1) Nordstrom opens its first standalone men’s store, relying on data to cultivate its foray into New York City.

What happened

  • Nordstrom’s first standalone men’s store—and first store in New York—will open this Thursday in Manhattan. The store enters the market at a time when the menswear industry is growing faster than women’s apparel—in the next three years, it is expected to grow 3%, valuing $33 billion by 2020, up 14% from 2015.

Why it matters

  • The question that plagued Nordstrom while the men’s store concept was in development—which will most likely persist—was how to differentiate the store from other retailers. Nordstrom is up against both the decline in brick-and-mortar retail and department stores. Plus, it will have to decipher how to stand out in one of the biggest and most competitive shopping hubs worldwide—where many of the same products are widely available.
  • In its attempt to answer these questions, the company is combining data with old fashioned customer service. New York is already Nordstrom’s biggest online market, and the company looked at its customer records to filter which brands are most likely to attract shoppers to the store. Focusing on international brands, streetwear and bespoke suits, any brands that are widely available elsewhere will provide exclusive products and styles to Nordstrom. But overall, the men’s store will offer only 200 brands—30% fewer than is typical in the men’s departure at Nordstrom’s full-line stores.
  • The success of the men’s store will speak to the company’s ability to reflect the specificities of New York’s highly differentiated market—an issue that has caused other companies entering New York, such as Seattle-based Totokaelo, to crash and burn. Nordstrom is much larger and more established than Totokaelo ever was, but as a department store whose shares have declined approximately 40% since 2015, there’s pressure on the company to perform well with this new venture. Especially given the continued expansion of its off-price Rack (there are now four NYC locations), opening a successful full-price store could bolster the department store for years to come as a leader in fashion-forward apparel.

2) LVMH launches a luxury accelerator with the hope of staying ahead of the premium goods industry.

What happened

  • LVMH officially announced its luxury startup accelerator, La Maison des Startups. Located in Station F in Paris—a “startup megacampus”—LVMH plans to work with 50 international startups each year in six-month stints. Many of these startups were selected via the LVMH Innovation Award, which launched in 2017.
  • The initiative will focus on collaborations between the startups and LVMH’s 70 brands to develop new services and technologies for the luxury industry. LVMH may provide investment to the startups.
  • LVMH’s first unofficial luxury startup partner was premium sneaker and streetwear marketplace Stadium Goods, which the luxury conglomerate invested in last February 2018 through LVMH Luxury Ventures (LVMH Luxury Ventures buys stakes in companies with “high-growth potential”). At the time of the deal, Stadium Goods had already raised $56 million and was working with Amazon, eBay and others. Founded in 2015, Stadium Goods made an estimated $100 million in revenue in 2017 and also plans to open a concept store in the new Nordstrom men’s store in New York City.

Why it matters

  • With La Maison des Startups, LVMH is adding another vehicle that allows its infrastructure to identify, invest in and incubate the luxury brands it sees as most promising. Along with LVMH Luxury Ventures and L Catterton—a 2016 partnership between LVMH and Catterton, a consumer-focused private equity firm—the luxury accelerator aims to help LVMH stay ahead of the pack.
  • When it comes to the startup accelerator, LVMH has funds to offer, but the startups might serve a higher purpose: to rejuvenate an older company that requires an influx of constant innovation in order remain at the forefront of luxury. Working and collaborating with these up-and-coming brands—instead of competing with them—will help LVMH integrate new and useful practices to help run and evolve its portfolio of more than 60 brands to stay on-trend.

3) Warby Parker continues to raise money, but now has to meet investors’ expectations.

What happened

  • Warby Parker, founded in 2010, raised an additional $75 million in March 2018 from big-name investors including T. Rowe Price and Baillie Gifford. This values the company at more than $1.7 billion and likely sets Warby Parker on the path to go public sometime in the near future.

Why it matters

  • Warby Parker’s 2017 revenue totalled an estimated $320 to $340 million, which is low given its valuation and raises investors’ concerns (in contrast, the valuation of Luxottica, a Warby Parker rival, is 2.6 times its annual revenue). Though the company is on track to increase its revenue by 40% in 2018, investors believe that Warby Parker needs to develop new technologies and services to ensure that it remains the go-to eyewear retailer. Fourteen Warby Parker stores now offer 20-minute eye exams, which customers can book online, and in 2017, the company released a vision-testing app with a feature that allows users to try on glasses virtually.
  • Warby Parker shot up and grew fast—in less than a decade, it has opened 64 brick-and-mortar locations, which the company plans to grow to 100 by the end of 2018. But as it continues to increase its square footage, Warby Parker will have to maintain its margins to evolve into a mature business. Otherwise it risks the same fate as companies like Honest Company, which raised $303 million between 2011 and 2017, but whose high valuation impeded its own acquisition opprotunity and ultimately prevented the company from going public.

4) Union Square Ventures invests in livestream marketplace ShopShops, reflecting shifting perceptions of live video commerce in the U.S.

What happened

  • Union Square Ventures (USV) invested in ShopShops, a global and interactive livestream marketplace founded in China in 2016. ShopShops’s online platform connects consumers with retailers and brands in real time, as well as encourages shopper-to-shopper communication. To do so, ShopShops hosts visit physical stores, showcasing and discussing products, which viewers can purchase through the service.

Why it matters

  • USV’s investment will help more companies in ShopShops’ network compete with Amazon, accessing the burgeoning field of live video to fostering closer relations with customers. The venture capital firm’s interest in ShopShops also speaks to shifting perceptions of live video commerce in the U.S., where businesses have yet to harness livestream as it is utilized in the Chinese consumer market. Brands and retailers that livestream not only meet the growing pool of customers on their phones and laptops, but also foster a more personalized shopping experience in which shoppers can connect to a personality they know and like. Using a seasoned host to visit stores and speak about products, ShopShops live video unites entertainment with ecommerce, which can be extremely valuable for the companies to evade overt commerciality, using the tool to target their core customer base.
  • Part of the livestream delay in the U.S. is linked to the lack of digital infrastructure to support this type of ecommerce. But with ShopShops, which takes care of payment, fulfillment and logistics, brands and retailers that partner with it in the U.S. will be able to access these services. Live video and ecommerce are widely used by Chinese consumers—not only does it permit seamless mobile transactions, but it also opens up their purchasing power to products in foreign markets.