1) Pinterest strives to make pins more shoppable, and its advertising business more profitable.

What happened

  • Pinterest users who click on a home- or style-related pin—that is, an image with a description and link to the original online source, the main currency of Pinterest—will now see a collection of similar shoppable items and recommendations. These Product Pins (a revamped version of Buyable Pins) are updated in real time to reflect the availability of the items on a brand or retailer’s ecommerce site, as well as their price. By adding metadata to their product pages, companies can enable Product Pins or entire product catalogs that live on Pinterest. As before, they can also pay for promotional pins, which is the company’s only source of revenue.
  • This move comes after Pinterest acquired the image recognition and visual search startup VisualGraph in 2014—a merger that also resulted in the February 2017 launch of a feature that matches Pinterest content to photos uploaded by users. This feature is similar to ASOS’ visual search tool, which matches shoppers’ photos of an item in real life and sources similar ones available for purchase on its own site.

Why it matters

  • Pinterest now has 250 million monthly users, but must continue its fight to stay relevant in the age of Instagram, which hit 1 billion monthy users in June 2018. Both apps are image-based, and both are ramping up efforts to become more shoppable, enabling users to discover more products, even if they are not actively using the app or site to shop. Pinterest allows users to easily save image boards on their profiles—a type of personalization that Instagram lacks (Instagram users can save images in a private feed, but the company has not prioritized building out this feature). A more deeply integrated productization effort between brands and Pinterest can help it differentiate from the competition, essentially allowing users to make wishlists and discover more products that keep them spending more time on the app.
  • Since Pinterest started testing its newest shopping-related features, clicks on products to retail sites increased 40%, which is great news for brands and retailers, but diverts traffic away from Pinterest itself. The company doesn’t currently monetize the Product Pins feature, nor does it take a cut of sales that begin on its platform. For its new feature to pay off, it will have to become a go-to shopping destination—the site consumers start a product search on, instead of Amazon, Google, Instagram or another platform—so that more brands advertise on Pinterest, building its only source of revenue. It seems like Pinterest is already working to do so: In tandem with the launch of Product Pins, the company also revamped its Ad Manager tool to streamline the ad-buying process for brands and agencies.

2) Sunday Riley receives criticism for fake reviews, highlighting the power of the crowd.

What happened

  • Sunday Riley, a skincare brand founded in 2009, came under flack last week after an anonymous Reddit post claimed the company published fabricated customer reviews on Sephora.com where it has a wholesale account. A former employee of the brand corroborated that the Reddit post was correct, and provided evidence in the form of an email from the company about how to craft a believable product review.
  • The brand responded to an Instagram post by Estee Laundry—an account that discusses beauty-industry news—writing that, “At one point, we did encourage people to post positive reviews at the launch of this product, consistent with their experiences.” Sephora also published a press release, noting that it is working with the brand to ensure this doesn’t happen again, and that the incident was not consistent with reviews on the retailer’s platform, which are vetted by a specific team.

Why it matters

  • Sunday Riley built its brand on a strong social presence, prioritizing the voices of customers and influencers over traditional forms of advertising to appear relatable and authentic—an important consideration for internet brands, which often rely on customer reviews to facilitate trust, though increasingly, many of these messages have turned out to be fake.
  • Ironically, the news that broke about Sunday Riley endorsing fake reviews confirms the very power of social media and consumers that the company tried to tap into in the first place to build its reputation. The Reddit post emerged on the famous /r/SkincareAddiction thread—a well-known source for consumers, scientists and industry experts to voice skin-related woes and recommendations, as well as debunk myths. The subreddit has more than 450,000 unique visitors, empowering consumers to navigate one of the more confusing industries with an educated eye. At the same time, however, communication channels like this pose risks to brands, especially when former employees or industry natives weigh in with an inside scoop.
  • What happened with Sunday Riley is a reminder to consumer brands—not only to keep in mind that contemporary consumers value transparency more than ever, but also that internal company practices matter, whether in terms employee policies, marketing or supply chain dynamics. Especially if a brand is involved in an industry like skincare, which comes with a unique set of challenges—for instance, the skeptical science behind some product benefits and confusing terminology—brands need to take responsibility for their actions. Beyond FTC guidelines, which dictate that what Sunday Riley did was unlawful, product quality speaks for itself and shouldn’t necessitate fake reviews.

3) RSE Ventures is creating an empire that capitalizes on expertise in the real estate, restaurant and sports industries.

What happened

  • Since launching in 2012, the private investment firm RSE Ventures has turned its focus to the food industry, funding celebrity chef David Chang’s Momofuku restaurants, Christina Tosi’s Milk Bar, the restaurant reservation app Resy, the coffee shop Bluestone Lane, and the casual dining spot &pizza.
  • In many cases, RSE has transformed once local, New York brands into companies with a national presence. With its $21 million investment from RSE in June 2018, Bluestone Lane plans to grow from 30 locations to 60 and Milk Bar now operates an ecommerce business, bringing its treats to anyone with an internet connection. While consumer company investors typically seek returns within three to five years, RSE has specifically stated it wants to invest in the long-term success of these businesses.

Why it matters

  • Behind RSE’s investments is Stephen Ross, who also owns Related, the real estate company that acquired Equinox in 2005. Related is also behind the Hudson Yards development in New York City, which is set to open in 2019 and will launch the first Equinox hotel as well as house the RSE headquarters. Hudson Yards illuminates how Ross is capitalizing on his real estate knowledge—the development expects to welcome 30 million people each year, and though many restaurant businesses are vying for a lease, four will go to brands RSE has invested in.
  • The Hudson Yards plan also comes with a solid precedent. After investing in Momofuku and &pizza, Ross opened outposts at the Miami Dolphins stadium (which he also owns), helping these brands expand to new markets. Since then, Momofuku has entered five additional sports venues. Broadly, RSE is simultaneously helping these restaurant businesses grow in multiple ways, highlighting potential high-value crossovers in its network to spin its own flywheel. By bundling multiple businesses instead of having them grow individually—essentially urbanizing the restaurant industry—RSE has the opportunity to create a critical mass of options in one place that appeals to a wide breadth of shoppers.

4) Patagonia gets political, but is it too on-brand?

What happened

  • For the first time, Patagonia endorsed two candidates for the Montana and Nevada Senate—possibly the only time a consumer brand has done so. The chosen candidates—Jon Tester and Jacky Rosen—are both Democrats in favor of protecting public land and enacting environmentally conscious policies. The move follows Patagonia’s December 2017 diatribe against President Trump after he announced plans to restrict the square footage of two national monuments in Utah (visitors to the company’s ecommerce site were greeted with a black banner that read, “The President Stole Your Land”).

Why it matters

  • Patagonia has built its reputation as a environmentally friendly company for lovers of the great outdoors. This image makes a lot of sense given the brand’s product assortment, which includes outerwear, gear for fishing and hiking, and other apparel and accessories to be used in nature. As a heritage brand founded back in 1973, this legacy also bolsters Patagonia’s authenticity and trustworthiness to consumers. But these facts can’t be divorced from business practices: It’s in the best interest for the company to protect nature, as its products are inherently tied to spending time in it.
  • Though many executives and companies donate to candidates and other initiatives personally, Patagonia and Nike suggest that brands are retailers are increasingly embracing consumer-facing politicization. But while it’s in many ways a less controversial move than Nike’s contract with Colin Kaepernick, there are clear motives at play in Patagonia’s decision to endorse two Democratic candidates. The choice is innately a marketing technique—after the 2017 message, Patagonia’s sales rose 7% from the week prior. But as Nike’s campaign and contract with Kaepernick showed, it’s always a gamble to get involved in politics, even if the positives outweigh the negatives. Though it may enhance a brand’s relatability and transparency, which more consumers want, it can also alienate customers who disagree with the stance taken or prefer corporate neutrality.