TEN BRANDS TO KEEP AN EYE ON IN 2017

In business, a new calendar year is an exciting time for companies to grow, diversify and explore new opportunities. Below, I have compiled a list of my top ten companies to watch this year. I am looking forward to seeing these brands in action as they continue to break boundaries and disrupt the marketplace.

Feel free to leave your thoughts and opinions on these brands or your own suggestions on groundbreaking companies for 2017.

Toys “R” Us

On June 2, 2015, after receiving mixed reviews as the Athletic Director at the University of Michigan, Dave Brandon was appointed by Bain Capital as the CEO of Toys “R” Us. In the six year’s prior to Brandon’s appointment, Toy’s “R” Us never saw sales increase year-over-year. 

In his first few months at the specialty retailer, Brandon stated the obvious: “The experience needs to be more fun. The big-box advantages of selection and price that made the format so successful have been obliterated by the web. There need to be more reasons for people to go to a store.”

This is precisely why Toys “R” Us is one of my key brands to watch in 2017. 

If Toys “R” Us can become the weekend destination for kids and bring their stores to life, it will be a winner. The partnership with Mattel’s American Girl brand is a step in the right direction. A former colleague once told me the average person spends over three hours per visit at an American Girl store. Can you imagine if a Toys “R” Us customer spent even a quarter of that time in their store? 

Brandon’s management style also brings much needed energy and excitement to the company. He was quoted saying he wants his managers to be bold and to take risks. His advice to his employees: “If you’re not prepared to stick your neck out, put a stake in the ground, take a risk, and go out there and make something happen, you’re going to lose.”

Virgin Hotels & Voyages

Sir Richard Branson’s Virgin Group, an integral part of the travel and tourism industry with brands such as Virgin Atlantic, Virgin Rail & Virgin America recently expanded to hotels and cruises. 

In February 2015, Virgin Hotel Chicago debuted and within one year, the hotel won Conde Nast’s readers choice award for best hotel in the US among 300,000 travelers. Raul Leal, CEO of Virgin Hotels, was quoted saying “when Virgin does its job well, it eliminates the areas of friction points in a consumer business that cause displeasure.”

The hotel chain plans to expand into Nashville, Dallas, Palm Springs and New York. If the Chicago property is any gauge of the future of Virgin Hotels, there is a lot to be on the lookout for in the coming years.

In October, Virgin Group unveiled the new name for their forthcoming cruise line – Virgin Voyages. Sir Richard Branson told the Miami Herald, “the only reason we ever go into a new industry is if we feel it’s lacking in something and I think the cruise industry, there is a lot of people who just would never go on a cruise ship. We basically decided, ‘Let’s have a blank sheet of paper, let’s create the kind of voyage company that we would like to go on,’ and that’s what we’ve done.”

While the first Virgin ship won’t set sail until 2020, the marketing hype train should be rolling along soon.

Sprint

For the past few years, T-Mobile has been the disruptor in the wireless industry, stealing market share from competitors. In August 2015, T-Mobile passed Sprint as the third largest wireless provider based on U.S. customers, however, I believe there is still hope for Sprint in 2017.

In June, Sprint featured their first advertisement with former Verizon pitchman Paul Marcarelli. The ad took off quickly and has now been viewed over 14 million times on YouTube. The ad campaign is ingenious; helping to deliver on Sprint’s core brand values for consumers. In the new campaign, Marcarelli acts as himself, opposed to the infamous “test man” character with Verizon. Marcarelli was quoted saying, "they didn't hire a network guy, they didn't hire a tech guy, they didn't hire a pretty movie star. They hired a customer. I think in some ways, that's what's so incredibly clever about this campaign."

Beyond the ad campaign, Sprint recently announced an exclusive wireless partnership with Niantic, the publisher and developer of Pokémon Go. There will soon be a special Pokémon Go experience in more than 10,500 Sprint stores across the country, where players can engage with the game by collecting Pokeballs and eggs to help them advance to the next round. 

Sprint is making some strong moves, but is it enough to pass T-Mobile? Stay tuned in 2017.

Sugarfina

In 2012, Sugarfina was founded on the basis that grown-ups deserve their own candy store. Since then, Sugarfina has seen significant growth opening eighteen stores across the country, thirteen shop-in-shop stands in Nordstrom stores in the U.S. and Canada as well as establishing global partnerships with top retailers in the luxury, hospitality and fashion sectors.

The company carries over 150 candies from chocolate-coated salty sweet bites to fruity, chewy gummies and my wife’s personal favorite – mint chip caramels. The company also offers a signature candy cocktail line featuring sweets made with liquors including rum, bourbon and champagne. When they launched “Rosé All Day Bears” in June, the product went viral and sold out in two hours with a 18,000 person waitlist.

In 2015, Sugarfina’s revenue topped $7 million. They will triple that number this year. Product line extensions combined with international expansion makes me plenty excited about the future of this unique brand.

Blue Nile

Blue Nile is the leading on-line retailer for diamonds. This past November, it was announced the brand would be purchased for $500 million by an investor group consisting of Bain Capital and others.

Like Amazon’s brick-and-mortar bookstore or Warby Parker moving into their own storefronts, Blue Nile has already ventured into physical locations. The first store opened in Long Island a few years back and with a fifth store now open in Washington, the company can continue connecting with their customers not only virtually, but on a personal level.

The foundation for diversification had been set by CEO Harvey Kanter, but with Bain Capital taking the reigns, 2017 could be a year for Blue Nile to further emphasize a customer first mentality both online and offline.

Snap, Inc.

Snapchat, now known as Snap, Inc. has seen incredible growth the past few years. 

When Snapchat came to the market three years ago, there were 33 million monthly active users. This year, Snapchat has 301 million active users. Twitter, which has been around since 2006, has only 16 million more monthly active users.

Last September, Snap began to diversify and started selling spectacles – camera equipped sunglasses that can convert to the Snapchat app. Pop-up dispensers are the only way to grab a pair as the product cannot be found in stores. A “Snapbot” vending machine started in Los Angeles and has been making its way across the country. Snap has built fantastic consumer hype for a product 1/10 the cost of the retired Google glasses.

Moving forward, it will be interesting to see how content creators and brands use spectacles to reach their target audiences.

Snap is primed to IPO in 2017 with an estimated value between $20-25 billion.

True Food Kitchen

True Food Kitchen (TFK) boasts a chain of restaurants featuring dishes that adhere to the principles of Dr. Weil’s anti-inflammatory diet including delicious flavors, healthy nutrients and environmental awareness, not to mention an inviting atmosphere.

The first TFK opened in Phoenix, AZ in 2008 and became an immediate success. The brand has since grown to over fifteen restaurants with additional locations scheduled to open next year.

In 2015, Fox Restaurant Concepts, the ownership group of TFK, announced the hire of Christine Barone to the position of CEO. With Ms. Barone’s knowledge of the food industry and Fox’s intention to spin-off TFK as a stand-alone company under Centerbridge Partners, TFK looks poised to have a very successful 2017.

Franchising, enhancing the menu and expanding internationally could all be possible moves for TFK in the coming year.    

Hyatt

One of my favorite hotel chains, Hyatt, has some exciting things in the pipeline for 2017. Last year, Hyatt announced a new loyalty program, World of Hyatt, that is set to launch in March 2017. World of Hyatt will offer greater rewards for longer stays irrespective of the number of stays hoping to attract high-end travelers. Hyatt will also award customers who visit five or more of the Hyatt brands with a free night. 

The new loyalty program is a long-term strategy to gain new premium customers who will book longer stays at Hyatt hotels. It has been said the program has the potential to add about 30,000 to 40,000 new customers and with the recent Marriott/Starwood merger, Hyatt could definitely use these additional members.

In addition to their new loyalty program, Hyatt launched its first-ever dual-branded marketing campaign dubbed “You’ve Come Too Far to Settle Now” across Hyatt Place and Hyatt House brands last year. The idea is to show business travelers that the hotels are designed just for them, understanding their needs when they are on the road.

It is still too early to judge the success of the campaign, but bravo to Hyatt for trying something new and different.

Shinola

As someone who was born and raised in Detroit, I am proud to sport my Shinola watch and see the company thrive under the leadership of former Detroit Lions President Tom Lewand.

Founded in 2011 by Tom Katsotis of Fossil Group, Shinola has turned into an American luxury lifestyle brand specializing in watches, bicycles and leather goods.

Shinola’s narrative is about producing beautiful products made in America. Within the first eighteen months of Shinola’s launch, the company already had $80 million in total orders. Since that date, Shinola has opened eleven retail stores and secured lucrative relationships with high-end retailers including Nordstrom and Bloomingdales. 

Shinola has also contributed to the re-development of downtown Detroit. There are now 400+ employees working in the city center.

The Shinola brand will continue to evolve this year and next. Kartsostis and real estate developer Dan Gilbert announced the launch of a 130-person boutique Shinola Hotel in downtown Detroit slated to open in 2018. 

With Lewand at the helm, it will be interesting to see how else Shinola will look to grow in the next few years.

Harry’s

In full transparency, I was not aware of the Harry’s brand until I visited the men’s grooming aisle at my local Target last year. The in-store signage, branding and placement for Harry’s was absolutely incredible for a relatively unknown brand.

I found out Harry’s is/was a direct-to-consumer subscription business delivering razors and personal products to customers by mail. The co-founders paid $100 million for a 96-year-old German factory to produce the blades. With its success in e-commerce, Harry’s plan in 2016 was to push into traditional brick-and-mortar stores.

Harry’s has been extremely successful in their subscription business as they use their website to tell the Harry’s story. Physical retail is a bit more difficult since brands only have limited shelf space.

On August 21, Harry’s began selling their razors in all 1,800 Target stores nation-wide. That’s 1.4 million razors in the second largest retailer for shaving goods in the United States. An immediate nationwide roll-out (without testing) with any retailer is an impressive feat. Based on Nielsen data, it has been a very successful launch. Within weeks of the launch, Harry’s grabbed a 10% share of Target’s cartridge sales and about 50% of razor sales. On the other hand, Gillette’s sales in Target significantly declined over the same period.

Target made a bet on Harry’s and Harry’s delivered; telling their narrative in-store in a compelling way.

The Target/Harry’s deal could produce over $20 million for Harry’s in 2017. That does not even include possible add-ons like face scrubs, cleansers and another major market – women’s razors. The future looks bright for Harry’s if they can keep up the momentum in 2017 and venture into other physical retailers such as Walmart.