The New Channel for Consumer Products
It features boutique retailers increasingly known as “shoppy shops” and a wholesale platform, Faire, that’s a discovery engine for startups and small businesses.
Here are today’s highlights:
The Commerce Department reports another strong quarter of economic growth.
More home buyers are insisting on buying all of the furniture, too.
Similarweb ranks the fastest growing digital brands.
You know something’s going on at Google when even the massage therapists get laid off.
The new path to discovery: Instagram, Faire, and “shoppy shops”: “Big Night touts itself as ‘a jewel box of a shop’ that carries pantry items ‘from all over the world,’ tableware, condiments, and, yes, olive oil. It’s the kind of store that gave rise to the great tinned-fish renaissance of the late ’10s. It offers all the essentials you need for a fabulous dinner party — including this $145 caipirinha pitcher — but more than anything, Big Night feels like a place where you can touch all of the products you see on Instagram. ‘I have heard it so many times,’ said Katherine Lewin, Big Night’s founder and CEO, when I asked if she thinks her store feels like everyone’s Instagram feed.”
“Neil Shankar, a designer at the company formerly known as Square, has a term for these types of stores: shoppy shops. He told me the name resonated on his TikTok page, which dissects the consumer-packaged-goods industry. ‘There didn’t really seem to be a name for all these artisanal markets that are popping up that carry these brands,’ he said.”
“Founded by a group of former Block employees (that’s the company that used to be Square), Faire is a digital marketplace that makes it seamless for store owners to find new products and buy wholesale.”
“For the products being curated, placement on Faire can fuel explosive growth. ‘Right when we hit the 100-store mark that I was going for, we got onto Faire’s marketplace and basically loaded all of our accounts into there,’ said [Allen] Dushi of Graza [olive oil]. ‘It’s very much a discovery tool. Faire is a machine. I think we just passed 500 accounts.’”
“‘Just the fact that we ship and collect 100 percent of the dollars from these independent stores is incredible for a business,’ Dushi said. ‘If we didn’t have that, I would have to hire someone to be doing outreach, calling these people and making sure we get a credit card and can get paid, and chasing them if we don’t.’” READ MORE
Small businesses are still hiring: “Since February 2020, small establishments—locations with fewer than 250 employees—have hired 3.67 million more people than have been laid off or who quit. Larger establishments—those with 250 employees or more—have cut a net 800,000 jobs during that time, despite some rapid pandemic-era expansions in such sectors as tech. That is according to data from the government’s Job Openings and Labor Turnover Survey. ‘Small businesses are literally holding up the labor market,’ said Aneta Markowska, Jefferies chief economist.”
“Small businesses accounted for 78 percent of the U.S. job listings in November, the latest month for which data are available, and 91 percent of the post-pandemic increase in job openings, according to Ms. Markowska’s calculations.”
“Small businesses generally rely on what consumers are buying right now to determine whether to increase or decrease their head counts. Data show Americans are slowing down but still spending a lot.”
“Gary Weiner, president and chief executive officer of Saxon Shoes in Richmond, Va., was looking to double his sales staff in 2022 by hiring about 15 people. He was only able to hire about half that number, and he said his staff was forced to scramble for much of the year. He is hoping to add more workers this year.” READ MORE
Here’s another reason the labor market is tight: “Long Covid is having a significant effect on America’s workforce, preventing substantial numbers of people from going back to work while others continue needing medical care long after returning to their jobs, according to a new analysis of workers’ compensation claims in New York State. The study, published Tuesday by New York’s largest workers’ compensation insurer, found that during the first two years of the pandemic, about 71 percent of people the fund classified as experiencing long Covid either required continuing medical treatment or were unable to work for six months or more. More than a year after contracting the coronavirus, 18 percent of long Covid patients had still not returned to work, more than three-fourths of them younger than 60, the analysis found.”
“‘It’s a pretty conservative estimate,’ said Gaurav Vasisht, executive director and chief executive officer of the insurance fund. ‘It’s not capturing people who may have gone back to work and didn’t seek medical attention and may still be suffering, so you know, they’re just toughing it out.’” READ MORE
Among the layoffs at Google are 31 massage therapists: “The decision to let go of a number of massage therapists comes as the company makes moves to eliminate other office perks as part of its cost-cutting measures. In recent months, Google curbed its spending on employee travel, restricting it to ‘business critical’ trips only and not allowing travel for social events or offsite team meetings.” READ MORE
U.S. economic growth remained strong in the fourth quarter: “U.S. gross domestic product, adjusted for inflation, increased at an annual rate of 2.9 percent in the fourth quarter of 2022, the Commerce Department said Thursday. That was down slightly from a 3.2 percent growth rate in the third quarter. Consumer spending, the bedrock of the U.S. economy, grew at a 2.1 percent rate. The data is preliminary and will be revised at least twice in coming months. ‘The economy continued to motor on,’ said Michael Gapen, chief U.S. economist for Bank of America. ‘There’s more momentum in the economy at year-end than we thought, and a lot of that is from households.’”
“The healthy fourth-quarter growth capped a year in which economic output contracted in the first half, prompting talk of a recession, then rebounded. Over the year as a whole, as measured from the fourth quarter a year earlier, G.D.P. grew 1 percent, down sharply from 5.7 percent growth in 2021.”
“‘2020 was the pandemic. 2021 was the bounce back from the pandemic. 2022 was a transition year,’ said Jay Bryson, chief economist for Wells Fargo. ‘It will go in the history books as an OK year.’” READ MORE
In California, business groups have forced a vote on fast food regulations: “A California law creating a council with broad authority to set wages and improve the working conditions of fast-food employees has been halted after restaurant and trade groups submitted enough signatures to place the issue before voters next year. Officials from the California secretary of state’s office announced late Tuesday that Save Local Restaurants, a broad coalition of small-business owners, large corporations, restaurateurs and franchisees, had turned in enough valid signatures to stop the law from taking effect.”
“Legislation signed in September by Gov. Gavin Newsom, a Democrat, would set up a 10-member council of union representatives, employers and workers to oversee the fast-food industry’s labor practices in the state.”
“The panel would have the authority to raise the minimum wage of fast-food workers to as much as $22 an hour — well above the statewide minimum of $15.50. In addition, the council would oversee health, safety and anti-discrimination regulations for nearly 550,000 fast-food workers statewide.” READ MORE
To avoid supply chain issues, more home buyers are also buying the sellers’ furniture: “Last year, Gerardo and Rita Luna upgraded from their roughly 2,700-square-foot home in Oxnard, Calif., to a much larger house in nearby Santa Paula, paying $2.4 million. The couple, who own four automotive repair facilities, said they had been looking for a quieter place, where they wouldn’t be able to ‘shake their neighbors’ hands through the window,’ Mr. Luna said. The Santa Paula estate, on 6 acres, fit the bill perfectly. The only problem: how could they possibly furnish such a large property? They didn’t have nearly enough furniture to fill the nearly 7,000-square-foot house, and what they did have didn’t fit the French Country style of their new home. Plus, they knew that global supply-chain issues would likely make buying new furniture difficult and time-consuming.”
“The seller was downsizing to a new home nearby and agreed to sell her furniture to the Lunas for about $30,000, ‘pennies on the dollar,’ compared with the original prices, said the Lunas’ real-estate agent, Victoria Adam of Sotheby’s International Realty.”
“With supply-chain delays and other logistical issues leaving buyers waiting months or even years for their new furniture, agents said, purchasing the sellers’ furniture is much more appealing than it used to be.”
“Developer Rick Rosemarin said he encountered this desperation firsthand last year, when he was trying to sell a roughly $10 million estate he built in Greenwich, Conn. It turned out that one would-be buyer who toured the modern estate was just trolling for furniture. The buyer said the house wasn’t for him, but asked if he could purchase all the furniture for another home he was buying.”
“Andrew Bowen, partner at ASH Staging, said as a result of the surge in demand, his company recently started renting staged furniture to buyers for a year, so that they could have a place to sit and sleep while waiting for their own items to arrive.” READ MORE
Similarweb ranked the fastest growing digital brands of 2022: Ranked by categories like tech, beauty, autos, financial services, careers, and travel, the brands include Skims, Capital One Travel, and GasBuddy. READ MORE
THE 21 HATS PODCAST
This week, Shawn Busse, Liz Picarazzi, and Sarah Segal talk about when it’s time to give up on a product. For Liz, the problem product is her package locker, which is designed to defeat porch pirates but hasn’t really taken off—especially considering how widespread the concern is. Could the glitter-bomb guy be the answer to Liz’s marketing challenge? Or is it time for her to back off? Plus: In the age of Zoom and remote workers, what have the owners figured out about running effective meetings? And if you're pricing a range of services in a proposal, do you price your offering a la carte? Do you always charge the same prices? And is there a way to ease a client into a monthly retainer?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren