Brands should be transparent about price increases due to external factors like tariffs. Unlike airlines that permanently added fees, businesses that remove surcharges when costs decrease build long-term trust and avoid commoditization.
Operating partners add maximum value when involved pre-acquisition. They should help shape the value creation plan and deal thesis from the start, rather than being brought in post-close simply to execute a plan others have created.
Focusing solely on direct-to-consumer (DTC) or wholesale is a failed strategy. Nike's retreat from wholesale and Allbirds' late entry into physical retail both backfired. A balanced, multi-channel presence is now a non-negotiable for consumer brands to meet customer expectations.
A great retail experience goes beyond transactions. Successful brands like Lululemon create "retail theater" by hosting local events like yoga classes in their stores. This builds community and brand loyalty, generating higher long-term ROI than focusing purely on daily sales per square foot.
The direct-to-consumer model that relied on heavy ad spend is broken. Apple's iOS 14 update made ad targeting ineffective by removing access to third-party data, while Shopify flooded the market with competitors, making customer acquisition costs unsustainable.