Glossy+: New retailers are betting big on DTC brands

Opening a store is one thing. Opening a four-story, 15,000-square-foot store with a 20-year, $45 million lease in NYC’s retail-prime NoHo neighborhood is quite another.

Tal Zvi Nathanel and Amir Zwickel, entrepreneurs from the marketing and tech, and real estate fields, respectively, did just that this week with Showfields, their version of what like-modeled companies are labeling “the Shopify of physical retail.” In short, they set the stage for a number of digitally native brands to test physical retail with minimal investment and effort.

“There's this gap,” said Nathanel, of the duo’s inspiration. “Thanks to direct-to-consumer brands, there’s more innovation out there than at any other point in history, but in the streets, we see less and less and less innovation; it’s just boring.”

The store’s main floor, which is the only level now opened, is dedicated to wellness. Nine brands, each with three- or four-month leases, occupy odd-shaped spaces separated by walls and doorways. Included are electric toothbrush brand Quip, rowing machine brand CityRow, weighted blanket company Gravity, and Boll and Branch, which sells bedding. Custom hair-care brand Function of Beauty’s room features an Instagram-perfect bathtub, and the setup of subscription flower company It’s By You was designed to facilitate workshops. A space that will be hosted by a different influencer every month is currently lined with tile to look like a shower and features Babba Canales’s bathroom product picks by various brands. At a far end, coastal vegetarian restaurant By Chloe hosts concept restaurant Thrills by Chloe, inspired by a funhouse and meant to be a testbed for menu items. CBD-infused desserts are on the menu.

“Our model is very similar to the original Selfridges; shoppers are walking in and seeing things for the first time, every time,” said Katie Hunt, Showfields’ chief brand officer, who noted that there’s a waitlist for the second round of tenants and no two competitors sell in the space at one time.

Nathanel said all included brands are design-oriented, consumer-centric and mission-driven, plus they’re all after the same customer and offer accessible price points.

In February, the rest of the floors will open -- one dedicated to home products and one to fashion. The fourth will be a co-working space used for launches, lectures and community classes.

Nathanel and Zwickel came up with the idea for Showfields two years ago. If the concept pans out, they plan to open locations in major cities around the world, from L.A. to Milan to Tokyo. In 2019, the goal is to open two stores, likely with a West Coast location coming next. Eventually, Nathanel said, they want around eight stores in NYC, in neighborhoods in need of a shakeup, like the Upper West Side, the Upper East Side and Williamsburg.

Like B8ta, Bulletin, Fourpost and Neighborhood Goods, Showfields’ goal is to break down retail’s barriers to entry for brands. A technology platform is set up to make the process of opening a store simple: There are six steps, including choosing a package and signing an agreement void of “fancy words,” said Zwickel.  Packages include a showroom model, where shoppers can order in store and have select items shipped, and a cash-and-carry model, where the brand stocks product on site. In all cases, Showfields provides a long list of necessities and services, including store design, staffing, security and tech for purchase transactions. Leases for brands range from $7,000 to $20,000 per month.

“There's not only Macy's; there's Macy's, there's Bergdorf, there's Saks, there's Dover Street Market, there are so many department stores,” said Nathanel, when asked about Showfields’ many competitors. “And there should be more shared spaces, because these young brands are what it's all about right now.” –Jill Manoff

Hair care is going through a transformation
The hair-care category is getting some lift lately, as more brands find opportunities to grow their business in the sector.

This week, Glamsquad announced it will begin selling its own a line of eight products and a travel-size kit to customers, after having completed over 500,000 appointments as a salon services platform bringing makeup artists and hair stylists to customers’ doors. The products will be sold on Glamsquad’s website and app.

This closely follows news that AI-powered hair-care brand Function of Beauty shipped its 1-millionth order, fellow AI-powered brand Prose added a new product offering and raised $18 million in funding, and eight-year-old Ursa Major launched into the category.

According to NPD Group, the hair market is the fastest-growing category in the prestige beauty space, worth $645 million, up 19 percent from last year. What’s fueling the fire? Clean beauty, technology, personalization and luxury ingredients. These were once considered trends, but these have now evolved into pillars of the beauty industry, and hair-care brands are now tapping into these categories.

For its part, Glamsquad relied on data gathered from its 500,000 appointments to inform its product development. For example, its hair mask comes in an aerosol can and only needs to be left on for five minutes, compared to the usual experience of scooping out the product and leaving it on for 15 minutes. This was due to consumers talking to Glamsquad stylists and expressing their desire for products that worked efficiently and quickly.

We were really driven by this idea of human-to-human R and D,” said Amy Shecter, chief executive officer of Glamsquad. “It was born out of this intel and technology.” –Emma Sandler

Private-label brands are seeing holiday sales
As more brands are going the direct retail route, there’s been an upswing in retailers debuting their own private labels -- from mass retailers like Target, for which private labels are their bread and butter, to luxury retailers like Net-a-Porter and Yoox, which have each introduced several new labels in the past year.

This past Black Friday/Cyber Monday was the first test of these newly-created private labels in the intense holiday shopping season. Yoox Net-a-Porter shared with me some data from the holiday shopping weekend showing its private brands performed better than expected: Yoox’s AI-powered label 8 by Yoox, for one, sold more than 3,500 pieces in two days.

Brands and retailers are not going to completely separate any time soon. But as direct retail seems more appealing to more brands, you can’t blame retailers for being a little defensive. –Danny Parisi

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