1) Outdoor Voices launches an editorial platform as a resource for its community that aims to simultaneously enhance its advertising funnel.

WHAT HAPPENED: Outdoor Voices launched “The Recreationalist” as both a digital media site and a quarterly zine, which will feature a range of healthy and active lifestyle-based content. The online platform will be promoted organically across social media channels and YouTube.

WHY IT MATTERS

  • OV has relied on influencers and local events to grow. Now seven years old, with a vastly different customer acquisition landscape than even a few years ago, it makes sense for OV to introduce an editorial platform to better reach and retain its growing customer base.
  • While maintaining the editorial platform may require higher upfront costs (it already has a staff of five with plans to double to ten), investing in editorial could be a cheaper and potentially more effective advertising and retention tool than paid social advertising, especially for those in between purchases. With 20 to 30 stories published monthly, backed by corresponding social media posts, the digital editorial content can market the brand in an authentic way—reinforcing the strong sense of community OV was founded on.
  • This move aligns OV with a growing list of media companies and product brands that are playing musical chairs. Companies like Goop, Glossier and Highsnobiety have all seen success by transforming loyal audiences into shoppers eager for branded product. The Recreationalist gives OV full control over its brand messaging and allows for more impactful, lower-cost and vertically integrated marketing content that can help sustain its brand and business over the long term.

2) Etsy will prioritize sellers that offer free shipping across its platform. Will this help Etsy’s business or harm its reputation as a community of small business owners?

WHAT HAPPENED: Etsy sellers that offer free shipping outright or on $30+ orders within the U.S. will receive priority in-search results, email marketing and social media campaigns. The company will also help train sellers on pricing strategies that enable them to offer free shipping.

WHY IT MATTERS

  • Etsy’s latest decision aims to foster greater demand, but has repercussions for both domestic and international sellers. Advising sellers to increase individual item prices to cover free shipping costs will raise prices for both customer demographics while only U.S. customers benefit. At the same time, buyers purchasing multiple items will also end up paying significantly more if each item’s price is padded to include free shipping.
  • More broadly, Etsy is responding to the Amazon effect and its recent focus on free one-day shipping for Prime members. But prioritizing some vendors over others could run counter to its ethos. Etsy defended its initiative, noting that buyers are 20% more likely to purchase from shops with the free shipping offer.
  • Compared to Amazon, Etsy was built as a platform to centralize local artists and small businesses, focusing more on sellers over buyers. This push steers Etsy away from its original mission while reflecting the reality that even micro-sellers need to meet modern consumer expectations.
  • While Etsy buyers are often willing to pay whatever price is listed for an artisan-made Etsy product, the platform appears to be using free shipping as bait to attract shoppers. But it fails to address the implications of elongated lead times, which can vary depending on the seller.

3) Sephora incubates Instagram-famous brands, providing additional exposure but potentially sacrificing the niche status that put these brands on the map.

WHAT HAPPENED: Sephora introduced “The Next Big Thing”—an in-store display designated for digitally-native brands at its Times Square flagship store. The visual merchandising initiative will be featured in all U.S. stores in time for the holidays, rotating a new cohort of brands every quarter, with the opportunity for successful brands to become a permanent fixture in Sephora’s assortment.

WHY IT MATTERS

  • Sephora is not the only retailer to prioritize partnerships with “much-hyped” internet brands—Ulta’s partnership with Kylie Cosmetics, Target’s BeautyCounter, Nordstrom’s Pop-In forum, among others, have created an arms race for multi-brand retailers to capitalize on up-and-coming direct-to-consumer brands. “The Next Big Thing” program provides Sephora with a new ground for testing nascent brands, increasing traffic from companies built on Instagram and applying this data to its in-house brands.
  • But the relationship is not necessarily a win-win. With over 700 stores across the U.S., the digitally-native indie brands in “The Next Big Thing” gain access to new customers and a physical store space, but their mission and uniqueness could relegate them to just another product on the shelf at such a major retailer, as they are forced to compete against cult classics like Chanel or Urban Decay.
  • While an omnichannel experience is a non-negotiable for brands’ success today—digitally-native brands need to transition to physical spaces at some point in their growth trajectory—the question is whether Sephora is the right place to do so and whether the tradeoffs are worth it for access to the beauty retailer.
  • Launching a pop-up, a stand alone store, or partnering with a smaller specialty store like the Detox Market, Credo or SpaceNK, allows an indie brand to retain greater exclusivity through limited distribution. Additionally, these alternative offline channels allow companies to control their image to a greater extent and build a more personalized connection with shoppers—an opportunity that “The Next Big Thing” may not permit as Sephora will dictate the direct connection with shoppers.

4) Costco launches digital version of its membership card—a new step toward modernization for a retailer that managed to dominate without a major digital presence.

WHAT HAPPENED: Costco members can now enter stores and pay for purchases with a digital membership card. The card is available through the Costco app and is activated by creating an account on the retailer’s website.

WHY IT MATTERS

  • Costco’s decision to digitize the company’s membership card embraces a modern payment system. While Costco is certainly late to the party on this technology, the digital membership feature most likely signifies a tactic to offer more convenience to its loyal member base when visiting their local Costco store.
  • Costco’s ability to dominate as a majority offline retailer in the era of Amazon is even more impressive given that year to date Costco’s shares are up 38.9%, outpacing Amazon (+30.8%) and Walmart (+23.5%). These results are relative as Costco has a much smaller annual revenue versus Amazon, enabling Costco to spark growth more quickly, but Costco’s customer satisfaction rate is also on par with that of Amazon: 83 points (out of 100) compared to 82.
  • With a smaller business, Costco also has more control over its stores and a better chance to serve its members—making Costco’s customer service more personalized, the in-store shopping experience unique and the brick-and-mortar stores more compelling for Costco members than an online platform.