For a certain population of 40-somethings, the name Waldenbooks conjures warm memories of the 1980s, when an afternoon at the local mall almost certainly involved a stop inside the small bookstore to grab the latest “Baby-Sitter’s Club” release or “Garfield” comic.
Unfortunately, the bookseller is now nothing but a memory—albeit one invoked with surprising regularity in Twitter nostalgia threads.
That’s because it was shuttered long before Retail Ecommerce Ventures, LLC (REV) founders Alex Mehr and Tai Lopez arrived on the scene. These talented e-commerce entrepreneurs are on a mission to save beloved retail brands from oblivion, creating a second life for them online.
For REV, then, the year 2020 wasn’t really about resilience or survival. It was about opportunity.
While the rest of us were buying hand sanitizer and PlayStations, REV was buying the assets, IP and trademarks of struggling legacy retailers—and reinventing them for the changing 21st century landscape. As The Wall Street Journal reported in November, REV’s recent acquisitions include RadioShack, Pier 1 Imports and the trademark assets of Modell’s Sporting Goods. Its portfolio collection also includes Dressbarn, Linens N’ Things, and The Franklin Mint.
A New Kind of Gravitational Pull
All of this is part of a deliberate play to rebalance a North American retail picture that in many cases was no longer meeting the needs of today’s consumers. REV co-founder and Chief Executive Alex Mehr described the realities of retail like this: “I think of a brand as a gravitational force field. The shopping center was whole a collection of brands. Together, they created a bigger gravitational force field that brought customers into a certain geographical—physical—location.”
WHILE THE REST OF US WERE BUYING HAND SANITIZER AND PLAYSTATIONS, REV WAS BUYING THE ASSETS, IP AND TRADEMARKS OF STRUGGLING LEGACY RETAILERS—AND REINVENTING THEM FOR THE CHANGING 21ST-CENTURY LANDSCAPE.
If this sounds like a curious way to describe consumer behavior, it’s relevant to mention here that Mehr began his career as a NASA research scientist.
“We are recreating the same concept in an online way,” he says, of REV’s approach to e-commerce. “The collection of these brands creates a stronger gravitational force field that brings people into a collection of websites, instead of a physical store. And unless you do that well, you become irrelevant. Unless your brand is visible, the consumer cannot enjoy buying from it.”
That brand ceases to exist entirely—unless you count its Twitter mentions.
To create a gravitational force online, REV has linked its collection of brands together in one ecosystem. If you go to Pier1.com, for example, you’ll see a ribbon at the top of the page that lists all of the REV brands in one place. The consumer can click on those other websites and know they’ll enjoy the same intuitive and secure shopping experience at each one. The company is starting to launch apps for each brand it acquires as well.
So, is the force field of our phones so strong it will obliterate physical retail entirely? Likely not.
Those who worry about the end of physical retail altogether, Mehr says, aren’t seeing the whole picture. The end game of the migration of beloved retail brands online will not be one in which we stop leaving our homes and simply accept package deliveries. Experts in retail—like Mehr—don’t think of shopping as either being online or offline. Instead, there are actually four modalities, each one with a specific purpose. If you want to succeed in a competitive world of commerce, you have to have all four corners covered.
Think of a balanced two-by-two matrix:
- Pure offline: Walk into a store and purchase something at the cash register.
- Pure online: Go to Pier1.com on your phone or computer, order something, and see it delivered to your home.
- Online to offline: Order a Starbucks latte and pay for it on your phone, and then go into a physical Starbucks store and pick it up in person. Or, order your medication from Walgreens, and do curbside pickup to receive the prescription.
- Offline to online: This is the showroom model. Think of a Tesla showroom with only a few vehicles onsite to see, touch, sit in. You don’t actually buy the car right there. You look at it, eventually order it online, and have it delivered.
One reason many retailers have struggled in recent years—pandemic notwithstanding—is they failed to adequately address, or at least consider, all four corners of this matrix. Many were so busy trying to defend, optimize or prop up their brick-and-mortar locations that they failed to put enough resources and attention into the online piece, which plays a role in three out of the four modalities.
“I THINK OF A BRAND AS A GRAVITATIONAL FORCE FIELD. THE SHOPPING CENTER WAS WHOLE A COLLECTION OF BRANDS. TOGETHER, THEY CREATED A BIGGER GRAVITATIONAL FORCE FIELD THAT BROUGHT CUSTOMERS INTO A CERTAIN GEOGRAPHICAL—PHYSICAL—LOCATION.”
Co-founder and CEO, Retail Ecommerce Ventures, LLC
“A lot of these retailers I look at started online to offline, but they never actually put a lot of attention to it,” Mehr notes. “The game has changed. A few—a small percentage—of these guys have also invested and are able to play online. The majority of them are not. And they’re either going bankrupt or they are about to. The pandemic is accelerating the process. So now, they have even less time to figure it out. A lot of them went into this situation really unprepared.”
Mehr foresees this enormous rebalancing occurring not just in the retail sector of the economy, but in learning and education as well. We’ll always want to be with other people in a physical location, of course—humans are nothing if not deeply social animals. (Even government restrictions could not prevent people from socializing.) But there are opportunities to deliver some aspects of education via computer, as many parents and teachers are experiencing right now.
Things will eventually normalize in each sector, Mehr predicts. We’re simply at the beginning of the adoption curve.
E-commerce Expertise Meets Private Capital
Prior to launching REV with Lopez, Mehr founded a different kind of online venture: the dating platform Zoosk. He understands, therefore, how difficult it is to build a brand from scratch—how much time, energy and capital it actually takes to build a name from nothing into, well, something. How all the elements have to match for it to gel into the kind of brand awareness one can actually measure.
With REV, the equation they’re working today is different. The portfolio brands are already something. They take up real estate—yes, in the physical world, but more importantly, in the minds of consumers. As such, the job now is to help these entities serve their purpose again in a changed world by bringing tested e-commerce competencies to the table.
“I look at a lot of distressed retailers,” Mehr says. “And they don’t have the online DNA. It’s completely wrong on every level, from website to user interface to merchandising to marketing to email marketing. We have not yet, to this day, taken over the actual website of one of these companies. We make it look like the previous one, but none of them are actually suitable. We have to rebuild them.”
To do so, REV largely uses the Shopify Plus platform along with a specific e-commerce playbook it is continuously refining. A team of talented experts rounds out the mix.
“We are perfecting the art of rebuilding these brands online and it’s become, actually, kind of easy at this point,” Mehr says, providing a peek at REV’s special sauce. “We literally have a long checklist of things that need to happen so we don’t fumble.”
The REV team collects all the pieces to relaunch a brand: identity, data items and people. Private capital drives the whole engine, though REV doesn’t run a fund and is not a traditional private equity firm. It is instead a holding company funded by an investor club of high-net-worth individuals and family offices comfortable with investments with a certain risk profile.
“Sometimes, we hire people from the previous company to bring their know-how about the brand,” Mehr says. “Every brand has history and vendors. That is available to you as data, but there’s also the human inspiration. We’ll ask, who were the main buyers in the previous company? We talk to them and hire the good ones. They have that institutional knowledge about that particular brand.”
Modell’s Sporting Goods and RadioShack have a particularly long history, in fact. The former was founded in Manhattan by Morris A. Modell in 1889 and remained a family company, passing through four generations of Modells. The latter was founded in 1921 by two brothers, Theodore and Milton Deutschmann, to provide equipment for amateur ham radio operators.
According to REV, the former owners of RadioShack believe in REV’s vision for a new RadioShack and appreciated the company’s success with Pier 1 Imports and Dressbarn. As such, the former owners elected to retain a minority stake in the business: “I believe in REV’s vision, leadership, and the success they have shown in bringing iconic brands back to life,” said Ron Garriques in a recent press release announcing the acquisition. Garriques is one of the former owners. “REV was quick to recognize the retail sector’s shift to e-commerce, which has accelerated as a result of the pandemic, and to capitalize on the opportunity to breathe new life into well-known and loved brands.”
“REV WAS QUICK TO RECOGNIZE THE RETAIL SECTOR’S SHIFT TO E-COMMERCE, WHICH HAS ACCELERATED AS A RESULT OF THE PANDEMIC, AND TO CAPITALIZE ON THE OPPORTUNITY TO BREATHE NEW LIFE INTO WELL-KNOWN AND LOVED BRANDS.”
Former Owner, RadioShack
Up and to the Right
As 2021 begins, Mehr is understandably optimistic about the future. “Both Tai and I like the Berkshire Hathaway model. If I’m not mistaken, they have 94 subsidiaries. We have eight. So, I feel like we are at 8%.”
The REV approach to investment is wider and broader than just taking physical retail brands to e-commerce. Case in point was its acquisition of The Franklin Mint, which never had brick-and-mortar stores. Nevertheless, the firm seeks to stay within its circle of competence online as it navigates the choppy waters of our changing economy.
Alex Mehr sees blue skies ahead, grounded in a sense of optimism that drives the core of REV’s operation.
“You sometimes have the total economy shrinking a little bit,” he acknowledges. “When there’s a crisis like a pandemic, certain industries get hurt and other industries benefit. But overall, if you look at the history of civilization, the direction has been always up and to the right.
“I believe in a free market system,” he adds. “I believe in allowing people—entrepreneurs—to build things for everyone. I believe in human ingenuity.”
Laura Schaefer is a freelance writer and author based in Orlando, Florida.