As we move closer to a post-COVID-19 world, it’s undeniable that the virus’ influence on the global economy has been enormous.
How Successful Entrepreneur Tai Lopez Is Saving Dying Brands by Taking Them Online
All around the world, consumer behavior changed virtually overnight, leaving businesses rushing to discover new ways to interact with their customers to keep generating revenue.
Unfortunately, the retail sector has been one of the worst affected industries, with many brick-and-mortar stores closing due to government lockdowns and tight implementation of social distancing regulations.
Consequently, worldwide retail sales plummeted by 5.7 percent, leaving many retailers with little choice but to close their physical stores or risk bankruptcy.
During this time, the majority of investors salvaged what they could and decided to jump ship.
However, young, serial entrepreneur Tai Lopez and his business partner Alex Mehr decided this was the opportune moment to acquire these failing retail brands and give them a digital makeover.
Who is Tai Lopez?
Tai Lopez’s entrepreneurial story is one for the books. Tai is a college dropout who was raised by a single mother.
He began his journey to success at the mere age of six when he moved from selling cherry tomatoes on the side of the road to selling lemonade.
He increased his profits, and it’s clear that from this young age, he understood business.
His first large success was becoming an owner of a dating company. Today he is a successful entrepreneur, investor, motivational speaker, and online personality, and he’s done it all by the age of 37.
His newest venture has led him down the path of saving dying brands, and with the emergence of COVID-19, his help couldn’t come at a better time.
COVID-19, the Catalyst for Digital Adoption
According to a McKinsey report, COVID-19 accelerated the rate companies developed digital products and services by an estimated seven years.
As we just touched upon, this response was primarily due to the rapid shifting of consumer buying patterns that saw a significant preference towards online purchases.
Thus, it appears that Pandora’s box has been opened, as many consumers who were previously hesitant to utilize digital services have been pushed to do so.
These new, infrequent online shoppers are now aware of the advantages and convenience of online shopping.
In fact, a sizable portion of these individuals is anticipated to continue shopping online for the foreseeable future.
For that reason, these changes in consumer habits are predicted to cause a 169% rise in eCommerce purchases even after the pandemic ends.
Brands on the Brink
With this massive shift towards eCommerce solutions, retail stores have been left without any real means to defend against their online competition, which has seen many famous brands pushed to the brink of bankruptcy.
As a result, there have been over 128 high profile bankruptcies in the retail sector, including names such as:
- JCPenney
- Brooks Brothers
- Lucky Brand
- GNC
- Neiman Marcus
- L’Occitane
- G-STAR
- Guitar Center
- Aldo
Unfortunately, this is pretty bad news for the wider economy as a whole, not just those of us that enjoy buying our clothes on the high street.
The stark reality is that major banks collectively hold $1.3 trillion in corporate debt from the consumer products sector alone.
If the retail industry implodes, then it could spell disaster for many of the large financial institutions.
However, blaming COVID-19 for the retail meltdown would be inaccurate, as brick-and-mortar retailers have long been oblivious to their customer’s shifting demands/needs.
Over the years, they have failed to implement sought-after changes such as the acceptance of new payment methods, improving online discoverability, and the engagement of customers across digital channels.
As such, ever since eCommerce started gaining traction, the writing has been on the wall for these physical retail brands.
Enter Tai Lopez’s and Alex Mehr’s “Retail Ecommerce Ventures”
Founded in 2019 by Tai Lopez and his business partner Alex Mehr, Retail Ecommerce Ventures (REV) is setting out to revive these failing brands by acquiring them and changing their emphasis to a digital-only approach.
In many ways, this is an ingenious idea, as instead of building a brand from scratch, Tai and Alex stand to benefit from the pre-existing momentum and reputation that these renowned yet distressed retail brands possess.
Interestingly, according to Lopez, REV’s original targets were retail behemoths like Barnes & Noble and Forever 21.
However, the two founders understood that the expense of securing the IP rights to these trademarks would make it difficult to turn a profit, and with the stakes so high, these high-profile acquisitions would prove too risky.
That’s when they started looking for declining retail firms that had strong brand loyalty.
Stores May Die, but Brands Live Forever
Both Tai and Alex firmly understood the tremendous value of the intellectual property that these bankrupt businesses held.
Seeing their physical stores close down was not an indication that their business was failing or that consumers didn’t want to purchase their products. It was, in fact, an indication that the brand’s current business model was unsustainable.
This is partly due to the massive overheads associated with brick-and-mortar stores, such as leasing expenses, workers’ salaries, insurance, storing goods, and utility costs.
REV‘s strategy is to remove the most problematic aspect of their business operations (the physical stores themselves).
Then, they can focus on a much more customer-centric approach while setting up a variety of online sales channels, subsequently benefiting from the brand’s identity and the existing customer base.
In most cases, REV’s process involves redesigning their acquired company’s websites to incorporate e-commerce functionalities, typically utilizing an existing and recognized platform, such as Shopify Plus, to simplify the process.
Furthermore, many brands also require a complete overhaul of their current leadership, which means that Lopez and Mehr sometimes have to rejig the management structure to streamline operations.
So Far, so Good for Tai Lopez’s Latest Venture
So far, Tai Lopez’s new venture has gotten off to a great start, with a few high-profile successes under his belt already.
At the time of writing, REV currently has fifteen holdings, including the acquisitions of Modell’s Sporting Goods, Stein Mart, Pier 1 Imports, and Dressbarn.
With Dressbarn being one of their earliest acquisitions, it’s already clear to see they have a winning recipe.
REV says the new Dressbarn.com generated over $40 million in sales in 2020, with sales estimated to reach $65 million in 2021.
Conclusion
And the incredible part is that Dessbarn is now run by a tiny 30-member team, as opposed to the 9,000 employees it had during its brick and mortar era.
These guys are certainly on to something, and it will be fascinating to see how well the rest of their portfolio performs in the coming years.
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