The brands that have emerged as winners in 2020 have ditched old adages and stale strategies, instead relying on learnings to fuel their evolution.
A new report from Klaviyo, Route and Future Commerce highlights some of the brands and qualities that have inspired consumer confidence and loyalty in the age of COVID-19.
“If ever there was a time to look to the world of retail for wisdom, responsibility, and durability, it is now,” analysts wrote. “In 2020 alone, we’ve seen DTC darlings fall, founders crash and burn, and bankruptcies,” and some of that was happening before the pandemic struck, they said.
Since consumers have become confined to their homes, brands have had to work even harder at leveraging new tools to create lasting relationships with shoppers.
While it’s hard to compete with the longstanding leader in logistics, companies have risen to the challenge and grown their market share in recent months.
“Topping the list is Target,” analysts said, pointing to the big-box retailer’s logistics service, Shipt, as “a formidable last-mile challenger” to Amazon Prime. Social commerce titans Facebook and Instagram took the No. 2 spot, as users are able to shop brands through the platforms as they would stores.
Shopify took the No. 3 spot, as it allows brands to focus on “business fundamentals, not IT” while reaching millions of shoppers. Shoprunner’s logistics capabilities, which give upscale brands access to two-day shipping to rival Amazon’s marketplace, earned the No. 8 spot.
Reaching Gen Z
Characterizing the youngest demographic of active shoppers with the acronym CARLY (Can’t Afford Real Life Yet), analysts said this group is nonetheless an important target for brands to reach.
Despite their lack of financial independence, CARLY shoppers are hyper-connected and driven by the ephemeral nature of fleeting trends. They’re also drawn to brands and experiences that fly in the face of conventional retail wisdom, from design to marketing.
Omnichannel retailer Kith took the No. 1 spot. Streetwear roots, brand collaborations and a thriving social media following earned the brand its stripes, while enigmatic online brand MSCHF came in No. 2 because of its quirky, celebrated product drops.
“Optimistic” streetwear brand Mad Happy placed No. 7, while “ugly AF shoes” Crocs came in No. 8 with Gen Z shoppers who wear them ironically. E-tailer Entireworld took the No. 9 spot, as an “early adopter of the anti-design design trend.”
Brands that invest in cultivating their following along with facilitating “inter-customer relationships and interactions” can provide a true sense of community, analysts said. Forums where customers or members can meet and develop relationships are important for creating long-term loyalty.
Fitness phenom Peloton unsurprisingly took the No. 1 spot in this category, with its unshakable cult following. Athleisure brand Rhone earned its No. 3 spot on the list through its collaborative efforts to bring brands together during COVID-19, while Bay Area footwear upstart Rothy’s placed No. 4 for its leadership in the creation of sustainable footwear.
Performance active wear brands Tracksmith, Nobull and Outdoor Voices took the No. 5, No. 6 and No. 7 spots, respectively. While they all create workout apparel, each has amassed a distinct and loyal following by tapping into the unique personalities of their consumer bases.
Led by values
“American purchasing behavior is trending toward alignment with a worldview,” analysts wrote, and shoppers are eager to use their wallet share to vote for the issues they care about.
Purpose-driven brands hold themselves to high social and environmental standards, and their value to consumers stems as much from their actions as it does from the products they create and sell.
Outdoor retailer REI led the pack at No. 1, based on its “generations of partnership” with its customers. The co-op educates close to 18,000 members on environmental conservation and the benefits of unplugging from technology.
Sustainable footwear stalwart Allbirds came in No. 3 for its inventive approach to open-sourced, environmentally friendly shoes and recent partnership with Adidas, while Nudie Jeans’ luxury denim took the No. 4 spot for its educational approach to revamping one of the world’s most ecologically damaging and polluting fabrics.
“Late stage” retail
Embodying the opposite of massive, faceless corporations that don’t hold themselves accountable to the greater good, the report’s winners instead strive to “uplift underserved communities, create and market sustainable products, pay their employees a living wage, and treat their suppliers ethically and fairly.”
As a brand that holds steadfastly to its stand against environmental and social injustices, Patagonia earned the No. 1 spot in this category. Everlane came in No. 3 for pioneering the concept of “radical transparency” in supply chain processes, while Reformation took the No. 4 spot for being “an early and consistent voice in sustainable and fair manufacturing.”
Known Supply’s supply chains traceability and efforts at “lifting up communities with fair wage and labor practices” earned it the No. 7 spot. Los Angeles’ Christy Dawn came in No. 8 for its use of deadstock fabrics and company-grown cottons, and Able Apparel placed No. 9 because of its efforts to create sustainable fashion as well as provide quality jobs to those in underserved communities.
According to the report, some of the best brands aren’t driven by products, but by the personalities behind them. First, cultural powerhouses amass a following of fans drawn to them for their style, talents or ideals, and then a successful brand venture follows.
Predictably, Kanye West’s Yeezy takes the No. 2 spot in this category (the first apparel brand on the list). The rapper-turned-fashion-mogul has built an empire on his flamboyant persona.
West buddy and sometimes collaborator Virgil Abloh and his brand, Off-White, took the No. 4 spot. As the artistic director of Louis Vuitton’s men’s wear collection and a musician in his own right, Abloh’s larger-than-life personality draws consumers to whatever products he develops.
And, proving that all roads lead back to West, sister-in-law Khloe Kardashian’s Good American denim label took the No. 9 spot on the list. With a successful reality show gracing airwaves for more than a decade, and a commitment to inclusive sizing inherent to her brand philosophy, it’s no wonder that consumers are hooked.
Independently minded DTCs
The proliferation of countless direct-to-consumer brands has spurred conversations about the way they’re funded. While many of the space’s standouts, like Away and Outdoor Voices, raised significant venture capital in the early stages of their businesses, many DTCs embark on the journey without outside funding at all.
Instead, they rely on friends, family and their own savings for support while they get on their feet. “This ultimately means slower growth for brands, but likely a higher upside for founders able to stick it out through the next few years of economic uncertainty,” analysts said. And, the company’s founders retain control as it scales.
Boston’s New Balance earned the No. 1 spot in this grouping. Over more than a century in business, the footwear brand has reinvented itself time and again, relying on fresh perspectives and collaborations to infuse newness into offerings.
Shapewear brand Spanx came in No. 3 on the list, as founder Sara Blakely became the world’s youngest self-made female billionaire in 2012, having started the brand with $5,000 of her own money.
Eileen Fisher took the No. 4 spot, as the designer considered taking her eponymous brand public but opted instead to dedicate 40 percent to employees through an employee stock ownership program in 2006.
Sleepwear brand Lunya ranked No. 5 due to founder Ashley Merrill’s refusal to accept offers to buy her brand of luxury lounge apparel.
New luxury leaders
A new class of luxury brands are paving the path forward, especially with constantly connected millennial shoppers. With exclusive product drops and a heavy focus on the convenience of e-commerce, these labels and retailers are competing with some of the industry’s most established, and coveted, players.
Queens men’s wear brand Aime Leon Dore ranked No. 4 for its celeb and influencer following, while ‘90s favorite Acne Jeans is experiencing a resurgence in popularity, coming in No. 6.
“Businesses aren’t all about products and customers,” the report said. “They’re also about the equitable partnership between the corporation and its workforce.”
Brands and retailers that invest in their employees and their communities, while in the age of COVID-19, taking their workers’ health and safety into account, earned distinctions on this list.
Costco has been a consistent standard bearer for this behavior, analysts said, earning it a No. 2 ranking. The retailer has developed a reputation for providing quality retail jobs, and the impact of that investment is a long-term workforce that is invested in the health of the business, that also develops relationships with the company’s customers.