The Modern Retail Podcast Digiday

John Foley may be best known as the founder and former CEO of Peloton, but it turns out interior design is his real passion.
"I've been passionate about rugs for decades," he said on the Modern Retail Podcast. "I love design, I love spaces."
This was all said to explain why he launched a rug company. Ernesta is a direct-to-consumer brand selling higher-end rugs. It launched in September of last year and just opened its first showroom in Manhattan last month.
"Now I'm addicted to you know those super high-end custom rugs," he said. "And we're trying to bring them now to both interior designers and to consumers at a price point that most people can't afford."
Ernesta is still in its early days, but Foley said the business is growing and gaining a name for itself. As he described it, the hope is for Ernesta to do for rugs what The Shade Store did for curtains. He even sees Ernesta's business model looking similar to it. "[The Shade store is] right around 50/50, selling to consumers and selling to trade. So we believe we're going to be right in that zone," he said.
Still, the company is very young and still has a lot of learning to do. The biggest lesson thus far is figuring out how best to tap the vast and opaque world of interior design. While customers can buy their rugs directly from its site or store, Foley is also hoping to becoming a trusted partner to designers and firms.
"My team and I come from the consumer world, and so we understand consumers a lot more than we understand interior designers and the trade," he said. "So we're learning our way into it."
Now, with the first store open, Ernesta is hoping to see how well it helps grow sales -- and eventually continue building the business from there. The company is also planning on launching an online platform for customers to share their own designs and interior layouts in the hopes of inspiring others.
"We're building this scaffolding -- this product experience community -- onto Ernesta, he said. "And I think in the next six to 12 months, that's going to come to life and be a really special part of the shopping experience."

On this week's Modern Retail Rundown: President Biden signed a bill that requires TikTok to either sell itself or face a U.S. ban. Next, the team discusses Saks' newly announced retail media network — and why it's a growing trend among retailers. Lastly, we dive into a new Amazon grocery subscription service that caters to low-income families.

Every brand talks about paths to profitability, but few actually reach it.
Customizable beauty brand Prose is one company that has bucked the trend and reached meaningful profitability. The company has made nearly $500 million since launching in 2018 and estimates it will bring in $160 million this year. What's more, this year the company is on track to be profitable, after hitting profitability last May as well for the entire third quarter of 2023.
At the Modern Retail Commerce Summit, held last week in New Orleans, Prose co-founder and CEO Arnaud Plas spoke about how he's been leading the company to reach these major milestones. "That has been a journey," Plas said.
Prose hasn't sacrificed growth in order to hit its profitability targets. For example, the company has expanded into new areas. "A major step with a spirit of reaching profitability [was] we launched skin care in 2023," Plas said.
While expanding into new categories is expensive, the thesis behind Prose was to build a vertically integrated and automated production system and then add more products to grow revenue. "The key was really: How do we automate production and customization?" Plas said.
By building out its own New York-based manufacturing, and figuring out how to automate parts of it, Prose was able to lower its production cost over the years while also charging a premium for offering customized products. It took many years, but Plas believed that if the brand could streamline its production enough while launching into new areas, the financials would work out.
"If we were able to execute this, there would be a pretty high and significant value creation for the company," he said.
But brands can't go all in on growth at once. And perhaps that's the biggest lesson from Prose's evolution so far. "The reality is that when you want to be profitable, you have to sequence your efforts," said Plas.

Digiday Media's WorkLife is proud to present season three of The Return, a podcast about the modern workforce, with this season focused on middle management.
Last season, we heard what it’s like for Gen Z to enter the workforce for the first time in a post-pandemic world. We highlighted themes like why values are so important to Gen Zers, whether or not they are loyal to their employers, how they use TikTok for career advice, what it means to be a young professional who is a boss to older workers, and so much more.
This time, we’re hearing from the population of workers that some argue is the backbone of a successfully-run organization: middle management. They are the ones who are navigating those RTO mandates, welcoming a new generation of workers that have a different approach than those who came before them, the rise of artificial intelligence – the list goes on.
In season three of The Return, we speak to middle managers themselves to hear beyond their everyday stresses of the job, but what they need to guarantee everyone they manage has what they need to be the best at what they do. C-suite, listen up because they need your help too.
We dive into how middle management stress is a decades-long issue (there are New York Times headlines dating back to 1971), how the wrong people are being chosen to be managers which is leading to the rise of “accidental managers,” what it’s like to have hard conversations and having to be a therapist at times, where people are finding support as a middle manager, and how AI is impacting the job of a middle manager.
With a Q+A format, you will hear in-depth conversations with folks including Colette Stallbaumer, Microsoft’s general manager of Microsoft 365 and Future of Work Marketing, Rob Pierre, former CEO of advertising services platform Jellyfish, and Emily Field, partner at McKinsey & Company who co-authored “Power to the Middle: Why Managers Hold the Keys to the Future of Work,” to name a few.
Season three of The Return is hosted by Cloey Callahan, senior reporter at Digiday Media’s WorkLife, and produced by Digiday Media’s audio producer Sara Patterson.
Subscribe to the WorkLife podcast now on Apple Podcasts – or wherever you get your podcasts – to hear the first episode on Tuesday, April 23.

This week on the Modern Retail Rundown: After less than a year of relaunching its virtual workout app, Peloton quietly got rid of the free membership tier because it wasn't converting users into paying customers. Meanwhile, Lego's adult customer base continues to grow as adults buy up its newer intricate and more expensive sets. Finally, after doing away with its Just Walk Out technology at its own grocery stores, Amazon plans to sell it to other retailers.

Violife is trying to become the Oatly of plant-based cheese.
The brand, which launched in 2013, is part of the Greek plant-based food company Arivia. But it didn't hit U.S. shelves until 2015. Since then, Violife has taken off. It is now the number one plant-based cheese in the world -- and it continues to roll out new products to continue its growth streak.
According to Violife's global president and chief growth officer Olga Osminkina-Jones, the current strategy is to make plant-based cheese into a mainstream product.
"The category itself is truly nascent," she said.
Osminkina-Jones is a consumer brand veteran. Before joining Violife, she held vp-level roles at companies like PepsiCo, Danone and Heineken. The reason she decided to go to a plant-based food startup, she said, was "to take on a challenge like the reinvention and acceleration of a category."
And indeed that's the project ahead. So far, things seem to be working. Violife is in most major grocers and continues to launch new products. Most recently, it unveiled a new cream cheese product that could be used in baked products.
But the real hurdle isn't about shelf space, but in getting more people to try the product. In many ways, what plant-based cheese needs is an Oatly moment.
"As you look at the trajectories of such categories as plant-based milk, you can clearly see that the scale of adoption was equally propelled by the collaborations and partnerships with the right channels and customers," Osminkina-Jones said.
With that, the focus is on getting more people familiar with the product so that the overall category can continue to grow. While Violife is in a good position as the category leader, Osminkina knows there's still a lot of work ahead.
"The key here is not to run before we can walk," she said.