Nike & Dick’s Share Loyalty Data and Saks Bets on Holiday Livestreams

Welcome to Retail Data News, our regular series about news and trends in the retail and direct-to-consumer (DTC) industries. This week’s roundup includes articles from November 1 to November 7. Topics include data and tech, holiday news and forecasts, and the latest in retail, food and beverage, and delivery news. 

If you’re a retail insider or someone interested in retail, DTC and consumer trends, this series is for you!

Holiday Forecasts & News

Key Innovations in China’s Luxury Market in 11.11 Shopping Festival

Luxury market forecasts for the upcoming 11.11 shopping holiday can be summed up in one word, “more.” More of everything. More personalization, more experiential omnichannel. We’ll likely see hindsight reporting a week after the event ends, which will be telling as we enter the hot holiday selling. Read the story. 

McKinsey: 87% of Gen Z Will Use Social Media for Holiday Shopping Inspiration

A quick caveat, Mckinsey is on the lower end of holiday forecasts, predicting Q4 to go up 7%, compared to 7-11% predicted by others. Social is the biggest influencer for Gen Z (surprise!). About 62% of respondents are already running into out of stock issues with only 13% of them willing to wait. Read the story. 

Saks Debuts Holiday Livestream Shopping Shows

Saks is joining the livestreaming trend, hoping to attract younger audiences and boost its sales. Other major retailers are also planning to livestream. I am still bearish on this trend as I think its success in Asia is partly due to the strong celebrity following that is a big part of the culture there. This holiday season will probably tell us a lot about the success of livestreaming. Read the story. 

Delivery & Curbside News

Uber, Bed Bath & Beyond Partner to Deliver Baby and Kids’ Clothing

Bed Bath & Beyond is partnering with Uber to launch Uber Baby. It will fall under the Uber Eats umbrella, even though it will cover more than food. Uber is trying to become a lot more than just ride hailing as it builds up from its previous bad publicity and governance issues. BBBY is definitely building a lot of partnerships to build up its post-pandemic growth. Recent results have been disappointing and the company must be focused on its growth. The other big bet it’s making is on private label brands (which is the CEO’s core competency). With the new Chief Digital Officer rising up the ranks, it must be revisiting a lot of its martech and digital ops tech. Read the story. 

Curbside Pickup Is Now a Must-have for Customers (and Retailers)

Good article on the increase of curbside pickup and companies’ efforts to incorporate it into their processes. Good notes on the need for good inventory management, designing an effective process. No mention of modeling who will be receptive to it. Read the story. 

Walmart Steps Up Delivery, Online Alcohol Availability as Holidays Near

The Holiday Wars are escalating. Walmart is pushing omnichannel capabilities, boosting delivery hours until 10pm (up by 2 hours) and increasing the number of stores offering alcohol delivery as well as the ones that offer order pick up. And the company has added more perks to WalMart+. Most interesting to me is that Walmart has an SVP of Last Mile. Read the story. 

Health & Fitness

Peloton Feels the Burn as Americans Head Back to the Gym

As people start getting out more, including going back to the office, the value of the very expensive in-home fitness equipment begins to diminish. While convenient, as one writer put it quite succinctly, if you work out at home, nobody can see how good you look in your workout clothes. As we come out of the pandemic, the dust will settle on how much we get back out for work, entertainment, and exercise. That will tell us how big the market for in-home equipment is and how it will grow. What the article doesn’t mention is how much permanence there will be on outdoor activities like hiking that saw massive increases during the pandemic. Will people settle for outdoor activities and in-door gyms and stop in-home equipment completely? I don’t think so, but how the total “workout” market will divide itself up amongst these activities post pandemic will tell a lot about the valuation of these companies and their marketing plans. Read the story. 

Tonal, the At-home Fitness Company Backed by Amazon, Hits $1.6 Billion Valuation on New Funding Round, Readies for IPO

Tonal gets another round of financing, valuing it at $1.6 billion. Risky move by whoever is investing, considering Peloton’s announcement (see above). Still, it’s a fluid market and a lot is yet to be determined, hence an investment! Interesting partnership with Nordstrom, which gives Tonal a good retail presence (Nordstrom needs the partnership more to create differentiation for itself). Besides Amazon, some athletes with strong brand recognition have also invested in Tonal (including Serena Williams) and the company poached talent from other established companies across industries. Overall, smart moves by Tonal. Read the story.

Sporting Goods & Apparel 

Foot Locker Promises Strong Growth for Atmos as Takeover Completed

Foot Locker completes the acquisition of Atmos. This was announced a while back. Foot Locker is moving fast to expand and strengthen its position. Atmos is giving it a strong presence in the Asian market as well as a good owned brand. Foot Locker must be putting a lot of time and resources into lowering its dependency on Nike (see article below about Nike and Dick’s Sporting Goods). Read the story. 

Nike and Dick’s Tie Loyalty Programs Together

Nike and Dick’s Sporting Goods join their loyalty programs and make them available on Dick’s app. This is a big win for Dick’s. I presume it’s also available on Nike’s app as well. Nike is definitely building up relationships with very few retailers. Three were mentioned in the article, Dick’s, Foot Locker, and JD Sports. Previous reports point to seven preferred vendors for Nike currently, which indicates they may be trying to shrink the list as they continue to build their own DTC. Foot Locker’s recent actions seem to indicate it’s trying to lower their dependence on Nike. JD Sports is interesting because it’s the smallest of the group. Dick’s is less dependent on Nike due to the size of the assortment, the activities (athletic and otherwise) it supports, and the average size of the stores. Both companies should get a wealth of first-party data that was not available to them previously. Dick’s is also strengthening its relationship with Nike, which it can afford, Nike represents about 20% of its volume compared to Foot Locker at 67%. Read the story. 

Under Armour CEO: ‘The Majority of Our Transformational Work’ Is Done

Under Armour posts quarterly results. Sales for the quarter grew 8% YoY, however the company posted flat revenues for the quarter last year. Although it would seem it benefited from the pandemic, that did not appear to be the case. Additionally, the company announced that “the majority of our transformational work” is mostly complete. That was interesting to see as it’s not a common comment in a quarterly report. It took a bit of digging to figure out what all of that is and I had to dig up their SEC filings to uncover. This “transformational work” involves taking hundreds of millions in restructuring charges, which is why their profit margin has gone up this much. It has nothing to do with less promotions or lower cost of goods sold (COGS) etc. It’s all in the restructuring costs. The breakdown is also interesting, Under Armour took a nearly $300 million hit on its  NY flagship store (noncash) as well as other lease restructuring and severance packages. Having said all of that, 8% growth in revenues when it removed its presence from a lot of retailers is not bad. Overall though, Under Armour’s numbers are not as healthy as they should be for an athletic DTC. Read the story. 

Retail News

Bed Bath & Beyond Inc. Announces Bold Moves to Redefine Business Model

More news from Bed Bath & Beyond. The Chief Digital Officer was promoted to Chief Customer Officer merging the Digital and Brand C-level roles. In addition, it repositioned the Chief Transformation Officer to Chief Growth Officer. This aligns the management suite closer to what is more common in larger organizations today.

The other announcements are even more interesting. BBBY is partnering with Kroger to sell basic (i.e. most sold) items through Kroger. A store within a store (a mini BBBY inside a Kroger) will be piloted next year. BBBY tried offering food in the past, both with the acquisition (and subsequent diverture) of Cost Plus and also through its own food department. This seems to be the same idea but in reverse. Rather than offer food in BBBY, offer BBBY in food. This will expand BBBY’s reach and awareness as Kroger’s customers tend to have high-visit rates. Kroger gets the benefit of moving closer to the Target model by broadening its offering and still maintaining its identity. 

Lastly, BBBY is launching a marketplace to sell items from “partner” brands. I think BBBY is trying to build on its brand equity and expand its offering. A lot of that is potentially driven by the strong executive team, which appear to be solid decisions by the CEO. Read the story. 

Capri Holdings Limited Announces Financial Results

Capri Holdings posts quarterly results. The company showed 17% growth, lower than the other luxury brands which hovered in the 30s. Versace had a good quarter at 45% while the other 2 brands (Jimmy Choo and Michael Kors) landed around 11%. Michael Kors comprises the majority of the volume at $881 million out of $1.3 billion for the quarter. Read the story. 

Crocs, ThredUp Partner on Resale

Crocs is joining the resale party. No, it’s not what you think (eeeekkk!). Well, actually it is. And more. Crocs buyers can return any item (yes, including crocs) to ThredUp and get Crocs credit. Crocs has been in the news as it’s escalating its efforts on sustainability, initially focusing on raw materials and shipping. This is its newest foray into the resale market. Adidas did something similar and so have other brands. ThredUp is by far the bigger beneficiary as it’s fast becoming a core consolidator of resale across brands. On a Crocs-related topic, did you know that Crocs has a joint collection with Balenciaga?! I don’t know how to react to it. How the mighty have fallen! And I am not talking about Crocs. Read the story. 

Walmart, Sam’s Club to Launch Elton John’s Debut Eyewear Line

Walmart is launching a new eyewear line with Elton John. This continues a trend that has been going on for years. Results on these partnerships vary dramatically, not just for Walmart but for any brand and retailer that invested in them. Too many factors contribute to the performance of these partnerships, so much so that I’ve stopped judging the logic behind them and instead wait for the results. Read the story. 

Build-A-Bear Appoints Digital Execs, Launches 3D Workshop

Build-A-Bear launches a 3D workshop—which is very on brand. The company’s whole positioning on personalization and experience needed that kind of digital capability. It also created a VP of Ecommerce role! Shouldn’t that have been done like a decade ago?! How was it running its ecomm operations and do I want to know?! I guess better late than never, but in that space, I hope Build-A-Bear can move extremely fast! Read the story. 

Wayfair’s Sales Fall Nearly 20% as Consumers Shift Spending

Wayfair posts weak quarterly results, down 19%, but up 35% from 2019. More and more news points to a slow but steady exit of the pandemic. Wayfair took a double hit. First, it no longer has the low overhead from the early pandemic when stores were closed and shopping was almost entirely online. Plus, buying for home and home offices has declined from the pandemic peaks. The pandemic was the only time Wayfair was actually profitable and it is now back in the red. Wayfair needs to show it can generate profits during normal business operations. Read the story. 

Ralph Lauren Is Opening 90 New Stores This Year

Ralph Lauren posts disappointing results for the quarter. RL is boosting its DTC operations (like everyone else). Interestingly, its wholesale and its ecomm sales both grew more than the overall company. The drag on revenues was, interestingly enough, Asian retail operations. Which means that RL is moving counter to all other luxury brands which saw their Asian retail ops increase. It’s also one of the few companies whose wholesale is growing stronger than its DTC ops. How RL is run has been an interesting topic in the news and by insiders (if you are in retail, you’ve heard stories). It is very spread out across the wholesale sector with presence in too many retailers, some (a lot) of which are not aligned with the brand. However, the company has been hesitant to lose revenue by exiting retailers (in contrast to Under Armour in an article above). Ralph Lauren needs to make some hard choices beyond spinning off Club Monaco to better position the brand. Read the story. 

The Future of Ralph Lauren’s Iconic Polo, and Retail, May Be Coloring Your Own Clothes in the Store

Ralph Lauren is investigating how to custom dye clothes in-store. I don’t usually comment on speculative news. This one, though, is worth noting. Ralph Lauren is working with Dow to develop a more sustainable way to dye fabrics. Dying is famous for using toxic chemicals and large amounts of freshwater. The same technology can also be used to quickly (and sustainably) custom dye small batches of fabric, potentially in a store with smaller equipment (dying is currently done in large vats that look like a combo between a giant washing machine and a giant centrifuge). There are several interesting repercussions here, personalization and experiential retailing, both of which are mentioned in the article. I also found it insightful that it addresses one of the key conundrums in the DTC space today, the most sustainable option is NOT to sell more items, which conflicts with the whole idea of running a DTC operation. Read the story. 

Food & Beverage

Kroger Launches Paid Membership Program

Kroger launches two paid tiers to its loyalty program. Considering all other moves that Kroger has been making—launching a marketing platform, partnerships with Bed Bath and Beyond and other companies—this comes as no surprise. Kroger is trying to gain a bigger share of wallet, building on groceries and expanding from there. I expect to see more partnerships with complementary brands and retailers. I am not sure if they see themselves competing more with Amazon or Walmart or seeing growth beyond groceries. Read the story. 

Burger King to Give Crypto Rewards with Robinhood

Burger King is giving away crypto! You need to be a member of the BK loyalty program and spend over $5 on the app. You then qualify to receive one of either 20 Bitcoin, 200 Ether or 2 million Dogecoin. In case you are wondering, based on prices at the end of Saturday, Nov. 6, that comes to $44.4 million in rewards. No small change, even for BK. Winners need a Robinhood account, so Robinhood could have an upside on this with new customers. Read the story.