1) Fans of Outdoor Voices call out brands for copying its products, proving more powerful than non-existent legal protections

What happened

  • Outdoor Voices (OV) was the first brand to popularize its colorblocked leggings and tops made out of chunky stretch heather fabric. Over the past few years, other brands have taken inspiration from (or copied) the style, to varying degrees. Bandier, the multi-brand ecommerce retailer, is the latest to build off of Outdoor Voices with its new private label, We Over Me.
  • Many Outdoor Voices fans, in addition to OV CEO Tyler Haney, quickly called out Bandier for its rip-offs, which garnered OV some positive press.

Why it matters

  • Bandier is not the first brand to copy OV, but it definitely has the best-executed imitations. However, OV has no way to copyright or trademark these designs, since apparel does not have many of the same legal protections that other types of products or materials do.  
  • Instead, the brand relied on its supporters to make a scene on social media, which generated a significant amount of press. The paradox of the internet is that even though it is much easier to rip off existing work, as Bandier did, it also makes it possible for customers to shame these brands on a previously unimaginable scale. This, in turn, might be stronger (and cheaper) than any legal protections brands could dream of. In the minds of many OV customers, Bandier tainted its brand and is no longer buyable.
  • Additionally, this incident touches on many of the ideas we explored in Building Bulletproof Brands, which talks about how certain communities and networks can remain potent even when companies make knock-off products. As it happened in this case, a brand’s fans are often the best protection they have from rip-offs.

2) Amazon raises seller fees for fashion, apparel and jewelry

What happened

  • Amazon has raised the fees it charges third-party sellers on Amazon Marketplace. For items over $75, Clothing & Accessories fees went up from 15% to 17%; Handbags & Sunglasses category from 15% to 18%. Items under $75 remain at 15%. For jewelry, the company now takes 20% on the first $250 of the price and 5% beyond that.

Why it matters

  • There are a few possible explanations for this move, and it likely is a combination of many factors. First, Amazon could be raising fees because of high return rates on these items, for which fit is important and harder to judge online. Returns are expensive to process and it is in the company’s interest not to lose too much money in the process. It’s also possible that clothing is more expensive to handle at Amazon’s fulfillment centers and it needs to make more money for these efforts.
  • Second, the adjustment could be rooted in the company’s desire to push more people to sell its products to Amazon via wholesale, rather than using Marketplace, which is more of a consignment arrangement. However, this is less believable because Amazon really likes the scale that the Marketplace business provides and the fee change was not significant enough to imply that Amazon prefers wholesale.
  • Third, Amazon may feel confident enough that this fee change won’t make a major difference in a company’s propensity to sell its products on the platform—instead, Amazon may be gently guiding sellers to offer cheaper apparel products, where it likely sees more success, and to offer more expensive jewelry, a category it would like to grow.
  • Amazon always acts with significant intention and understanding when it comes to pricing, and it’s important to look at these changes through the lens of incentives for buyers and sellers.

3) 11% of U.S. Starbucks transactions now come from mobile ordering

What happened

  • While many brands have attempted to create a mobile app to improve on-the-go ordering and drive incremental sales, most have failed to drive consumer adoption at scale. Starbucks, whose loyalty program grew 11% to 14.2 million members, is one of the clearest leaders in the loyalty and mobile payments space.

Why it matters

  • Customers enrolled in loyalty programs tend to increase their spending, and Starbucks member spending now makes up 37% of U.S. sales. It’s vital for offline retailers to create sticky and usable loyalty-programs that save time and drive adoption for both shoppers and brands, similar to Sephora’s Beauty Insider program and the Starbucks Rewards app.   
  • Using an app makes it easier to spend money without thinking, while also making Starbucks an increasingly important part of people’s daily routines. It will be interesting to see where this growth tops out and what percent of customers are interested in the program. There’s also the interesting challenge of advertising a program to customers who zip in and out of the store quickly—the benefits have to click instantly.

4) Fake products continue to slip past The RealReal’s authenticity screens  

What happened

  • The RealReal is the leader among a new generation of vertical-specific secondary market platforms, in this case specializing in luxury and high-end goods. But there is growing concern that more fake and inauthentic products are being sold on the platform as the company scales. The RealReal has raised over $173 million dollars and sold over $500 million in gross merchandise value in 2017 (it takes a percentage of these sales), pushing the limits of authentication at scale.

Why it matters

  • Authenticity is core to the company’s pitch as it aims to become the default place to list luxury products. The company has over 60 in-house experts that help ensure products are authentic, but the vetting team is clearly not robust enough to match The RealReal’s new levels of scale.
  • It will be important to watch if fake products continue to slip past the experts as the company grows, which would necessitate an even larger highly-trained (and expensive) staff to keep the platform afloat. Other technology platforms might not have as much of a need for this, and could possibly outsource this work to a foreign country. But given the importance of the screening process to the company’s business model, authentication will likely grow as a cost center at The RealReal, speaking to the challenges of scaling technology platforms that still rely on human policing.  

5) IKEA-TaskRabbit partnership takes off in the U.S.

What happened

  • IKEA furniture customers seeking to circumvent DIY assembly now have the option to hire an employee from TaskRabbit, a startup that IKEA bought in 2017, which allows users to bring in temporary hires to their homes for delivery, housekeeping and other home services. Shoppers can schedule from TaskRabbit in-store after making a purchase, or with the TaskRabbit website or app, starting with two stores in California, with expected availability reaching all corners of the U.S.

Why it matters

  • As retail stores seek to differentiate themselves from online competitors, many are turning to value-added services to save customers time and make installation easier. IKEA’s partnership with TaskRabbit puts the Swedish company on more equal par with other tech-friendly companies that sell home goods on-demand like Amazon and Wayfair (TaskRabbit also has a partnership with Amazon).
  • The services increase IKEA’s presence in customers’ homes, as well as the value of its products, which customers can enjoy faster and more easily. If executed correctly, it should encourage customers to shop more frequently with IKEA as it solves one of the major pain points of purchasing.
  • However, it will be important to watch how scalable this service is. TaskRabbit was sold to IKEA (not bought) after failing to make money and scale. Finding quality workers in and around IKEA stores will definitely be a challenge. Can IKEA mitigate many of the problems TaskRabbit ran into as a standalone company, or will it make the same mistakes?