From cookies to cashmere, the comfort economy gains momentum during the coronavirus pandemic
Stress is reaching new levels as people juggle so much during the most anxious time in recent memory. And brands are clamoring to take the edge off.
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Beauty is in the eye of the beholder, but the same might be said for comfort these days, too. Scroll through Instagram, and staying healthy and happy in the quarantine era appears to consist of bespoke sweatpants, CBD-infused gummies, and plush bedding delivered straight to your door.
Behold, the comfort economy: a potpourri of brands, retailers, and influencers—all targeting consumers looking for a little dose of self-care and some anxiety relief. This convergence of industries has already been brewing for awhile, but it has since exploded with the coronavirus pandemic and subsequent shelter-in-place mandates, forcing many people to self-isolate at home and practice social distancing when in public.
“Health and wellness retailers—from drugstores to fitness fashion retailers and the likes of Peloton—have been able to take advantage of shoppers’ penchant—and panic—to protect themselves and remain healthy,” says Wendy Liebmann, founder and CEO of market research consultancy WSL Strategic Retail. Retailers that sell groceries have won the day—so far, she says, but retailers that sell home and office goods along with pet supplies have also done well “as shoppers hunker down and cuddle up.”
The term “self-care” has different meanings for different people, but it has rapidly become part of the lexicon—especially for millennials and Generation Z—over the past few years.
For Alisha Ramos, founder of the popular newsletter Girls’ Night In, self-care is being able to tune in to what you need in the moment physically, mentally, emotionally, and socially.
“No matter your generation, we’re living in a more stressed-out, anxious world right now. The concept of self-care is an enticing antidote to that, and retailers have found ways to interpret it in various ways,” Ramos says.
Demographically, it’s a broad movement, according to Liebmann, although the more expensive self-care products and services are driven by higher incomes. And interest in natural, alternative remedies and services skews younger, she says. “Retailers are adapting to what shoppers want,” Liebmann says, noting her firm’s research has tracked shoppers moving toward this approach to taking care of one’s own health since 2014, evolving from what she describes as “sick-care to self-care.”
“This was grounded in the economic issues surrounding being sick—the cost of getting well, being out of work, etc.—to the growing stress of everyday life and a new set of values that emerged out of the 2008 recession…and the quest by Americans for greater well-being,” Liebmann explains. “The other factor that drove self-care was a lack of trust in many of the institutions and retailers who were ‘supposed’ to take care of shoppers’ health and well-being.”
At Girls’ Night In, which defines itself as a club for women who’d prefer to stay in on Friday nights, Ramos says the newsletter features products that her team is personally purchasing or eyeing. “It’s currently a sensitive time for shopping and consumer spending, so we’ve been careful to share products across a wide range of price points, as well as products created by smaller makers and businesses,” she explains.
“Self-care is a conscious choice to invest in your health and well-being, as well as personal growth and development,” says Ariel Kaye, CEO and founder of home essentials brand Parachute. “Finding ways to incorporate rituals that nurture and make you feel good are essential.”
She suggests a reciprocal relationship has emerged: Consumers are looking for goods, communities, and experiences that contribute to their happiness, and retailers have responded through content and physical products.
However, Liebmann remains cautious, stressing retailers recognize that as the economic crisis grows, shoppers will have to cut back on spending and maintain tighter budgets. Retailers will need to adjust with not only more affordable wellness and self-care products, but also respond with easier access to online options as well as empathetic digital marketing.
“Shoppers are moving from the panic of the first days of the pandemic. We are now seeing them consider the more mundane realities of everyday life,” Liebmann says. “Stress is reaching new levels as people juggle so much.”
Spring is traditionally a time to clean and refresh the home, and Parachute’s catalog offers a wide range of items, from bath towels to bedding, including mattresses. Since millions of people nationwide started working from home in mid-March, the company has seen a steep increase in sales for its classic bathrobe, made from 100% long-staple Turkish cotton using Aerocotton weaving technology. “Robes have transitioned into the everyday wardrobe, and I’m here for it,” Kaye exclaims.
Kaye says it became clear in the beginning of March that COVID-19 was going to impact Parachute’s business. On March 14, the company, based in Venice, Calif., closed its 10 retail stores for the foreseeable future. “Retail is a meaningful revenue driver for us, and our stores are profitable,” she says. But e-commerce sales have been holding up, and Kaye speculates customers are taking this time to invest in their homes to make them more comfortable and cozy. Parachute also has a growing hospitality program, partnering with boutique hotels on linens and robes, but the program has been forced to pause as the travel industry has been hit especially hard.
“I think that we are all slowing down and being more conscious as consumers,” Kaye says. “I see that people are looking for quality rather than quantity, and supporting local, small businesses in any way they can.”
Parachute’s office employees are currently working from home, meeting for videoconference calls daily to track business, collaborate on projects, and just provide a check-in for everyone. Parachute did lay off a few members of its headquarters staff, and it has had to furlough its retail employees for the foreseeable future. “This is a big adjustment, personally and professionally,” Kaye admits. “There are days that I feel great and others that are a struggle. There is a lot of uncertainty to process, and that can feel overwhelming.”
Parachute has since partnered with Platform, a shopping center in Culver City, Calif., to offer its robes through a “drive-thru” retail service; customers can shop from their cars while adhering to social distancing mandates. The company is also building out its own curbside pickup program, and it launched free virtual styling consultations. When restrictions lift on nonessential businesses, Parachute is looking into in-store appointment shopping as well as “buy online, pick up in store” options. Longer term, Kaye says, Parachute looks forward to opening more retail locations across the country “when the time is right.”
The new look
The first step to getting comfortable at home—whether you’re working or not—starts with what you’re wearing. And suffice it to say, most of us aren’t putting on traditional office attire each day anymore. While April is expected to be a bloodbath for apparel retailers that rely on heavy in-store foot traffic, brands that deliver direct to consumers and transition well from season to season are expected to fare better. Athleisure sales, in particular, are expected to grow by 6.5% globally, according to UBS. (However, while been athleisure brands have been able to capitalize—so far—on the work-from-home shift, Liebmann cautions against getting overly excited. “For the most part, shoppers aren’t running out to buy new things,” she says. “They are mostly wearing what they have.”)
Nevertheless, Naadam—a luxury knitwear brand that many New Yorkers might recall from subway ads featuring serene models dressed in cashmere turtlenecks while holding baby goats—has seen sales surge over the past six weeks, tracking at more than 180% year-over-year, which CEO and cofounder Matt Scanlan attributes to the new safe-at-home lifestyle.
“Naadam is a fairly seasonal business, so we are in the fortunate position that the immediate impact of COVID-19 has not dramatically changed our financial outlook for the year,” Scanlan says, projecting 2020 will still be a year of growth for the brand. “While this time of year is comparatively less busy, since our peak season is September through February, we still have a 100% projected sales increase to last year.”
Select women’s cotton and cashmere lounge sets sold out immediately, but Naadam recently restocked the products. And jumpsuits are also flying off the shelves—nearly 10,000 units were sold within the first two weeks they became available online. These aren’t your average sweatshirts that you might throw on for household work. They are $75 cashmere sweaters and $175 cashmere lounge pants. Cotton joggers start at $135.
“The demand for the product continues to be so high that we have had to pull back product,” Scanlan says. “The item goes offline in the next few weeks, and won’t be reintroduced until the fall.”
Naadam has seen increased cart sizes for loungewear products, resulting in higher average order values, which the company attributes to people shopping not just for themselves, but for family and friends with whom they are quarantined. Additionally, the brand has seen an increase in male shopping behavior online across all product categories. Typically, men’s sales represent 20% of overall business at Naadam, but currently, the company is tracking closer to 40%. “We are also seeing a lot of our first-time customers repeat-purchase in a very short time period of about two weeks,” Scanlan says. “All of this feels very circumstantial. We expect, overall, to have a much busier summer sales season as our product relevance has clearly been extended.”
Self-care represents many different categories of retail, Scanlan says, from consumer-packaged goods like skin care to apparel, such as activewear and loungewear.
“Ultimately, I think self-care is a residual effect of larger trends in consumer preferences, such as sustainability and health and wellness, both of which are a derivative of our global economy providing unparalleled transparency across global supply chains,” Scanlan says. “People have been given more information to make more informed consumer choices, and thus feel more empowered than ever to take control of their own wellness and well-being in all aspects.” That’s from what you eat, to your workouts and wellness routines, to your mental health, and, in Naadam’s case, to how you dress.
“If you are spending 95% of your time inside at home, then, in theory, 95% of your online purchases will reflect your behavior,” Scanlan says. Apparel will shift away from dresses and suits to loungewear and sleepwear, while bedding, home decor, and skin care—all of which easily converge under the self-care umbrella—have become top-of-mind purchases for consumers around the country. Yet this change in behavior has positioned some products for success and others for major difficulties. “We are in the fortunate position that our products have matched consumer demand for low-cost, high-quality loungewear,” Scanlan says.
So far, Naadam has been able to maintain its team of 80 employees, and Scanlan says there are no plans to furlough or make any other HR-related changes as a result of COVID-19. “Our business has not suffered in the short term, and we have made a commitment to keep our teams intact,” Scanlan says. “We think it’s really important we provide stability and not contribute to the larger economic shifts related to unemployment.”
While Zoom has become the most prevalent (or at least, buzzy) tool for teleconferencing, Scanlan admits his team spent some time juggling multiple systems with varying degrees of success. “We needed to acclimate to the technology systems for proper communication and accommodate meetings and plans that had been scheduled months in advance,” he explains. “Our business’s success hinges on strictly adhered to time and action calendars that support product production and development. There are dozens of checkpoints related to product testing, fitting, and planning that need to be done in person. Sample products have been shuttled around in passenger-less Ubers on a daily basis for weeks now.”
Anticipating warmer months ahead—when that cozy feeling might be too close for comfort in a turtleneck—Naadam is preparing to launch a temperature-regulating sleepwear collection, which was pushed ahead of schedule given the shopping climate right now. This is the first time that Naadam is launching sleepwear, but it has been in development for nearly two years. “We work across a vertically integrated network of global manufacturers that provides nimbleness and transparency, which has allowed us to maintain and even speed up our production launch schedule during this time,” Scanlan says.
Another side effect of the COVID-19 outbreak: a shift in consumption patterns. The toilet paper shortage continues at many grocery stores in major cities, and alcohol sellers have also witnessed a stock-up mentality taking hold.
“Consumers are now buying in larger quantities and showing a vast preference for products that can be shipped to (and enjoyed within) the home,” says Catharine Dockery, a venture capitalist and founding partner of Vice Ventures. “They’re also continuing to spend on self-care products, more so than before, as they look to cope with the stress and isolation of quarantine.”
Vice Ventures is a seed-stage fund that invests in startups within industries that are traditionally seen as “bad” or taboo, as outlined by vice clauses. These categories include cannabis and CBD, sex tech, e-gambling, and nicotine harm reduction. But these products are not mutually exclusive to self-care, at least not for its investors and customers. Dockery defines self-care as the implementation of products or behaviors that are intended to provide long-term mental or physical benefits to the individual. That could be anything from a new strain of cannabis (where legal) to a fancy new candle that makes you feel happy to be at home, she suggests, citing her own guilty pleasure: Diptyque candles, which range from $38 to $198 per unit.
Dockery sees two factors driving the self-care movement right now: the destigmatization of enjoyment and the idolization of productivity. “Having fun is simply getting more socially acceptable, and we’ve started to lose this social sense that life is intended to be a slog from beginning to end with the only definition of success being the family you leave behind and the material wealth you accumulate,” she explains. “I also see self-care as a way of further promoting a work hard/play hard mindset—especially popular in younger generations, in which individuals are taking better care of themselves in the hope that they see monetary, professional, or personal rewards.”
Under the Vice Ventures umbrella, Dockery thinks most of the brands in the firm’s portfolio have some aspect of self-care. A few of the most prominent examples: Maude, sex-positive products from body oils to toys; Recess, a CBD-infused sparkling seltzer; and Lucy, a maker of alternative, lower-dosage, smoke-free nicotine products. Both Lucy and Recess e-commerce sales have doubled over the past week, and Maude is indexing to surpass total sales this year by 200% over 2019 results, with a 20% increase in returning customers and, particularly, a 15% spike in lubricant sales.
Early on in the crisis, when most of the quarantine precautions were confined to China, Dockery says some of the brands at Vice Ventures experienced production hiccups, with a few even running out of product owing to a combination of supply chain friction and consumer stockpiling behavior. “At the moment, we’re seeing the early effects taking place in companies that had a very short runway coming into the pandemic,” Dockery says. “This group is relatively well mixed between companies who were already in a difficult cash flow situation and those who had the bad luck to time a capital raise for early spring. Fundraising markets have dried up meaningfully, so most of those who had the ability to cut their burn and wait out the crisis have done so.”
And while it’s hard to argue that any of these products don’t contribute to self-care and provide comfort to the consumer in one way or another, some of the products that have received funding from Vice Ventures might be classified as “guilty pleasures”—and then some. Dockery says the most limiting aspect of that classification is the “guilty” part.
“There’s a social stigma here that still is being broken down—not all pleasures have to be guilty. We’re often trying to find products that carry less guilt for the consumer, and which promote harm reduction alongside enjoyment,” Dockery says. “For us, the mentality of self-care also needs to come with an understanding that most things we do for or to ourselves are not 100% positive or negative. We don’t classify driving as a guilty pleasure, though it pollutes the environment and supports the oil and gas industries. Why do we insist people should carry guilt for seeking happiness?”
In America, at least, one cannot discuss comfort without including comfort food. With most restaurants shuttered and grocery stores enforcing new rules to maintain social distancing, Americans are reevaluating how and where they get their food. And for many people, food is the fastest and easiest quick fix for mood enhancement, which is often now arriving via delivery.
Typically, the holiday season leading up to the New Year is the busiest time of year for Goldbelly, an online marketplace, curated with regional and artisanal foods from purveyors across the United States. March and April are usually a slower period for the company, according to founder and CEO Joe Ariel. But like everything else, that changed this spring. Goldbelly has seen sales up by 100% across all categories—especially in its savory food categories, like Chicago-style pizza, New York City bagels, Philadelphia cheesesteaks, and the all-time classic comfort food macaroni and cheese, compared with sweets, such as cakes and cookies. Ariel speculates that more people are looking for foods they can enjoy for lunch and dinner, while also stocking up.
“At Goldbelly, we believe in the emotional power of food, so we are finding that our customers are ordering more food that delivers a sense of comfort and nostalgia. We’re seeing the most classic American comfort foods as the top sellers,” Ariel says. “Our mission is to bring people comfort through food, whatever they dream of, wherever they are. Now more than ever, we recognize how important our mission is, and we’re working around the clock to keep up with demand and to onboard many new restaurants.”
When dine-in restaurants without takeout or delivery services were forced to close their doors indefinitely, Ariel says he knew that many of his vendors would be relying on Goldbelly’s nationwide shipping business. Since mid-March, Goldbelly has seen an influx of new customers, as well as returning customers, ordering in larger quantities—up to 30% to 40% more than normal. Goldbelly has approximately 500 vendors across all 50 states, and it is looking to onboard twice as many restaurants as it has retained in the past.
“The future in our industry is going to be about meeting customers on their own terms. Restaurants and businesses are now more willingly serving their customers through delivery and online sales,” Ariel says. And more retailers are making the jump. Shake Shack, for example, partnered with Goldbelly last month to ship its famous ShackBurger directly to customers’ homes across the country. This is something that may not have been likely a few months ago, Ariel admits, but says customers are loving it. “They are so thankful to have that experience in their homes,” he says. “It’s an edible hug in a box.”
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