This week, we look at the distribution channels that are a draw for fashion brands in 2021.
The perfect-match niche retailer
Sustainable sleepwear brand More Sunday, launched in 2017, has been a DTC brand exclusively selling through its e-commerce site for the last four years. But that will change come March 14, when multi-brand sustainable retailer Tiare Rose officially launches.
“I couldn’t say no,” said Danielle Wu, founder of More Sunday, of signing with Tiare Rose. She had planned to focus on DTC and marketplace sales, but decided to “experiment with” Tiare Rose, as it closely aligns with her vision and mission for the company.
Tiare Rose’s focuses are two timely concepts: sustainable products and livestreaming. Founder Kim Castellano began planning it during retail’s pandemic-driven reset, in May 2020.
The focus on sustainability was the biggest selling point for Wu. “It felt like they would be an extension of my own DTC channel. Being able to [further] spread awareness about toxic chemicals in clothes is more important than having full control of the customer.”
Tiare Rose will launch with 29 brands, all of which fit criteria in its two established pillars of environmental impact and social responsibility. They’re also heavy in categories that skyrocketed in 2020, like activewear (including Alala) and skin care (Kypris, Mymiel).
To amplify the sustainability message, Tiare Rose will host regular, QVC-style livestreams — Wu will be featured in one leading up to Mother’s Day. There’s also its physical store, in Sun Valley, Idaho.
“The idea [for the livestreaming component] was: How can we work with brands to help them grow sales, and how can we offer customers a better shopping experience?” Castellano said.
Along with brand founders, the livestreams will be hosted by micro-influencers and, eventually, editors, said Castellano. They’re filmed in the store and housed on the brand’s website, rolling out on a near-daily basis, to start. When a livestream is in session, shoppers on any page will see a flashing gold “Live” button in the bottom left corner. There’s also a “Join Live Shop” menu item and a schedule of upcoming livestreams in the middle of the homepage. The livestreams are viewable for a week after each event.
“We want to provide an editorial take on [products], where it’s not just sell, sell, sell, buy, buy, buy,” said Castellano.
In addition, Tiare Rose offers brand exposure through Instagram, its newsletters and press, said Wu. Out of the gate, Tiare Rose will use organic Instagram posts and a referral program to drive people to the site.
“I’m a team of one,” said Wu. “Unless you have millions of dollars, it’s very difficult for a small brand to compete with retailers on advertising and timely content.”
Another clinching factor was that Tiare Rose promised to discuss any promotions with brands before launching, Wu said.
Castellano said Tiare Rose’s partnerships with brands vary, based on each company’s objectives and capabilities. More Sunday’s is a “hybrid,” incorporating dropshipping and wholesale pricing.
Castellano’s goal is to have 100,000 customers by the end of the year, with each spending an average of $150 a month.
But throughout that growth, she plans to stay laser-focused on adhering to the standards she’s communicated to sustainability-focused partners. That’s one reason she has no plans to fundraise anytime soon.
“I don’t think having an investor is bad, but you do have to give up a lot of your dreams,” said Castellano. “And there are so many ethical points of this [business] that are important to us. I don’t want to sell my soul and my values.”
The minimized-risk brand store
After opening two New York City stores through retail-as-a-service provider Leap, clothing essentials brand Goodlife is opening two more stores by the end of the month: an Austin location on Friday, followed by a Scottsdale store on March 26.
“Commerce in those cities have been less affected by the pandemic,” said Chris Molnar, founder and co-CEO of Goodlife. In addition, based on sales data from the company’s e-commerce sales and lone retail partner Nordstrom, the locations house large populations of Goodlife shoppers.
Working with Leap, Goodlife opened a Bleecker Street store in late 2019, followed by a Hudson Yards location in October 2020. The leases are owned by Leap, which manages all of the stores’ operations outside of stocking them with product and marketing them. That includes providing in-demand services like curbside pickup, as well as hiring and training staff — associates at Hudson Yards have been hosting virtual appointments in the store’s downtime.
“The upfront capital that Leap puts into these locations is huge for us,” said Molnar. “Plus, you’re not entering into the traditional lease liabilities that other companies have had to take on. When everyone was scrambling and renegotiating during the pandemic, we weren’t dealing with it.”
Amish Tolia, co-founder and co-CEO of Leap, said the company managed to grow in 2020, thanks to updating its market development plan to focus on cities other than New York, Chicago and San Francisco. He also owed the growth to new demand from brands, after they experienced great e-commerce growth and factored the unit economics of being omnichannel.
Tolia said landlords play nice with Leap, as they see it as less of a credit risk, compared to a mono-brand store. “If one brand doesn’t work in a location, we can move that brand out and move in another brand in 5-7 days,” he said, comparing the process to strategically merchandising a department store. “They won’t wind up looking at a dark box for 6-12 months.”
On the flip side, he said, Leap’s data can direct brands to their ideal location at a given time — based on an area emerging as a home goods hub, for example. “We provide brands with flexibility so they don’t need to be in a location, if it’s not working for them.”
Tolia said Leap is seeing a rise in “bigger, higher awareness brands” that have experience in retail but are now looking to offload some of the risk of a lease. He’s also seeing a boom in categories including home furnishings and athleisure, and fewer formalwear clients. Among other trends is landlords seeking “interesting ways to activate their spaces,” to balance out the mass vacancies.
Moving forward, Leap will open more stores in Austin and Scottsdale to “create density in those markets.” The plan is to enter the Dallas market in the second quarter, and to establish a presence in Los Angeles and Orange County. It will open 25-35 new stores by the end of the year, adding to its existing dozen.
While Goodlife has more customers in L.A. than Austin and Scottsdale, Molnar said that, for now, the company “didn’t want to go into another market that’s depressed.” By the end of the year, however, it will likely have Leap stores in L.A. and South Florida, he said. The goal is brand awareness and providing customers an opportunity to feel and touch the product.
Currently, Goodlife’s sales are equally split between direct and wholesale, but growing DTC sales to be 80% is a focus. It doesn’t plan to take on other wholesale partners. Molnar called the Nordstrom partnership “a very traditional, profitable, high-margin, replenishment-driven business.” The company also does “some business” on Amazon, he said.
Goodlife will market the new stores via geo-targeted social media ads in the markets, as well as through its own social media channels and emails. It will offer new customers 15% off for signing up for its emails, as it does through its website; all will get a gift with purchase. “It’s going to be a lot of digital marketing, because you can’t do events now,” said Molnar.
Concept to sales floor: One non-bra brand’s journey to launch
Annette Azan, founder of Nuudii System, and Kirsten Horning, principal at XRC Labs, on the launch of what Azan calls her “boobwear body essentials company.”
Finding the white space
Azan: “The Nuudii is to bras what leggings are to pants. It’s a completely new product that took three-and-a-half years to develop. We did a lot of trialing with women over the years to get this right. And then once we launched, we went with some real marketing [featuring] our customers. We basically just took their experiences and used it for marketing. Our first adopters are women who like to go braless or really hate bras. And, interestingly, they span ages 18-65. Our largest group that is actually growing is 45-plus.”
Azan: “We launched on Kickstarter in July of 2019 and did amazingly well. We did $750,000 in sales in 30 days, which was a great proof of concept. But we had to go from manufacturing nothing to making 18,000 products. So we basically rolled from Kickstarter to Indiegogo to keep raising. By the end of the year, we did almost $1 million in sales, for six months. After that product shipped, I met Kirsten at XRC Labs.”
Horning: “That was a year ago, as of January. XRC Labs has invested in about 100 companies, to date, and we’ve been around for about five years. We invest in everything, from new materials and textiles, all the way to supply chain [solutions] and retail tech, to consumer goods like Nuudii System. We’re always looking for the disruptors, and movers and shakers in the retail and consumer goods industry — what’s going to be the next big thing in three to five years. And we’re looking for fantastic entrepreneurs, as well.
For Nuudii [System], we provided pre-seed capital there. The biggest thing for us, besides funding, is that we try to put all of our entrepreneurs in front of the right people — the best mentors within our network and the best retailers. We help them create partnerships beyond our team. Our staff of 12 doesn’t know everything about everything.”
Azan: “Rebuilding our website [with XRC Labs] gave me the push to really be bold enough to say what Nuudii really is. We’re calling b.s. on the bra industry, and we’re just saying that. Razor company Billie is one of [XRC’s] great cohort brands, and Billie doesn’t mince words. And that gave me a lot of courage.
And now, we’re in the middle of an amazing experience: We had the chance to sell through [email protected]’s Self-Love store for two months, which wraps on March 15. So far, we’ve had an 81% sell-through.”
Azan: “I can passionately, truthfully say that Nuudii System is a CPG brand, with its tiny, small packaging. This is the future, right? You look at stores’ bra and lingerie departments, and they’re like dinosaurs. This is never going to be hanging on a hanger. You’re never going to try it on.
My mentors and I have a lot of discussions about what retail partners would make sense. Sephora would be my biggie. But on our way there, I think we can sit like Spanx in areas where we can help retailers sell fashion. So if you’re shopping Farfetch or Nordstrom, a Nuudii pops up when you’re shopping for a one-shoulder dress.”
5 questions with the founders of NuOrder
On Wednesday, B2B e-commerce platform NuOrder announced a $45 million round led by Brighton Park Capital and Imaginary Ventures. Hours later, its founders Olivia Skuza and Heath Wells sat down with Glossy to discuss retail’s digital future.
How did the pandemic impact your business?
Wells: “We immediately did some market research to see what retailers and brands wanted. And we threw all of our muscle onto a product called virtual showroom, and that was a bet that paid off. We had three consecutive record quarters: Q2, Q3 and Q4.”
Skuza: “People would normally be doing business by going to showrooms to look at product, going to trade shows, going to fashion weeks. That wasn’t an option anymore. Plus with the reduced size of teams, companies had to figure out how to do more with less. In the last 12 months, we’ve seen an 87% increase year-over-year in the number of retailers placing orders [on NuOrder], and a 300% growth in our European business. Technology is now the solution to fueling a lot of these [retail] businesses.”
What’s the plan for your new investment dollars?
Wells: “The bulk of the money is going to go into R&D. We’re a tech company, and that’s why we’ve won. We bet big on products. And we think that’s what customers buy, and that’s what they love. And then the next bet is new markets. We’re really making a stamp on Europe, but there are a bunch of emerging markets that we’re [eyeing]. And then, finally, as we go more global, we need to be able to support customers in every time zone, in multiple languages.”
What about long-term goals?
Wells: “We have this vision of this single platform, where there is a common data standard. What happens today is that brands call a product whatever they want. So if they’ve got a jacket, they’ll maybe call it a moto, because it’s a motorbike jacket. Or they’ll call it a coat, or a trench. What happens is that if you go to somewhere like Net-a-Porter, they’re calling it coats. So Net-a-Porter, unfortunately, gets stuck with translating all of that data into their own data. So we’re building the mapping and the standardization to do that. We feel like that is, without a doubt, our responsibility — to say, ‘We’re gonna call it black. It’s not midnight, it’s not noire.’ If people still want to call it that, that’s fine. But you’ve got to then have it mapped into the common language once, and then that unlocks everything else.”
Skuza: “And that’s really going to unlock the future around the opportunity for discovery. Everyone needs to be talking the same language in order to fulfill and present a best assortment of products and brands. We want to help accelerate some of that thinking.”
Are physical trade shows going to exist in the future?
Wells: “Humans are tribal beings. We all need to see each other, and the energy that we have when we’re in a room together is something that should be valued. We sell a digital solution, but we’re realists. I think [trade shows] are going to happen at fewer times through the year, and digital and the physical will work hand-in-hand; they’re not at odds with each other. Going to physical appointments is more about the relationship: ‘I want to come and see you, I want to talk to you, I want to look at you in the eyes and understand your business.’ And then the business side is going to happen within a platform. Everyone sees technology as just a way for efficiency, and that’s true. But it’s more about what we do with that data that can enable people to do their jobs better. So if I’m a buyer, I can now drill down on any data point, and I can visualize what my storefront is going to look like. You can unlock all these different things.”
In terms of drilling down on data, are more brands seeking out sustainability-focused brands and BIPOC-founded brands to meet new goals?
Wells: “Yes. Retailers can now filter down to diversity-based brands, as well as sustainably-based brands. We’ve added metadata to make that more filterable. We did a lot of work with the CFDA around promoting those types of brands in labeling them, so they can get the exposure they deserve.”
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