1) Faire raises $150 million to grow its wholesale marketplace, a solution for independent retailers to connect with creators.

WHAT HAPPENED: Faire is a marketplace similar to Etsy but focuses on wholesale orders, as evidenced by its minimum order quantity requirement. The company raised the money from venture capitalists including Peter Thiel’s Founders Fund, valuing Faire at $1 billion.

WHY IT MATTERS

  • Amazon has put small businesses out of business while Faire helps keep them in business. Faire’s platform makes it easy for thousands of local stores to sample products from craftspeople around the world with no risk. It eases the buying process for small retailers by allowing them to not pay for new products upfront and return inventory that didn’t work at no cost. Ultimately, Faire helps to reverse the impact Amazon has had on small businesses by enabling them to develop their business online and attract new audiences with enhanced exposure and product assortments. Amazon, on the other hand, puts the burden on small businesses and is more focused on itself than its vendors.
  • Although Faire has shown early signs of success, it needs to invest more in tools to make its vendors successful if it wants to truly impact their businesses. While Etsy helps power businesses in the long tail, Faire will need to turn its small-time vendors into bigger and more powerful brands to continue powering the platform. To do this, it has to invest in more tools to grow its vendors’ sales—something Amazon is very good at. At the same time, Faire needs to insure that independent retailers are thriving as well, as they generate the demand that pays for the supply. This might be a long-term challenge as many independent retailers continue to struggle and giving them access to better products alone will not be enough. Instead, Faire should move further into helping the retailers themselves grow their business so the brands Faire serves still have outlets to sell their products in.

2) Lululemon partnered with Mirror, a fitness startup seeking to standardize at-home exercise, positioning the athleisure retailer at the forefront of a growing fitness trend.

WHAT HAPPENED: Mirror, a $1,500 interactive fitness mirror, announced it would partner with Lululemon to create wellness content for the device, which will also be available in Lululemon stores. The brand also led Mirror’s Series B funding.

WHY IT MATTERS

  • A strategic partnership with Lululemon will help Mirror quickly and organically reach a wider audience. Neither company has confirmed how many of Lululemon’s 460 stores will feature Mirror’s technology, but this collaboration will allow more consumers to engage with the product, while also giving them another reason to come into Lululemon’s stores. This also could help Mirror grow its retail footprint without opening many showrooms or stores itself. If its technology and workout regimes resonate with consumers, Lululemon’s distribution plus word-of-mouth will help propel the brand forward, attributes that have been key for its competitor Peloton.
  • Mirror will strengthen Lululemon’s current fitness offering and allow the retailer to venture into new wellness categories. Lululemon currently hosts yoga classes at most of its locations and features class pricing in line with popular boutique studios like FlyWheel or Y7. But integrating Mirror into its retail stores will help Lululemon establish new programs like guided meditation. This could give new meaning to at home-fitness and wellness regimes, ones that are convenient, accessible and technologically-driven. Of course, everyone wins if customers are wearing Lululemon while they raise their game.

3) Direct-to-consumer brands are using corporate gifting programs to acquire customers, another move to fight against rising customer acquisition costs.

WHAT HAPPENED: Direct-to-consumer brands like Bombas and Away are developing internal sales teams to manage corporate gifting programs.

WHY IT MATTERS

  • Corporate gifting is an ideal strategy for growing direct-to-consumer brands to acquire customers for less. As the cost of paid social media advertising continues to surge, brands need to find creative ways to reach new audiences. Traditional marketing channels promote brand awareness, but corporate gifting programs invite participation and therefore increased conversion. This approach enables more personalized branded experiences which means loyal customers. Corporate gifting aligns with the idea of marketing to higher-intent customers, not just more customers. Importantly, workplaces supply a massive captive audience and are a prime outlet for word-of-mouth to spread via the literal water cooler.
  • Despite the extra time and resources that corporate gifting sales require, there should be a long-term payoff. This marks one of the first times direct-to-consumer brands have hired traditional sales teams since many shunned wholesale in the first place. While this brings added cost and infrastructure, like all sales organizations, the investment should pay off. While a corporate program can take months for a brand to land, the product gets in the hands of a large group of future customers, giving it bulk access to a new audience.

4) JCPenny will launch a retail lab, another attempt at reinvention that overlooks the retailer’s underlying problems.

WHAT HAPPENED: JCPenney will open a 208,000 square-foot store in Hurst, Texas that will feature a selfie studio, a video game lounge and a barbershop, among other experiences. The retailer plans to use this store to inform what it rolls out to its 850 other stores.

WHY IT MATTERS

  • While testing can help retailers determine what customers want, a single test store is not enough to produce reliable results. A large, shiny new store catering to a concentrated customer demographic hardly speaks to the trends that resonate with the rest of the company’s shoppers. Instead, it risks applying what works at one store to many, which could send it running in the wrong direction. Instead of expanding its brick-and-mortar footprint altogether (and opening up new stores that are still way too big), JCPenney should invest in technology that limits its inventory, allows it to better understand what brands or products are actually working and better serve its customers.
  • A range of heightened experiences won’t solve JCPenney’s main problems, which are excess inventory and outdated stores. Of the multiple turnaround plans JCPenney has introduced, the retailer has yet to downsize. Complex lease agreements are the culprit but it needs to bite the bullet sooner rather than later. The experiences that JCPenney is investing in might keep customers in-store longer, but relying only on this change won’t turn around the business. Instead of opening a massive new store, remodeling its existing stores into smaller, more focused formats that feature curated assortments and inspire discovery would be more beneficial in the long term. The struggling department store needs to realize that it is structurally not set up for success.