Retail Data News: Lululemon, Fabletics, and POPSUGAR Ready for Fitness Season
As the year winds down, fitness fashion retailers gear up. This week’s Retail Data News roundup, featuring articles from December 6 to December 12, also includes the latest from Alibaba, Burberry, Jack in the Box, Stitch Fix, Chewy, and more.
Stay up to date on all the latest consumer trends and retail, direct-to-consumer (DTC), and data-intensive marketing news with this blog series.
New Gear for “New Year, New You” Resolutions
Fabletics Taps Actress Vanessa Hudgens to Promote New Velour Clothing Line
Fabletics is expanding its assortment and as before, it uses a celebrity to do so, this time Vanessa Hudgens. Fabletics’ roster of celebrities is impressive (the company was cofounded by Kate Hudson). In addition, the company is making other good moves besides product assortment. It partnered with ThredUp, expanded its app to include a lot more content relevant to the brand, and has a VIP loyalty program. Read the full story.
POPSUGAR Creates First Fitness Equipment Collection
POPSUGAR launches a fitness equipment collection, exclusive at Target. Monetizing content has always been an opportunity and challenge for content creators, not just publishers. Certainly the collection is aligned with POPSUGAR’s positioning and Target certainly knows how to build an exclusive (or owned) brand. The key question is how unique are the items and will they attract buyers over and above generic equivalent products? Sales will tell. Read the full story.
Lululemon’s Sales and Profits Surge Despite Freight Costs
Lululemon posts strong quarterly results, growing 30% YoY to $1.5 billion in sales for the quarter. Its DTC component is now 40% of the company. It also launched a resale site (Lululemon Like New), staying on top of the booming resale trend. Now, the concern for the company is Mirror, its at-home gym. Lululemon has lowered its revenue estimates for Mirror, and the press release didn’t give much detail on how it plans to build up Mirror, which is a concern. Read the full story.
Luxury Looks to Resale, Pop-ups, and Celebrity Influencers
Welcome to Luxury Fashion Resale: Discerning Customers Beckon to Brands
This McKinsey article about the resale luxury market includes survey results relating to people’s perceptions and drivers to resale, especially for luxury. The two most common reasons for shopping luxury brands in resale are finding rare items and supporting sustainability. Only a third of respondents said pricing. That may indicate the resale market will be cannibalistic (as I have hypothesised before) or the early entrants are the existing buyers and new buyers that will now find these luxury brands affordable through resale have not entered yet. According to the article, resale is here to stay, whether brands enter it or not, making their entry almost inevitable (notwithstanding brands burying their heads in the sand). Which then opens a key strategic consideration for luxury brands—how to enter the resale market, how to manage it, and how to minimize cannibalization. As strange as this sounds, I think the simple answer is for brands to go out of their way to advertise their resale presence, attract new customers (at a lower price point) as well as provide a channel for existing ones to find rare items and sell items they no longer use. This has to be done in conjunction with upping the experience, uniqueness, and value add of buying new luxury items to curb cannibalization. Read the full story.
Exclusive: Burberry Launches Rental and Resale with My Wardrobe HQ
Burberry is entering the resale and rental market. Both channels make sense for the brand, considering its strong brand affinity and pricing, especially the rental channel. I am still unsure of the net effect of the resale channel. It’s helping the environment, but as mentioned above, the concern for the brands should be how cannibalistic is the resale channel going to be to the full price one? As more and more luxury brands are entering this market, we will probably begin to get a read on this question. Read the full story.
Looking Back at the Retail Pop-up Highlights of 2021
I have to admit, I haven’t put much thought into the concept of pop-up stores. This article includes a good laundry list of 2021 luxury pop-ups in Asia. Successful pop-up stores need to have good timing, a good location, and a unique experience. And they have to be available for a limited time to drive interest. Done right, they can boost a brand’s equity and awareness. How brands can measure the net impact (including the halo effect) is the more interesting challenge. Read the full story.
Top Korean Celebrities Who Became Luxury Brand Ambassadors in 2021
Luxury brands appointed Korean celebrities as brand ambassadors in 2021. Celebrity ambassadors appear to make a bigger impact on brands in Asia than the rest of the world, due to a stronger celebrity following in Asia. Live streaming has been one area where results are clearly measurable in Asia and yet to be realized elsewhere. Advertising, of course, was the original application but its incremental impact has been difficult to measure. Read the full story.
Hot, Fast and Mobile Food Trends
Marc Lore’s Latest Startup Has 60 Chefs and Half a Billion Dollars
Here is a twist on the traditional food truck. Located in an affluent New Jersey suburb, which already has a legitimate food scene, Wonder has 60 trucks with plans to expand to more than 1,000 by the end of 2022. Investor Marc Lore has flipped the food truck and delivery model upside down. How it works: a restaurant (including some owned by celebrity chefs) designs food that can be prepared in a food truck. Each restaurant is assigned a truck that serves only its food and acts as an extension of the restaurant. The truck takes orders on the company’s app, drives to the area, and delivers the food to the front door. There is a lot more nuance to this. Food is partially prepared in a central location. In addition, the company also has a “traditional” delivery service. According to the article, Lore is trying to solve the problem of “soggy fries.” It is a problem, I fully admit. However, in the bigger scheme of things…? Read the full story.
Jack in the Box to Buy Del Taco for $575M
Jack in the Box is buying Del Taco. Even combined, the new company will have about 2,800 stores, much smaller than the top players in this sector. To compete with the bigger players, Jack in the Box will need to grow in size and expand its geography, starting with the continental U.S. Read the full story.
The Growth of Hot Drinks Market in China
Hot drinks are trending in China. As expected, the market is dominated by hot tea, followed by hot coffee. The total market is over $30 billion in 2020, projected with a healthy 9.4% growth to 2025. Read the full story.
Amazon and Alibaba News
#TikTokMadeMeBuyIt Is Driving Amazon Beauty Sales
Not surprisingly, going viral helps sales. With a focus on beauty, this article looks at the impact going viral on TikTok has on sales. How much of an impact? Apparently, 85% growth (through Amazon). I am sure there is a lot of variability, especially for very small or very large brands. This is obviously key insight for social marketing teams, more interesting though are the potential concepts it opens for product development and extensions, brand affinity (owned and cross) that would impact strategic implementations. Read the full story.
Alibaba Overhauls Ecommerce Businesses, Appoints New CFO
Alibaba is separating its China digital ops from its non-Chinese ops. Alibaba is facing lower growth (not just through its 11/11 event), largely because of its sheer size! The goal of the split is to “become more agile and accelerate growth.” Potentially, the company will begin focusing on growth outside China. The cold war between Amazon and WalMart may very well become a three-way fight. Read the full story.
Retail and DTC Results and News
Crafting a Fit-for-future Retail Operating Model
Mckinsey explains the retail “upheaval” (their words, not mine). The article summarizes really well the issues retailers and DTC brands have been facing even before the pandemic—a decrease in foot traffic, shifting consumer preferences, and digital shift. The article captures a lot of the changes that retailers and DTC brands need to make, however, it doesn’t capture the sheer extent of these changes. Besides the aforementioned, retailers and DTC brands have to contend with the explosion in startups, the expansion of delivery channels (BOPIS, curbside, delivery services, meal kits, etc.), content expansion (free and streaming) as well as privacy laws. Retailers and DTC brands need to think beyond selling a product or service and more about what their positioning is and what underlying needs they address for the consumer. Read the full story.
Uniqlo Clothes Plans to Produce from Recycled Materials by 2030
Uniqlo is committing to higher sustainability goals. The targets involve the most commonly cited sustainability goals, including sourcing, in-store energy efficiency, etc. More apparel companies are making the same commitments, which is not surprising considering apparel’s impact on the environment (especially water usage and pollution). Now, we need to see action. As the old saying goes, acta, non verba. Read the full story.
Stitch Fix Faces Harsh Reality of Apparel Retail in ‘Messy’ Q1
Stitch Fix sales are up 19% for the quarter but the company went back into the red. According to the company, it faced “unanticipated difficulties” as it moved from its subscription, curated model to a more traditional ecommerce model. Not to pile on, but the analysts quoted in this article made a clear and obvious point. If Stitch Fix is “migrating” to a traditional ecomm model, then it’s no different than any other ecomm site out there. The curated subscription was the uniqueness factor of the company. If the new ecomm model (which the company is calling Freestyle) is cannibalistic to the subscription (Fix) model, then Stitch Fix is fast becoming undifferentiated, and I am not sure they have the capabilities and infrastructure (expertise and systems) to compete effectively. Read the full story.
DSW Parent Sets Profit Record in Q3
Although DSW posted good profit numbers, its sales are down by 8% to 2019 (at $853.5 million). Vince Camuto is probably driving a large part of the sales drop (with formal shoes taking a pandemic hit), but it’s not the sole driver. The core business is also soft, even with strong sales of athletic and casual wear in the U.S. during the pandemic. The trend of athletic brands going DTC may continue to hurt DSW. Private brands may help (as mentioned in the article), but DSW needs to do a lot more to attract customers to its store and sites. Read the full story.
Torrid Braces for Rising Costs and Ongoing Pandemic Uncertainty After Mixed Q3
Torrid posted an OK quarter with sales rising 13% YoY to $306 million for the quarter. The plus-size apparel company is also blaming the supply chain for much of the issues it’s been facing. It is expanding its lingerie lines for plus size. The sector is growing. However, more and more retailers are expanding their sizing to enter into the plus size. This opens up interesting challenges in merchandise planning and inventory optimization with sku counts increasing geometrically (by style/color/size). Companies that can plan and optimize their assortment at the sku level will have a clear advantage in this space. Not to mention that it is still unclear just how much we’ll all be working from home vs in the office down the road, which, of course, impacts what clothes we want to buy, rent, and resell. Read the full story.
Chewy Delivers 24% Sales Growth as Demand Remains Strong
Chewy posts a good quarter with sales at $2.2 billion, up 24% YoY. This sector has benefited a lot from pet ownership, which skyrocketed during the pandemic and will create ongoing revenues for the DTC in the sector (if they can retain customers, an area Chewy has shown strength in). I am always interested in how Chewy expands its product portfolio to address all pet needs. This quarter, it announced pet insurance and it is eyeing other areas like grooming. As I mentioned before, I like Chewy for clear positioning that drives its strategic choices. What I’d give to see its data. Read the full story.
Signet Jewelers Continues To Grab Market Share With Year-To-Date Sales Up 65% and An Acquisition
This article goes through Signet’s efforts to distinguish each of its brands, grow its omnichannel presence, and compete in the upscale jewelry market, which is still dominated by small and independent retailers. Signet is also trying to broaden its reach into engagement rings. The company is looking at becoming more customer centric. It needs to differentiate its brands and evolve to be present at all customer jewelry events. Other retailers including Cartier, Tiffany, and Blue Nile are already making inroads. Read the full story.
CVS Health and Microsoft Announce New Strategic Alliance to Reimagine Personalized Care and Accelerate Digital Transformation
CVS is partnering with Microsoft on a number of initiatives as it continues its transformation to become a more digital, customer-focused company while bringing the pharmacy and health care divisions closer together. The article mentions several key areas Microsoft will develop. Some components involve digitization and data access. Lastly, there seems to be a placeholder for the “new and different” category. CVS has several challenges to overcome, including its size, a privacy-focused industry, and a bigger focus on health by consumers. These initiatives are aligned with those challenges, the question is can they deliver? Read the full story.
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