1) Dollar Shave Club debuts fragrance in an attempt to differentiate from other digital-first men’s health brands.

What happened

  • Dollar Shave Club, the direct-to-consumer subscription razor brand founded in 2011, is expanding to a new category: fragrance. The product line, Blueprint, is available online only and includes six scents, classified either as “warm” and “fresh” for $50 each.
  • The company has forayed into other product verticals both before and after its 2016 acquisition by Unilever, including wipes in 2013 and oral care in 2017. In addition to its monthly subscription, it now also offers a full-service option, which lets subscribers decide the frequency of shipments and adjust their product assortment based on individual needs.

Why it matters

  • Dollar Shave Club has a slew of competitors in the men’s healthcare and wellness space, including digitally-native brands like Hims and Harry’s, as well as legacy mass retailers. The company made waves when it first debuted its razor subscription program, largely tied to the co-founder’s viral marketing video. As it expands into new product categories, the company is offering a wider set of essentials to its customers to become a one-stop shop for men, but that’s exactly what Hims and Harry’s are attempting to accomplish as well, in addition to creating products for female customers. So far, neither of the other digital brands has launched a fragrance line, which makes it a good choice for DSC, but eventually, more product overlap is inevitable.
  • While Hims and Harry’s look to women to increase their customer base in the face of sky-high valuations, DSC must add new products to keep growing as its main shaving business slows down, both in the face of competition and as customer retention and acquisition declines. DSC looked to its current 4 million subscribers to inform Blueprint (for instance, it found that 76% of members own more than two colognes, which convinced DSC to launch with six scents). But it’s not yet clear whether fragrance will help the company expand its audience moving forward.

2) Dollar stores look to urban markets for expansion—proof that they are brick-and-mortar mainstays despite the rise of Amazon.

What happened

  • By the end of 2018, Five Below will operate a total of 750 stores, a number that’s risen four times since 2012 when the company filed to go public. Increasing the ubiquity of its 8,000-square-foot stores, it has recently arrived to Manhattan. Since its IPO, the company has seen sales growth in 24 out of 25 quarters, making $1.28 billion in total.
  • Meanwhile, Dollar General—one of the mainstays in rural America—has launched an urban retail concept called DGX, aimed at price-conscious millennial shoppers, in Raleigh, Nashville and Philadelphia. DGX storefronts are half the size of a typical 9,000-square-foot Dollar General store, but combine pharmacy and convenience store with groceries. Dollar General’s same-store sales have increased for 28 consecutive years and the company now operates 15,000 locations, but is seeking to open additional 13,000, which will necessitate opening the brand up to urban markets—a demographic that currently makes up about one-third to 40% of Dollar General locations.

Why it matters

  • Five Below was launched in 2002 by the founders of Zany Brainy, a now defunct toy store chain. The dollar stores have made an impact as hubs for discovery and excitement, especially for children and young adults—shelves are a maximum of five rungs high in order to stay at the eye level of these younger shoppers, and the store blueprint wraps around like a maze. The company prides itself on jumping on new product opportunities in the toy sector—including the viral fidget spinners of 2017 and this year’s slime obsession—and is also working to fill the void left by Toys R Us, partnering with Hasbro and Mattel for access to new products, and expanding toy sections in each store by 20 feet in the run up to the holiday season.
  • With this in mind, Five Below has worked to shed the reputation of the dollar store as the place to shop for cheap essentials, turning it into more of a treasure hunt for children and adults alike. With DGX, Dollar General also takes strides to distance the connotation of the dollar store from chaotic and cluttered to organized and clean—ideally, a DGX shopper won’t necessarily be aware that the store is operated by Dollar General to begin with. The experiential quality, coupled with low prices, has helped both Five Below and Dollar General stay relevant in the age of Amazon—one study found that a basket of 67 items at Five Below was 52.6% less expensive than on Amazon.
  • Still, as these companies enter more urban markets, they’ll have to face higher rents, as well as steeper costs of labor and logistics in cities—something that has affected both Walmart and Target’s foray into metropolitan areas. Additionally, since many of these cheaper products are manufactured in China and therefore are beholden to U.S. tariffs, keeping prices low—a priority at both stores—may prove more difficult as time goes on.

3) As more influencers become investors, brands gain long-term partners.

What happened

  • With the influencers firmly established as mainstays in the consumer industry, some are beginning to invest in brands themselves. Often times, it works like this: Influencers acquire minority stakes in brands with a minimal cash investment between $10,000 and $50,000, or no payment at all. In return, brands gain a long-term partnership, with the influencer not only promoting the brand on social media, but also bringing a toolkit of her own, including contacts, industry and product advice and marketing knowhow.
  • Blogger Arielle Charnas, for example, owns a stake in Bandier (recently, she was one of the first influencers to launch her own brand, Something Navy, as a private-label at Nordstrom). Charnas’ stake in Bandier is in the low single digits—much higher than the fraction typically given to influencers—but she did not pay for it, instead promoting the brand on Instagram through an informal agreement. At the same time, other influencers do not endorse the brands they invest in, instead choosing to support the brand with their clout, connections and expertise.

Why it matters

  • Celebrities have long-endorsed companies, but the influencer investing attaches much more than a marketable name to brands. With influencer marketing prices rising, it makes sense for brands to partner with someone who will do more than just post promotions on Instagram. FTC regulations dictate that both investors and promoters must disclose when they endorse a product or a brand, but while the “paid partnership” label can erode trust in influencer marketing, disclosing an investor relationship can actually legitimize a promotional post as it points to an influencer’s faith and interest in the brand.
  • Influencers have a made a career out of partnering with brands and have likely picked up many business lessons and skill sets along the way, which they can now endow a brand with in the long term. This more committed relationship also gives brands the opportunity to grow alongside influencers, both gaining a dedicated partner and heightening the level of authenticity in their influencer marketing. Because an influencer who invests in a brand has equity in the business, he or she has chosen—and has additional incentive—to stands by the brand for a long period to see it succeed. Moving forward, the industry is likely to see more brand-influencer collaborations along the lines of Something Navy—the influencers who are able to deepen their relationships with brands, whether through investment or other means, will be poised to embark on these projects.

4) Glossier will open a flagship store in its former New York City showroom.

What happened

  • Glossier’s first flagship store will open at the company’s original showroom at 123 Lafayette Street. The converted 3,000-square-foot, two-story space features a blueprint conducive to making connections with the brand, its sales associates (Offline Editors) and other shoppers, as well as a unique point-of-sale system that makes it easy for customers to start shopping in the store and continue online, or vice versa.
  • Glossier launched online in 2014 and is now available online in seven countries, in addition to two permanent stores in Los Angeles and New York. It has also opened various pop-ups in Chicago, London, New York and San Francisco where the brand partnered with (and gave a pink makeover to) Rhea’s Cafe. This limited footprint is inextricably tied to the company’s intention not to use retail to drive growth. Glossier also raised $52 million in Series C funding in February 2018, which founder Emily Weiss stated would be used to do “keep building the beauty company of the future: the one that you shape.”

Why it matters

  • With its flagship, Glossier is working to embody what it calls “emotional commerce”—an experience that encourages relationship building between shoppers and the brand, shoppers and other shoppers, and shoppers and Glossier’s Offline Editors, who are trained to speak to customers as “educated” friends. With the store layout built to maximize engagement and discovery—there is a specific space designated for creating social media posts, and another based on the brand’s most successful product, the Boy Brow—the hope is that the permanent location becomes a sort of watering hole, predicated on providing a space for the Glossier community and welcoming newcomers, more so than finalizing purchases.
  • This brick-and-mortar retail concept builds on the crowd-first mentality Glossier has embraced from the beginning—and even before the brand launched on Weiss’ beauty blog, Into the Gloss. Dedicating a room to the best-selling Boy Brow conveys to customers that Glossier is listening to them and building off of their preferences. And, similar to how Glossier has announced new products via Into the Gloss, developing them with the help of feedback from readers, a permanent store gives the company a new space to engage and gain insights from customers that will help it grow into what its customers want it to become.