1) Billboards, stickers and other non-traditional ads grow in popularity as more brands diversify.

What happened

  • “Out of home” advertising—billboards, ads on public transportation and in other public venues like sports stadiums—now comprise 7% of total ad spend. This year, out-of-home will account for $38 billion in expenditures, up 3% from 2017 and up 35% since 2010. This avenue is growing in popularity among both digitally-native brands like Glossier and Facebook and long-standing brands like Nike and Coca Cola. Netflix and Alibaba have both invested in outdoor ad companies themselves while Google may soon debut a billboard product available through its own advertising business.
  • While the largest 2018 year-over-year growth in global advertising will still come from online channels (an anticipated 11.5% increase), out-of-home is expected to grow 3.1%—significantly more than advertising will grow on TV or radio. Forty percent of total ad spend is still directed to internet marketing and 33% to television.

Why it matters

  • This shift in the advertising landscape is largely explained by the rise in digital advertising costs; between 2012 and 2016, for example, the average price of a Facebook ad increased 9.6 times. As digital channels become increasingly saturated with advertisements, prices will continue to rise, forcing brands to look to other channels, including offline ones.
  • Billboards, however, can catch the eye of a large number of consumers, standing out thanks to their large scale. Paradoxically, however, it’s digital technology that is helping brands create thriving offline ads. Because the vast majority of consumers spend ample time on their smartphones, companies can utilize digital activity to locate the best spots to place their ads, both where they will garner the most eyeballs and target their demographic most effectively. Since billboards can now be digital, companies can experiment with various campaigns in one place, even altering the text so that it’s equally readable both in and out of traffic. Software also exists that helps companies purchase or sell advertisements, further streamlining the process.
  • At the same, while some brands go big, others are going small. While data-driven billboards are personalized insofar as they can more effectively target consumer groups, stickers connect with each shopper personally and allow customers to advertise the company themselves. Ouai, the haircare brand, Glossier, the beauty brand and Dripkit, the direct-to-consumer coffee brand, all send customers stickers with their ecommerce orders or hand them out at product launch events. Whereas the heritage luggage company Rimowa also sells stickers that customers can place on their suitcases, free options at these digital-first brands foster greater community and personalization, often highlighting other interests shoppers have outside of the brand itself. Plus, brands can easily digitize the stickers on Instagram, letting customers generate word-of-mouth growth without explicitly endorsing a corporate entity.

2) Nordstrom launches its first influencer-driven, private-label brand, playing to both parties’ strengths.

What happened

  • The new brand—Something Navy—was created in partnership with the blogger Arielle Charnas who will act as design director. Products will be sold in 55 of Nordstrom’s stores as well as online (select items will also be featured in Trunk Club, Nordstrom’s personal stylist service).
  • Though Something Navy is Nordstrom’s first influencer-helmed brand, it’s not the first retailer to go down this path. Lane Bryant, the women’s extended-size apparel retailer, announced a collaboration with the influencer Tanesha Awasthi in August 2018 and Macy’s recently began offering a line with the influencer Natalia Suarez both online and at its shop-in-shops.

Why it matters

  • Like celebrity collaborations, influencer-driven brands can open up new and devoted customers for retailers. With Something Navy, Charnas brings 1.1 million Instagram followers with a high level of engagement; before the launch, she even utilized Instagram Stories to vet fabrics and silhouettes among her followers, which gave Nordstrom real-time feedback and likely elevated anticipation for the line. Additionally, a partnership with Nordstrom gives Charnas and her brand a higher profile.
  • One of the main concerns with collaborations like these is the degree of involvement an influencer or celebrity has in the brand in concrete terms. Celebrity partnership gaffes like the Kardashian Kollection at Sears haphazardly slapped the Kardashian name on an apparel line, selling items that the sisters would never actually wear—this lack of authenticity was impossible to ignore, forcing Sears to continuously discount the collection until eventual discontinuation.
  • Something Navy, however, grew out of a previous collab between Charnas and Nordstrom, when she worked on the retailer’s private-label brand Treasure & Bond in 2017. The success of this partnership convinced Nordstrom that a longer-term commitment with Charnas would be a glowing opportunity. The company also states that it seeks out influencers who emulate the department store’s values, and it seems to have found a meaningful connection and good partner in Charnas. As the influencer market grows and evolves, retailers who pair up with influencers who contribute concrete expertise will help companies like Nordstrom flourish, not only with additional exclusive products that help it stand out against other department stores, but also with new personalities attached to its brand.

3) Gap will launch a men’s athleisure counterpart to Athleta, but faces other competitors in the space.

What happened

  • Hill City, Gap’s activewear line for men, is modeled after its successful women’s brand, Athleta, and will sell items that can be applied to a variety of sports and activities. Set to launch this October, both online and in some Athleta stores, the parent company may also open standalone Hill City stores down the line.

Why it matters

  • Hill City isn’t only about jumping on the growing activewear industry, which now accounts for 22% of total apparel sales (activewear apparel sales grew approximately 2% in 2017, reaching $48 billion). It’s also about boosting Gap, whose namesake brand and Banana Republic brand are slumping, causing the parent company to close stores. Facing these troubles, Gap has sought to strengthen what is working now, which happens to be Athleta—though the company doesn’t break out its separate brands in financial reports, Gap’s CEO claims that Athleta, which launched in 2011, is a large contributor to earnings.
  • Planning to open more Athleta stores regardless, Gap also wants to find an athleisure solution for men. Right now, Gap and Old Navy sell cheaper activewear options for male customers, but the parent company plans for Hill City’s merchandise to be a premium offering. While Gap has lagged in the mass market space, failing to stand apart with exclusive products in favor of pushing the same commodified basics, activewear for men could be a new way to lean into its forte. Gap will have to face competition from other brands such as Lululemon that are attempting to strengthen their hold over men’s activewear as well, but establishing Hill City at Athleta stores first will be an economical way to introduce the brand, ideally catching the eye of current Athleta customers and spiraling out from there. The only problem is that Athleta is widely associated with women’s activewear only, so one of Gap’s biggest challenges will be getting male shoppers into the store.

4) Bumble, the dating app, plans to go into beauty.

What happened

  • Bumble, the dating app founded in 2014 that empowers women to make the first move, is working with dermatologists and psychotherapists to create a holistic skincare line, set to launch in 2019. Products may include items like Break Up With Bad, a facial oil “for breakups and breakouts,” closely tied to Bumble’s woman-centric philosophy.

Why it matters

  • Throughout its growth, Bumble’s CEO Whitney Wolfe Herd has championed an anti-misogyny platform, much of which is grounded in her very own experience. A co-founder of Tinder who was fired in 2014, she filed a lawsuit against the company for sexual harassment and has since worked to make the workplace and the world a healthier and safer environment for women. Bumble now has a sprawling network that includes its flagship dating app, which now has 35 million users globally across North America, Europe, Australia and India, as of this fall; Bumble BFF to connect with new friends, which now has 3 million users; and Bumble Bizz, a professional networking app used by high-profile figures like Kris Jenner.
  • As Bumble’s reach continues to expand, it has a growing and engaged female community to tap into, built largely on Bumble’s platform against misogyny. Sharing these values, app users are likely to welcome more avenues for interaction with the brand. Down the line, this could mean more than just products, but also events, festivals and other activities tied to Bumble’s value system. While the culture of #MeToo has certainly led some brands to blatantly capitalize on the movement—Hard Candy notoriously filed a patent in January 2018 to create a line of #MeToo-branded beauty products—Bumble’s app, which helps women take more control over their dating lives, and Wolfe Herd’s own experiences as a female founder and CEO tie a unique authenticity to any merchandise plans Bumble may seek out in the future. The biggest hurdle for Bumble will be in creating a product-based business for its beauty products that either folds into the apps or stands alone; this revenue model will be much different from the subscription-based business Bumble uses on its apps.