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The Scroll-Effect in Retail Shopping 🛍️

The Scroll-Effect in Retail Shopping 🛍️
July 29, 2021

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I recently noticed a crowd of young people–I'm guessing 18 years old–who looked like the teenagers of my generation from the 90s and Y2K era. Trends -- from bike shorts to baguette handbags to bucket hats -- always have cyclical resurgences. But the extent to which these kids were nailing looks popularized before they were born had me wondering: is social media making it easier for kids to mimic the hyper-specific niche looks of past decades? Are retailers following trends rather than making them based on the rapidly evolving tastes getting the most likes and tags?

The Scroll Effect

Watching a Gen Z person shop online is a dizzying spectacle of swiping, tapping, clicking, and shipping. Start by scrolling on Instagram or TikTok, see a clothing haul or a story with a cute lewk, add a few more swipes to reach the brand's Instagram shop or app, and then add the item to your cart. 

The generation that is most reliant on social media for style decisions is also leading trends for the rest of us. With Gen X parents doling out the cash and millennials responding to the sheer quantity of content created by this under 24 crowd, Gen Z is instructing retailers on what to make. Some brands are thriving under these new terms, by being able to shift to trends quickly and on a mass scale. While 45% of Gen Z claims brand values like sustainability are a key factor in their decision to buy from a brand, it’s many fast-fashion brands that are reaping the rewards of their trend cycles. 


Gen Z Approved E-Commerce Retailers:

Shein boasts the largest assortment of clothing, covering all the trends at incredibly low prices. The site offers cottage core puff sleeve dresses for $15 & $1.50 flower pattern rings to complete the fit. This focus adds up to a $15BN private company valuation. The company operates out of Nanjing, China.

Fashion Nova similarly is a trend rapid-responder with very low prices. The company is based out of LA, where it recently settled a lawsuit with Versace for a knockoff of the famous Jennifer Lopez Grammy’s look. If you know, you know.

Gym Shark is the athletic wear preferred by most fitness influencers with “snatched” bodies. Their leggings in particular are bestsellers, creating an optical illusion of bodacious booties. The London-based company is a gym unicorn at a $1BN valuation. 

Fabletics utilizes the OG method of influencing–celebrity–with Kate Hudson as a founder. Its customer base might lean millennial, but the brand still relies upon social media as a cannon to both design and sales. The company's valuation was boosted in 2020, no doubt in part because of its extensive leisurewear selection.

Lulu’s is another Shein/Fashion Nova competitor that churns out the latest in Gen Z trends. It's the only company on this list actually born in the 90s which, according to graphic tees saying “90s baby,” is a bragging right for kids these days.

For that 45% committed to sustainability, there are used clothing resellers like thredUP & depop. After all, those trending low-rise jeans must have crawled out of some millennial's parents' basement.
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The retail behemoth will begin to share its e-commerce secrets, for a (licensing) fee.

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650 Companies | 97 Funding Activities | 81 M&A Deals

Funding & Deal Highlights:

iCapital Network raises $440MM from Temasek Holdings

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The Not Company raises $235MM from Tiger Global Management

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Stonepeak Infrastructure acquires Lumen Technologies for $2.7BN

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Warburg Pincus acquires FlexXray 

Industrial Services • Acquisition • Arlington, TX

Omnicell acquires FDS Amplicare for $177MM

HealthTech • Acquisition • Fort Worth, TX

PerkinElmer acquires BioLegend for $5.3BN

Biotech Research • Acquisition • San Diego, CA

ILC Dover acquires Flexan 

Medical Devices • Acquisition • Lincolnshire, IL

ModivCare acquires CareFinders Total Care for $340MM

Eldercare • Acquisition • Hackensack, NJ

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