Could localized manufacturing be the solution to endless markdowns?

Today, two seemingly different questions are top of mind for many physical goods brands: 1) How do we end the catastrophic parade of endless sales and markdowns?; and 2) Is there a way to bring back domestic manufacturing in some capacity? But are…


Word of mouth without a network effect is not a competitive advantage

In Building Bulletproof Brands, a Loose Threads series about how the internet destroyed traditional moats for physical goods brands but also created new ones, I wrote about how the power of word of mouth is not what many think. As new physical goods…


Building Bulletproof Brands — Part III: How networks and tokens could reshape the economics of physical goods brands

Part I of this series looked at the changing landscape of brand longevity and how the traditional formulas that used to make brands defensible are now obsolete. Part II proposed a new formula that harnesses networks as the only defensible moat…


Building Bulletproof Brands — Part II: Networks are the strongest moats for consumer goods brands

Part I explored how the internet fundamentally changed the playbook for building durable physical goods brands. Before the internet, mastering product, brand, distribution—signified as (product + brand + distribution)—was enough to make a brand…


Building Bulletproof Brands — Part I: Why don’t brands last like they used to?

How does one build a brand that lasts for centuries? Today, in the consumer goods space—specifically in apparel, fashion, footwear, beauty, cosmetics, accessories, and furniture—it's an especially challenging quandary given the ferocious speed at…


Mickey Drexler and the death of a supply-driven world

J.Crew’s Mickey Drexler Confesses: I Underestimated How Tech Would Upend Retail read the headline of a big feature in the Wall Street Journal, which ricocheted around the retail and technology world last week. The piece highlighted J.Crew's…


Offense vs defense: Amazon and Walmart’s diverging acquisition strategies

Walmart's acquisition spree in the consumer space has earned the company a lot of press recently. The speed of these acquisitions is a bet that buying companies, brands and talent is the only way for Walmart to catch up to Amazon, its biggest…


What’s happening with retail and fulfillment job growth?

There's a lot of commotion right now about the loss of retail jobs and the impending death of retail. While retail isn't dying—channels as foundational as physical stores don't "die"—legacy retailers are struggling. Retailers are going bankrupt and…


Amazon is a catalyst, not a middleman, in a direct to consumer world

This May, Amazon is holding a summit for consumer packaged goods (CPG) companies, according to Bloomberg. The goal is to convince CPG brands to rethink everything from manufacturing to packaging for the ecommerce-driven world we live in. Producing…


Why brands can’t escape the reality of politics

I recently attended a discussion with Jacques Panis, the president of Shinola, a company convinced it exemplifies the unrivaled power of American manufacturing and the ingenuity of the private sector. Panis spent a considerable amount of time…


If people are price-sensitive to ethical products, then redefine the pricing scheme

Liz Pape, the founder of Elizabeth Suzann, a direct to consumer brand based in Nashville, recently wrote a thorough post about the complexity of making ethical clothing and running a successful business in a time where consumers are increasingly…


What happens when beauty, health and wellness products move from standardized to personalized?

Right now, if you walk into your nearest grocery store, drug store or department store, you'll find at least thirty different types of toothpaste, shampoo, conditioner, deodorant, mouthwash, sunscreen, moisturizer, makeup, lipstick, foundation and a…


Loose Threads 2016 year in review: six trends at the intersection of fashion, technology and commerce

2016 was quite a year for fashion, technology and commerce. This was the year where the reality of different ventures, channels, and theses started to become clearer, as we moved on from the pure hype cycle of endless venture funding and direct to…


The Scale Series — Part V: Bigger isn’t always better

Part I of this series explored the capital conditions that got us to a place where many brands swung for the fences, while Part II and Part III investigated some of the successes and failures in this growth environment. Part IV proposed a new…


The Scale Series — Part IV: Localized Luxury

The early 2000s were full of brands launching adjacencies, some of which we looked at in Part II and Part III. Michael Kors, Marc Jacobs, Burberry and many others created endless diffusion lines and offshoots that tried to take the spirit and cache…


The Scale Series — Part III: Brands that have endured

In Part II we looked at brands that have overscaled their promise. Now, we'll examine successful fashion brands that have balanced their creative and commercial aspirations over the long term, which allows the strength of a brand to compound.


The Scale Series — Part II: Brands that overscaled

In Part I, we looked at the factors that both businesses and brands need to consider when scaling. With this foundation, we'll now examine some of the failures and some of the successes in the fashion industry. This piece will look at the former,…


The Scale Series — Part I: How and why brands overscale

A person starts a business to grow it. The general goal is to earn some revenue, and then some more revenue, and then lots and lots of revenue, while being profitable along the way. The process of getting there is often called scaling the business,…


Nasty Gal: the dangers of ephemeral growth and focus

Nasty Gal filed for Chapter 11 bankruptcy protection last week, which allows the company to reorganize its finances but continue operating. The company, started by Sophia Amoruso as an eBay store selling vintage clothing in 2006, quickly grew over…


Buzzfeed Product Labs and the intersection of everything

The most interesting piece of news last week was that Buzzfeed is formally launching a commerce lab. Named Buzzfeed Product Lab, and led by Ben Kaufman, the former founder of Quirky, the goal is to bring the Buzzfeed mentality—and its massive…


Hype vs discovery: lessons from the Spectacles rollout

The world is full of hype. Hype starts as a whisper, then turns into a growing thunder, finally transforming into all out hysteria. This chain of events can apply to anything. A new brand, the latest sneaker drop, "Hamilton." The problem,…


From online to offline: cost structures and sunken costs

The future potential of a business is closely linked to where it stands in the present. If the future is headed north but the current business is positioned south, it's going to take a lot of work to reorient itself. In the commerce world, the most…


Decoding Amazon’s Fashion Ambitions

Getting consumers to buy luxury products on Amazon.com is just one small piece of a much wider strategy to disrupt the fashion industry like never before. This article originally appears in the Business of Fashion.


When replicating your previous success isn’t enough

The biggest head-scratcher (that probably should not have been a head-scratcher) last week was that Totokaelo, the well-known Seattle boutique that opened a flagship almost a year ago in New York, had sold to Herschel Supply Co, the company that…


Are algorithms the future of factoring?

Capital is the lifeblood of a business. For companies that make physical things, such as fashion brands, accessing the right capital at the right time is crucial. Both direct to consumer and wholesale brands have to pay for products to be…


At the whim of a buyer

People have been selling things since the beginning of time. A transaction between two people or businesses is nothing new. More recently, the nature, context and demands of the transaction have changed. Deals can be more complex, take longer, and…


“Cutting out the middleman”

If I had to pick one phrase that best sums up the current state of ecommerce startups, “cutting out the middleman” would be it. Almost no other phrase has been uttered so much while simultaneously being the founding pillar of so many soon-to-be…


Amazon’s success phasing out list pricing is exactly where JCPenney failed

There's an article in the New York Times entitled Amazon Is Quietly Eliminating List Prices. List prices, or manufacturer suggested retail price (MSRP), serve two main purposes. First, it's illegal for a company that sells goods to a distributor or…


Vetements follow up: Kanye, staying in stores longer and selling online

The response to my piece on Vetements and the exaggerated death of wholesale has been really exciting. The piece's contrarian view clearly resonated. Even so, there are a few points I want to expand on. Adam Wray, from Fashion REDEF, sent me a nice…


Macy’s, newspapers and Amazon eating the middle of the retail market

The middle of the retail market continues to evaporate. Two articles recently summed up this transformation: Big-Box Retailers Have Two Options If They Want to Survive, in the Harvard Business Review, and The Macy's factor in Politico. Big-box…


Vetements and the exaggerated death of wholesale

There's a great piece in the Wall Street Journal called The Cult of Vetements, a detailed look at the Paris-based fashion brand that has, since 2014, been the talk of the industry. The piece goes into detail about the brand's pricing, production and…


A Prime misunderstanding: explaining Amazon Prime’s success

Amazon Prime is the greatest and most misunderstood loyalty program ever created. This is a loyalty program with no point system. A loyalty program customers have to pay $99 a year to be a part of. Prime is not predicated on signing up for another…


Vertical vs horizontal mindsets: the fashion tech horserace

During the most recent Exponent podcast, which was a podcast about podcasts, Ben Thompson made a fascinating point about the current media landscape. He was reminiscing about the focus of current media platforms to organize vertically. Medium,…


Modernizing fashion education

I had a great talk with Doug Hand, the eloquent and well-known fashion lawyer, on the latest episode of the Loose Threads Podcast, titled "Navigating the Legal Complexities of the Fashion Industry." Towards the middle of the episode, we were…


Chat bots and interfaces in the fashion industry: a hybrid approach

Chat bots, the automated and sometimes smart contextual messaging systems, are all the rage, fresh off the heels of Facebook's annual developer conference and the release of Kik's bot platform. Think piece after think piece is trumpeting chat bots…


Artificial intelligence and fashion: a platform play

Artificial intelligence, often called AI or deep learning, will undoubtedly transform the fashion industry. This transformation will have a few important qualities: 1) AI will be a platform play, not something brands build and launch individually;…


Friction and the future of shopping: finding a sales associate

Tracking down a sales associate in a store is a big pain point. Sometimes they are busy, sometimes they aren't paying attention, and sometimes you're in a dressing room and your options are limited. Some brands, like Rebecca Minkoff, have…


A roundup of fashion tech startups from Y Combinator’s Winter 2016 batch

Y Combinator, the famed Silicon Valley startup incubator, hosted a solid amount of fashion tech startups in its most recent batch. Below is a roundup the eight companies, ranked in terms of their impact on the industry. Plenty to think about here.


Push vs pull: helping customers discover the right products

I used to find a lot of my reading material on Twitter. I followed a bunch of media sites and writers, and as articles popped into my feed, I would read them or save them for later. I liked that this process was both immediate and direct; I felt…


Supply chain and cashflow: two keys missing from the CFDA’s fashion system report

Last week, the CFDA and Boston Consulting Group released the results of a study about the future of the fashion system, entitled Examining the future of New York Fashion Week. There's currently a lot of anxiety in the fashion world and many corners…


Friction and the future of shopping: brand-specific apps

There are no shortage of ideas about the future of shopping and retail. The industry is spending an immense amount of energy deciding which technologies will power what comes next, from beacons to apps to self checkout to virtual reality. The media…


Selling wholesale for the right reasons: gross margin vs net cash

A recent article in Business of Fashion called Can Young Luxury Brands Bypass Wholesale? looked into the relevance of wholesale given the rise of direct to consumer labels. The piece had some interesting insights, drawing on points from Warby…


A data-driven blueprint for building a fashion brand

The fashion world has always had a love affair for people who stick to their gut. "I just knew this would be a big seller." "I woke up one day and it popped into my head, and then we had the new It Bag." The problem is for every time someone says…


Ignoring effective frequency: why buy buttons failed

Many considered buy buttons—little additions to social networks that allow users to buy what they were seeing—a major step forward for social commerce. Instead, they faltered. Conversions were dismal. Buy buttons failed for two reasons: 1)…


PayPal is an emerging brand’s best friend

To many people in the tech world, PayPal's days as an innovative company are long gone. The company brings up memories of an early frontier in web payments in the mid 2000s. But for an emerging brand, which often lacks a consumer's trust early…


Augmenting commerce with social, not the other way around

Companies across fashion and ecommerce have tried to bridge the divide between social and commerce by throwing boatloads capital at the problem. These efforts have been largely unsuccessful. Buy buttons and its ilk don't convert as expected,…


Emulating Facebook’s News Feed will fix fashion’s inventory problems

Fashion's retail cycle is dominated by endless sales and markdowns, which is highly problematic for brands and retailers. This is the ultimate race to the bottom: sales start earlier in the season, prices drop lower than before, all with the hopes…


Press is like crack and how fashion brands can stay off it

The fashion world looks at press as the holy grail. The common wisdom is that press is the best way to build a company and brand. The thinking is often along the lines of: If only we get press on this will the brand take off and we'll make a…


The fallacy of an online-only brand leading to immediate prosperity

When you start a new venture in a new industry, it’s easy to question why certain things exist. This is healthy, possibly mandatory, if you want to make an impact and stay ahead of the curve. But it’s highly problematic to take action without…


How Retailers Structurally De-Risk Their Business

In the fashion industry, the power to influence, create and reinforce critical structures rests at the top of the supply chain. In many cases, retailers hold this position. Some retailers are mono-brand retailers, meaning they design, produce and…