The ‘blame Amazon’ era of bad retail is over

It’s not Amazon’s existence or cut-throat competitive strategies that have sealed the fate of other retailers that are losing market share, like JCPenney, Bed Bath & Beyond and Sears. Instead, it was a series of executional and strategic missteps over a critical window of time during which today’s better-equipped competitors were taking action in areas like e-commerce and logistics as well as experiences and services.

Daily Briefing Jun 14

Chewy looks to healthcare, private brands to reach profitability as a public company

Pet retailer Chewy made a splash on the stock market this week. The online company priced its initial offering at about $22 per share, valuing it at $8.77 billion. On Friday, shares climbed to $39, and the company raised $1 billion in the IPO. PetSmart bought Chewy in 2017 for $3.4 billion, but spun it off in order to help pay down its debt.

VF Corporation is partnering with Tmall's Innovation Center to target Chinese customers

Through the official partnership, VF gets access to data from Alibaba’s 654 million-customer database across its marketplaces, including Tmall and Taobao. With that data and TMIC, VF can more readily identify customer trends, test new products before launching them, build customer data profiles and track products post-launch in order to judge how well they’re performing with Chinese customers.

Luma CEO Terry Kawaja: DTC is 'a highly fragmented ecosystem ripe for consolidation'

Terry Kawaja, CEO and founder of strategic advisory firm Luma Partners, anticipates these types of relationships will separate who wins in the DTC category from who disappears. Speaking at the BDMI Media Summit on Thursday, Kawaja positioned this evolution of the category as the natural evolution of an industry that started out independently, but now has to live up to big valuations from investor funding: According to data from Luma, $10 billion has been funneled into roughly 400 direct-to-consumer brands to date.

Other news to know

  • Specialty apparel retailer Francesca’s is adding to the list of 2019 store closures. According to Retail Dive, the company said during its first quarter earnings report Thursday morning that it expects to close at least 30 of its 722 stores this year. Net sales fell 13% to $87 million, and CEO Michael Prendergast said Francesca’s e-commerce business underperformed expectations due to taking higher-then-expected markdowns to clear older product.
  • Facebook is now an e-commerce investor. TechCrunch reported that the social media giant invested in Meesho, an online marketplace headquartered in India that connects resellers with customers on platforms like WhatsApp. While the deal is notable for the inroads it will help Facebook make in India, it’s also another sign that Facebook sees e-commerce taking up a greater share of activity across all of its platforms in all markets.
Share of U.S. e-commerce sales that are expected to come from Amazon in 2019, according to a new estimate from eMarketer
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Foot Locker CMO Jed Berger: 'The wider industry is looking for brands to evolve'

In the past, Foot Locker had to figure out how to market products from companies like Adidas and Nike after it had already been created. Now, CMO Jed Berger and Foot Locker are working more closely with vendors to develop product exclusively for their stores, using customer data and insight from Berger’s marketing team that its vendor partners don’t have access to.

'There's a spike with each sale': How 'closet sales' help resellers acquire customers

Fashion resellers do not have access to the same tools and strategies that brands and retailers can employ, like collaborating on a new product or dropping a hyped collection. Instead, they have to turn to other strategies to draw attention and bring in new customers. Celebrity closet sales are one way that resellers are making that happen.

Furniture brand Burrow opens second store in Chicago with a focus on events

Furniture brand Burrow opens second store in Chicago with a focus on events

Burrow, like many other DTC brands that are getting into physical retail for the first time, is leaning heavily on events and experiences to drive people into stores. Its second store is open today in Chicago, which Burrow chose because it's the brand's second-biggest market behind New York City in terms of both revenue and customers.

'The term DTC is a misnomer': Brands recalibrate strategies as direct businesses become more complex

Under the weight of the category, and increasingly complex business models, the direct-to-consumer label is cracking in its purity, but startup brands still have a similar mission in mind as they navigate their categories: Build sustainable businesses by any means possible (even if that means wholesale) while keeping customer wants and needs firmly rooted in the center of that strategy.

Propelling consumers towards conversion: Three ways location data transforms media spend

Propelling consumers towards conversion: Three ways location data transforms media spend

Location data is no longer limited to geo-fencing, which typically triggers a text or app notification when a person enters a street or store.

Inside Blue Apron's comeback strategy

Blue Apron’s rise and fall has become a cautionary tale to other billion-dollar-valued consumer startup unicorns: Profitability may not matter to venture capitalists, but a lack of it can sink a business that’s beholden to stockholders scrutinizing quarter-by-quarter performance.

Target is using its stores for same-day delivery and online order fulfillment

Store fulfillment for online orders is something Target has been investing in heavily. Through a combination of ship-from-store, same day delivery powered by Shipt and in-store order pick-up and drive-up options, Target stores now fulfill 80% of online orders. As CEO Brian Cornell told investors during the company’s first-quarter results for 2019, it’s an operation that’s profitable for Target.

Lululemon's investments in e-commerce and international growth are paying off

Lululemon is seeing positive results from its investments in new categories like men's, e-commerce capabilities and international growth. During its first quarter earnings report on Wednesday, the company saw revenue increase 20% over the same period last year, to $782 million.

Modern Retail Leaders Dinner
Jul 31, 2019

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