Tariff deals, American Eagle’s ad controversy and the rise of postpartum care market

0:07Hello, everyone, and welcome to the Modern Retail Podcast, our show that covers the ways the retail industry is changing and modernizing. I'm senior reporter Melissa Daniels. Later in this episode, we'll be getting into the state of tariffs and the controversy around American Eagle's Sydney Sweeney campaign. And I have an exciting featured segment about the developing market for postpartum care products. But first, I'm joined by reporter Julia Waldo, filling in for my co-host Gabby Barco today. Julia, how's it going? It's going well. Yeah, it's a rainy day in New York, but one of my labooboos is on the way.

0:45So I'm very excited. Excuse me, one of? This has been a multiple purchase journey for you? This has been. Yes, I do have to admit that. I do have two on the way. One is coming soon and one is coming in September. So, you know, I'll let you know what happens when the first one arrives. I don't know who it will be. Wow. My vote is for you to film it and do an unboxing and then we'll put it on the Modern Retail Instagram as an experiment. I think we should try that. I like that. I've always wanted to try to do an unboxing video. I've never tried it. I've just watched them. So this could be a new skill set I could develop.

1:27You know, I probably shouldn't admit this here, but I've actually done two of them. What's your secret? You have any tips? I mean, I don't think they really went over that well because I didn't do it again. But I had a lot of fun. I did one around a specialty deli that I ordered some products from an Italian deli back home. And then I also did one around Tarte Cosmetics when I was really excited to get a kit from them that I had ordered after a long time of lurking it. So it was just a way for me to like have fun on TikTok to experiment with the platform because I'm always trying to justify like, you know, new ways of using these tools that come out in the name of keeping myself as a relevant media creature.

2:12So it's just kind of like, hey, see what works. But it was fun. I mean, listen, opening packages is already fun. So it's just kind of a way to to spice it up. That's true. How are you other than other than this unboxing saga? Oh, I'm great. I mean, it's been a really wonderful summer here in Southern California, and particularly this week. I've really enjoyed some time outside. But I've also just been working a lot because the world of retail is quite busy right now. You know, as I mentioned, we're going to get into everything that's been going on with tariffs and the American Eagle campaign to just some really big retail headlines that we're going to discuss here in the rundown portion of the episode.

2:53By the time our audience is hearing this, we'll have met the August 1st deadline that President Trump had set for new trade deals to be in place. But as CNBC reported, Treasury Secretary Scott Besant on Wednesday urged corporate America, quote, not to panic if tariffs still go up because some deals haven't been reached yet. There's still a lot of details that need to be ironed out. And, you know, the secretary said that countries, quote, can still do a deal after the deadline expires. Julia, what have you looked at around tariffs this week? What's been happening as we hit this August 1st deadline?

3:32Yeah, it's been a very intense week on the tariffs front. So far, as of this recording, you know, the White House has said that it has reached some deals with various countries. So, for instance, the EU and the U.S. reportedly reached a deal on a 15 percent tariff. The BBC is reporting that details are still going to be ironed out. So definitely more to come on that front. You know, Japan, that rate is at 15 percent, including on Japanese vehicles. So, you know, will affect, you know, companies like Toyota, et cetera. You know, the Philippines, 19 percent rate. Indonesia, also 19 percent. Vietnam, 20%.

4:17The Vietnam one is, you know, interesting because a lot of footwear is made in Vietnam. A lot of brands, including, you know, On, primarily manufactured in Vietnam. So, you know, rates of any kind, definitely going to affect them there. With Vietnam in particular, I know this was something you covered earlier this year because some brands had maybe thought about trying to try to move their facilities out of Vietnam, but necessarily they couldn't because the infrastructure to make footwear doesn't necessarily exist in other countries. Is that kind of what you had reported or is there any updates there?

4:52Yeah, definitely. A lot of brands are still not happy with the fact that there is going to be a tariff in regards to Vietnam at all, especially because as you just mentioned, so much of the existing infrastructure to make things like sneakers and boots exists completely outside of the US. The vast, vast, vast majority of shoes that are worn and purchased in the U.S. come from outside of the country. So for a lot of brands, they already have these existing factories. They have these relationships with suppliers. You know, they're very hesitant and many times, you know, unwilling to throw those away just because of these tariffs.

5:31So, you know, definitely we've seen some pushback from the footwear industry on this point. And so I think that will continue to happen. Yeah, yeah. Yeah, see, it's kind of like even though the quote unquote deals are in place or have been announced, it doesn't necessarily mean that the reality of France dealing with it gets any easier. Maybe it does add a degree of certainty, at least to the extent that they can get the information on what the tariff is going to be when their goods come into the U.S. But yeah, it doesn't necessarily change the headache of trying to figure out what your balance sheet looks like or, you know, the hassle of trying to find a new supplier.

6:09But there's still a lot of questions here. You know, in the case of Mexico, a 90-day extension was announced for a trade deal with Mexico. And this is gonna be a big one for the retail industry because I think a lot of companies in recent years had been looking to Mexico as a nearshore option for suppliers instead of going to Asia. But Julia, I'm curious if there's any other insights that you have on what this really means for brands. You know, we talked about how some of this has just been a really confusing year for them to keep up with. But what are brands saying to you right now about how they're reacting to some of these trade deals or what's next for them?

6:48Yeah, brands, from what I'm hearing, are, as you said, happy to have some sort of certainty, some sort of hard number coming out of things. You know, that I'm sure definitely helps in terms of planning. But again, a lot of these brands really still have a lot up in the air right now. They don't know if, you know, the terms of these deals could change in a few weeks or a few months. You know, if more duties will be slapped on top of existing duties of other ones will be taken away, you know, for planning purposes, it's making things really, really hard. And a lot of what I'm hearing right now is that brands are very confused about what to do about the holidays in particular.

7:25Like right now is a really big time for when brands are solidifying their holiday plans and their holiday orders, getting those in. And a lot of them just don't really know what to do in case things change. And, you know, there is a brand called Spring Rose who I talked to recently. They're an adaptive intimates company. And they were telling me that, you know, some of their products were coming in from China and they were on a boat waiting to come in. And basically, Spring Rose was able to get an exception in terms of duties because they are an adaptive brand. And apparently there is some sort of exception for that.

8:06But they had to submit all this paperwork to the government. And again, for that, like only some of their products qualified. So that was kind of up in the air for them. They have to decide if they want to make more products or order more products from China going forward. Like they just have the ones that they have now. But if they want to do more in the future, especially around the holidays, it's kind of unclear what those duties will be. So just for planning purposes, brands are still not sure what to do. Right. Right. Yeah. On the case of exemptions, you know, I believe at this time there's still pressure on lawmakers to try to secure exemptions for baby products, because many of those do still come from Asia and would be hit by these tariffs, which is, you know, driving up the cost of products that are really essential.

8:52But from the brand side, you know, you mentioned this earlier, this is already changing how brands are planning. A Deloitte survey from this week showed that 78 % of respondents are concerned about securing adequate inventory. So that means the vast majority of retail buyers are looking at their holiday planning and what they usually get in inventory and saying, gosh, this is going to be a challenge this year. There's approximately one in five retail buyers who've paused shipments of certain orders just until there's more trade certainty. And 18 percent have canceled orders that they said would not be profitable.

9:27You know, from my perspective, this is just a new wrinkle. You know, I think tariffs and duties are a reality of doing business in a modern environment. But But to have such uncertainty around what the cost might be is really a new layer of planning that a lot of brands are having to navigate. Yeah. And I'm hearing from brands that all this uncertainty, it's affecting their hiring and whether they want to bring on new people, it's affecting their investments in certain technology, even starting new projects. A lot is on hold for a lot of brands because they just don't know what the situation is going to look like in a few months.

10:04and that's kind of inhibiting their growth now. Yeah, yeah. But there's still a lot of time for this to shake out. I think some buyers are gonna just change where they're sourcing from. As we mentioned, some brands may develop new relationships with suppliers. We also see a lot of companies just leveraging AI in new ways, a lot of supply chain prediction, a lot of demand forecasting, trying to figure out if they can predict what a product assortment might be that they need to have in place for the holidays. And, you know, there's also just some macro things that might change. You know, the announcement that DeMinimus is now no longer a loophole in all countries.

10:44There was an order saying packages of under$800 as of August 29th will be subject to all applicable duties. That rule had already been in place for China and Hong Kong. So, you know, having that go worldwide has big ramifications for the e-commerce world and, you know, is something that a lot of brands have been fighting for for a long time in the name of leveling the playing field. Absolutely. Yeah, it's going to be an interesting next few weeks and months to see, you know, how the landscape changes and how brands respond. And for a lot of them, yeah, it's just going to be a kind of matter of the minute decision, I think.

11:19Oh, yes, this is not the last we have heard on the tariff deal front. But to transition into another story for the rundown this week, you know, as I mentioned up top, we're going to talk about the Sydney Sweeney and American Eagle ad campaign controversy. If you haven't heard about this yet, you know, you're forgiven for not being as terminally online as some of us. But I think at this point, it's definitely metered out into mass media. And it's a big deal in the marketing world. And it's the kind of controversy that we really haven't seen in a while over an ad campaign. You know, Julia, talk to me about how we got here with this ad campaign controversy.

11:56You covered the campaign at its launch and interviewed members of the American Eagle marketing team about it. Yes, absolutely. So basically, just for some context, American Eagle launched this ad campaign with Sydney Sweeney, who's known for her work on the White Lotus, Euphoria, a bunch of other projects earlier in July. This was a huge, huge campaign for the brand. Normally they work with, you know, multiple public figures and ads. This time they really only work with Sydney Sweeney. They kind of put all their eggs in the Sydney Sweeney proverbial basket, you know, and called her, you know, the biggest get in the history of their brand.

12:33That's what they told me. So this was definitely a pricey campaign for them, very wide ranging. What they did was they posted, you know ads with sydney sweeney with the tagline sydney sweeney has great genes on you know bus wraparounds on billboards they put out snap stories they started a broadcast channel on instagram which was something they had not done before they even put up a 20 story ad in times square that is 3d and it's sydney sweeney like blowing kisses to the crowd so they really they went all out on this but you know that tagline of sydney sweeney has great genes that definitely sparked some controversy.

13:11So when this hit, the internet kind of exploded a little bit because, you know, as Julia said, the tagline of the campaign is Sidney Sweeney has great genes. And the whole premise is this play on genes, G-E-N-E-S or genes, J-E-A-N-S, as in the kinds of genes that American Eagle sells. But because of this play on genes and genetics, people began to criticize this as a way that American Eagle was promoting eugenics. And the fact that Sydney Sweeney is a blonde haired, blue eyed woman saying this, you know, really rubbed some the wrong way, given, you know, just the sort of Aryanism associated with that and given the cultural climate that we're in here in the U.S.

13:56yeah absolutely there was definitely a lot of backlash on you know social media people commenting on uh you know american eagles posts about the campaign but also people making their own videos their own posts about this um you know exactly saying what you just said um you know that they were concerned about this message and its implications at this time on the other hand there were some people who you know didn't agree with that who were saying this criticism is overblown. All American Eagle is doing is really pointing to the fact that Sweeney is considered conventionally attractive, like her great genes are that she's a beautiful woman.

14:33And that's that. And then other people, you know, we're saying, okay, this campaign is kind of tone deaf, but rather than criticizing American Eagle and spending a lot of time talking about Sidney Sweeney, we really should be talking about, you know, the Nazi ideology that's being embraced by a lot of Americans. And that's what we should really be talking about. And not so much within in the context of this campaign. And then the other part of this is that as part of this campaign, American Eagle and Sydney Sweeney developed this gene that they're calling the Sydney gene. It has a butterfly design on the back.

15:05And what's important about this gene is that proceeds from the sale of this gene will be going to a crisis text line that you can text for support around domestic violence. And so, you know, some people had also expressed concerns that that message is getting lost, you know, in regards to this whole campaign. So there's a lot of different sides. It's been, as you mentioned, talked about on all corners of the Internet. It's also showing up in talk radio. It's showing up on cable news. A lot of people are weighing in with their opinions. Thanks for all your reporting on this, Julia. I really appreciate you breaking all that down for us.

15:41And it's interesting to me because stories like this always seem to have some sort of backlash to the backlash. You know, you have in the first instance, people seeing this campaign and feeling offended and harmed by it because they see a blonde haired, blue eyed woman talking about jeans, you know, at a time when when fascism and the echoes of fascism are very present for many people. And then you have, you know, I think Megyn Kelly had a segment about this where she was saying, yeah, it's OK to just celebrate a conventionally attractive woman again. And we have these sort of, you know, dueling polls around what we can show and say about women's bodies.

16:18It's really an interesting moment. I'm wondering if you have any insights on, you know, just what you think was happening with American Eagle in the marketing of this. Or, you know, I've seen a lot of criticism that people said, well, they must not have had people of color in the room when they developed this campaign. Right. Yeah. I mean, I to that point, I guess I wasn't in the room, so I can't, you know, speak as to who was in the room. But I mean, that is that is a big concern with a lot of these marketing campaigns. You know, are they going through the correct checks and balances and the right funnels and and everything?

16:52And, you know, now we reported, you know, earlier that American Eagle has been in talks with this crisis communications firm regarding how to handle this situation. You know, it's been about a week since this campaign rolled out. Their stock price has gone down in that time. We're definitely seeing this play out for them financially. and it's just, you know, another example of how when you are rolling out a marketing campaign, you definitely need a lot of people to, you know, give feedback on it and, you know, highlight any potential problem areas that could be had. It's just, I think, you know, especially because there's so many ways of seeing a marketing campaign now, it's not just, oh, did you pass the billboard?

17:37It's, you could see it on social media, you could see it in person, et cetera. you know, having those checks and balances is really important. Yeah, you know, context matters. And knowing that your audience could be anywhere at any time is a huge thing for a brand that's trying to be everywhere like this. And you have to look at all the subtleties and sensitivities, right? You know, a friend of the pod, Mary Cirincione, who's a PR pro that I love talking to, she wrote about this at Adweek. And I thought she had a really salient point, which was, quote, the focus on Sweeney's breasts and her sex symbol status feel like an odd play for a brand which arguably has been trying to market real women for a decade plus.

18:19The seemingly all out shift in brand direction doesn't make sense. And I thought that was an interesting perspective because, you know, this isn't just really about the ad itself. It's about American Eagle's entire brand journey and brand story and how the ad plays in that brand story. And if you watch the ads, it does feel like a big departure. And, you know, as your reporting showed, that's something that they were they were going for in a lot of ways. You know, like you said, by partnering with one star in particular, by doing something that was kind of, you know, a more wink and a nod. And by having an ad campaign that I believe was also used for both genders, you know, they had pictures of Sydney Sweeney on the men's side and then her products, you know, this this jean that she designed in the women's section and really just taken over the whole store.

19:06So there's going to be a lot of conversation here. I truly think this is just the beginning and that this might go down as, you know, one of the biggest brand cultural, you know, controversies of the year, you know, sitting here in August 2025. Julia, any other updates or insights about this story that you can share? Yeah. So, you know, a lot of American Eagle's social media posts in the past week have been about this campaign specifically and only this campaign. However, the brand did post an Instagram photo of a non-white model a few days ago. This also had the caption that said, denim on denim on denim on denim.

19:47AE has great jeans. Jeans with a J. Yes, jeans with a J. I'm sorry. Jeans with a J. A lot of people in the comments were asking if this was the brand's attempt at damage control because, you know, using a model of color when people are talking about, you know, particularly what we just talked about, you know, it's going to be interesting to see if this moves the needle on American Eagle sales. I think the other thing that is important to point out here is the fact that a lot of people were troubled about the fact that this came out of American Eagle, which is a company that has American in its name, you know, and so if the brand had been named something, you know, just Eagle, for instance, you know, know, I think it still would have been controversial, but the fact that, you know, the brand is basically modded on Americana, American identity, et cetera, et cetera.

20:38I think that also kind of plays a role in how people are reacting to this and, you know, what that says about the state of, you know, politics and discussions around race in this country. So, yeah, it'll be an interesting story to continue to monitor for sure. Yeah, I so appreciate your insights and all that you've reported on here. And yeah, I mean, it'll definitely be interesting to see what shakes out during American Eagle's earnings call, you know, in late summer, early fall. As I said, I think this might go down as one of the biggest brand cultural moments of the year. And I'm sure we'll be talking about it again.

21:12Julia, thank you so much for joining us on The Rundown today. I appreciate having you here. Thank you for having me. All right. And next, we will be hearing my interview with Sarah O 'Leary, the CEO of Femtech company Willow and Jen Saxton, the founder of the Services Marketplace Tot Squad. We get into one of my favorite topics to report on, which is the rise and development of the postpartum consumer goods category. This sounds like a really niche space, but it's a really important one, whether or not you're a mom, because, you know, it's a great example of how brands can take advantage of opportunity in white space when you're really solving a problem and listing your customer.

21:48So more from that after the break.

22:00The postpartum period, aka the fourth trimester, is one of the most challenging for new parents. For mothers who physically give birth, it's extremely demanding on your body. And for everyone else, it's simply exhausting and overwhelming, and there's so much new stuff to figure out. But because of this, for brands and for companies, there is huge space and opportunity to tap into this market. In researching this episode, I couldn't find exact figures on the size of the market for consumer products in the postpartum space. But we know that women's health overall is a booming industry. The total VC dollars going to women's health more than tripled between 2019 and 2024, outpacing healthcare as a whole, according to a Silicon Valley Bank report.

22:51And as a result, there's a new crop of companies that you're finding in big box stores and on online marketplaces. They're looking to change this entire postpartum experience. So today I am joined by Jen Saxton, the founder of Tot Squad, which operates a marketplace for new parent services and support. And we have Sarah O 'Leary, the CEO of Willow, which is a femtech products innovator that pioneered a wireless breast pump. Welcome to the MR podcast, Jen and Sarah. Thank you. Thank you. All right. So for listeners who have not gone through the postpartum experience and aren't familiar with your products, can each of you briefly explain what your company does and the problems that you're looking to solve in the postpartum space?

23:34Sarah, let's start with you. Sure. Sounds good. So if you have pumped ever, you will be familiar with this story, but I'll kind of back up a little bit and just explain what pumping breast milk is like. Before Willow, a breast pump basically was kind of a big box that was a motor attached to some cords, attached to some what we call flanges, which kind of dangle off your body and then have bottles attached to them, sort of like milking a cow. And essentially what Willow did was look at this experience, which you had to do more or less undressed, plugged in, tied down to the wall, a little humiliated, honestly, having gone through it, is we said, what if it didn't have to be this way?

24:16And invented a fully in-bra wearable breast pump. So essentially everything that needs to happen with the pump happens inside of your bra, kind of underneath your clothes. We launched at CES in 2017, and we have since continued to be on a mission to elevate the maternal experience through innovation that is centered on deep knowledge of postpartum women and the journey they're going through. Just so thrilled to think about the idea of people talking about nursing and pumping on the CES floor. That is extremely badass. Jen, Jen, tell us about Top Squad and all that you've created there. Yeah, sure.

24:56I'm a serial entrepreneur in the baby industry. And my first company was a cleaning service for strollers and car seats, which I franchised and scaled before having a baby and realizing that I had way bigger problems than just a dirty stroller and car seat. So I wanted to go from being a service provider to building a platform that connected moms and new parents with service providers. So at Top Squad, we're basically building a marketplace similar to care.com. There's so many people playing in the childcare space, and we're really helping parents connect with the long tail of services. Everything from sleep coaches, lactation support, newborn photographers, baby proofers, car seat installers, like there's dozens of categories of services that people are trying to find and book.

25:39And I was going in Facebook groups, you know, asking for recommendations and having to email and call 80 different sleep coaches while I'm sleep deprived. And I don't know the difference between the$300 lady and the$3 ,000 ladies. So I just thought we needed technology to bring more transparency into that process. So you could see transparent pricing, availability, read reviews and certifications of all these different providers. And so we started launching them through partners like Target and Amazon and Walmart as part of the baby registry. So kind of the best analogy would be like Honey Fund, where you have people that are getting married and they no longer want silverware in China.