DTC Dispatch #009

LATEST NEWS

Abercrombie & Fitch was the top-performing stock in the S&P 1500 Index last year

Abercrombie & Fitch has been a clear winner in retail stocks, as this years fashion trends revisited the late 90s and early 2000s. The fashion company gained 285% this year, its best annual performance since going public in 1996. This is a sharp pivot from 2022, when the retailer’s shares fell 34%. Abercrombie focused on its target audience, young Millennial and Gen-Z shoppers heading back to work, school and social lives after the pandemic.

Our take: Abercrombie & Fitch realized that they needed to rebrand themselves in order to become profitable again. The retailer has repositioned themselves to appeal to the Millennial audience, who used to buy their clothes in the 90s and early 2000s.

There is optimism that Abercrombie can continue to boost sales and have a strong 2024.

Peloton brings fitness classes to TikTok in bigger push for Gen Z

Peloton will develop custom content for TikTok as part of a new agreement, according to a press release. Videos will appear in a #TikTokFitness Powered by Peloton co-branded hub and feature both live and pre-recorded classes. The portal will be grounded in themes from Peloton’s recently introduced “Anyone. Anytime. Anywhere.” brand positioning around accessibility.

Our take: Peloton has continued to struggle as demand for its at-home fitness offerings have shrunk since the pandemic. This is the first time the company has produced content to be distributed outside of its owned channels. The move represents an overture to TikTok’s Gen-Z heavy audience as Peloton seeks to reignite growth.

Videos about Gen Z and Gen Alpha wreaking havoc at Sephora are flooding TikTok

During the 2023 holiday season, kids went to Sephora en masse and Sephora shoppers and staffers went to TikTok to complain about their behavior. The accusations and complaints on TikTok recall the young shoppers fighting with one another in store, leaving messes of testers, breaking testers and being rude to salespeople.

Our take: Sephora has positioned themselves as a luxury beauty retailer in recent years. In the age of social media, this “epidemic of kids in Sephora” can come to light and go viral overnight. These videos have sparked conversation over the retailer and what steps they are taking to get back to a more luxury shopping experience. The beauty retailer has yet to comment on the videos.

Buy now, pay later boosts online holiday spending

With a boost from buy now, pay later apps, US consumers spent a record $222 billion online between Nov. 1 and Dec. 31. That is up 4.9% year over year, according to the latest numbers from Adobe Analytics. “In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” Vivek Pandya, Adobe Digital Insights’ lead analyst, said in a statement.

Our take: 2023 was a year of uncertainty for our economy and therefore consumer spending habits. Consumers saved money early in the year in fear of a recession later on. Due to economic uncertainty, buy now, pay later options help consumers feel they can better plan for these expenses.

FEATURED CONTENT

This 27-year old has made over $10M selling swords on YouTube.

Within 3 years, this 27-year old’s sword brand, “Mini Katana,” has pulled over 5B views and is becoming a $100M DTC business. Mini Katana’s top 8 YouTube Shorts have 1.2B views combined. In March 2022, they had 0 subscribers. Now they have 6.4M subscribers, 21 months later. They are able to get an insane number of views because:

1. They bring the craziness of Anime to life in sensational videos

2. These videos are engineered for the Shorts algorithm

Our take: In Issac Medeiros’s mind, Mini Katana is a media-company monetizing through swords. There is so much focus on content, because as Ryan Hashemi, ‘the YouTube-for-business guy’ preaches, content-first companies will dominate the next decade.

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