The Niche Paradox: The difference between underserved and niche markets
While many of the newest crop of digitally-native, direct-to-consumer brands attempt to democratize luxury in one way or another, they still overwhelmingly attend to young professionals in urban centers like New York, Los Angeles and San Francisco.…
Actors, like brands, rise and fall based on performance
As more businesses strive to be defensible, competitive and long-lasting, the vast majority nevertheless lose relevance, fall prey to better-managed copycats, or fail to evolve to meet changing consumer needs—evidence that a brand’s status is never…
The promises and perils of digital waitlists
Last week I wrote about the authenticity of long lines, using Supreme and Everlane as contrasting examples. Long lines and limited scarcity are part of Supreme’s DNA, while they are out of place for a basics brand like Everlane. Either way, I noted…
The difference between Supreme and Everlane’s long lines
If you happen to be near a Supreme store on a Thursday around 11am, you’re likely to see hundreds of people waiting in a barricaded line for the latest drop. Just a few blocks away from Supreme, you’ll see a line of one or two dozen people outside…
Is Debt Divine or Disastrous?
While debt has proved problematic for bigger companies, it can also be a savior for smaller ones. In the direct-to-consumer horse race, brands are trying to scale faster than their competitors—most companies have turned to selling equity in exchange…
Should brands leave money on the table—or on the shelf?
Despite its envious position, Supreme is in an interesting conundrum: to keep growing, it either has to keep making more products or raise the prices of existing ones, but doing so will change the sellout characteristics for the brand. This is…
It takes decades to build a meaningful brand—and minutes to destroy it
In a previous edition of The Filter, we presented the concept that Brand and The Brand are two different entities. We defined Brand as “the accumulation of all of a company’s actions to make something meaningful and memorable” and we defined The…
What can the direct-to-consumer explosion learn from the farm-to-table movement?
In the mid-2000s, the farm-to-table movement transformed the food industry. Though the food industry is often ahead of others because it sells products that people physically consume, the consumer goods space—fashion, apparel, beauty, CPG and…
Virgil’s Ladder: From Vision to Vuitton
This week, after months of rumors, LVMH named Virgil Abloh—Kanye West’s life-long creative director, founder of Off-White, endless brand collaborator, DJ and former Fendi intern—as the new menswear director for Louis Vuitton. The appointment propels…
As Facebook advertising costs rise, digitally-native brands turn to traditional advertising
A Warby Parker pamphlet arrives in the mail. A Glossier billboard hovers above Houston Street. Clones of an Away wheatpaste coat a construction barrier. A Stitch Fix TV ad blares from the television. For a generation of digitally-native brands,…
Big brands need to unbundle themselves if they want to survive
Gap, Ralph Lauren, Abercrombie and Fitch, J.Crew and Aeropostale have thousands of people on staff, hundreds of retail stores, and complex global supply chains. But having largely failed to deliver shoppers better products, inspiring brands and…
The gift and curse of Amazon’s margin mentality
Amazon has an entirely different view of margin than most other companies. One of CEO Jeff Bezos’ most well-known quotes is, “Your margin is my opportunity,” signaling the company’s intention to use its scale to significantly drive down prices for…
Why is Walmart intentionally launching brands outside its ecosystem?
Last week Walmart announced that it’s launching two new standalone brands: Allswell for mattresses and other bedding products, and Co Squared for beauty and personal care. These are the first two standalone brands Walmart has launched since its…
Equinox’s foresight and the future of retail real estate
Today, consumers are spending more money on experiences rather than things. But despite this shift, the real estate industry’s main answer has been to fall back on its existing business model of renting out space—maybe this time to a restaurant…
Basics brands are commodities. Why do people keep building them?
The hidden secret of most businesses is that the more boring the business, the better the business—the flashier, the worse. This heuristic is especially true in the consumer goods landscape, where brands run the hazard of seeking attention over…
What is Amazon? Definitely not a conglomerate.
Standard Oil and General Electric—two of the most successful companies ever—are the go-to comparison for massive, interlinked companies. But those who call Amazon the Standard Oil or GE of the 21st century use a comparison that falls short and…
The difference between Brand and The Brand, and why neither are defensible
“The brand is defensible” is a phrase increasingly muttered across the consumer landscape. The challenge with a statement like this is that “brand” usually lacks a definition, further perpetuating an important misunderstanding: people are mixing up…
The uncertain road from a single product to lasting brand
A single-product company that desires to become a brand needs to diversify its products over time to maintain interest and evolve with the market. But few single-product based companies have been able to build lasting brands with a wide assortment…
Facebook is the ultimate middleman. Will brands cut it out?
“Cutting out the middleman” is a phrase thrown around endlessly across the consumer industry, often without much thought. Particularly catalyzed by the direct-to-consumer and digitally-native brand boom, the concept transformed from a boring…
Retail is having its Napster moment
Wired UK recently published a great behind-the-scenes piece about the company that makes stages and sets for the largest touring musicians around the world. Reading it illuminated a parallel between the music industry’s evolution and that of……
2017 Year in Review: 8 Fundamental Shifts Reshaping the Consumer Economy
2017 was yet another transformative year for the consumer economy. There were a range of new developments and trends from the last few years that continued accelerating. What follows is a recap of 2017, along with some predictions and…
The internet was supposed to eliminate sales associates. Then it revitalized them.
As online sales rapidly increase, Amazon takes a bigger piece of the ecommerce pie, voice commerce and virtual reality appear imminent and subscription models are revitalized, why do sales associates need to be part of the shopping journey at all?…
As gifting moves online, digital media is the new gatekeeper.
In yet another triumph for the rapid ascent of ecommerce, 2017 is the first year that the majority of gifting purchases will happen online instead of in stores, according to Deloitte’s annual holiday survey. Throughout the 20th century, third-party…
Brands think wholesale is the problem. Is it actually the solution?
How did wholesale end up as the enemy? It’s a question I frequently ponder when looking back at the last five years of the digitally-native gold rush, which has created a new crop of brands—Warby Parker, Bonobos, Outdoor Voices, Glossier, Away and…
Malls give Apple special treatment. Is it paying off?
For the past few years, various government and media publications have pointed a spotlight on Apple's tax-minimization efforts, which allow it to park over $111 billion dollars offshore. The New York Times published another big piece this week…
What is Stitch Fix? A platform, a retailer or something new?
Stitch Fix recently filed to go public, giving people the first look at the company’s health, unique characteristics and competitive advantages. While many consider Stitch Fix yet another subscription box company, it is much more complicated—and…
What does private label even mean anymore?
What makes a private label a private label? Is it the products sold under the label, the brand built around it, or the distribution it has access to? In a retail landscape where direct to consumer brands are making a limited number of simple…
From a digitally-native gold rush to an impending bloodbath
Will any digitally-native brands out-scale and outlast the 20th century heritage brands that came before them? This is the most pressing question for the digitally-native gold rush, which has led investors to pump hundreds of millions of dollars…
Why invest in Supreme when its secondary market is more valuable?
This week the Carlyle Group, a big private equity firm, bought a stake in the one-of-a-kind brand Supreme for $500 million, valuing it at over $1 billion, making it the most valuable privately-held streetwear brand. Industry sources…
Direct to consumer brands vs commodities: who will prevail?
A few weeks ago, Dave Ambrose tweeted out the above image showing an Away suitcase and an Amazon Basics replica side-by-side. The Away bag costs $295 and the Amazon Basics one is $89.99. Away is one of the current darlings of the direct to consumer…
Amazon and Absolutism
I've always been fascinated and perplexed by the rhetoric that brands use when talking about Amazon. It's usually a combination of uncertainty, confusion and absolutism. Most of this, understandably, comes from fear. As every day passes, the saying…