Add to Cart 10th February
It’s good to be back.
Like an Amazon product feed, there are millions of pieces of retail-related content released each week. Every fortnight I write about the stories I found most valuable, to keep in the back pocket.
NOTE: Reading online isn’t like reading a book. For those who want to skim and get the main facts I do a ‘TLDR’ and a ‘binge’ deep dive for those who want more.
CATEGORY: Celebrities and the creator economy
Of all the Super Bowl ads that ran over the past week, 63% of them featured celebrities (yes I counted). This is almost double previous records, where it was reported that 36.5% of ads featured celebrities.
And yes, I acknowledge that Hollywood stars have significantly more time on their hands than ever before. In fact, as noted by Bob Hoffman last week ‘it’s a lot easier to find a celebrity than an idea’.
As TV viewership declines, a celebrity with millions of followers on Instagram is a crucial amplification strategy for a million dollar commercial.
But there’s more to this story.
General Motors didn’t insert a Will Ferrell cameo into their ad. They employed him (talent) as creator to sell a GM car only as Will Ferrell could (by declaring war on Norway). To borrow Bob Hoffman’s line: the celebrity is the idea. Dare I say the medium is the message.
Just as the gatekeepers of content have changed, so too has the role of ‘celebrity.’ Talent has become the idea and the product, giving rise to new retail opportunities.
TLDR
- In ‘the new mainstream,’ subcultures or niche communities have their own celebrities — versus the ‘traditional’ stardom featured in Superbowl ads
- The Long Tail of these cultures/interests means products in low demand can collectively make up market share that rivals or even exceeds the blockbusters
- The social app landscape continues to tilt in favour of celebrities (Patreon, OnlyFans, Twitch all seeing huge YoY growth) which spawn retail opportunities (e.g. merch, collabs)
- Celebs in the new mainstream co-create content with fans. This ultimately leads to the co-creation of products, and exclusivity of products via a celebrity’s ‘meme’ IP.
BINGE
Celebrity is an important topic — because the definition of a ‘mega star’ is changing, particularly when we consider the long tail of internet sub cultures. Big game commercials aside, there’s a broader trend at play, which has major implications for retail.
TNM
Let’s start with Marc Geffen’s writings about ‘The New Mainstream’ (TNM). In discussing celebrity fandom he explains:
Whereas there used to be only enough cultural headspace to anoint a select few celebs as global media royalty, now each subculture or niche community seems to have its own mega star.
The internet as the ‘fifth estate’ means anyone can be a celebrity of their own sub community. And while the Super Bowl very much played into the ‘global media royalty,’ there is royalty everywhere you look. From Blackpink’s Jisoo (KPop), DanTDM (Minecraft) or Margaret Zhang (fashion) .
And each sub community is a retail opportunity.
I’ve written about Shopify and TikTok a few times before, but the key here is the potential these platforms give in monetising the long tail.
Direct-to-audience
Chris Anderson’s 2006 book, The Long Tail, predicted the how products in low demand can collectively make up market share that rivals or even exceeds the blockbusters, but only if distribution is large enough. He wrote:
For too long we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching…
E-commerce players such as Shopify in combination with platforms such as TikTok or Instagram give low demand products opportunity to service niche interests, removing the issue of lowest-common denominator altogether. Understanding a market opportunity is really about understanding different audiences or communities. “Direct-to-audience” is the new DTC.
Fans and the creator economy
The social app landscape continues to tilt in favour of celebrities (both mass and niche).
As Axios reported last week, creator-economy platforms like Patreon, Substack and OnlyFans have soared in popularity in 2020. Nearly every major app geared toward content creators saw significant increases in downloads during the pandemic, according to data from Apptopia.
These apps aren’t social networks, chat platforms or Q and A forums; they’re built around content makers who are paid. It’s a stark contrast to platforms like Facebook that are mostly powered by everyday users’ unpaid posts and interactions.
And there are many ways to pay creators. From exclusive content to shout-outs, these platforms give the consumer enhanced access to talent. The natural progression of these communities is retail opportunities — already witnessed across the multiple creator-made product ranges (whether it’s Emma Chamberlain’s coffee, The Joana Ceddia Trinket Box or Mishti Rahman’s lipsticks).
100 followers on OnlyFans
Scale is also relevant. The opportunity for monetisation naturally varies depending on fan base, but as Li Jin for a16z proves, it’s not that hard to make decent money.
As Jin explains, the average initial pledge amount on Patreon has increased 22 percent over the past two years and since 2017. Further, the share of new patrons paying more than $100 per month — or $1,200 per year — has grown 21 percent.
If we swap a Patreon pledge for a retail product, the same direct-to-audience dynamic applies and the opportunity for e-commerce becomes very obvious.
Further, all three tiers of audiences contribute to the value of products even if they’re not purchasing them. Products are spawned from participation and fandom, which platforms such as TikTok prioritise, powering the fan-to-creator cycle.
Memes as products
Another core aspect of celebrity is the narratives they co-create. This ultimately leads to the co-creation of products.
The way stories and celebrities ‘go viral’ is very different to the transmission of traditional media.
As Ben Thompson points out in his latest post, the creation and evolution of internet stories feeds off communities both supplying and demanding content. I could talk for years about my love of memes, but what is important is how they evolve to become unrecognisable, frequently indescribable and increasingly exclusive.
As Thompson describes:
The best way to describe what happened to Gamestop is that it was a meme: it’s meaning was anything, and everything, evolving like oral traditions of old, but doing so at the speed of light. The real world impact, though, was very real…
I talk about importance of narratives in next section (stay reading!), but the best description of the Gamestop saga is exactly as Thompson says: it is a clear example of real-world value emerging from the co-creation of sub communities online.
Major Youtubers such as Joana Ceddia produce merchandise that is essentially memes in product form. Her trinket box range literally contains physical inside-jokes for her fans (e.g. a kazoo and a mini figurine).
I acknowledge the fragmentation of audiences and products is not a *groundbreaking* hot take.
The purpose of this thread is to assess the role of creators (talent) and fans in shaping new trends in retail. The long tail enables what Geffen calls the paradox of the new mainstream; products that are both niche and mega popular. Recent events surrounding Gamestop, Superbowl, OnlyFans and TikTok etc prove there is infinite potential for celebrity and retail.
CONSUMER: Conspicuous to conscientious
Over the break I rediscovered Narrative Economics by the Nobel Prize-winning economist and NYT best-selling author Robert Schiller.
While it was published in 2019, its lessons endure.
The key word in the title is “viral” (aka one word summary of 2020). Before you yawn, note that the book offers a new way to think about how popular stories (spread via the public) help drive economic events.
Put simply: narratives can be very contagious. Like any outbreak, not everyone becomes infected, but when narratives do begin to spread they become the primary cause of behaviour — ‘for most people the narrative will be fundamental to their reasons for doing, or not doing things that affect the economy’.
Most striking was the chapter on ‘Frugality versus Conspicuous Consumption’ which is particularly relevant in the old panny D (as I’m still unashamedly calling it).
TLDR
- Schiller explains how two narratives (frugality vs conspicuous consumption) are at constant war.
- During the great depression of the 1930s, frugality reigned supreme which ironically served to prolong the effects of the period.
- The story of frugality (and disgust in indulging in luxury) spurred the rise of “poverty chic” during the 1930s, influencing everything from widespread bicycle usage, denim fashion trends and jigsaw puzzle mania (sound familiar?)
- Similar societal narratives are evident today — specifically the ‘eat the rich’ trends across TikTok, and retail consumption centered on simple pleasures.
- Conspicuous consumption categories (e.g. luxury goods) have pivoted to adapt to the new narrative, introducing sustainability and aligning to social values — better known as conscientious consumption.
BINGE
Schiller talks through the cultural narrative that dominated the depression of the 1930s which (surprising or not) has many plot similarities to the social narrative circulating today.
Schiller explains how two narratives (frugality vs conspicuous consumption) are at constant war. From Ancient Greece to Japan, frugality reigns supreme and people have long-told stories about the ‘disgusting’ nature of flaunting wealth. In opposition to these stories are narratives about conspicuous consumption (think: American dream), or spending to big to show off your success.
Each have taken priority at different periods of history, and both are incredibly important as they influence the overall state of the economy…and more specifically, retail. After re-reading, I naturally asked the question: which narrative is winning right now? Frugality or conspicuous consumption?
Let’s start by looking at luxury — the classic ‘conspicuous’ status-driving category. Forbes reports that the global personal luxury goods market saw a 23% decline in 2020, losing $79B in sales and marking the greatest year-over-year drop in the 25-years it has been recorded.
A lot of this makes sense. Jet-setting luxury travelers account for between 20-to-30% of luxury goods sales, according to McKinsey. But is there a greater human interest angle at play?
Frugality reigns supreme
When the going gets tough, people get thrifty.
Schiller recounts how during the Great Depression in the 1930s, the phrase ‘keep up with the Joneses’ was created to look down on people who needlessly purchased goods to maintain appearances.
During the pandemic, a different (albeit similar) social sentiment has emerged. Consider Kim Kardashian’s ‘humble’ 40th birthday bash on a private island in October which was met with outrage online.
Not soon after, the phrase ‘eat the rich’ started trending across Twitter and eventually became a full-blown trend on TikTok. What started as a reaction to rising inequality during the pandemic quickly became an opportunity to point out wealth disparities in everyday purchases. Much like the 1930s Depression, such societal catchphrases reflect consumer expectations about collective spending patterns.
Schiller argues that such ‘narratives’ greatly influence the economy. E.g. in the 1930s depression, the affinity for thriftiness actually prolonged the depression. Further, consumers fell into natural patterns of consumption driven by societal attitudes.
In the 1930s “poverty chic” culture spurred new trends in retail, which stood out to me as eerily similar to consumption patterns of the pandemic.
I bucketed some of the major retail trends Schiller mentioned and quickly made comparisons to current consumer climate. These include:
- Widespread bicycle adoption: thriftiness and a fear of unemployment drove the postponement of new car purchases and a huge increase in bike sales, with many department stores installing bike racks. Naturally the sales of new Ford Motor Cars dropped 86% from 1929 to 1932. Similarly, sales of new cars in Australia plunged almost 50% last year while bike sales soared — driving approximately 6 months worth of purchases in 6-weeks.
- Modesty Fashion: Blue denim jeans suddenly became fashionable in the 1930s depression. What were previously dubbed “work clothes” quickly ascended to become a symbol of equality and democracy, with Levi Strauss launching their first women’s jeans line in 1936. The 2020 equivalent? Look no further than NYT article, “Sweatpants forever.” Retailers like Stylerunner saw 80% growth in tracksuit sales, with high fashion brands releasing their own lines (typically in earthy shades of khaki, slate and clay). And yes I acknowledge WFH supercharged this trend, but the collective adoption of the 21st century “work” uniform is surely history repeating.
- Jigsaw mania: For entertainment in quiet, stay-at-home evenings, cardboard jigsaw puzzles were suddenly on sale everywhere. The 1930s depression triggered the largest jigsaw puzzle craze in U.S. history, with weekly cardboard puzzles sold at newsstands. Fast forward to 2020, and puzzles made a serious comeback, with Scomo actually describing puzzles as an “essential item” worthy to leave the house to purchase during peak of the pandemic.
I acknowledge that bikes, tracksuits and puzzles may indeed by nothing more than rational responses to pandemic-enforced lockdowns, however Schiller makes clear that enthusiasm for such products drive a broader ‘craze’ or frugality phenomena. The change in demand for goods are services through time is dependent on subtle changes in narratives. As Schiller remarks:
Only after one heard the narrative describing others who rode a bike to work or stayed home assembling jigsaw puzzles in the evening would be comfortable doing the same things.
The ‘eat the rich’ trends of 2020 indicate where the current narrative exists: It’s disgusting to show off your wealth while people are suffering.
Taking a Schiller lens, we can assess how such consumer attitudes have influenced the retail sector — specifically those goods typically associated with conspicuous consumption.
Why is this interesting?
Collective social attitudes (i.e. a frugality mindset) is driving a radical reset to luxury consumers’ priorities. With increased time spent at home, experts have noted a shift in demand for ‘conscientious luxury,’ with restraint shown towards indulging in personal luxury goods such as jewellery, watches and high fashion.
Globally, there are exceptions to this (specifically in China where luxury sales were actually up in 2020), however on the whole, many luxury brands have pivoted to emphasising new values e.g. environmental stances, sustainability and socially-responsible business practices and support of cultural values like gender, race, sexual orientation and income equality. Sustainability platform ‘Positive Luxury’ gained traction over the past 12 months with over 170 members including Christian Dior, IWC and Luis Vuitton signing on and major growth plans this year.
In this sense, the Schiller lens provides a new way to think about how popular stories help drive economic events and more specifically, retail trends. An eventual return of the conspicuous consumption narrative will similarly trigger huge change in consumer preferences- across both everyday and luxury categories.
CULTURE: Stand and Gorp
Hikecore is nothing new. But a torrent of functional-first fashion collabs (including one of the most anticipated in 2021) prove that #gorpcore is here to stay.
For the uneducated, GORP is a colloquial acronym for trail mix (“Good Ol’ Raisins and Peanuts”) which has been adopted to describe a steady adoption of mountain-gear-as-high-fashion.
Think technical backpacks, GORE-TEX cargo pants and puffer jackets that can withstand -22 degree ice-storms…but also be worn to brunch.
After Patagonia distanced itself from tech bros back in 2019, gorp has taken on many forms. The events of the past year has accelerated gorp’s place in culture as both an aesthetic and a distinct eco-focused attitude towards fashion.
TLDR
- The pandemic has supercharged gorpcore, represented by the highly anticipated collab between The North Face x Gucci back in Jan.
- An increase in people exercising outdoors (and moving away from cities) has propelled mountain-wear further into the spotlight.
- Gorpcore also plays into a growing rejection of fast fashion with its focus on durability and technical design.
- Gucci adopted The North Face’s commitment towards sustainability by using recycled nylon and fabric from previous collections.
- Longevity and durability was celebrated in the collection’s homage to 70’s outdoor aesthetics.
- Exploration was injected into every media channel, from (traditional) mountaineering magazines to (non-traditional) avatar items in Pokemon Go.
BINGE
The WSJ does an excellent job recounting the trend’s origins, specifically gorpcore an offshoot of normcore (a personal fave) — both of which put pragmatic on a pedestal. Jacob Gallager writes:
Gorp fans worship practicality, but they also cherish the hints of high design that brands lace into their outdoor gear.
Winter in the northern hemisphere has seen the gorp collabs go into overdrive, with many US or Canadian brands teaming up with prominent Japanese contemporary fashion chains such as Arc’teryx and Beams and And Wander. Italian brand NemeN is renowned for its futuristic dyed weather resistant parkas while Salomon (known for its skis and hiking boots) has rolled out an army of highly coveted sneakers and even a collab with COMME des GARÇONS.
Why is this interesting?
As the WSJ points out, gorpcore has been around for a while (the term was coined back in 2017) however the pandemic has undoubtedly supercharged the trend. Three key factors:
- A heightened appreciation of nature and the environment — particularly as many migrate away from urban centres. Closed gyms has more people exercising outdoors and exploring local hikes as a novel (and COVID-safe) form of leisure.
- A growing focus on durability, driven by a rejection of fast fashion in favour of something that’s better for the planet (a movement Patagonia has spearheaded with its ‘worn wear’ initiative)
- The opportunity to “nerd out” over the technical qualities of gorpcore fashion. A focus on efficiency and good design in technology can easily transfer into fashion (whether it’s injecting resin into parkas to make them more rain-proof or the most breathable GORE-TEX possible)
What does this mean for retail?
A focus on function, authenticity and adventure is ripe territory for brands seeking to re-invent themselves in 2021’s unique cultural climate. But like any cultural trend, brands should tread carefully.
When The North Face x Gucci announced their collab on Instagram late last year, it was met with some skepticism. Hard core fans questioned if fashion hypebeasts had ever come close to mountaineering.
Yet this highly anticipated collab surprised many. Its rollout presents three key lessons for retail:
- Be an authentic eco-ally
The convergence of an Italian icon with a California based outdoor brand presented an opportunity to signal new values.
Gucci’s recent commitment towards sustainability (i.e. the very brand identity of The North Face) carried throughout the collection.
In honour of both brands’ commitment to sustainability, Gucci re-used ECONYL fabric from previous Off The Grid collections. The collection’s luggage and bags also featured recycled nylon fabric.
Beyond sustainability, the The North Face x Gucci were authentic in their media placements, partnering with the usual fashion platforms (think: Highsnobiety) as well as adventure and hiking publications such as Sidetracked magazine which celebrated the ‘unchartered territory’ that each brand had embarked on.
2. Celebrate durability in all forms
Gorp is the antithesis of fast fashion.
Gucci used it as an opportunity to celebrate the timelessness of North Face design, paying homage to the late 1960s and 1970s when The North Face was founded in a humble San Francisco mountaineering store. Everything from the campaign’s soundtrack (set to the tune “Bad Moon Rising” by Credence ClearwaterRevival, who had their practice studio adjacent to The North Face’s original storefront in California) to the hazy photos that mimic old-school 70's film
By reviving 70’s outdoor aesthetics, Gucci injected an enduring respect for the outdoors into the collection- respecting its origins whilst re-inventing Gucci’s future.
3. Explore through innovation
Adventurous clothing demands and adventurous media execution.
Which is exactly what Gucci did by adding a third player into the collab…Pokemon Go. A week after the collection dropped, Pokemon announced that avatar items based on The North Face x Gucci Collection were available in the game for explorers who were close enough to select “Gucci pins” located in specific cities around the world.
While many argued Pokemon was an awkward third-wheel, the digital extension to this collab was a natural evolution of the brand’s joint exploration into unchartered territories.
The exclusivity of these drops, combining both real and virtual fashion hunts allowed both brands to reach new customers and bring adventure to those audiences who don't have easy access to an IRL mountain.
