1) Beautycon embraces pop-ups to bring experiential events and community to more consumers year-round, but it can’t replicate the exclusivity of its festivals.

WHAT HAPPENED: Beautycon, which began in 2011 as a conference for YouTube beauty influencers and launched a B2B festival for beauty brands in Los Angeles in August 2013, is looking to pop-ups to bring the experience to more people, more times a year.

Why it matters

  • Since 2013, Beautycon’s main conference, the Beautycon Festival, has grown into a biannual event that can attract up to 30,000 attendees, including company representatives, beauty influencers and consumers. For Beautycon Festival vendors, the opportunity is clear: The event serves as a social media-friendly marketing vehicle while giving brands brands the opportunity to engage with customers in person (particularly important for digitally-native companies) alongside a lineup of speakers, celebrity appearances, makeup tutorials by YouTube influencers and DJ sets. In the past, the conference has garnered $4,200 per square foot, speaking to the power of in-person retail.
  • Festivals, however, aren’t a scalable experience for Beautycon, according to CEO Maj Mahdara. Instead, the company is building out ecommerce and Beautycon Pop—a pop-up concept that mimics the festivals on a smaller, shorter-term scale. The pop-ups, typically in operation for three to ten months, aim to create social media-worthy retail experiences that merge legacy beauty brands with up-and-coming, direct-to-consumer companies (its pilot pop-up in LA featured 22 digitally-native, female-founded brands). The company also says it wants to merge ecommerce with community and education, though its current site doesn’t differentiate much from other retailers. The good news is that through the festivals, Beautycon has built a brand for itself grounded in inclusivity and entering both physical retail and ecommerce will enhance this identity by making the brand more accessible to a broader audience. But ecommerce, and to an extent the pop-ups as well, cannot replicate the exclusivity of a two-day festival with singular experiences—so much so that attendees buy a ticket to then go shopping. It remains to be seen whether the pop-ups will be more scalable than a conference that sells 30,000 tickets given the operational complexity of launching multiple, temporary retail concepts.

2) Down to Shop and Dote launch new shopping apps in an attempt to attract shoppers with entertainment.

WHAT HAPPENED: Down to Shop streams product-centric shows daily, starring Instagram influencers and Upright Citizens Brigade alumni, while Dote hosts live streamed “shopping parties.”

Why it matters

  • Both Dote and Down to Shop are both third-party marketplaces that use video content to incite shoppers to watch and buy. The latter, which pegs itself as “the funnest way to shop,” uploads professionally-produced shows that subvert the traditional live streaming model of QVC by selling products through comedy, poking fun at infomercials. The company, which launched its app this week, says it’s already working with more than 60 brands, including Dirty Lemon, the cat litter company Pretty Litter and Sustain Condoms.
  • Down to Shop is far from the only new shopping app to grace the market, though it stands out with high-quality content while more shopping apps rely on live video for authenticity and community engagement. The social shopping app Dote recently launched an interactive, live streaming function called Shopping Party, which streams content from influencers while users shop its 150 brands. Compared to Down to Shop, Dote’s content is exclusive—one-time shopping events—and live. But both shopping apps are all in the business of selling products through editorial content, making shopping an event rather than just a transaction. Their obstacle will be attracting enough consumers to their standalone platforms. They’re both attempting to do this with entertainment, but it remains to be seen whether that will be enough for someone to buy Dirty Lemon through a third-party app rather than directly from the brand.

3) Fast-casual mimics fast-food as Starbucks, Chipotle and other companies create drive-thrus in suburban markets for mobile orders.

WHAT HAPPENED: Eighty percent of new Starbucks locations include “digital drive-thru lanes,” which Chipotle, Cava and Dunkin Donuts are also in the process of testing.

Why it matters

  • Mobile ordering has thrown a wrench in how restaurants conduct business. In cities, Sweetgreen has set aside real estate in each location for online pickups, as well as launched a delivery system called Outposts that drops salad orders off at dedicated pickup zones without requiring the use of a third-party delivery service (there are now more than 150 outposts, many at office buildings and co-working spaces such as Nike and WeWork). Starbucks also expanded delivery with UberEats in the U.S. in December 2018 to stave off falling foot traffic while Dig Inn rearranged its entire supply chain to separate in-person customers from mobile customers, centralizing its kitchen for mobile orders and improving the quality of food for travel.
  • Now fast-casual restaurants are attempting to optimize mobile orders for suburban consumers—a major part of Starbuck and Chipotle’s customer demographic and a growing portion of Cava’s. The mobile-order drive-thrus account for customers who are driving to pick up their orders and ensure instant gratification by providing pre-set time windows when the food will be ready. The drawback for this type of pickup is that customers won’t enter the restaurant at all and their interaction will employees and the brand more broadly will be minimal. But if customers are already ordering on their smartphones, the best case scenario is that they experience a seamless and convenient transaction while retrieving their food, which will incite them to come back in the future. Allowing customers to pick up mobile orders themselves also comes at a lower cost than delivering these mobile orders to customers’ homes, which is a major benefit to companies.

4) Neiman Marcus dips its toes in the resale market for the second time, buying a minority stake in Fashionphile.

WHAT HAPPENED: Neiman Marcus’ investment in Fashionphile, an online marketplace for secondhand designer handbags and accessories will allow consumers to consign items at some department store locations.

Why it matters

  • Following its one-year partnership with The RealReal that ended in 2016, Neiman Marcus’ minority stake in Fashionphile illustrates the company’s renewed interest in the resale market, which grew faster than it expected in the past few years. In 2018, luxury resale accounted for $6 billion of a $24 billion resale industry in the U.S., according to studies from Bain & Co. and GlobalData PLC—the latter predicts the market to reach $51 billion by 2023. Through a customer survey, Neiman Marcus also found that 50% of its shoppers purchase secondhand luxury products. Fashionphile is a smaller company than The RealReal, its main competitor—it will make an estimated $200 million in 2019 revenue compared The RealReal’s $500 million 2018 revenue). But Neiman Marcus’ decision to invest comes at a time when The RealReal is revving up to go public. It also mirrors Foot Locker’s recent $100 million investment in GOAT, a sneaker resale marketplace, and Farfetch’s $250 million acquisition of another sneaker resale retailer, Stadium Goods.
  • With Fashionphile “salons” at a number of Neiman Marcus locations, consumers will be able to consign pre-owned items and receive a payment immediately, which the department store hopes they will spend at Neiman. However, customers won’t be able to purchase Fashionphile products in person—they’ll have to rely on the company’s owned retail (it operates four boutiques) or its site. Other retailers have also embraced this strategy—Amazon customers can now make returns at all of Kohl’s locations, which gives Kohl’s more facetime with more shoppers and leads to more in-store purchases. Though the Neiman Marcus-Fashionphile partnership will grow the pool of customers who find the department relevant, it’s uncertain whether visitors will take the cash they earn consigning to buy Neiman products at full price.