1、How To Build a21stCentury Brand2019-2020the IAB direct brands reportDirect Brand Initiative Strategic Partners:Indirect brand economy,1879-2010 retailerpublisheradvertising agencybrandconsumerfinancesourcingmanufacturinglogisticsdistributionintegration2Direct brand economy,2010+productservicesIdenti
2、tycommunitydataanalyticsprogrammaticstorytellingretailingmeasurementconsumerbrandfulfillment stackdata stackattention stackproduction stack34The IAB direct brands report01.The Disrupted Consumer Economy,2018-20192018 was peak retail apocalypseMore than 12,000 stores were projected to close in 2018 u
3、p from roughly 9,000 in 2017,and the largest number of closures in U.S.history,according to Cushman&Wakefield2017 retail closures were 4x 2016 closuresBy 2022,analysts estimate that 1 out of every 4 malls in the U.S.could be out of businessSource:Cushman&Wakefield Research and Moodys Analyticshttps:
4、/ growth in digital channels accelerated Table 1.Estimated Quarterly U.S.Retail Sales:Total E-commerce1(Estimates are based on data from the Monthly Retail Trade Survey and administrative records.Unless otherwise specified,all estimates are revised based on the 2016 Annual Retail Trade Survey.)71E-c
5、ommerce sales are sales of goods and services where the buyer places in order,or the price and terms of the sale are negotiated over an Internet,mobile device(M-commerce),extranet,Electronic Data Interchange(EDI)network,electronic mail,or other comparable online system.Payment may or may not be made
6、 online.2Estimates are adjusted for seasonal variation,but not for price changes.Total sales estimates are also adjusted for trading-day differences and moving holidays.Note:Table 2 provides estimated measures of sampling variability.For information on confidentiality protection,sampling error,nonsa
7、mpling error,simple design,and definitions see http:/www.census.gov/retail/mrts/how_surveys_are_collected.html.3rd quarter e-tail sales=$131B or 9.8%total salesA decade of steady,uninterrupted brick-and-mortar transition to e-tailEstimated Quarterly U.S.Retail E-commerce Sales as a Percent of Total
8、Quarterly Retail Sales:1stQuarter 2009 3rdQuarter 2018Source:https:/www.census.gov/retail/mrts/www/data/pdf/ec_current.pdfAdjusted:E-Retail Q3:$130.9Bil+3.1%over Q2And y/y Q3+14.5%Total Retail Q3:$1340.2Bil+9 over Q2And y/y Q3+5.3The Quarterly Retail E-Commerce sales estimate for the fourth quarter
9、of 2018 is scheduled for release on February 20,2019 at 10:00 A.M.EST.For information,including estimates from 4thquarter 1999 forward,visit the Census Bureaus Web site at http:/www.census.gov/retail.For additional information about Census Bureau e-business measurement programs and plan visit https:
10、/www.census.gov/programs-surveys/e-stats.html.*The 90%confidence interval includes zero.The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.8Digital shoppings retail share grew 2.5x in a decadeSource:Internet Retailer,U.S.Commerce
11、 Dept.https:/ as a Percent of Total Retail Sales2007:5.1%2012:7.9%2017:13.0%5%92007$136B$2,535B200713%82007$3,496B2017Across categories,digital retail$growth vastly exceeds brick-and-mortarSource:Nielsen,2017.https:/ Dollar GrowthFMCG categories are seizing outsized growth from e-commerce and“e”help
12、s emerging brands take share from incumbents11Source:Circle Up.https:/ International(Sept 2014);3QSR Magazine,Wells Fargo Securities;42013 Yogurt Market via Statistic Yogurt Dossier;5Specialty Coffee Association of America(Dec 2014);6Fortune Magazine(May 2015)$18 billion$4 billion90%Seismic Shift in
13、 Market ShareGrowing market shift to emerging brandsSlow adaptation to disruption is taking down incumbents12In most categories,direct brands are stealing share from incumbents13Sources:https:/ than 100“bed-in-a-box”companies like Casper,Leesa,and Purple doubled U.S.market share between 2016-2018,to
14、 about 10%,as leading incumbent Tempur Sealy saw sales decline 4.6%in the first half of 2018 and the largest American retailer,Mattress Firm,declared bankruptcy.In most categories,direct brands are stealing share from incumbents14US pet care industry sales grew by 4%in 2018.Online pet product sales
15、were up 30%in the first half of 2018.Sales for direct brand dog walking services Rover and Wag!grew 30%and 165%respectively.https:/ most categories,direct brands are stealing share from incumbents15U.S.personal care and beauty product sales grew 4.5%in 2018.Online personal care and beauty sales grew
16、 24%.Direct brand SiO Beauty tripled sales in 2018.Kylie Cosmetics generated$420M in revenue in its first 18 months.https:/ most categories,direct brands are stealing share from incumbentsIn a U.S.beer market that declined 1%by volume in 2017,craft brewer sales grew 5%by volume,and now account for m
17、ore than 23%of the$111.4 billion U.S.beer market.The 50 fastest growing craft brewers had median growth of 216%.16Source:https:/www.brewersassociation.org/statistics/national-beer-sales-production-data/In most categories,direct brands are stealing share from incumbents17The total U.S.furniture marke
18、t was flat from 2017 to 2018,and expected to grow annually by only 0.7%through 2023.Digital sales accounted for a quarter of all dollars spent on home goods&furniture in 2018,and are projected to account for 38%of sales in 2022.“Fast furniture”startup Burrow has been growing 20%per monthSources:http
19、s:/ IAB direct brands report 02.The Direct Brand Playbook,2019Play 1:CAC-to-LTV is the new purchase funnel19CACExperiencesSpeedDataServiceInstagram+FacebookPodcastingOTT VideoPlatformsProgrammatic DisplayContentMissionOmnichannelRetailCustomer ServiceCommunityProduct-to-MarketCustomer ServiceDirect
20、DeliveryDiscoveryDirect DeliveryProblem-solvingCustomizationProduct UsagePricingLifetime ValuePlay 2:Direct Brands are acquiring individual consumers20“CAC is the new rent.”Daniel Gulati,Comcast VenturesSources:https:/ consumers are consuming the world on mobile devices21Sources:Nielsen Total Audien
21、ce ReportsAverage Time Spent Per Adult 18+Per DayExhibit 1 Based on the Total U.S.PopulationDaily Time Spent with Live TV decreased by 14%in 3 years while mobile device time-spent was+133%Mobile:+133%in 3 yearsTV:-14%in 3 yrs40%of all e-commerce currently is m-commerce22Sources:*eMarketer *Forrester
22、,Mobile Commerce Forecast:Mobile 39.6%Mobile commerce=$208.1BPlay 3:Storytelling gets more acquisitions more cheaply23Source:MidrollOverview:To increase new customer acquisition,athletic sock disruptor Bombas advertised on podcasts valued for storytellingThey measured campaign performance using vani
23、ty URLs which led to a sign-up form to receive an emailed coupon codeResults:In a given week,50-60%of new customers could be attributed from paid channels with podcasting ranging from 15%to 40%of thatPlay 4:Community turns CAC into LTVSources:Forbes 11/7/18,IAB The Shift 12/6/18,Y https:/ online sal
24、es come via peer referralsFabletics:Found customers in areas with physical stores spend 2.8x more across all channels than customers in areas without stores.Matches Fashion:User-generated shoppable content drives 35%of site revenues“We have a 360-degree marketingplan,so we have everything fromradio
25、to television now but thebiggest part of our marketing allgoes toward our community.Itssocialmedia,itscommunitybuilding,its information sharing.”Ido Leffler,Co-Founder,Brandless“shoppable social”is on path to generate$165 billion in sales by 2021 25Source:Business Wire;ADI Retail Industry Report,n=5
26、0 billion site visits,2017 Growth In Share Of Retail Site VisitsBy marketing channelPlay 5:For disruptors,branding must perform and vice versa 26Sources:B,11/14/18 D,6/22/18;D,10/31/18.“We dont think that something like impressions means anything.Since these brands are selling direct-to-consumer,wer
27、e able to understand how certain stories work,and how placement and communications work,and then replicate the things that work.I dont think that transparency has existed in our industry.”Jesse Derris,founder,Derris“Traditional agency-brand relationships were a function of relationship building and
28、pricing efficiency.Thats still important but for the DTC brands,its much more quantifiable.So we need to be prepared to be held accountable for those types of goals.Theres no fancy PowerPoint presentation or New York City dinner that explains away us not driving the business outcome that they want u
29、s to.”Sam Appelbaum,GM,Performance Marketing,YellowhammerAmid an eroding unbundled agency model.27Sources:AdA State of the Agency Report,4/30/18,TheE,3/28/18Top 5 Agency Holding Cos Stock Prices:Last 3 Years to Dec.18 U.S.agency revenue grew 1.8%in 2017,slowest growth since the ad market emerged fro
30、m recession in 2010.Interpublic,Omnicom and Publicis have also notably registered anemic growth.WPP had worst year since the financial crisis,declining revenues from like-for-like operations and a slightly reduced profit margin.This year company projects organic growth will be flat.disruptor agencie
31、s are introducing end-to-end account consultancies28Sources:B,11/14/18;D,10/31/18;CrunchBase;LinkedIn.Play 6:Direct brands are becoming media promiscuous2990%launched with a Facebook-dominant strategy50%of marketing spend still goes to Facebook family40%+have customer acquisition cost management as
32、a top 3 KPIDuring the first 6 months of 2017,the average Facebook CPMs 171%,and average CPC 136%.Respondents are testing 3 other marketing channelsSources: https:/ https:/ brands are now colonizing main media30Source:VAB analysis of Nielsen ad Intel data,calendar year 2015-2017.TV spend includes nat
33、ional cable TV,broadcast TV,Spanish language cable TV,Spanish-language broadcast TV,spot TV,syndication TV.Reflects the cume TV spend of the 50 direct brands identified in this report.All 50 companies existed since 2015,except for Hubble,which was founded in 2016.50 Direct-Disruptor Brands Collectiv
34、ely Spent Over$1.3 Billion on TV in 2017,A 98%Increase YOY“Direct-Disruptor”brands has accelerated spending recently in this very competitive environment,having invested over$MM more in TV of the last yearStreaming consumers are disruptor-brand buyers31Source:IAB 2018;Ad Receptivity and the Ad-Suppo
35、rted OTT Video Viewer.Q27b.Subscription Purchases(Pet food,Contact Lenses,Meal Kits,etc.)How much would you estimate that your household spends on the following per month?Base:Total n=1223,ASV OTT Viewer n=589,SVOD Viewer n=332,TV Only Viewer n=302Mean Spend on Subscription Purchases(e.g.,Pet food,C
36、ontact Lenses,Meal Kits,etc.)TotalASV OTT ViewerSVOD ViewerTV Only ViewerAddressable TV will probably remain the favored disruptor buyThirdLove started investing in TV in 2017 with a budget of$286,000 for the first month.Within 3 months,they had spent$3 million.ThirdLovesmonthly TV budget has more t
37、han quadrupled since then.It has aired three separate ad campaigns and spent over$13.2 million on TV in 2018,per Nielsen.ThirdLove buys a mix of traditional TV and addressable TV ads,and measures traditional TV ads and addressable TV spots with website visits,conversions and cost-per-actions using t
38、hird-party TV analytics software.The company says TV could comprise 20%of its marketing spend by the end of 2019.Source:D,1/22/19“As advertising on Facebook and other digital channels becomes more and more expensive,offline strategy,especially TV,is more and more important.”Heidi Zak,co-founder&CEO,
39、ThirdLove32Big media streaming wars will increase reach and spend33Source:Videology/Advertiser Perceptions Advanced TV Trends,April 2018;eMarketer,July 2018Play 7:Omnichannel shopping is the new normal34Source:IAB US-China Digital Commerce Study 2016.Base:US online shoppers.BROWSE FIRST IN-STOREBROW
40、SE FIRST ONLINE1-in-4Online purchases are made after browsing in store first1-in-3In-store purchases are made after browsing online firstPURCHASEIN-STOREONLINE PURCHASESBROWSE PURCHASE16%30%13%Browsing and Buying:In Store vs.Online42%Pop-up stores are todays“creative revolution”Sources:RISN,11/28/18
41、 and 11/12/18;CNT,7/27/18;Forbes,7/12/18,US.FashionN,3/15/18;TeenV,3/14/18;BusinessI,8/23/18;Brand Sites.GlossierLaunched a pop-up in San Franciscos Rheas Caf,which served its signature dishes while also merchandising the space to whimsically show off Glossier products amidst flowers and restaurant
42、props.SnowePop-up in NYC is part of a shoppable loft,event space,and registry designed to inspire home transformations;“hybrid approach”of creating a physical location that can“inspire”and make people shop.Away“Terminal A”pop-up in SoHo is a chic airport design with a TSA-style checkpoint,luggage sc
43、anners,a NYC-themed souvenir area,and the companys luggage line.The“Uniform Shop”area lets customers mix and match luggage color combinations,add limited-edition stickers to their own luggage,or purchase luggage with hand-painted monogramming,pins,and embroidery.35Digital retail enabler Shopify is a
44、ssisting 150 disruptors to open locationsSource:S,customers;Pop-ups;Menagerie;LocalBranchComGymShark apparel used Shopify to quickly set up pop-up shops in various markets using iPads and credit card readers.The POS app syncs inventory and sales on the go.Having an in-person presence helped to creat
45、e excitement about the brand while also garnering important information from customers about what they like and what they would like to see in the future.Kylie Cosmetics is currently using Shopify to run a pop-up shop at Westfield Topanga outside Los Angeles.The shop features a glamourous replicatio
46、n of Kylie Jenners own bedroom as well as a Christmas tree with Kylie Cosmetics for ornaments.The shop sells her full selection of cosmetics,gift sets,and lip kits.Casey Shagena of Menagerie,which used Shopify for a temporary pop-up shop,says,“Shopify has helped me grow my business with easy-to-use
47、POS features.”Mackenzie&Blaine Vossler of TheLocalB,which used Shopify to open a retail shop,say,“Using Shopify POS makes running our store on the road simple.”36Stores are for experiencing as much as for selling37Source:RISN,11/28/18 and 11/12/18;CNT,7/27/18;Forbes,7/12/18,US.FashionN,3/15/18;TeenV
48、,3/14/18;BusinessI,8/23/18;Brand Sites.Caspers“Dreamery”locations where fans of the brand can schedule a nap on one of Caspers cutting-edge mattresses;experience includes a sleep mask,robe,earplugs,makeup wipes,as well as a cup of coffee afterward.38Source:R,10/10/18Casper will open 200 stores in No
49、rth America within 3 years,lingerie startup Adore Me for up to 300 in 5 years,and Allbirds for stores in 4 cities in the next year.More than half(60%)of the e-retailers studied opened their first pop-ups locations in New York,followed by LA(16.2%)and Toronto(5.4%).More than a third(41.3%)opened thei
50、r first permanent location in New York,then LA and San Francisco(12%each)and Chicago(5.3%).Nearly 62%of permanent stores opened in the same city where an e-commerce venture opened their first pop-up shop.Last year the greatest number of permanent stores were opened by formerly online-only retailers,
