Retail Venture Capital

Strategy and our investment approach

When it comes to retail strategy we believe it is best to keep an open mind. Product category, incumbent behaviour, location, and growth stage of your business can all make a big difference. 

For example if you’re running a pet care business we’d likely advise a major focus on D2C. However if you’re running a beauty brand we’d suggest you consider a blended approach of both online and physical stores.

There is no one-size fit’s all approach to retail venture capital. With that in mind, here are three strategic considerations you ignore at your peril.

Be careful going into other people’s stores

It’s tempting to take a big listing from the likes of Wal-Mart and Target - think of the scale, the presence, the prestige!

But, there are downsides, you can’t present yourself the way you want to, you get lost on the shelf up against everyone else and you can lose the agility to be able to keep evolving (your product, your price point, etc.). You lose your relationship with the customer data on who is buying your product. That data can help you market more effectively as well as learning how to evolve and enhance your products. 

So be cautious, and don’t go sooner than you feel is right just because you’re flattered or excited.

But nor should you be anti physical stores

Depending on your specific category and brand, there could well be a time and a place for selling through other people’s stores - it can be a great way to get reach and volume as part of your overall proposition.

And, we see many brands which were online DTC only starting to add a small number of stores (e.g. Away and Everlane) - with the emphasis on ’small number’.

This can be a great way to raise the profile of your brand in target markets - giving customers the opportunity to experience your brand more fully and try out the product. 

Most brands see their online sales go up when a physical store is opened in the area.

And what of Amazon?

About half of product searches start on Amazon so you need to have a strategy:

If you’re not on Amazon, someone else probably will be in your place - either grabbing people searching for your brand or selling look-a-like or poorly explained grey market products, damaging your brand. On the other hand, selling on Amazon prevents you from collecting valuable customer data and limits your ability to fully engage the customer in your product and brand experience. You’ll need to carefully weigh the advantages of discoverability and volume with the disadvantages of limited visibility.  

For example, if you’re an apparel brand, it often makes sense to put a subset of your range on Amazon, and invest the time to present and market the product well.This protects your space, attracts new customers, sells some product, and ideally diverts customers to your own website to get the full range and full experience going forward.

On the other hand, if you’re a beauty company offering customised formulas, the disadvantages of selling on Amazon will far outweigh any benefit.

Retail venture capital, growth and investment

If you’re an entrepreneur looking to grow your cause-driven business through major retail venture capital we can help, and we are different. As well as $375 million ready to invest, we have in house experts in ecommerce and physical retail.

Contact us