Goop will sell its wellness products in Sephora, a wholesale partnership that risks diluting the luxury lifestyle brand.

WHAT HAPPENED: Starting this week, Goop’s wellness products will be available for sale on Sephora.com and Goop skincare will be available in Sephora stores in February, with more product categories to come in the following months. This is the first time that Goop’s products will be available outside of its own retail channels and at select independent retailers. The brand’s partnership with Sephora coincides with the launch of its Netflix series “The Goop Lab.”

WHY IT MATTERS

  • It will be challenging for Goop to communicate its brand ethos without the direct connection to its own platform. Goop’s positioning as a lifestyle brand—it offers recipes, wellness tips, products (beauty, apparel, wellness, etc), workshops, events and more—enables the company to keep building the Goop world. Up until now, customers have to buy directly from the company to access the Goop world, which has been key to its success. Controlled distribution channels forced consumers to interact with the brand in its entirety, giving them a clear understanding of what the Goop brand stands for, even before making a purchase. The strong sense of connection the brand organically promotes on its own platforms will be difficult to establish in the mass retail format.
  • A wholesale partnership with Sephora moves Goop away from the curatorial role that made it famous in the first place. Selling its products in Sephora challenges Goop’s status as a taste-maker, replacing the novelty of handpicked items by Gwenyth Paltrow and her band of “Goopies” with that of Sephora’s buying department. Seeing Goop’s private label products outside of the brand’s bubble could make the high price-tag off-putting for Sephora customers unfamiliar with the brand. For current loyal brand fans, availability in Sephora could challenge the existing community as the brand transitions away from its niche roots and into the mass-market.

2) Highsnobiety entered physical retail with a pop-up in Selfridges, a strategy that enables the media brand to remain flexible and maintain its loyal following.

WHAT HAPPENED: The streetwear-focused media brand partnered with Selfridges to launch its Co.Lab pop-up, which opened this week and runs until February 9th. The 1,600 square-foot space will feature new drops of merchandise each week and the launch coincides with the release of its co-produced documentary Colette, Mon Amour. Highsnobiety designed a collection with Colette’s founder, which will be available in the Co.Lab space and online.

WHY IT MATTERS

  • Highsnobiety’s use of short term pop-ups as its main physical manifestation will allow it to maintain relevance over time. As a digitally-native company with a diverse fanbase all over the world, launching pop-ups regularly creates a sense of novelty that encourages its followers to shop both in-store and online. Building a permanent store in New York City or LA would attract crowds, but creates a host of other operational issues that a media company is not suited to handle. While this is an initial experiment, the question is how widely this can scale and how many different retail partners will want to work with Highsnobiety before the ask for some sort of exclusivity given the intense competition among major retailers.
  • Highsnobiety’s media positioning is advantageous because advertisers can become product collaborators and vice versa. While there is an immense amount of noise in the streetwear collaboration world, Highsnobiety’s media background and global reach incentivize brands to both advertise and create products with the company. For some brands, this could be more fruitful than collaborating with more traditional streetwear labels like Supreme. In turn, this vertical integration allows Highsnobiety to earn more revenue from each client while using other brands to expand its commerce business.

3) Sweetgreen wants to move beyond salads, but it needs to improve its technology and delivery strategies before expanding.

WHAT HAPPENED: Sweetgreen recently opened its new 3.0 concept store in New York City and plans to double its store count in the next three years. The company has raised $350 million in private capital, bringing its valuation to $1.6 billion, which makes it the only restaurant unicorn. Sweetgreen currently operates 103 locations.

WHY IT MATTERS

  • Rather than focus on category and merchandise expansion, Sweetgreen needs to refine its technology and operations. While its 3.0 store received some positive feedback, other customers described their experience as confusing and irritating because of unclear pricing signage, too much merchandise and long wait times. Mistakes are inevitable, but the company needs to beef-up its technological and operational capabilities if it wants to be known—and valued—as a tech company. Starbucks launched its mobile pickup in 2015 and continues to improve its service, staffing employees specifically for pickup operations and iterating on its mobile app. Sweetgreen’s smartphone app accounts for 55% of its order volume, proof that its audience desires convenience and speed. Perfecting this model with only salads will make store expansion more seamless and will help the brand to develop its reputation throughout the country.
  • While Sweetgreen’s “Outpost” strategy is a corporate alternative to traditional delivery, it will need to own the one on one delivery process to continue growing. In just over a year, Sweetgreen built over 700 Outposts, which are office-specific pickup areas for local employees to order their salads online and pick them up in their lobby for no added cost. This strategy is helping Sweetgreen become the lunch of choice for many office buildings but in order for Sweetgreen to effectively scale outside of urban areas, it needs to normalize this service for a wide range of customers—outside of corporate office dwellers.

4) Casper laid off 30 employees, a sign that the mattress unicorn is struggling to define itself beyond selling mattresses online.

WHAT HAPPENED: Casper let go of 30 employees as part of a reorganization and in advance of an initial public offering. The company was valued at $1.1 billion in its most recent round of funding.

WHY IT MATTERS

  • Casper’s origin as a mattress-only company hinders its ability to gain traction as a lifestyle brand. While Casper was one of the first brands to normalize buying a mattress online, close to 200 legacy players and existing bedding companies have entered the online mattress space, making it increasingly difficult for Casper to stand out. Once Casper realized that only selling mattresses—a high-AOV, infrequent purchase—wasn’t sustainable, many of the adjacent sleep categories already had either intense competition (Parachute, Brooklinen, Allswell) or category leaders. Casper lacked conviction and its follow up products have mostly sputtered.
  • Casper’s focus on launching hundreds of stores is getting in the way of its desperate need for product innovation. After two years in business and nearly $200 million in mattress sales in 2016, Casper’s venture into product categories like pillows, lighting and dog beds has failed to turn it into a lifestyle brand. Casper announced plans to open a fleet of stores last year to widen its physical footprint, but without compelling products to stock the shelves the exercise will not be worth much. Instead of focusing on retail expansion, Casper needs to re-evaluate its product strategy by developing products that actually improve sleep for customers, not LTV for Casper.