Retail Data News: Alibaba, CVS, ‘Ghost Kitchens - Treasure Data Blog
Has the Ecommerce Magic Worn off for Alibaba? Read Retail Data News

Has the Ecommerce Magic Worn off for Alibaba? Read Retail Data News

Has the Ecommerce Magic Worn off for Alibaba? Read Retail Data News

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 8 to November 14. Topics include the latest in digital transformation from the likes of Carrefour and Nike, as well as other hot retail topics.

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

Digital, Data & Tech News

Digital and Data Central as French Retailer Carrefour Speeds Up Turnaround

French retailer Carrefour continues to invest in digital transformation. In 2018, it began to become more digitally savvy (and become a “digital retail company” in their words). It is also starting a VC fund to invest in startups in its space–all solid moves. Carrefour previously announced partnerships with Uber. What is not mentioned in the news is how the company plans to go beyond digital and achieve better customer focus. Read the story.

How Nike Execs Think Through Its Digital Ecosystem

This is a great article on how Nike is using data to build up its DTC presence, including loyalty perks, store locations, and its overall consumer contact evolution. Read the story.

Disney May Have a ‘Structural’ Problem in Streaming, Analyst Warns

Walt Disney paid subscribers are up by 2.1 million, to a total of 118 million, which is similar to the recent announcements from Netflix and HBO regarding their slowed growth. My take is that as we come out of the pandemic, consumers will rethink how many paid subscriptions services they are willing to keep. Amazon stands at a clear advantage as its streaming service is bundled with a lot of other perks of Amazon Prime members. Walt Disney also has a big advantage from its Star Wars and Marvel brands, plus its massive Disney library (as a parent of young kids, “put on Disney,” is one of the best ways to corral them). I agree with the article, Disney has a good success rate on its programming, but it needs to increase the volume of new content. Plus, it has to do all that without diluting its brands, which provoke very strong emotions in its viewers! Read the story.

Booming Theme Park Business Powers Q4 Revenue Jump for Walt Disney Co.

Related to the preceding article, Disney reported fourth-quarter and end-of-year results. Revenue was up 26%, with “parks, experiences and products” driving the growth, as people began to visit Disney properties again. At a much higher level, Disney has strong advantages over its competitors. Besides its content library and brands, it has a diverse portfolio of experiences and merchandise aligned to a strong brand, both in awareness and positive perceptions. However, it risks falling into the trap of the big behemoth that can not move fast enough and loses strength, one division at a time. The increase in content generation across free and streaming services is certainly a risk for the subscription business. Read the story.

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Bumble Shares Plunge 20% as COVID-19 Hurts User Growth

Bumble continues to lose customers, although it holds on to revenues. It’s also expecting a better Q4 as Covid restrictions continue to be relaxed. The company commented on varying performance across geographies with Russia and Brazil posting solid growth. Read the story.

Kids and Tween Retail News

The Children’s Place Launches Tween Brand ‘Sugar & Jade’

The Children’s Place is launching a tween brand. On the surface, the move makes sense. It can retain customers as they migrate from TCP sizing to the tween. The interesting challenge is when that size change occurs, the customer changes as well in terms of taste, preference, and most importantly, how much mum and dad gets to choose! Styling and positioning will be key, as well as messaging. Read the story.

Francesca’s Launches Franki as Stand-alone Tween Brand

Francesca’s tween brand website will launch next week. It anticipates opening up two pop-ups. This seems suspiciously similar to Pacsun’s approach. Read the story.

Pacsun Opens First Pacsun Kids Store

Pacsun opened the first Pacsun Kids store. Pacsun Kids launched in June online and with several pop-ups and Nordstrom. It would appear the test results were good since Pacsun is building up on the brand. The target audience is kids 4-14 years old. What makes it interesting is that the brand is fully genderless. It is not clear if The Children’s Place and Francesca’s will follow this trend. Read the story.

Singles’ Day Wrap Up

Singles’ Day: Alibaba’s Annual Event Sees Slowest Ever Sales Growth

First initial results for 11/11 in China. The biggest shopping event in the world (far eclipsing Black Friday-Cyber Monday in the U.S.) ended up at $84 billion in sales for Alibaba, an increase of 8.5% over last year. The event was expanded from one day to eleven days, with the U.S. being the largest seller. In total, over 250,000 brands participated. This was the lowest growth of the event, despite extending the event to 11 days. However, at these levels, it’s not surprising that growth is muted. I am sure there will be revisions and more detailed hindsighting of the event over the next few days. Read the story.

11-11 Turns 12: Alibaba’s Singles’ Day Answers Many Questions, Blazes New Ground in Retail

The best insights into the event come from Michael Zakkour at 5 New Digital. He succinctly summarizes the top trends from this year’s 11/11 that are expected to be hot in the coming months in the rest of the world. The biggest ones: livestreaming, short videos (of the TikTok variety), cross-border commerce and sustainability. What was new as emerging trends were “doing good while shopping” (I really hope this catches on) and the penetration of small and medium size companies into the event, which opens the door for further growth in China. Read the story.

Restaurant & Grocery News

Inspire Brands Launches a Ghost Kitchen as More Restaurants Lean into Virtual Restaurants

Inspire Brands opens a cross brand ghost kitchen. Sort of, it’s been running since July, and I guess now it’s “officially” open. All brands will be available (Arby’s, Jimmy John’s, Buffalo Wings etc) in a shared environment. The kitchen will also offer a waiting area with charging stations and locker pickup. There are a lot of different efforts by different chains to complement their capabilities with ghost kitchens, including within the restaurant, owned and standalone, franchised etc. The economics seem to work out better, due to real estate costs, labor costs etc. It’s possible that this may lead to a shrinkage of sit-down spaces in fast food restaurants, at least in high density (read: expensive) urban areas. Read the story. 

Publix Launches Virtual Convenience Store Across Its Footprint

Publix is jumping on Instacart. Not much of a choice for Publix really. Instacart is becoming ubiquitous, and companies in several sectors—including groceries—feel the need to have a presence there, irrespective of their own delivery capabilities. Instacart’s reach is now becoming so large that it will need to change its interface to allow users to find companies more easily! Read the story.

El Pollo Loco Keeps Focus on Labor Amid Leadership Change

El Pollo Loco loses its CEO, amid labor shortages and pricing pressures. Read the story.

QDOBA Promotes Karin Silk to Chief Marketing Officer

Qdoba promotes internally for its chief marketing officer. That’s worth noting, because she was involved in several strategic moves for the company, and her responsibilities will include both digital initiatives and marketing. With the innovations she brought already, coupled with the timing as we are coming out of the pandemic and the pressure build up from other fast food chains (see several articles over the last few weeks), she will be under pressure to get results. Read the story.

Online Boosts Ahold Delhaize Results

Ahold posts 5% growth in its latest quarter. A big boost in performance came from online ordering through FreshDirect in the US. The article is light on details and I checked their press release to dig for any insights on their plans. They have quite a few interesting initiatives that should help the company strategically. They are opening an online marketplace via Giant Food, they are expanding their BOPIS and curbside pickup, as well as their delivery services in parts of Europe. In addition, they are pushing ahead, making investments in sustainability efforts and continuing acquisitions focused on geographic reach. Read the story.

Direct-to-Consumer News

These Traditional Brands Are Shifting to a DTC Model. Here’s How.

Good article on the history and efforts of CPG brands to develop their DTC models. It focuses a lot on the pioneers in this migration, such as athletic brands like Nike and Adidas. It also touches on some of the brands that have escalated their efforts a bit more quietly, like Levi, Columbia Sportswear, even Crocs. The article also covers quite well the challenges that CPG brands face, including lower margins in DTC, and the need to build two departments that do the same thing, one in DTC and one in wholesale, especially in marketing and distribution. What the article does not touch on though, is how the loss of third-party cookies will most likely escalate these efforts and force even the laggards to move towards a DTC model. I still hope that someone with a much louder voice and decision-making power will make the crazy move for a retailer to share customer data with the brands themselves—with the right guardrails, of course. That will finally give CPG companies a true, full view of their customers’ activities and help them to compete better. Retailers have to give up some of that control. Interestingly enough, it’s already been tried now in Japan. Lohaco, a large B2C site, has started sharing customer-specific data using a unified ID to help brands with product development and promotions. Read the story.

How Direct-to-Consumer Brands Can Continue to Grow

Good article by HBR on the evolution of DTC brands beyond their startup roots. The article captures the early advantages that DTC brands have over the established players (CPGs or retailers) with a focus on LTV/CAC, rather than on P&L, as well as an emphasis on the flexibility DTC brands have in using digital media to promote awareness. Lastly, HBR explains how DTC brands are disrupting the traditional best practices in new product launches, sometimes even doing the opposite of what conventional wisdom holds correct. The article recommended four key areas for DTC brands to focus on after their initial growth spurts. They are (1) deepening customer relationships—the initial product launch usually fills a gap in functionality or pricing. To go beyond the initial growth, they need to build relationships with customers and have a value proposition they can build upon. (2) Accompany the customer on their journey. Put differently, DTC startups tend to have full customer data (even if a lot is anonymous), and they can use that data to understand customers better. (3) Strategically consider omnichannel (ie. store) initiatives. (4) Strengthen the core product and value proposition first, before moving to product extensions. Read the story.

Loyalty Programs

CVS Adds New Benefits to Beauty Loyalty Program

CVS is expanding the perks of its loyalty program (again). CVS has been in flux for over a year now with a lot of changes in management heads and growth in several key areas, including analytics. It is making solid moves in becoming more customer centric, though the speed of change may be slower than what the company is hoping for. Cross pollinating CVS Health (ex Aetna) and CVP Pharmacy will be one of the key deciding factors for CVS’s future. Read the story.

Williams Sonoma Launches New Shipping Membership Program

Williams Sonoma launches a paid loyalty program. At $99, you get free shipping for “standard” items, the recipes app, and virtual cooking classes. Considering what other paid programs offer—including Williams Sonoma competitors like Wayfair—I can’t see the company attracting a lot of interest beyond frequent buyers who will take advantage of free shipping. Overall though, WS needs to improve the perks if it hopes to build this into a loyalty play. Read the story.

Luxury Goods

Global Luxury Goods Market Comes Roaring Back to Hit New Record

Great article on trends in the luxury goods market. The industry is experiencing post-pandemic growth, especially in China. The study found three trends dominating the industry. First is the growth in digital, as consumers are more willing to buy luxury items online. The second notable trend is growth in luxury resale. The key is whether resale’s net effect will grow the whole sector, on the theory that more people will be able to afford luxury items (even in resale), or will it be detrimental to the sector because of sales cannibalization? Lastly, and I found this interesting, there is increased interest in sustainability personalization and alignment of brands to their values. Read the story.

The Weekly Closeout: Supreme x Tiffany

Tiffany & Co. launches a collaboration with Supreme. Tiffany continues its efforts to appeal to a younger audience and lower its dependency on engagement rings. So far, Tiffany’s efforts don’t appear to have had a long-term impact (including some backlash as well). What Tiffany needs is more than a merchandising and marketing push to align with a new generation. It needs to put serious efforts into translating the quality and prestige of the Tiffany brand into something meaningful to younger generations that are more skeptical of brands, hype, and expensive jewelry in general. Read the story.

Retail News

Adidas Takes $1.2 Billion Sales Hit as Supply Snags Drag On

Adidas (finally) announces that it’s been affected by supply chain issues. Following previous announcements by most major retailers, DTC brands, and CPG makers, Adidas confirmed it’s also affected to the tune of around $1.2 billion in sales. Like other large players, it is working to identify solutions including expanding manufacturing capabilities across countries and optimizing country inventory. This is a common theme in the news these days and could very likely be the variable with the highest impact on the success of the holiday season. Read the story.

Target Shaped Private Labels into Powerhouse Brands. Now Others Want to Do the Same.

Good article on the evolution of private label brands starting with Target’s bet on private labels. It includes an interesting comparison on the efforts of other companies like Walmart, Bed Bath & Beyond, and Macy’s. Covers potential reasons for the success of Target in this area. What is not included in the article is consumer perceptions and how to identify the drivers of success with private-label brands beyond Target’s. I’d love to see some research on this. Read the story.

Banana Republic’s Brand Chief Out After Less Than a Year

The Chief Brand Officer (CBO) of Banana Republic has left after a few months. This is, unfortunately, not surprising. Gap Inc. has hired and lost several executives in these roles over the last four years. Gap has lost its relevance. BR was particularly impacted by the pandemic and will continue to be as we settle into a hybrid work environment. Gap Inc. needs to start thinking beyond traditional mass marketing and merchandising. Rather, it needs to define what it stands for and evangelize that across its organization. As strange as it may sound, each Gap brand needs to identify its raison d’etre and align with that across all its functions. Examples abound of retailers with more solid positioning, such as Zara, Shein, Patagonia, etc. Read the story.

Warby Parker’s Sales Up 32%, But Losses Widen

Warby Parker posts good revenue increases and really big losses. Although the company is saying, “We are growing, so you should expect losses,” there is (I hope, at least) a time limit on how long Warby Parker (and others like Casper) can use that classic line. Interesting comments from the company on how it sees stores as billboards, which means it is thinking of stores as more than just a place to buy products. This attitude will serve the company well, if it permeates everything it does, including store ops, layout, etc. Read the story.

Dillard’s Q3 Profits Skyrocket More than 500%

Dillard’s posts strong quarterly results. The best metric in the company’s announcement is the 12% comps growth from 2019, indicating it is currently growing market share, most likely from other department stores. However, both equity analysts and the company itself are acknowledging this will not last. The big question is what next? Wait for the inevitable as department stores slowly fade in a slow death? I hope Dillard’s makes a gamble and takes a stand with unique positioning. It literally has to stop thinking of itself as a department store and figure out what it wants to be. That will not only guarantee its survival but also its growth. Read the story.

Party City’s Halloween More Solid than Scary, but Costs Loom

Party City’s Halloween performance was weaker than expected. Despite the attempt at salvaging a silver lining, the company’s 2021 performance was already lower than its weak 2019 showing. Party City’s response was a renowned focus mostly on improving merchandising. I read that as a red flag. Merchandising is no longer the be-all, end-all solution to retailers’ challenges, any more than “it’s the weather” is an acceptable excuse for regional sales gyrations. Party City needs to think beyond “carry it and they will come” if it is to improve results. Read the story.

Ace Hardware Goes Thanksgrilling in Customer Service Strategy

Ace Hardware is continuing its tradition of hosting “Thanksgrilling” events to boost traffic and purchases at the stores. This tactic is aligned with the company’s strategy to be “the helpful  place.” Ace Hardware will also share grilling recipes and other content on its websites. As good as this tactic is, Ace needs to do a lot more than Thanksgrilling to retain its customers. Read the story.

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Nick Antoniades
Nick Antoniades
Nick Antoniades is the Industry Principal for Retail at Treasure Data, a leading enterprise CDP with over 450 clients globally. Nick has over 20 years’ experience driving growth in the digital and retail sectors for enterprise brands like Bed Bath and Beyond, Vitamin Shoppe, and New York & Company. Nick has a proven track record in shaping strategy and optimizing user experience with expertise in digital and omnichannel lifecycle customer journey, CRM, marketing strategy and optimization, ecommerce operations, analytics, and customer loyalty. Additionally, Nick brings in-depth operational knowledge across marketing channels including SEM, email, SMS, affiliate, retargeting, and direct mail as well as optimization methodologies, such as A/B testing and personalization.
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