Morning Report

What you need to know one minute before daylight

Instagram-Friendly Storefronts and the Trend of Agile Management

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RETAIL 

Selene Cruz opened Re:store in San Francisco which gives storefront access to several hard-to-find, online-only brands: “Cruz opened the doors to Re:store, which positions itself as a sort of WeWork for cult-y, online-only or difficult-to-find brands. It brings cool Millennial-targeting labels—many of which would fit the ‘Instagram brand’ descriptor—like Sézane, Boy Smells and Lisa Says Gah together under one roof, and instead of a traditional wholesale model, brands pay as little as $350 per month for a presence on the immersive, experiential and Instagrammable (of course) retail floor, as well as a 20 percent commission. There’s also a community workspace on site, offering fledgling entrepreneurs who may otherwise be operating out of their apartments a place to work and interact with customers. … 

“Her vision is not dissimilar from a couple of other new retail concepts. There’s Texas’s Neighborhood Goods, which has been dubbed the ‘department store of the future’ and rents out retail space to DTC brands like Hims, MeUndies and Serena Williams’s clothing line in an experiential, Instagram-friendly environment. … That opportunity to connect with customers is no doubt a draw for brands, particularly those for whom this is their brick-and-mortar debut. Plus, Re:store lowers the barrier to entry for upstart brands to have a physical presence and evade the downsides of wholesale, like meeting deadlines and other strict terms while having to put up all the money for production (only to have unsold products returned, in some cases).”

Nike has launched its sneaker subscription service, Nike Adventure Club, after a two-year trial period: “You can get them on a monthly, bimonthly, or quarterly basis. Each pair of shoes works out to between $50 and $60 a pair—which puts the service on higher end of the kids’ sneaker market … Customers can choose what style they want, from performance shoes for sport to casual everyday sneakers, and they can also skip months and easily swap sneakers if they don’t fit or their kid doesn’t like them. Dave Cobban, the general manager of the Nike Adventure Club, says the company has been building this subscription service for the past two years. Nike brought on 10,000 families from its customer base to test it out, and ultimately found that the parents most interested in this program were people who valued convenience and time over price. ‘One mother said that between driving her kids to soccer practice and music class, she just didn’t have the time to go to the mall to buy a new pair of shoes,’ he says. ‘This program solved a problem for her.’”

TRADE

The 25 percent tariffs on Chinese imports are giving businesses headaches, particularly for Harlan Stone and his vinyl flooring company: “For operations such as Mr. Stone’s, the math is painful. He and others are trying to figure out how much of the new expense can be dispersed throughout the supply chain, how much should be passed to customers, at what potential cost in lost sales, and how much they must swallow. … Mr. Stone and his Connecticut-headquartered HMTX Industries LLC wanted a commitment from Home Depot to absorb some of the higher tariff. … The 18 Flooring Liquidators retail stores in California carry Chinese-made products from HMTX, among others. The chain has raised prices for some products because of the tariffs. Tiles for a living room, dining room and hallway space can run up to hundreds of dollars more than before. ‘You can’t have a 25 percent increase and not have an effect on retail prices,’ said Stephen Kellogg, president and owner.”

STARTUPS

Lucidworks, which just secured $100 million in funding, created an AI-powered search engine that personalizes users’ searches: “Lucidworks believes its approach can produce better and more relevant results than other search services in the market, and it plans to use the funding for its next stage of growth to become, in the words of CEO Will Hayes, ‘the world’s next important platform.’ … In an interview, Hayes said that what sets Lucidworks apart is how it uses machine learning and other AI processes to personalise those results after ‘sorting through mountains of data,’ to provide enterprise information to knowledge workers, shopping results on an e-commerce site to consumers, data to wealth managers or whatever it is that is being sought. Take the case of a shopping experience, he said by way of explanation. ‘If I’m on REI to buy hiking shoes, I don’t just want to see the highest-rated hiking shoes, or the most expensive,’ he said. The idea is that Lucidworks builds algorithms that bring in other data sources—your past shopping patterns, your location, what kind of walking you might be doing, what other people like you have purchased—to produce a more focused list of products that you are more likely to buy. ‘Amazon has no taste,’ he concluded, a little playfully.”

Light Field Lab rethinks the concept of 3D TVs: “[The] Bay Area startup that emerged from stealth two years ago, wants to build holographic screens that enable viewers to see ‘volumetric’ 3D without wearing special glasses. You won’t only see depth in the images, you’ll be able to physically move around the display and see new perspectives of the action, giving you the sensation that the digital content is floating mid-air. ‘Light field’ technology has had a rough go finding its way to market. … For now, Light Field Lab isn’t focused on at-home light field experience; rather, they want to build a modular platform that lets entertainment venues stack together tons of their devices to create huge 3D video walls that deliver a very unique 3D experience.”

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MANAGEMENT 

A fast-paced style of teamwork known as “agile management” does away with departmental bureaucracy and it’s being adopted by companies ranging from snack makers to bankers: “The agile craze has many potential benefits. There’s no single definition of agile—it’s a set of principles aimed at freeing teams from departmental silos and other bureaucracy so they can work more efficiently. Among the more popular practices are breaking big projects down into a series of smaller tasks, meeting daily to report progress and eliminate obstacles, and completing tasks in time periods called sprints. When applied wisely, agile principles save time and speed teamwork on projects that are complex or have an uncertain outcome. …

“Starmark, an ad agency in Fort Lauderdale, Fla., embraced agile techniques about four years ago. The company used to produce ad campaigns in the traditional way: Projects would move from one department to the next until they were done. By the time clients got to review them, their needs may have changed or the work may have strayed from their expectations, requiring costly revisions. In switching to agile teams, Starmark tore down the silos separating its creative, data-analysis, copywriting, media and digital departments and replaced them with two cross-functional, self-managed teams. The teams hold 20-minute check-in meetings, also called stand-ups, each morning. All employees describe in 60 to 90 seconds what they are working on, what they plan to deliver that day and what obstacles they face.”

Give us a nudge: Not buying this agile management trend? Let us know how you manage your team by sending your comments to mattg@oxfordcenter.com

CULTURE

A new survey shows that entrepreneurs living in rural areas feel better off than those in Manhattan and Silicon Valley: “When it comes to quality of life and cost of living, 80 percent of rural small business owners believe they are better off than business owners in urban or suburban areas. … [SCORE CEO Bridget] Weston says rural businesses tend to operate with higher profit margins while earning comparable revenue to urban businesses. Weston adds, ‘What this means is that rural entrepreneurs have the advantage of keeping more of their business revenue, which makes it possible for them to provide a higher quality of life for themselves and their families.’”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

SentreHEART, a developer of catheter-based technologies intended for suturing soft tissues, reached a definitive agreement to be acquired by AtriCure, a medical device company specializing in Afib. The company was acquired for $300 million. 

VENTURE CAPITAL

SingleFile, a legal-tech company intended to automate compliance filings, raised $3.3 million in seed funding.

LucidWorks, a developer of search and discovery applications designed to build smart search-based applications, raised $100 million through a combination of debt and Series F funding. The valuation of the company is $370 million following the round.

SPOTLIGHT 

Space is limited at our August 23 Roundtable Intensive at Roam Innovative Workplace in Buckhead, GA at 8:30 a.m. where we will discuss the Wild World of Digital Marketing in 2020. Note: This event is for Oxford Members Only. Contact Carson Kendrick at events@oxfordcenter.com to RSVP. 

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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