#329 - The Crystal Ball of Commerce: Predicting Trends with Next Big Shop’s Founders

Hey everyone, we're super excited to announce the launch of our Slack community for D two C pod. This is a space exclusively for D two C founders and operators to connect, share ideas, ask questions and support each other. You'll be able to engage with the best minds and operators and consumer and currently we're on a waitlist and it will open up the community once we reach 150 members. So apply using the link in the description and we hope to see you on slack. So before we kick off today's review recording, ive got one more for you. Keeping up your momentum this year starts with the right selling tools and if youre looking to increase revenue, grow faster, build more pipeline, and close more deals, check out the all new sales hub from HubSpot. Youll be able to manage your whole sales process. Plus my favorite part, the reporting.

Its super intuitive, powerful and customizable. Plus the whole thing is powered by AI, so your teams can spend less time on tedious, time consuming stuff and more time on developing relationships. Also, no one likes a clunky platform that takes months to onboard onto. But getting set up on saleshub is really quick and easy. It's free to get started. The pricing will scale with your business, and with more than 1300 integrations and add ons, you can tune it to your exact needs. Visit HubSpot.com sales to start selling with sales hub what's going on? DTC pod today we're joined by David Hoffman and Samir Rayani of next big shop. So we have been wanting to do this one for a while now.

Basically, these guys built one of the craziest data products that I've seen in e commerce. They basically have data on all the different shops, what they're doing, what products sell, how much volume stores are doing, what's hot, what's not, all of that sort of stuff. And we even teamed up with them in the past on DTcETC, and they help power some of our products and being able to pull and ingest data on that side. Anyway, I've been looking forward to this one for a while, but I'll let you guys kick us off. Why don't you tell us a little bit about your backgrounds, kind of how you got started building next big products, and then what led you into the direct to consumer space.

Awesome. Thanks so much, Blaine. We're stoked to be here. Samir, do you want to tell a backstory?

Sure. So David and I have been building data products for the last 15 years. We started in college. We met in an entrepreneurship class and we built a data analytics product for the music industry. It was called next big sound. So you can see that we're not too creative with our naming, but in that business, we tracked millions of artists and songs all over the Internet and sold that data back to record labels and the industry at large, primarily with the goal of trying to understand how does a band become famous? How do you go from playing in your garage to headlining nationwide tours? And that sort of question took us down this really fun, exciting journey for the next ten years, where you fast forward from there. We sold that business to Pandora in 2015, started to work on different projects and ideas. David started a home goods brand with his wife, bringing products from Norway back to the US and selling them.

Started a Shopify store. And I was tinkering on some other random things, and through a sort of circuitous path, found ourselves in the world of data again and found this way to understand how a shop was selling and how their inventory was changing over time. And, you know, sort of brought us back to that original question of not how does a band become famous, but how does a shop go from selling an apartment in Greenpoint to retail nationwide?

Sweet. And then, David. Yeah. Why don't you tell us a little bit about your background as well. I know you guys have been working together on this stuff for a while, but, yeah, tell us a little bit about your role and kind of how you. You think about things.

That was a great introduction, by the way, Samir. I say this so many times every day. I'm sick of myself saying it, so it's fun to hear someone else say it. I can fill in a few gaps around how we got there. So, first thing, when Samir and I met, we were the only two kids on campus, this is back in 2009, who were really good at building websites, and we were part of a competition between student government candidates. And that year, they had the sickest websites. We're like, hey, instead of competing, maybe we should team up and build stuff together. I lean more on the design and product side of things.

Sameer is more on the hacker genius tech side of things. But our roles totally overlap, and we do a lot of things together. After we sold next big sound, which we'd also launched next big book as part of that business. So trying to answer the same question in book publishing. And the plan was to raise a series b and bring predictive analytics to every creative vertical. And when Pandora came in and made us an offer we couldn't refuse, we, of course, accepted that. But I think it left a chip on our shoulder and curiosity about where else is there publicly available but difficult to access data. That's a treasure trove of valuable insights that people can use to make better decisions.

And how do we not just serve that up in scary bi tools and spreadsheets, but make it this really human thing, acknowledging that there are humans behind every one of these interactions, and that by understanding the human behavior, we can make better decisions on the other side. So Samir and I coincidentally both remodeled houses around 2016, 2017. And that was what inspired that scandinavian home goods store. We were renting the cabin we'd remodeled on Airbnb. And as guests came through, they kept messaging us, going, where'd you get these products? These are incredible. And not knowing, really, what d two c was, or e commerce outside of Amazon. My wife ambitiously launched this brand, Blue House goods, and negotiated partnerships with all these scandinavian companies, started bringing their products in. We didn't know what a three pl was.

I literally had racks of inventory in my living room in Greenpoint. Toddlers crawling around, packing orders, running ads, sending newsletters, doing the whole thing. And it struck me, I forgot who said this, but I repeat it all the time. You know, brands are the new bands. It almost felt like the moment in time that we were coming into this world was a time where, if you're a young person, instead of starting a band with your friends, maybe you're starting a store online. And it's the new. And I love what Philip Jackson over at future commerce always says. Culture is commerce.

It's this cultural, creative expression that's so much of what Bluehouse goods was for my wife, too. Not just, hey, I want to start a business and make a bunch of money. It's not going to put this product into the world that people love and need. And that's where I think Samir and I thrive, is this intersection of art and commerce. And how do you measure the unmeasurable, subjective things in the world and understand what's actually happening? And that's been the goal of next big shop. So, yeah, I hope that filled in some gaps.

Yeah, definitely, definitely filled in some gaps. And I love that as a model, I think that's something that everyone tries. It's like, how do you predict the future? How do you know what's going on? And based off of existing data, how do we extrapolate that? Because if you have a competitive edge, that helps anyone, helps anyone out having a little crystal ball. So let's actually talk about it. You guys probably have one of the best pulses on what's actually happening in e commerce across stores in terms of shops and trends and products and all of that sort of stuff. So I've been playing around with the tool a bunch. It's obviously really cool. You can basically go in any shop, see how much they're selling, see what products they're selling, see how much volume each one of those products are doing, see which ones are hot, which ones are not.

But, um, you know, I'll kick it over to you guys. What. Why don't we just start with. Let's start with what's hot, right? Like, what's hot in e commerce. Um, this today, like, what. What brands and what products are, like, really blowing you up. Blowing up in a. And, you know, and maybe we can even put some numbers to, um, to what you're seeing.

Yeah, totally. Let's talk about what's hot. One of the ones that surprised me recently is, and it makes sense with seasonality. So first things first. We started tracking data nine months ago, so we're early on in this journey. One of the things we don't know yet is seasonality because of only having nine months. But we have seen trends around holidays or buying behavior. And one of the things this summer that's gone to the top are some of these plant shops that we're tracking where you can buy plants online.

And as someone who has never touched a rake in my life, that's not true, but it feels like it now. I'm not the audience for that, but I love this idea of people at home, like, not going to the nursery, but browsing all these beautiful plates and buying them online. What else, Samir? We can even look at the charts.

Yeah. I mean, obviously, with summer coming up, things like sunscreen, I think health and wellness products has always been, like, a trend that we've. Well, since beginning of the year, we've seen a sort of rise in health and wellness products. But again, it's really hard to tell without knowing the full seasonality piece. But just. Just this year, relative to the other products, they've definitely outpaced.

Yeah. We published this Black Friday analysis where we did a lot of macro analysis on this. And right now, the product is really geared towards getting down to the nitty gritty. We're tracking 84 million skus and seeing how any of those skus are performing. But we zoomed out and did this analysis for Black Friday, and it's really interesting to see the long arc of COVID trends where there was this movement towards being at home and buying lots of home goods and making your space great and wearing loose fitting, comfy clothes, and then seeing just the surge around Black Friday, of the opposite behavior emerging around it, becoming very individual focused. Hey, I'm going back out in the world. Skincare products are crushing. Supplements are crushing.

Nice clothes that people wear out are crushing. We see this all over the charts. I was just pulling up the site right now. We published 15 charts across categories in the D to C, 200 top best selling shops that we track. And let me see here.

Yeah, and you know what I'd love if we do, David, maybe you pick a shop and just kind of, like, paint the picture, and maybe this will actually be a fun exercise to do just so people get an idea of, like, how to think about it. Let's pick a store like a popular brand in each one of the major categories. And let's talk about how much revenue they're doing and maybe even how much revenue they're doing per product, because this is the type of stuff for a lot of private companies that, sure, maybe you'll see some threads on Twitter. It's like, oh, I made, you know, 10 million on this one product in twelve months. But, like, you don't really get to see it. So let's go by product, or let's go by category. Pick a brand, tell us the brand, and let's actually, like, dive into. Let's.

Do you know what we're seeing?

How many? By the way, I always wanted to ask someone this. How many of those screenshots that you see on Twitter do you think are just webkit inspected with zero? I know how to use Webkit inspector. Two, and take screenshots. It's fun. Like, the precedent for private company data is so strange coming from the music industry. It was published every week. People were addicted to it. The expectation was, this data is gonna be public, we're gonna be ranked in a list, and we're gonna know exactly where we stand.

It's much more opaque in e commerce. And I think just before we get into any actual numbers, I want to give the disclaimer on our methodology and say a few things. One is which. No. Revenue estimation methodology is perfect. I'm going to say numbers in the next few minutes that are wrong. Two, we're in the business of helping merchants. We're not trying to put anyone on Blaster out their numbers.

We're trying to help people see the full picture so that they can make the best decisions. And then three, there's a few important caveats that are going to be a little bit technical, but let's get into them. One is inventory coverage. So when a shop has a product set to either sell through, meaning people can keep purchasing it after it's out of stock, or has a max per customer, meaning that someone can only buy five of a given product in a session, then we can't track those products. We communicate that back to the people using next big shop with our inventory coverage metrics. The brand that I'm about to talk about has 99% inventory coverage, so I feel pretty good about it. The other one is bundle sales. Bundles are awesome for brands.

Right? Let's get that aov up. Let's have someone buy the whole package instead of a bunch of one off products. In the case of how we're tracking data, though, that can cause us to overestimate numbers. So sometimes we'll see numbers that feel way higher when they actually are because of those bundles. Now, there's a handful of other nuances to the methodology that can throw the numbers off one way or another. I'm sure I'm going to say a number that's totally wrong, but our whole strategy is to be as transparent as possible about how we're tracking this and educate people so they can make informed decisions themselves.

Absolutely. And I appreciate that disclaimer, but I think it's also important to point out that a lot of times on Twitter, what I was talking about, you'll see a screenshot of shopify revenue or whatever, and you don't know how much money people are pumping into Facebook ads. If it's like a one day thing, like, I made 50 grand today and like, you know, join my course or whatever, that sort of stuff. So I think even just having, being able to, like, estimate this stuff from the outside and being able to take that best guess is just, it just paints a picture of, like, what the market really, you know, is saying, which is, which is a really cool thing. So, yeah, let's, let's jump, jump into it.

Yeah. And just to follow up quickly on all that, you know, we're, we're actively trying to, you know, enhance these estimates and these models with other datasets or with mostly with other datasets and like, improving it so that it's normalized across different currencies as well.

Yeah. Per store modeling here's built some wizardry that models per each store. So we're converting currencies for global stores back to USD based on historical exchange rates, for example. And there's lots of other per store modeling work we can do you want me to share my screen or just voiceover?

Yeah. I mean, why don't. Yeah, why don't you share your screen?

Let's.

Let's do it.

Let's do it. All right. Enough buildup. Let's get in there. Cool. Can you guys see that?

Oh, yeah.

Awesome. So let's start with accessories. And blenders is such a cool story. It was a brand where we saw them spike in a major way when Dion Sanders wore them coaching cU football and then have seen them continue from there. They're, of course, selling brick and mortar and online, but we've got them at 182 million estimated annualized sales based on the data that we've been tracking on them since October. If we look back at the last two weeks, we've got them at 11 million, and we also put them in a percentile. So in the accessories category, compared to every other shop that sells accessories that we track, they're in the 98th percentile. It's like when you bring your baby to the doctor and they say, like, you've got the tallest kid ever, leaning 98th percentile.

That's what blenders is in accessories, they're the tallest kid. I just bought a pair of these that I immediately lost. Some of that need to buy a new one. Pretty sure my daughter sent them somewhere. And I was actually, as I was buying them, I was like, how popular are these glasses I'm buying? I'm probably choosing the most popular one. And they were, like, number 57 or something, super far down on their list. But we're looking at their best sellers by week. So for the week of May 20, this black Tundra RX looks like it moved the most units based on how its inventory changed, which is what we're tracking.

Again, publicly available, difficult to access data, and then diving down even deeper on that. The progressive champagne high index and polarized variant, that particular Sku did about 20k in sales in that week. Sweet.

Yeah, this is really cool. And maybe just for the people who maybe don't have the visual, why don't you rattle off some of the numbers just like in the last month? Let's talk about all the different products in the last month and how much they're pushing.

Yeah, totally. So right now, we can only view per week what they're selling. But that's a great piece of feedback at feature request, and we should be able to do that in the future. But for this last week, black Tundra Rx 270K american icon shades 240k black another version of Black Tundra RX why do you think that is, Samir, that there's two of those? It's probably different variants laddering up into a. Right.

Probably am.

Yeah. So this is. I mean, this is the reality of this is that metadata is messy. And so the way these numbers get aggregated, it's not always going to be a perfectly clean signal, but now it's also 200k.

But, yeah, I mean, it's really cool to see even in just, like, the glasses sense, like, their black tundra, which is like, they're sort of like mainline compared to, like, their long tail products, is selling at, like, you know, 2020 X. The volume, which is just like. It's. That's really neat to see versus, like, their long tail of, like, crazy colors and, like, you know, different. Different items that are maybe in, like, the 17k or, like, 15k, even their seven k, five k for a certain pair that's in, like, the longer tail of products. But, you know, and then you've even got a couple units, like goggles. I guess we're out of season right now, and they maybe sold, like, one unit of that all week. Right.

They're just selling beanies right now. Beanies are at the bottom of the list. It's the middle of summer, but, like, they've got 2700 skus. And it's. That's understanding that assortment and what's moving and how that's changing over time. I mean, just incredibly powerful.

Yeah. Sweet. Samir, any thoughts on. Any thoughts or commentary on this particular brand?

I didn't realize you could buy that many. I guess people do sunglasses a lot, so I don't know how many of these are replacements versus first time purchases.

Sweet. Okay, David, what's next? What else you want to look at?

Let's take a look at allo and apparel, because they've just consistently since we started next big shop, been at the top of the charts, just absolutely crushing. We have them pegged at 705 million estimated annualized sales. I've heard on podcasts and other places that they're around a billion in top line revenue. So this is the right ballpark. What is really interesting to me about allo is when we go back through the different weeks of their best sellers, it changes. And what that tells me is they're either aggressively bringing customers back for repeat purchases of new products or they're aggressively pushing new products and acquiring new customers. But the sort of I'm flipping back through the weeks right now, and, like, on May 6, we see this magnesium spray and glow oil duo and we see their sort of classic like lanings on the list. And then when we go to the next week, we see all high waist leggings, high waist air lift legging, accolade hoodie, recovery mode sneakers.

So the assortment is changing rapidly. I also love looking at the variant level on apparel. So what size and color combination is selling best? And luckily, when we were building our scandinavian home goods brand and my wife was making merchandising decisions, there weren't size or variant considerations really. These are the products we're selling. But I hear from operators of shoe brands, it's like, how many of each size do I need to buy so that I don't sit on a ton of inventory and it turns over quickly. I think understanding that in this case, the large and extra small and black are the best sellers for this week, and then looking at that over time can be really insightful for optimizing inventory turnover.

Yeah, go ahead. No, go for it, Tamar.

I was just going to say that I think we did a little bit of research on how skew catalog changes over time, and it's really interesting to see. And we can. I don't know, I would maybe send you some screenshots later so you can take a look at this, because it's not published anywhere. But how often some of these brands are releasing new lines or new collections as part of their strategy. There's some brands that are just releasing every five weeks or six weeks, and then there's some that just don't release a new collection at all and are just selling the same staple goods out of their shop week over week and some way to differentiate between. That could be. You're giving me that idea. I think it could be cool to see a chart of the ones that are always releasing new stuff versus the ones that have just have been releasing the same shit for the last three months or four months and how they rank against their relative peers.

Yeah, I think that's really neat because I know some, every brand's a little bit different, but I think that information starts to get really interesting, especially when you're looking at the same category. Imagine two cookware brands. One brand is like, we're going to go with our evergreen stuff, and another one's like, we're putting out this edition pan and that edition pan every five weeks. What does it look like and what's the sales impact? Does it drive stuff? So I think that kind of information is really neat, especially when you're looking at other competitors or other brands in a category that you're looking to like make some noise in, invest in, or whatever. The other thing that you mentioned, David, that I found really interesting was when we're looking at allo, and we're seeing if you can go back to that slide where every week they're like top selling products kind of change. Like, my best guess, and obviously I could totally be wrong, but this could have to do with their lifecycle strategy and how they're pushing and promoting products. Obviously these brands at this scale have massive, massive customer lists and it might just be a way where they're like, okay, this week we're blowing up our oil duo, next week we're blowing up leggings, et cetera, et cetera. So if that is the case, just to see the impact on sales that lifecycle is driving is pretty wild.

If that is the case. So, yeah, that's pretty wild to see. Yeah.

You're reminding me of something that we had a lot of fun and got a really positive reaction building back in the music industry that we haven't gotten to yet in this industry. But I would love to explore one day which is, what are the deeply held beliefs, like what are the things that become best practices or that people just believe about how to do things? Or the example you're making me think of was Teemo and sheen in fast fashion. And in the apparel category. How many of these DTC brands are now just moving at a way faster clip at a response to that? And is that actually the more successful strategy? Could we study frequency of new product release in a single category and have two segments that understand which strategy is actually more successful and for which brands? This dataset should have the answer to that question. I don't know what it is right now, but we'd love to find out.

We are really excited to announce that DTC pod is officially part of the HubSpot podcast network. The HubSpot podcast network is the audio destination for business professionals. And we're really excited about being part of the network because we're going to be able to keep growing the show, bringing you guys amazing guests, and obviously helping you guys learn from the best founders, marketers, and builders of the most successful consumer brands. So anyway, keep listening to DTC pod and more shows like us on the HubSpot podcast network@HubSpot.com. podcastnetwork. Yeah. Then, you know, this is super cool. Um, okay, so why don't we go back? So we, we did apparel.

Um, we did accessories. What other, uh, what other categories you want to look at? Yeah, let's look at like cosmetics, makeup, any, anything like that.

Beauty.

Beauty is always hot.

Let's, let's look at beauty and let's actually switch it up. For this example, instead of just picking a single brand, let's check out our compete tool. If you are old school Internet like Samir and I already remember compete.com and Alexa for search traffic. Of course, similarweb is the leader of that space now. But David Cancel, who started compete.com, was an investor in our first company. We built a very similar interface for comparing artists. And we love this sort of just like four up side by side look at brands. And we have a few suggested comparisons here.

One of them is actually in beauty where we're comparing Jones Road, thrive, Peach and Lily, and P Louise. And we can do that over various time periods. Now, the same caveats apply here, right? Inventory coverage can change these numbers if they're selling in stores or not. But I think what strikes me is how close all these brands are over the last month, doing around 10 million via D two C. And when we scroll down here, we can also see, I'm going to change my window width here to make this a little nicer. We can see there top product assortment side by side.

That's super cool.

And also how that percentage changes. All of these brands are growing over the last month, right? They all have a similar number of skus except for P L E. So like Jones Road has 256, skus, Thrive has 324 each, and Lilly has 230. P Luis has over 1000. And we can also see how that rolls up in a number of products. Like Jones Road has the fewest products at 65, and then it goes to 124, 219, 288. In almost all of these cases, we have 99% inventory coverage, which is awesome. But I can tell you that peach and Lily and peel these probably aren't actually selling this much because we see high percentage of sales from bundles on both those cases.

So we're probably double, triple, quadruple counting when they're selling bundled products. But I've been really inspired watching Cody, Bill Jones wrote in public. I mean, what an awesome business. What great milestones they're hitting. They're really thoughtful about how they're doing everything. And it's been really fun to see that play out in comparison to other beauty brands as they grow on Xbox shop too.

Yeah, that's really cool to see just from you've got your annualized sales, which let's just look at those first two. Jones Road, we're estimating that at 114 mil and thrive at 161. But then when you come down, we're able to track their average price, right. So in Jones Road, it's 28 versus 27 at thrive. And then sku count is like, you know, pretty similar. We've got 256 skus to 65 products at Jones Road. And on thrive we've got a little bit more with 324 skus to 124 products. And then scroll down a little bit more and then you've got, you know, obviously the coverage.

So that's just like, it's just cool to see where, you know, there's multiple ways to do it. And then, like you said, on the other side, you've got P Louise who has less annualized sales, but like, you know, massive, like four x, five X the products and inventory. Right.

At a higher price. Right.

And a higher price.

It's pretty awesome how close Jones Road and thrive are in terms of that average price. I mean, they're priced within a dollar of each other on average of their products.

Yeah.

I'm like, I'm not going to go start a beauty brand tomorrow. I don't know the first thing about it, but if I was going to and it was going after a similar audience, like, now I know my average price, right? I'm not going over over 30 if I want to be competitive on price with these guys.

Yeah. Yeah. And I think that's there's so much value there, right, for whether you're an entrepreneur, whether you're an investor, whether you're an operator, and you're just trying to figure out, like, okay, what's working. And let's take a look at the best performers in each category. Line them up, size them up and just see, because, like, you know, this is where you get your human perspective and then you're able to, like, compare it with, like, the actual data and like, the raw numbers. So, like, you can understand what these different brands are like from the brand Perseph perspective. But then when it comes to numbers, like, that's not something you can really see from the outside as much. But, like, having a tool like this lets you kind of understand a combination of strategy as well as like, what's working, how things are priced, how things are moving, and how the market is really evaluating those decisions.

For sure. I think one thing that was a little missed just because of the screen with, but we have the release date for every single one of these products. And so if you want to know how your competitors are doing or how industry you're considering going into is doing with new releases over the last month, you can just sort of segment new release sales and price versus historical sales and price for a given product.

Sweet. So yeah. What are some new products you're looking at David?

I'm looking at Jones Road new releases April 9. The lippy stick, 3 million in estimated annualized sales. Also love to see glossier. It's raising some of their prices and they did a great promotion around it to move more items before those prices come up. I think the pricing intelligence piece intellijms is crushing there. Amnt is crushing there. Theres a lot of focused tools around that, but I think just seeing the broad sort of spectrum of them and getting that insight is really valuable. And I want to go back actually to something you said, Blaine, which is I think its really important.

Its how we think about data and making it useful. There might be a use case here where im a dropshipper and I dont give a shit about lipstick and I'm just going to buy a bunch of Alibaba try and sell it so that I can make a buck. But I think the much more interesting way that we see people using is they have an assumption, they have intuition, or that they're making a creative decision and then they're referencing the numbers to confirm that, or referencing the numbers to invalidate that. But I think that way of behaving where you're still reasoning from first principles and making sound creative decisions and then validating them rather than looking for the answer in the data is the healthiest way to use this.

Yeah, 100%. Let's keep going. This is super fun. Let's go into. Yeah, what are we looking at now? This is, are we looking at trending? Trending topics?

Yes. So let's take it from a different perspective for a second, because I think so far, and so much of what we've done to date has been really shop focused. What are the best selling shops? And then diving into their products. One of the questions that we just kept getting asked and that we were personally really curious about is, all right, we have 84 million skus that we're tracking what products, regardless of shops are trending. And so we put together this trending topics tool that's based on keywords and product titles, and Sameer developed a popularity score that's based on both supply and demand. So think Google trends. But just for direct to consumer. But rather than being based on further up the funnel search intent, it's based on actual stores and the number of products that they're selling and actual demand and the number of people that are buying them.

And so I've been really inspired by some of the trends here. I think supplements is one that's come up a lot. I had a friend ask about apple cider vinegar and we've got a trend for that. Or probiotic and prebiotic. We have trends for that. Flavors for supplements like protein powder. Chocolate is one of the trends that's taking off the most. Let's dive into one of these, though, and see what we can learn.

The apple cider vinegar ones kind of surprised me because I saw a lot more like hair products and I that I didn't expect to see. I had no idea people were taking apple cider vinegar as a hair supplement.

I have actually looked closely at this one. So this will be fun. This is the off the cuff what's happening with apple cider vinegar online, going back to September, even into October, on a zero to 100 scale, we gave apple cider a 36 score. If we fast forward to the day, it's at 53 and it peaked at 80 right around Black Friday. Now from that score, that alone is like, okay, what is this zero to one odd number? What does that mean? I can see the trend line and I know it's popular, but what's actually contributing to that? So the next thing we get into are what are the best selling products contributing to apple cider vinegar? And the top product that we have here is apple cider vinegar gummies from Mary Ruth organics. And I didn't even know you could get Apple cider as a gummy. But I love this gummy trend. This is another great trend.

Like, it's been really fun watching following Dan at create and his creatine gummies and that just like blowing up. And we're seeing a ton of gummy trends here, too. The next one is apple cider vinegar and keto from herb tonics. And then what? Sameer said, apple cider vinegar hair rinse. Like this is of course, outside my world, but apparently thats a product thats trending. So we can go deep across stores now and see all the best selling products that are contributing to a trend. What their sales were over the last four weeks. Those gummies we were talking about earlier did 115K in sales in the last month, up 230% with an average price of dollar eleven.

And they were released back in 2020. But theyre having a moment now where theyre taking off. Then if we, sorry, go ahead, plan.

No, I was going to say what's so interesting about this is I think so much of e commerce, especially if you're launching your first shop. You're trying to identify a trend. You're trying to figure out what's hot. What's so interesting about this is you can kind of cut through, you can isolate an idea and then figure out which form factor is the one that you want to implement that idea with. Right. Like, apple cider vinegar is hot, but like an apple. Apple cider. Apple cider vinegar in the hair is slightly different than an apple cider vinegar that you drink or that you put on your feet or that you do something else with.

So being able to see these topical ideas and then tie those back to the actual products that are getting adopted by the market, because a lot of times, especially when a manufacturer might want to partner with someone or bring their products more directly to the masses, they've got the raw inputs and they know the topics hot, but they don't know the form factor that's going to resonate the most with audiences. So I think this is super interesting to be able to determine that sort of stuff as well.

Totally. That's like, you get an idea, you're curious about it, but how do you not just validate it? By looking at, like, one competitor who's crushing because there's a million variables, but look at it at a cross section. Cross what's in culture. I think that's where it becomes much more powerful. The other thing I just wanted to point out quickly here is market share. So we break market share down in trends to demand share and supply share, and we can see that DP Hurricane has the highest demand share for apple cider vinegar and also has, of the top ten, the highest supply share. So there's something interesting about this relationship between how many products am I selling and how many customers do I have?

And what does that mean? Could you just, like, let's run through that example. Like, what does that mean?

Yeah. So we write these subtexts on everything that nobody reads. So I'm literally going to read it out loud. So demand market share is based on four week sales of products with apple cider vinegar in their title, while supply market share reflects the total number of products of apple cider vinegar in their title available for sale by each shop.

Got it, got it, got it.

So there's this relationship between, you know, what is driving stores to create new products versus what are consumers purchasing because they exist in the stores versus a trend that they're latching onto because it's popular at that moment. And this tries to capture both of those.

Sweet. Yeah, this is super cool. And so what else are you seeing here, what else jumps out at you in this list?

I was fully expecting the supplements and vitamins, and I thought more drinks and beverages would sort of be naturally in the apple cider vinegar category. And I was really surprised to see hair care.

Yeah. Right. How much of it is like. Yeah. In that format for, for hair is. It's kind of wild.

It's super wild.

Cause you, you're just thinking of it as, like, you know, I think even for a while, like two years ago or three years ago, I was, like, taking acv shots every day. And so I was thinking, like, it was like, people buying that, but, like, seeing how much of it is actually in, you know, hair care and, like, beauty and wellness products is pretty, pretty interesting for sure.

I think it also speaks to, like, a truth or deeply held belief. But this is confirming it in a sort of micro way of selling beverages online is incredibly difficult. People want to taste them and they're heavy to ship. And we see that in our beverage category chart. It's like, yes, these businesses are crushing in retail, but the numbers that they're moving online are not there.

Well, let's go look. Let's go look at. Let's see what's going on in beverage, because, yeah, that's definitely accurate. Even on the pod. A lot of the beverage brands that we talked to, the way they position, it's like, very strong retail strategy. And then when it comes to superfans who are, you know, maybe testing out a new product, variant or they're launching something, they'll launch that, or, like, limited edition flavors, they'll put that out. But, like, I mean, yeah, I'll have you walk us through this, David. But, like, you know, element, for example, like, that's a, that's a hydration stick, right? So, like, that's going to be cheap, that's going to be easy to ship.

And again, you know, sure, you can buy that in retail, but, like, buying that online, it's like cheap, easy to store, that sort of thing. So, yeah, what are we seeing? What's thriving in beverage and next big shop?

So we're looking at our top list of drinks and beverage shops for the week of June 3, 2024. And the first thing that strikes me is that with the exception of two, it looks like all of these are mixed drinks that you mix from powders, and there's a call to be made between supplements and beverage. In the case where it's purely meant to be consumed as a beverage, we typically classify it as a beverage. Number one, we're looking at drink element number two. We're looking at Pete's coffee. Three, cometeer. Four or five, water boys. Six, mud water.

Seven, Dessoir. And that's on the not alcoholic, Katy Perry's brand. My wife loves those. Eight, pure juicer. Nine, bright cellars, and ten, fire department coffee. So they are the exception to the normal beverage product in the majority of cases here, where it is much easier to ship.

Whoa. That's cool. Yeah. We had dessoir and waterboy on the pod. So good to see they're killing it. I'm curious, what's Pete's coffee? What's that product that they're selling? Is that just their coffee?

Yeah. Let's check it out. Yeah, it blends, it looks like. So Major Dickerson's blend is top sales this week with doing about 100k online.

Hundred grand in coffee. Love to see it. Wait, and let's go back just for audience context. That'll be fun. Like, let's look at water boy and Desua, see how they're. They're doing.

Yeah. Got a waterboy at estimated 20 million annualized sales. Our inventory coverage on them is low, so I wouldn't be surprised. Surprised if they're actually doing more than that.

Yes.

Again, it's just DC, not other channels. A number one product, hydration and weekend recovery.

And this is cool. This is, like, this guy Mike, he launched waterboy basically off, like, a viral TikTok. They sold through their entire preorder before they even started developing it. It's like one tick tock. He's like, hey, here's why I like drinking this. So I put all of these. I put all of these vitamins in a hydration stick, and, like, none of the sugar, like, enjoy it, and, like, blew up. And that's awesome to see that.

Like, from that TikTok, they're already at, you know, an estimated 21. That's. That's really cool. And then on the other side, let's look at the swa. So slightly different product, different category, but have major celebrity backing, which is different. So what are we seeing from them?

So, first thing here, they're at only 27% inventory coverage. So, like, the simple math would just be to multiply whatever number I say by four. But that can also be way thrown off by a best seller that could be contributing even more than that. Right. And this also isn't accounting for all their sales at Target and other places where they're distributed retail, but we've got them at 27 million, and that's just online that's just on mind what we're estimating here.

Yeah, wow. That's significant for an online beverage. That's legit.

That is legit. And that also could be inflated by bundles and how counting it. But no, it's definitely in this category. Been such a fun brand to watch. Something we saw, of course, in dry January. And this is one of the other cool things.

Oh, you can see that? Yeah, you can see January. Look at that.

Yeah.

That's insane.

And I'll show you another view of it real quick. So we write, yeah, we use an LLM to put them into categories. We also write a unique description for each store so we're not just pulling the meta tag that shows up when you imessage it to someone. So we, the LLM wrote, desoit is a range of non alcoholic operatives made with natural adaptogens. So in next big shop we can build these custom lists and I'll show you one that I built before where you can say, in this case I did show me all the shops with low abd or non alcoholic in their description. So we're then quartering against those descriptions that we've written based on the contents of the shop's homepage. And now we've got a rank ordered list of all the non alcoholic and low abv shops that we're tracking. Dessois number one in that category for annualized sales.

And we can also see how it's comparing to zero proof boy saw, athletic brewing, Shirley proxies, liquid death, of course, being an alcoholic and a bunch of other brands. So just another look at the data and way that we can slice it.

Very cool, very cool.

I'd be really curious, you know, it's giving me a lot of ideas, but I'd be really curious to see how many of those drink and beverage shops offer subscriptions or like by category, which, which categories offer subscriptions versus a lot because it feels like the drinking beverage category would benefit a lot from subscriptions. If it's something that, you know, you're buying these elements sticks or water boy sticks on some regular basis, there's a lot of that.

And how does subscription factor into the data? Does it just count as like an order or does it throw off numbers in any way? How do you guys think about subscription?

It depends what subscription management service a brand is using. Some of them are our customers and are using this to find new brands to work with. And then it depends how that service interacts with inventory. In the case where every time a subscription goes out, inventory goes down. And that flows through super cleanly to this. But knowing if a brand is using subscription management software and which one they're using has been a very frequent request. We haven't done anything around it yet, but people really want to see that. But the related one, I also wanted to show you, Blaine.

I don't know if actually we told you about this one. Maybe it just came out this week. Um, is shops and retail. You know, we've. We've touched on retail distribution. A bunch of this, uh, there's a bunch of different store locator apps. There's three that are the most popular. Uh, and now with next big shop, you're able to see how many retail locations shops are in.

Um, so what is it? Smear? It's like, I don't know, probably 10% or so shops that we're tracking are in retail. And when we look at this list of shops, this is a list that we pulled together earlier, sort by retail locations. Yeah, we can look at some of these brands, like Wild Willys. Beauty is at 11,000 locations. Eboost is in 9000 locations. Drink lover boy. That's funny. For the Bravo fans out there, that lover boy is the brand from the guy on the show.

9000 retail locations. Graza and 8000 retail locations. Now, this is based on the store locators on their sites. But I think this is another way to cut through the noise of, like, all right, if that's my aspiration, if that's what success looks like to be carried in a ton of retailers, what are the brands that are carried at the most retailers? What are the brands in my category that are carried in retailers? And. And how can I use that as a sort of success metric or goal, too?

Right?

Yeah.

These are the brands you kind of want to pay attention to. If you're trying to model success, if your metric of success is being in retail.

Yeah, but it definitely is one of the big metrics, especially if you're in certain categories, like food and Bev, CPG, you got to be in retail. And what is it about the brand that the retailers are buying? Is it the positioning? Is it the packaging? Is it the brand? Is it something they stand for having this as a tool? Because, you know, we talk to a lot of brands. I think we. I just had this CPG brand on the pod last week. They were. They're doing over 100 mil in revenue, but their ecom stores, like, at one mil or something. Right? Like, so, you know, understanding that, okay, if this is a pure Ecom play, is this an omnichannel play? Is this a retail play with just a little bit of ecom? Like, what is it? And being able to have all the information to cut through. Because, like, every business is different, right? There are certain brands that just don't want to touch retail because it's easier to sell direct.

You get better margins and you don't need the headache. And you're like, I can build a 5100 million dollars business online. Why do I even need to worry about retail? Whereas you've got others that are like, I'm going straight to retail, wholesale, the whole nine yards. Having this stuff is really cool to see.

I met a brand that blew up online just e to see got into retail and now is basically contemplating turning their homepage into a store locator only because it's just more efficient for them to sell through the retailers than it is to, you know, fulfilled on their own 100%.

Especially if you're dealing with a product that, like, we were talking about, like, beverage or like, other big products where you're dealing with returns and you're dealing with, you know, heavy things to ship, heavy things to store, things that might expire. Like, in that case, you might be better off just saying, hey, retail is great. And that's why we always say it's like, direct is so great because you can test and validate an idea. It's like, do people even want this? Does like a consumer want it? Like, is my messaging right? Like, am I speaking to the right audience? You can optimize for that. But then, you know, as your business grows, you can make the right calls based on the category you're in, based off the type, the mix of products you're selling and all that sort of stuff. Guys, this is super cool. As we wrap up here, sameer, I wanted to kind of get your thoughts. What's, um.

Why don't you just talk to us about, like, some of the challenges of building data products? Because, like, I've worked with, with data a little bit and, like, you guys have put together, like, something that's, like, truly amazing. So, you know, what does it take to, like, what went into this? And, like, why is it so hard?

Um, a lot of patience, I would say, is probably the thing that goes into building a data product. Most people, or when you start working with data, it's easy to assume that the data you're looking at and getting is correct, but it often has a lot of caveats attached to it. As David alluded to many times as he was giving his demo. A really big challenge in building data products is how to effectively communicate those caveats so that the data is trustworthy and can be trusted and normalized across many different data sets. So if I had to pick one, that's probably the number one.

Sweet. Well guys, thanks so much for coming on. Love chatting trends, love diving into the numbers. I'm going to be using this tool a bunch so when we have other podcasts on, I'll be able to put them on the hot seat. So looking forward to that. And for anyone who's tuning in, where do we find and connect with you guys, both for next big shop and.

Personally the xbigshop.com and xbigshop on Twitter and on deca on Twitter.

And I'm Matt Samarayani.

Sweet guys. Well, thanks for coming on the show.

Awesome.

Thank you.

If you enjoyed the show, we'd love your support. A rating and review would go a long way as we continue to host the best builders in DTC and beyond. Follow and subscribe to the show and make sure to check out our show notes where you can find our socials and weekly newsletters. Visit us on dtcpod.com to join our founder community and access resources from every episode. We'll see you on the next pod.