Issue #16: US Open Sweeps NYC & Beyond

This US Open has brought buzz to tennis that, as a former high school tennis player, I never thought would happen. What happened is recently, tennis has done a great job of marketing via TV shows, like Netflix’s Break Point, while also having athletes be very active on TikTok. The marketing has culminated in the US Open being super popular this year, building on the past couple of year’s popularity. Plus, 4 out of the 8 semi-finalists being American doesn’t hurt either. This means brands wanting to capitalize on the buzz are having to shell out big bucks to get featured. I briefly covered it in Issue #15, but the high-cost barriers to entry have not limited some brands from getting scrappy. I wanted to dive deeper to offer a playbook for ways to stand out in the future at high cost events.

Here are two strategies that really stood out to me:

• Hubspot, the CRM software, wanted to be involved in getting their name out of the event. In an untraditional manner, they wrapped the entire 7 train, the only subway that goes out to the US Open, with branding and advertising. The cost, is an estimated $800,000, in contrast to the millions the top sponsors pay for in stadium advertising.

• The top players are expensive to sponsor, but the thing about tennis is there are only two athletes in focus for the entire match. And the significantly lower seed when playing top seed gets a lot of attention and airtime too while playing. Blue Owl Capital, the finance firm, saw this trend and decided to sponsor several lower-ranked athletes for their matches against top players. For instance, they sponsored Li Tu in his match against Alcaraz with a shirt patch. The cost to sponsor Alcaraz is typically in the millions, if not tens of millions. This way the got the attention of sponsoring Alcaraz for a match without paying the big bucks.

The lesson here, even in an event this big, with such a high cost of advertising entry, there are always ways to be scrappy and stand out.

PopUp Bagels: Williamsburg

Another week, another exciting development in the future of retail led by PopUp Bagels. This week, news trickled out of a new location being opened in Williamsburg, their first location in Brooklyn. Already this year, PopUp has added UWS and UES to their NYC portfolio, in addition to the original NYC location on Thompson Street. The playbook they are following for NYC dominance → countrywide is a playbook I recommend and has been successful in the past. Start in a local market, generate buzz, win the market, and use that to fuel expansion. It can be in other markets or areas, not just NYC too.

Two examples of success in the past following this playbook:

1. Van Leeuwen Ice Cream - Started in 2008 in Brooklyn, has grown to 30 locations, with 17 of them being in NYC

2. Levain Bakery - Started in 1995 on UWS, grew to 7 locations before opening outside of NYC in 2020 (waited 25 years to expand outside NYC!)

Winning your local market, regardless of what it is, is crucial to any brand looking to succeed in retail.

You Should Enable Tap To Pay in Retail

In the fall of 2019, I embarked on a journey across the pond to study abroad at the University of Birmingham in England. One of the big adjustments was tap to pay, contactless payments, and Apple Pay. These were the default payment options everywhere. It made payments super seamless and easy for customers. As someone who frequently had issues with card chips, I appreciated the convenience and the ability to circumvent that issue. The businesses probably appreciated that it was easier to get people to buy items. However, upon return, having become accustomed to that process, I was very disappointed it hadn’t caught on in the US further. Luckily, over the years it has caught on more.

However, this week I was in Bluestone Lane, a fast-casual coffee spot with locations across the world. It was founded in Australia, a leader in contactless payments. Much to my surprise, it was not accepted and they only allow cards to be swiped. In recent memory, only Bluestone and Walmart have not accepted contactless payments (super random combination). Not adopting innovative commerce technologies will hurt your business, especially ones that get people to spend more. Consumers charged 9.4% more on average to their credit cards and made more purchases after they started making mobile payments.

Maybe their technology is out of date and it’s expensive to upgrade the hardware. Maybe their processor charges extra fees for contactless payments (doubtful). Regardless, you need to keep up with consumer behavior. (I reached out to Bluestone Lane about why they don’t accept tap-to-pay - let’s see what they say!)

Instagram-able Moments, Gifting, & Occasions

Some of the biggest areas I see brands fail to capitalize on when building their business are gifting and creating experiences based on how their product is used. This week, H&H Bagels partnered up with Acme Smoked Fish to launch a lox flight in a nicely packaged box. The box features a bagel, cream cheese, and four lox flavors, two of which are only available in this box. What stands out to me here is the packaging, gifting opportunity, scarcity, and understanding of occasions your product is used with. All of these elevate a traditional product, bagel with lox, and turn it into something more. Plus, because the product is designed very well, it will spur posting on social media to build more brand awareness. As the holidays come around, it is not too late to get a product with these key features (packaging, gifting opportunity, scarcity, and understanding of occasions for your product) before OND. What are your favorite elevated brand experiences?

Callaway Topgolf Breakup

In October 2020, golf equipment manufacturer Callaway, acquired Topgolf, a bar/restaurant/driving range hybrid. In theory, it makes sense. An experiential opportunity to try products and get more people interested in golf. Then, you sell them Callaway products. However, in reality, the partnership never took off the ground and Topgolf has struggled to attract customers, having its second straight quarter with a foot traffic decline. The falling revenue and different operations made Callaway decide to separate the two companies. Optimistically, customer spending is still similar at Topgolf, the issue is getting people to come, as overall foot traffic dropped. Right now, the plan is to create a separate public company, but it seems like the company is open to acquisition offers as well. I am optimistic that the new company will be able to improve foot traffic. Consumers are seeking more in-person activities and events, plus the consumer spending is strong while there, which is great. It will be interesting to follow the turnaround.

One final thought: How much pickleball is eating into Topgolf’s customer base?

• Summary: Software to help brands ship, store, and fulfill products internationally

• Founder(s): Audrey Djiya and Peter Nsaka

• Amount raised & investors: Y Combinator

• How this will shape the future of commerce: One trend I am starting to see more in commerce is international commerce, as our large world continues to get closer together via digital and social media

• Why should you use this technology?: Great opportunity to grow and expand your market, without the high shipping cost and other headache

• My take: I listened to a great episode of Nik Sharma’s podcast with Cody Plofker of Jones Roads Beauty and one topic discussed was launching internationally/benefits of starting that, which got me jazzed about the concept

• Interested? Book a demo here

Additional Links:

1. Chipotle and Cava have both recently launched steak on their menu. It has been a tremendous success (read more here)

2. Yelp sues Google on the basis that Google is boosting its own product over others (read more here)

   • My take: It will be a fascinating case for marketplaces as a whole. Look at Amazon private label items.

3. Nordstrom seeing growth in off-price retail via the Nordstrom Rack concept (read more here)

4. Foxtrot has returned to open a store in Chicago, the first to reopen since it closed down (read more here)

5. Create, the creatine gummy, has raised $5M from Unilever Ventures (read more here)

6. Sweetgreen opens its first location in Columbus, Ohio (read more here)

7. Domino’s Pizza and Google both IPO’d in the summer of 2004 and the similarity in the stock price growth might shock you (read more here)

8. Albertsons launches new private label line, Overjoyed (read more here)

9. Lumber Liquidators is going out of business (read more here)

10. Temu and Shein are taking over the carrier networks (read more here about the impact)

11. Birkenstock program members spend 25% more than other consumers (read more here)

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