Erica Moore

Tech VCs getting over their skis investing in DTC brands set back CPG investment for a decade Historically VC has been about investing in technology that disrupted big markets and captured lots of value That model didn’t fit consumer brands...until around 2012 it suddenly did: FB/IG ads provided hyper targeted access to your core demographic — stand up a website (Tech!) and suddenly you could “cut out the middleman” and grab a bunch of margin typically “stolen” from you by “antiquated retailers” Apply that to BIG markets (Shoes! Beds! Bags!) and all of a sudden VCs were chomping at the bit (they love TAM) In 2016, Dollar Shave Club was bought for $1 billion by Unilever; by 2018 Bleecker and Chestnut streets were full of DTC storefronts and the VCs behind those brands were celebrating Then things started to change: CACs rose, growth slowed, Casper botched its IPO and Apple changed its iOS to make ad targeting even harder The investors who were just recently high fiving on the way up were now underwater (crushed under heavy pref stacks) They were quick to throw the industry under the bus: “Consumer products are too capital intensive” “There’s no big outcomes in consumer” “We’re pivoting to e-commerce enablement - picks and shovels!” “DTC just doesn’t work” ...and their peers, their LPs, the media and the ecosystem at large took them at their word The industry dismissed consumer products as a whole, and in doing so it threw the baby out with the bathwater and led a lot of capital to write off CPG But the real story: these were overfunded businesses with good (but not great) products, structurally low repeat purchase and minimal moat Allbirds, Casper and Away raised a combined $700m to create less than that much value in their end state; Unilever sold off Dollar Shave Club at a steep discount 7 years after buying it The lasting misconceptions became core narratives that were only recently violated as the VC community scratches its head at the recent run of big CPG exits that raised modest amounts of capital (Poppi, Siete, LesserEvil, Touchland, Simple Mills) Word lately is that “CPG is back” — it’s just a shame that all these people thought it ever left

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ODDBALL RAISES $2M TO SCALE PLANT-BASED JIGGLY SNACKS Oddball, a New York startup reinventing the jelly snack, just raised $2M in seed funding led by Springdale Ventures to fuel retail expansion, product innovation, and presence across three Whole Foods regions. Founded by Sophia Cheng, ex-Estée Lauder exec, Oddball makes better-for-you, plant-based jelly cups with agar, a seaweed-based gelling agent, each with a full serving of fruit and no sugar, gelatin, or preservatives. The recipes were developed in collaboration with a Michelin-starred chef, blending clean ingredients with culinary precision. The brand’s mission is clear: bring back the fun of fruit snacks in a cleaner, modern form - and maybe take a bite out of Jell-O, the 126-year-old Kraft Heinz icon. Once nearing $1B in sales, Jell-O has slipped to around ~$700M as tastes shift and new challengers move in.

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One of my agentic commerce predictions for 2026 in this recent Forbes piece: Matt Nichols, General Partner at Commerce Ventures, notes that the mechanics are already in motion. Looking ahead, he predicts that this year, "Agentic commerce transaction volume reaches meaningful levels as consumers advance from research to buying on AI platforms. 2026 will be the year that transactions are completed in these platforms." To this prediction, Nichols adds another: retailers will be forced to build "super-feeds" specifically for AI platforms. “These data feeds may involve monetary transactions that could include payments to AI platforms or payments to the retailer/brand (depending on balance of power).” https://lnkd.in/g65RAerA

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Figs, a DTC medical apparel co, was offered a ONE BILLION dollar buyout in December by Story3 capital They said no, and everyone thought they were crazy. Just 6mo later, Figs reports earnings & rockets past $1B market cap I've been covering Figs for a bit now; & they're clearly executing. Breaking down this quarter's report & why its so important. If you're a DTC operator, take notes ✍ 1/ Revenue FIGS beat on sales with $152.6M (+5.8% YoY) vs consensus at $134.6M That's great - but what really gets me going is the 3x beat on adj. EBITDA - $19.7M v consensus at $6M I mentioned last qtr that the company is making promising progress, and this qtr it showed up in a big way 2/ Gross Margin Here is where I see Figs really shine - a new distribution center is helping generate leverage on selling expenses, reducing 3pts QoQ as a % of revenue. Last qtr I said gross margin would expand with reductions in discounting and sales expenses, and I WAS RIGHT. This gross margin expansion unlocks a WORLD of opportunity for figs. 3/ Contribution Margin Of those 3 points, 2 fell down to the CM line DESPITE marketing increasing as a percent of sales modestly. This is a very powerful signal! 4/ Net Income All of the above leads to a huge uptick in net income and margin for FIGS - YoY net income growth of 545%. Figs has made a step change in profitability and the fundamentals are all there. The business is founder led with strong surrounding management and the market is LIKE SEVENTY BILLION DOLLARS

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Acquisition is getting more expensive. The smartest brands I know aren’t panicking. They’re pivoting. Instead of chasing more customers, they’re getting more value from the ones they already have. But that only works if you actually know who those customers are. Online, that’s mostly solved. In-store? Still a black box for too many brands. Every anonymous checkout is a missed opportunity to build a lasting relationship. That’s why I love this new research we did with EY. It shows how Shopify POS turns retail stores into powerful growth engines. On average, it converts 8 out of 10 first-time in-store shoppers into known customers, automatically. No clunky data entry. No friction. Just instant connection. Here’s how: over 200M shoppers already use Shop Pay. So when they buy in store, Shopify POS recognizes them and securely adds them to your customer database. No extra steps. The impact is huge: 📈 3x higher AOV 🏪 Up to 76% in-store sales growth 🔁 61% lift in repeat purchase rate Castañer 1927 Digital Director, Xavi, said it best:  “We just needed all our customers, all our orders, and all our stock in one place.” Once they unified their data with Shopify, they grew their customer base by 40% and increased store sales by 10%. When your store becomes a relationship engine instead of a transaction point, the numbers speak for themselves. Dig into the full EY report here: 👉 https://lnkd.in/eyfi4Krw

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Yesterday e.l.f. announced the acquisition of Rhode Beauty for $1B. A very exciting transaction in the beauty space. Sharing thoughts below: 1. Rhode has only been around for 3 years. The business has scaled quickly over that time, but often strategics are looking for staying power when they bet $1B on a brand. This is the quickest exit to a $1B outcome and shows that e.l.f. is betting on Rhode's long-term ability to be a trend-setting leader in the category. 2. Rhode announced its upcoming launch in Sephora just a week before the acquisition was announced. While there is a high chance of success in Sephora given Rhode's brand awareness and scale (in large credit to Hailey Bieber's following), the brand is still unproven in retail. Brands are often told they need to prove out retail prior to getting acquired — this shows that building a strong, scaled brand with good underlying metrics is perhaps more important than what channels you’re in. 3. Rhode's LTM revenue is $212M, implying a 4.7x sales multiple, which is in line what what we have historically seen for strategic skincare exits. Given the upcoming Sephora launch and low retail penetration today, there is a big opportunity to continue to drive growth over the next 12 months. The transaction price will probably look pretty good in a year from now. 4. While there have been mixed views on the staying power and authenticity of influencer / celebrity brands, Hailey Bieber has the unique combination of a massive following (55M ig followers) and authenticity in the space (I've been watching her skincare youtube videos far before Rhode launched). She is aspirational and her followers look to her for skincare / makeup inspiration. She has proven with multiple products that she can set trends, not follow them. 5. With the recent acquisitions of Naturium and Rhode, e.l.f. is proving to be one of the most active and bold strategic buyers in beauty over the past few years. It will be interesting to see how the beauty buyer universe continues to evolve in the years to come.

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The verdict is officially in: tariffs are causing the next resale boom. We all assumed this would happen, but now the Q1 data is here to back it up: –> ThredUp reports a 95% YoY increase in new buyers –> 11% YoY revenue growth at The RealReal –> Resale app downloads surged for Depop, eBay, and Poshmark –> Treet is seeing record sales revenue this quarter As James Reinhart, CEO of ThredUp puts it, "Given volatility in global trade, it’s probably more relevant than ever for a brand to think about how to get back products or recycle them into their supply chain to not pay tariffs on stuff it’s already made." And we're seeing it here at Treet. It's a no-brainer moment for branded resale. Brands that quickly adopt tariff-free revenue channels will be ahead. Thanks The Business of Fashion and Lei Takanashi for shining a light on this next wave in resale 🙏 https://lnkd.in/gmkhES3n

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15 Lessons I learned from turning around 3 big DTC brands over 25 years: 1) Set the right culture: Urgency, Meritocracy, Profitability. 2) Break the biz into Strategic v. Non-strategic costs: Strategic = profit-driving. Non-Strategic = not. 3) Jam suppliers: Put all contracts out to bid, cut consultants, negotiate agency fees. 4) Reduce subsidy costs: AKA discounts for ppl who’d have bought anyway. E.g. Timed exit pop-up. 5) Increase prices: Test price elasticity on popular products. 6) Adopt zero-based budgeting: 0 every expense. Justify new ones in writing. 7) Use discount ladders: Only discount @ the point of biggest impact + the minimum amount. 8) Rework compensation: Realign incentives. Profits > tenure. 9) Don’t become a tech org: Don’t hire engineers to build a crazy data pipeline. 10) Fix 1x buyer problem: Analyze Recency to drive 2nd purchases. 11) Be okay with layoffs: RIF = expected. Go once, go deep. 12) 3 Rev Multipliers: Purchase Frequency, AOV, # of Customers. 2x Rev by increasing each by 30%. 13) Juice AOV: Premium service upsells ^^^ your AOV. Also: cross-sell high-margin, low-cost items. 14) Use bounce-back campaigns: When a 1x buyer purchases from one category, trigger them an offer off another category. 15) Hunt 🐋: Not all customers are created equal. Focus on VIPs = massively outsized impact on your biz. Get full explanations of those 15 lessons. + read 15 more in my Nerd Marketing ebook, Turnaround Secrets. Download Link in comments.

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For the first 5 years at Chubbies, we built a fast-growing DTC business...and almost ran out of money. Only after realizing a key truth did we find the path to sustainable profit growth. Our story speaks to one of the largest points of tension in digital brand building today: It’s the tension between the simplicity of launching a DTC store and the scale and profitability of expanding distribution channels If you're feeling like you're pushing an increasingly heavy snowball up a mountain with your digital DTC business, this post is for you The Data: Market Sizes by Channel When we looked at the total market potential for e-commerce as a percent of total retail, we learned E-commerce makes up 15-20% of total retail, with the top 15 online retailers dominating 66% of the U.S. ecom market. This leaves DTC brands with only 5-7% of the total market potential Our Mistake: Assuming Infinite Scale of Digital DTC We—and countless brands—learned that this 5-7% is the easiest to access. With a creative product, you can launch a Shopify store, run ads, and boom—you’ve got a business that can grow quickly. And that's what we did Our Lesson: The Channel's Inherent Limitations We learned, however, that because of the scale limitations and the fact that the digital ecosystem is typically governed heavily by paid direct-response promotion on Facebook and Google, building a highly profitable business that reaches substantial scale on just this 5-7% is extremely difficult Updated Mindset: Why Would a Retailer Want to Carry My Product? This is where lessons around distribution came in. And here, the critical question became "How?". Why would retailers want to carry my product? Or, in other words, what’s the value proposition of my brand to a buyer from a big retailer? How does carrying my brand get that person promoted? The Answer: Brand This is where the power of Brand comes in. We realized that through every touchpoint—products, marketing, fulfillment, and more—we were building a brand and creating lasting (or fleeting) impressions with customers. The more we focused on building the brand at scale, (and delivering sell-through with existing partners) the more we saw interest from more buyers The deeper we got into this world, the more we learned about how buyers think. When a category buyer takes a look at their market, that’s what they’re looking for: businesses that will add to the pie, that will bring an audience, that will attract more buyers vs simply displacing other category competitors by competing at the price and offer level The best part? We learned investing in Brand digitally didn't just help grow in the digital channels, but it spurred growth across the full 100% of our category’s market Action You Can Take Today Exec meeting topic: Why would retailers want to carry my product? What’s the unique value proposition of my brand to a buyer from a big retailer? How does carrying my brand get the buyer promoted? Hope this helps

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Julie Bornstein is an old friend and colleague I was fortunate to learn from. She has a unique perspective on the evolution of commerce, having brought Nordstrom into the ecommerce era -> led digital at SEPHORA -> pioneered a new model of personalized shopping at Stitch Fix -> and is now solving fashion discovery with agents at Daydream. This episode w/ Rishabh and Julie was a glimpse into how the future of personalized shopping can work for both merchants and consumers, and was grounded in insights from the last 25 years of commerce. Link in comments:

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𝐒𝐨𝐥𝐨 𝐁𝐫𝐚𝐧𝐝𝐬 - 𝐭𝐡𝐞 𝐥𝐚𝐭𝐞𝐬𝐭 𝐝𝐢𝐬𝐭𝐫𝐞𝐬𝐬𝐞𝐝 𝐃𝐓𝐂 𝐛𝐫𝐚𝐧𝐝 In its recent earnings announcement, Solo Brands raised the alarm that "there is substantial doubt about our ability to continue as a going concern." Solo Brands is just the latest former "DTC darling" to hit rocky times, joining Allbirds, Peloton, Casper, Outdoor Voices and more. After initial DTC success with the Solo Stove, management started to snap up other outdoor-active brands like Oru Kayak, ISLE, IcyBreeze and Chubbies Shorts under the Solo Brands umbrella to apply the same DTC magic. In fact, when Solo Brands went public in 2021 they chose DTC as their stock symbol. Things haven't gone so well since then, with stock falling 99% from $21.03 in November 2021 to $0.22 toady. 𝗧𝗵𝗲 𝗴𝗼𝗼𝗱 𝗻𝗲𝘄𝘀 is that they have a stable of great brands and differentiated products that generate pretty healthy gross margins of over 61%. 𝗧𝗵𝗲 𝗯𝗮𝗱 𝗻𝗲𝘄𝘀 is that the DTC model has saddled them with unsustainable operating expenses -- $435M in 2024 or an eye-watering 96% of sales. Now in fairness, $136M of those expenses were "restructuring, contract termination and impairment charges" and that’s actually down from $249M in 2023. In an attempt to weather the coming storm, they drew $277M on their revolving credit facility in January, taking total debt to over $400M. They likely made that draw now because they "expect to experience difficulty remaining in compliance with the financial covenants in our credit agreement" which would cut them off from future lending. 𝗪𝗵𝗮𝘁'𝘀 𝗡𝗲𝘅𝘁? Major work is going to be needed to turn the company around, starting with taking a hatchet to that 96% operating expense line (albeit a really sleek stainless steel hatchet). Solo Brands has great brands, awesome products, healthy gross margins and a (ironically) healthy wholesale business. Major cuts are needed on the DTC side to refocus on top-of-the-funnel marketing that drives the overall business. Here’s hoping that Solo Brands has the runway to make needed changes and keep these great brands in our outdoor stores. Follow me for more #OutdoorIndustry insights and analysis: Eoin Comerford.

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Levi's just revealed what every fashion brand chasing DTC dreams needs to hear: 𝘄𝗵𝗼𝗹𝗲𝘀𝗮𝗹𝗲 𝘀𝘁𝗶𝗹𝗹 𝗱𝗿𝗶𝘃𝗲𝘀 𝟱𝟰% 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 $𝟲.𝟰 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀. While CEO Michelle Gass celebrates her "DTC First" strategy delivering 11% growth, here's what the numbers actually show: 𝘄𝗵𝗼𝗹𝗲𝘀𝗮𝗹𝗲 𝗱𝗿𝗼𝗽𝗽𝗲𝗱 𝟯.𝟰% 𝗮𝗻𝗱 𝘀𝘁𝗶𝗹𝗹 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗲𝘀 𝗺𝗼𝗿𝗲 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝘁𝗵𝗮𝗻 𝗗𝗧𝗖. The 2024 breakdown: ↳ Wholesale: $3.4 billion (54% of revenues, down 3.4%) ↳ DTC: $2.9 billion (46% of revenues, up 11.3%) ↳ Added 157 company-operated stores in one year Despite aggressive DTC expansion and double-digit growth, wholesale still generates $500 million more in annual revenue. 𝗧𝗵𝗲 𝗗𝗧𝗖-𝗙𝗶𝗿𝘀𝘁 𝗽𝗮𝗿𝗮𝗱𝗼𝘅 Levi's is pouring resources into DTC infrastructure: ↳ High fixed costs in retail real estate ↳ Significant ongoing investments in equipment, inventory, and personnel ↳ IT systems and omni-channel capabilities ↳ Rising labor costs at distribution centers Meanwhile, their wholesale channel declined 3.4% in 2024 (a warning signal they couldn't ignore). By Q4, management shifted focus to "stabilizing wholesale" for 2025. Translation: they realized the DTC-only path has limits. 𝗪𝗵𝘆 𝘄𝗵𝗼𝗹𝗲𝘀𝗮𝗹𝗲 𝘀𝘁𝗶𝗹𝗹 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 Levi's sells through approximately 50,000 retail locations worldwide. Their products sit in department stores, specialty retailers, and mass channels where consumers already shop. That's reach DTC can't replicate (at least not profitably). The math is simple: ↳ DTC: Higher margins × limited reach × high fixed costs = growth ceiling ↳ Wholesale: Lower margins × massive distribution × lower fixed costs = sustainable scale 𝗧𝗵𝗲 𝗿𝗲𝗮𝗹 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 Levi's isn't choosing between channels (they're optimizing both): ↳ DTC gives them brand control and customer data ↳ Wholesale gives them market penetration and volume ↳ The combination creates brand omnipresence Their top 10 wholesale customers still represent 26% of total revenues. No amount of DTC growth can replace that overnight. 𝗧𝗵𝗲 𝗹𝗲𝘀𝘀𝗼𝗻 𝗳𝗼𝗿 𝗳𝗮𝘀𝗵𝗶𝗼𝗻 𝗯𝗿𝗮𝗻𝗱𝘀 Stop viewing wholesale as legacy distribution. It's a growth multiplier when executed strategically. The winning formula isn't DTC-first or wholesale-first. It's channel harmony. Nike already tried going all-in on DTC but backtracked because it didn't make sense in the long run, financially speaking. Now Levi's is pushing "DTC First" while quietly working to stabilize their wholesale decline. It will be interesting to see how fashion brands decide to play in the future and what distribution channels they choose to prioritize. The winners won't be the brands that choose one channel over the other. They'll be the ones that master both. ___ 🛍️ P.S. If you think we can help your #fashion brand achieve better results with paid advertising and economics optimisation, feel free to send me a message or visit Grapefox.

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