering it was a leap of faith. "We had no data to say this is definitely something we should spend our time and money on." Kuhl talked about Burrow's supply chains, pivoting its business and how "anybody that tells you that they know how to forecast their business in this is either lying or completely naive."

Americans may have more reason than ever to appreciate the comforts of home and the value of making theirs their own. But even a company like Parachute, a luxury linens and home goods company founded in 2014, is feeling the pinch from the downturn in retail. "Our [physical] retail is about 25% of our business -- but it's a profitable part of our business," the company's founder Ariel Kaye said on the Modern Retail Podcast. "And it's really also how we connect with our customers and build relationships." The brand is accelerating some of the shopping alternatives it had already been planning before the coronavirus pandemic. "We've been excited about buy online, pickup in store, and curbside pickup for a long time, but it was always one of those things that we thought we would get to," Kaye said. "We want to make sure that we can deliver the experience that we want our customers to have no matter where they are."

If Benjamin Witte talks about his beverage brand Recess as if it were a budding empire, it's because he's noticed the same broad ambitions among the sector's big players. "Red Bull is a media company for the action sports community that monetizes through selling cans," Witte said on the Modern Retail Podcast. "We're speaking to creatives, just like Red Bull is speaking to the action sports community, and Gatorade is speaking to athletics." To that end, Recess -- which sells fruity sparkling waters infused with that relaxing CBD -- is planning on rolling out compelling online content (without the help of influencers), merchandise, and "IRL experiences," Witte said. The company launched in late 2018, and the coronavirus crisis isn't exactly slowing it down. E-commerce sales are up 5x, according to Witte, though he conceded that retail is predictably down. "No one's in Manhattan. We have a huge part of our sales come from the lunch crowd, the office crowd, the coffee shop crowd. That's gone. We're also not in the Targets and Walmarts yet because of the regulatory [element]. So we don't benefit from that, which is a lot of where the foot traffic is." Witte talked about what CBD does for him, entering a retail sector without prior experience and why he looks to Disney instead of LaCroix.

Rhone CEO Nate Checketts said his company "saw the writing on the wall really quickly" in the early days of the coronavirus pandemic. Companies like his men’s activewear brand would soon be bloated with inventory and feel the pressure to boost e-commerce promotions. "If everybody's getting promotional all at once, that's going to shift customer demand away from us if we're continuing to operate at full price," Checketts said. "So I challenged our team in 24 hours to get a promotion ready and to be ready to effectively communicate to the customers about what steps and actions we were taking." That plan included an email newsletter that's actually useful to readers instead of just being a distress call -- and the rare discount on Rhone products. "We won't go deep, but you will see brands that will have to," Checketts said. "In some cases it might act as a clearing house to get non-serious players out, and that will present some opportunities. I do think that brands that I won't name but leaned so heavily into retail before they were really ready for it are in a lot of pain now," he added. Even on Rhone's e-commerce front, he said, "there's definitely been a demand impact, no question." Checketts talked about leadership values, what brick-and-mortar landlords should keep in mind and how he's staying honest with his employees.

When people go shopping for mattresses, according to Resident co-founder Eric Hutchinson, they often know more or less what kind they're after. "The person who wants a memory foam mattress opts into that category very quickly," Hutchinson said on the Modern Retail Podcast. "They say: 'I am looking for a memory foam mattress,' so they're doing the comparative shopping versus other memory foam brands." In other words, people don't go mattress shopping as much as they go "memory foam" or "traditional" mattress shopping, right out of the gate. "Once we understood that, the notion that we would have a portfolio of brands was pretty clear to us." That's why Resident, a DTC holding company formed last year, has four mattress brands to its name, giving it the ability to meet consumers even after they've written off certain mattress categories. The company is "right at the point of break even profitability," Hutchinson said, and it's expanding to other parts of the home furnishing shopper's list. "The idea is to have products that resonate with the consumer across the entire furnishing life cycle of a home," Hutchinson said. Obviously, the coronavirus pandemic poses problems for any consumer business's plans. "Uncertainty is the most difficult thing to manage to," Hutchinson said. But he added that although retail revenue plummeted "almost overnight," the DTC side of the business is strong. "Right now consumers are online, so we pivoted our business and really have been able to make up the ground that we lost to the retail," Hutchinson said. He talked about the "aspirational" vibe of new DTC companies' brick-and-mortar stores, surveying customers and what digitally-native really means in his book.

Much has been written about the Chinese consumer that shops abroad in stores. But there is a growing movement among customers in China that, through livestreaming apps like ShopShops, are shopping at stores outside China, just through their phones. ShopShops founder Liyia Wu explained the experience from the customer's perspective: "Open up your phone, and with a click of a button you can be [on] any street, anywhere, opening the doors of stores that are interesting." The app allows viewers to watch hosts -- experienced salespeople or fashion influencers -- as they display clothes and accessories, QVC-style, for several hours. Customers can buy what they see and interact with the host and other shoppers via a chat function. ShopShops then makes a commission on purchases. The four-year-old company, based in both New York and Beijing, also completes the last leg of delivery within China. "Everything is shipped to us in bulk. We help to facilitate that last mile," Wu said. In the future, Wu hopes to expand ShopShops to hosting livestreams in other languages and on social media platforms rather than just the app itself.

Shark Tank investor and co-founder of RSE Ventures Matt Higgins thinks a change is coming to the DTC playbook. "I think it's amazing that you can come along and challenge taboo thinking around ED, or you can go ahead and create an entirely new cereal brand, launch it right away and get scale. That's not going away," Higgins said on the Modern Retail Podcast. What is going away, he added, is the idea that digitally-native companies can stick solely to the online world and survive. "That part is not true, but it's kind of obvious, looking back," Higgins said. "You're going to go where the customer is." Higgins talked about his prescription for Casper, Harvard Business School's week-long course on the DTC model and how it's time for a brand affinity metric.

When it comes to financial technology, China has Silicon Valley beat. WeChat is a big part of that. What started as a messaging app in 2011 is now a mobile payments giant. "People use it for everything. For utilities, for gaming, obviously to communicate with their family and friends, and to do business," said Yiren Lu, a software engineer (at Google) and a writer who covers WeChat and Chinese technology. WeChat users can transfer money to their friends. But they can also pay for groceries, look through menus or place an order at a tea shop without standing in line or handling cash -- or a credit card. "There are hundreds of millions of Chinese people who were unbanked, who did not have bank accounts. It was a very cash-heavy society," Lu said. WeChat and its main competitor, Alibaba's AliPay, "basically became banks," Lu added. She chalks WeChat's success -- some 34% of China's data traffic goes through the Tencent-owned app -- to this quickly solved pain point, but also to the country's rejection of American tech companies. In 2009, "China basically kicked out all of the U.S. tech companies," Lu said. China's "Great Firewall" blocked Facebook, Google, Twitter and Vimeo that year. If China offers a rapidly growing middle class -- one with less "antipathy towards the idea of consumerism," as Lu put it -- it is Chinese companies that are getting to it first.

The direct-to-consumer model didn't exist when Ariane Goldman started her first clothing brand in the mid-2000s. But by the time her second company, Hatch, launched in 2011, "the only way to really start the business was DTC," Goldman said on the Modern Retail Podcast. Hatch makes clothes to be worn at all stages of pregnancy -- and before and after too -- sold both online at stores in New York and Los Angeles. "The genesis was really what didn't exist out there. I was pregnant with my first daughter and looking for something to make me feel better," Goldman said. "Why wasn't it there? If I needed it, there must be millions of other women that need it too." The company landed $5 million in Series A funding last year, but Goldman is wary of the inordinate amounts of cash being stuffed into the DTC market. "Why are these great ideas all of a sudden being beaten up by inflation and numbers and greed?" she asked. "Sometimes I find myself wondering what it's all worth if you're not actually building something." Goldman talked about the advantages (and inevitability) of going DTC, what she learned from her first clothing brand and Hatch's expansion into beauty products.

Studs co-founder and CEO Anna Harman recently got a second piercing in her ears. One place she looked at would have charged her $500. The other, which she went for, was a tattoo parlor. "And while the piercing experience was great -- they pierce with a needle, it was healthy and safe -- the overall environment was really not suited to me. I felt really personally out of place there," Harman said on the Modern Retail Podcast. She reached out to Lisa Bubbers, who would go on to co-found Studs -- a store that pierces your ears and sells you jewelry as well -- with her last year. "I said to Lisa 'wow, it feels like there's a real opportunity here to reinvent this experience end-to-end,'" Harman recalled. "We really thought the opportunity was to combine healthy and safe needle piercing with really accessibly-priced, fun jewelry in an environment that the customer was excited to spend time in." Studs has a flagship store in Soho and is taking advantage of trends in the world of brick-and-mortar. "How do you physically expand in a way that's not incredibly capital intensive?" Harman said. "You will likely see Studs do things like shop-in-shops and kiosks." Harman joined the Modern Retail Podcast to discuss the dreaded piercing gun, and what she's learning from both the direct-to-consumer zeitgeist and her time at a hedge fund.

Coulter Lewis got the idea for Sunday when he saw the state of his local Home Depot's lawn care aisle. "You can smell it before you get there," Lewis said on the Modern Retail Podcast. "It's pallets stacked high with bags of chemical fertilizer, covered in caution labels." That was in 2017, the year before he launched the company out of Boulder, Colorado. First, Sunday asks customers to ship it a bit of soil from their property. Then it analyzes that alongside pre-existing soil and weather data before sending a regimen of pesticide-free products for you to apply via pouches that attach to your hose. Customers pay on a subscription basis annually, receiving four boxes a year. Plot by plot, the company is hoping to eat big retailers' lunch; the outdoor lawn and garden sector brings in $13 billion in retail sales for Home Depot and Lowe's, Lewis said, and the grand total is more than thrice that). "We're really not about coastal millennials. That's not our focus at all," Lewis said. "We're appealing to a more mass market."

For the Body Shop, it's about selling where the customers are -- even if that means it's not necessarily on your own sites or in your stores. "Stores for us are the bread and butter of the business, the biggest portion of the business, and will always be," U.S. general manager, Andrea Blieden said on the Modern Retail Podcast. At the same time, being on Amazon has been a big boon to the business, mostly because that's where a significant part of new customers are. "I just don't think that you're moving Amazon shoppers off Amazon that much," Blieden said. "If you want to capitalize on the fact that over 30% of Americans are using Amazon, you gotta go there." Blieden talked about the changes brought about by L'Oréal's sale of the company to Natura & Co. in 2017, The Body Shop's investment in Amazon and what it's like working at a company that speaks out on social issues.

Lo & Sons launched as a direct-to-consumer brand in 2010. That's practically prehistoric as far as the recent crop of DTC companies is concerned. "We were kind of an accidental DTC company," co-founder of the brand, which makes high-end handbags, Derek Lo said on the Modern Retail Podcast. "We started before the term even existed." The idea to start a family business came from Derek Lo's mother, Helen Lo, who despite her frequent travels couldn't find a bag that was easy on her back. She started a blog about light-weight bags -- Derek's brother Jan helped set it up on Tumblr -- before convincing her sons to quit their jobs and give their own company a shot. The company became profitable in 2013, according to Lo, and it did so while eschewing the typical playbook of so many DTC brands that came after -- outside investment, millennial-focused subway ads and the inevitable expansion into brick-and-mortar stores. The company's independence has helped Lo & Sons survive, in Lo's estimation. "We want to be a brand like Patagonia that's going to be around for decades, that's making a positive impact on the world," Lo said. Lo talked about the company's origins, marketing strategy and product innovations -- like a separate compartment for shoes.

Iris Nova founder Zak Normandin is betting on a suite of "no or low" sugar drinks -- sparkling teas, seltzers and lemon juices -- and on a new way to sell them. "Every brand has a phone number," Normandin explained on the Modern Retail Podcast. "When you want to place an order for a product you just pull out your phone, you text the brand directly." His lemonade brand, Dirty Lemon, has sold more than 2 million bottles since its founding in 2015, and per Forbes, 90% of those sales happened via text. And Iris Nova now is growing more, thanks to a cash injection of $15 million from Coca-Cola -- to whom, he said, he's open to selling to. "I think that that's probably the best path forward for us unless we can get to a place where, very quickly, where the company is profitable," Normandin said. Normandin called his research into the Asian market "inspiration" for the text message payment system. "I found that in Asia it was probably the most exciting, just the speed at which the market is moving is much different than here in the States," Normandin said. He talked about the fading clout of influencers, the tough path forward for direct-to-consumer companies and the value of text robots (even if none has passed the Turing test) on this week's episode.

Roman launched in 2017 with a specific mission: Treating erectile dysfunction online, with doctor consultations and medication delivered right to customers. The company has raised $176 million in funding. It's also changed its name to Ro and turned Roman into just one of the the brands it owns, expanding its telemedicine offerings to also tackle nicotine addiction (with a brand called Zero), perimenopausal conditions (Rory) and more. "We really realized that we had built a platform that could treat and serve far greater needs than just that one condition area," said Will Flaherty, the company's vp of growth, on the Modern Retail Podcast. Flaherty talked about how Ro's differentiation lies in service over product, why TV is central to its strategy and more.

Rebecca Taylor dresses aim to land between the feminine and something more irreverent. "Back in the day there was cool people and feminine people, but they didn't really cross over," the company's president, Janice Sullivan, said on this week's Modern Retail Podcast. "In Rebecca Taylor, it's where that meets," she added. "It's okay now to be a feminine feminist. It wasn't, maybe, years ago." A year after the departure of its founder, the designer sells dresses in six of its own U.S. stores, and rents them out on both its own website and Rent the Runway. It also just launched a new program that will take older Rebecca Taylor clothing in exchange for credits and discounts for new. Sullivan talked about the shopping experience, the rental business and why not to worry about cannibalizing your own market.

Before startup founders woo thousands of customers, they often try to convince investors to get onboard with their company's mission. As a principal investor at Lerer Hippeau, an early-stage venture capital fund based in New York, Caitlin Strandberg is on the other side of the table. The fund has invested widely, including in DTC brands like Allbirds, Casper, Everlane and Lola. Strandberg joined the Modern Retail Podcast to talk about how the VC game has changed since the rebirth of direct-to-consumer companies, what she considers a waste of venture dollars and why early growth (in percentage, not in raw numbers) is key to gauging a company's potential.

This week, it's a look ahead at what 2020 may have in store for retail. Modern Retail reporters Cale Weissman and Anna Hensel join host Shareen Pathak for a roundtable discussion about the beats and developments they know so well, from how Walmart and Target will seek to challenge Amazon to whether venture funding for direct-to-consumer startups will dry up.

Michael Wieder, the co-founder of Lalo, is betting on the baby stroller market. "We know that you're putting your most precious belonging in our products," Wieder said on this week's episode of the Modern Retail Podcast. "They have to be safe, they have to look good, they have to be an extension of who you are. If you don't trust us, then why buy us?" Wieder and his co-founders Jane Daines and Greg Davidson saw the new-to-parenthood customer as one facing many first-time purchasing decisions without much information to go on. "You get to a stage in your life where you're forced to make hundreds and hundreds of purchasing decisions for products you've never used before. That's unlike anything else you shop for," Wieder said. After launching their stroller, The Daily, earlier this year, Lalo added a second direct-to-consumer product to their line-up: a high chair. Wieder joined the podcast to talk about how to challenge incumbent brands, the DTC business model, and Lalo's next moves as far as new products go.

For Helena Price Hambrecht the abundance of alcohol at every after-work event meant that hangovers seemed inevitable. "I knew that I had a problem. I knew that everyone else I knew had a problem where we were like 'god, are we supposed to do this forever and not die?" she said on this week's episode of the Modern Retail Podcast. "We're supposed to drink, drinking is part of life, but we all feel terrible. Why isn't there a better way to drink?'" She and her husband Woody Hambrecht founded Haus to try supplying that better way. The company's drinks are alcoholic, but only a bit more than the stuff you put in an Aperol Spritz -- the growing popularity of which proves the "demand for something lighter," Price Hambrecht said -- and other aperitifs. Millennials, the thinking goes, aren't drinking to get drunk. Haus' concoctions are also on the not-so-sweet (read: sugary) side, and are under the legal cutoff (24% ABV) for mailing bottles to customers. Price Hambrecht joined the inaugural episode of the Modern Retail Podcast to talk about founding Haus, focusing on PR at launch and what comes next for the direct-to-consumer industry.