D2C

Coronavirus Disrupts the Disruptor

After a year in stealth mode, personal care brand incubator Arfa was primed for its first launch on March 17. Early indications suggested it would easily win D2C bingo: 

• Cofounders include ex-Glossier President and COO Henry Davis and Broadly Publisher Ariel Wengroff.
• Like Deciem or Iris Nova, Arfa is developing several standalone brands under its umbrella. 
• Arfa raised at least $7 million in seed funding from a group including Forerunner Ventures—the VC behind Birdies, 11 Honoré, and, yep, Glossier. 

But there was a twist. At other D2Cs, “community” refers to loyal Instagram followers. At Arfa, “community” refers to The Collective, a focus group that determines a) which products Arfa sells and b) how Arfa markets them. 

• Collective members are also stakeholders, splitting 5% of the company’s overall profits. 
• Arfa’s first release: Hiki, a line of sweat solutions from deodorant to body wipes.

Along came coronavirus

Last week, COVID-19 cases in the U.S. climbed and several states mandated nonessential workers stay home. So the fledgling company made an only-in-2020 call. 

Instead of launching its Hiki products for sale, Arfa decided to give them away for free. 

• Hospital and medical facility workers can get any two Hiki items for free as long as they pay $2.50 to cover part of credit card processing, packing, and shipping costs.
• Everyone else can earn two items for a $5 charge by sharing a positive message on social media and tagging #todayimfeeling and @arfabrands.  

“While we are a startup with limited resources, what we do have are Hiki products ready to ship and a fundamental belief in the power of empathy to help people feel better,” Arfa said in a statement.

• The underlying goal: Posts from shoppers who aren’t spending now build brand awareness for later. 

My takeaway: Results depending, Arfa’s alternative launch could be a road map for other companies that’ve hit pause on product rollouts.

WORKFORCE

190,000+ Essential Openings

Amazon isn’t the only retailer in need of more workers to meet coronavirus demands. Since Friday, a group of “essential” retailers has posted nearly enough job listings to hire all of Salt Lake City, Utah.

Walmart, already the nation’s largest private employer, said it plans to hire 150,000 associates at stores and distribution and fulfillment centers by May. 

• New applicants will undergo a SparkNotes interview: The two-week hiring cycle will be shortened to 24 hours. 
• The reason, per CEO Doug McMillon: “We know millions of Americans who are usually employed at this time are temporarily out of work, and at the same time we’re currently seeing strong demand.”

Also hiring: Dollar Tree with 25,000 openings, 7-Eleven with up to 20,000 openings, and Shipt with openings in the low thousands.

My two cents: All these openings put available workers in a bind. Open jobs are a welcome salve for the millions who are projected to be soon out of work. But frontline retail positions put workers at risk of exposure to the virus.

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TRENDS

What's the Price for Peace of Mind?

It depends on who you’re cooped up with.

For suburban families...it’s a few hundred dollars for an extra freezer, the NYT reports. At mom and pop appliance shops and national chains like Home Depot and Lowe’s, shoppers are flocking to supplemental freezers. Three months of premade lasagna have to go somewhere.

• Freezers are largely manufactured in China, leaving many U.S. stores short on inventory. 

For WFH warriors...it’s the cost of a new laptop, but suppliers haven’t caught up with increased demand for those, either. HP and Dell are still working through production delays in China, the WSJ reports. 

For apartment-bound roommates...it’s the cost of an eighth. Legal cannabis sales climbed in California, Colorado, Nevada, Oregon, and Washington state last week, per U.S. News & World Report. 

• In Oregon, cannabis sales last Monday were 75% higher than average. 
• In California, cannabis dispensaries will remain open as “essential businesses.”

Looking ahead...expect to see consumers spending even less on typical spring purchases like swimsuits. Already, app downloads for apparel retailers including Nike and Zara are declining, per the WSJ.

WHAT ELSE IS BREWING

• 90+ retail trade groups wrote the White House demanding economic support for retailers amid the coronavirus pandemic. 
• H&M joined the list of retailers using their logistics facilities to ship medical supplies.
• Amazon raised its overtime pay rate for U.S. warehouse workers. 
• Best Buy stores are now curbside pickup only. 
• Joann Stores invited customers to use its in-store classrooms to make medical supplies.
• Luxury resale is spiking in Hong Kong amid a recession.
• Allbirds is donating sneakers to frontline medical workers.

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TALKING SHOP

Hatch is positioned to fill the maternity retail gap left after Destination Maternity’s Chapter 11 bankruptcy last year. It has legions of celebrity fans like Meghan Markle and recently launched Fourth Trimester, a collection for new mothers.

Fourth Trimester’s debut coincided with the coronavirus outbreak, but founder Ariane Goldman says the timing didn't have a negative impact. In the latest edition of Talking Shop, Goldman explained how Hatch is making the most of the situation on every retailer's mind. Read our conversation here.

SWAPPING SKUS

You asked for more distractions from the coronavirus news. I’m answering with a frothy brand profile and an interactive e-comm adventure. 

• Mrs. Meyer's soap is a fixture on kitchen counters and hotel bathroom sinks around the country. Read how it became a phenomenon before we got serious about washing our hands (The Goods).
• Widespread retail disruption calls for creative solutions. The best I’ve found is Elliot’s Google Sheets shopping mall, complete with a muzak playlist and crowded food court (Elliot).