For years, direct-to-consumer brands have relied on Facebook and Instagram advertising to acquire new customers rapidly. This year, they tried to wean themselves off of it. Rather than putting all of their eggs in one basket, more DTC brands see acquiring customers in places other than Facebook as key to building a profitable, sustainable business.
This year, a number of brick-and-mortar retailers announced that they were piloting clothing rental services. Now, the big question in 2020 is how many of them will survive. Most of these new rental services are structured as a monthly subscription, and the hope is that these services prove to be a profitable, recurring revenue stream for brick-and-mortar retailers. But that recurring revenue stream doesn't come easily.
After years of having its lunch eaten by Amazon, eBay is trying to fend off new competition from a new crop of secondhand marketplaces. Startups from StockX to theRealReal to ThredUp have been able to grow quickly by focusing on specific verticals like luxury handbags or sneakers in which there's historically been a lot of demand for resale, as well as by promising to authenticate goods before shipping them to buyers as a way to win over customers who have been skeptical of buying secondhand goods over the internet. Now, eBay is trying to take a page or two from their playbook.
With the holidays fast approaching, Amazon's massive logistics network is being put to the test.In order to get those packages to customers on time, Amazon doesn't just rely on third-party carriers like the USPS, UPS and FedEx. Since building its first fulfillment centers in 1997, Amazon also now has its own fleet of trucks and cargo planes rushing to get customers their delivery time. It's also constantly adding new types of robotics to its warehouses, looking for ways to speed up the picking and package sortation process.
As Bonobos founder Andy Dunn prepares to leave Walmart, it's the latest sign of trouble for the company's group of digitally native brands. When Dunn joined Walmart in 2017, he was supposed to help the company find other digitally-native brands that would be ripe for acquisition, and help Walmart to attract more high-income shoppers. Instead, the company has found other ways to target a more affluent consumer.
Hotel rooms and lobbies are becoming and increasingly attractive area for retailers to acquire new customers. Last week, Rent the Runway announced that it was partnering with Marriott-owned W Hotels. Visitors at four W Hotels will have the option to rent four pieces of clothing from Rent the Runway when they book their rooms, which will be placed in the closets of their rooms when they arrive. And department stores including Nordstrom, Macy's and Bloomingdale's are currently hosting pop-ups in time for the holidays at a handful of New York City hotels, in order to draw more business from tourists.
On Monday, Away announced that Stuart Haselden, currently Lululemon's COO, will replace co-founder Steph Korey as CEO come January. Haselden has experience navigating some of the key challenges Away will face -- namely, evolving a company's brand identity as it expands beyond its core product, and developing a comprehensive plan for international expansion.
In order to better manage returns over the holidays, all retailers are looking at how they can give customers more cost-effective ways to exchange and send back items. But it's particularly a challenge for direct-to-consumer startups, many of whom at most have a handful of physical stores that customers can return products to.
As Five Below expands, it is straying from the traditional playbook of a discount chain by carrying more expensive products and spending more on brand marketing. So far, it's working. The company reported during its third quarter earnings on Wednesday that net sales were up 20.7% to $377.4 million compared to a year ago.
Since Jill Soltau took over as CEO of JCPenney more than a year ago, there's been no slowdown in announcements touting new executive hires, or store concepts it is piloting, in order to reassure investors that she and her executive team can turn around the beleaguered department store chain. But it's not so much a question of if Soltau can cut losses at JCPenney, but whether she can do it quickly enough.
Large grocery chains like Kroger are feeling competition not only from new players in grocery like Amazon, but also food delivery services like UberEats and Grubhub. In response, Kroger is getting more aggressive about forming partnerships that will allow its customers to more easily buy prepared meals.
In February, Amazon launched Amazon Live, a page for its own QVC-like shopping videos that are livestreamed and produced by Amazon, as well as a new app that would allow brands to create their own live shopping videos. Although Amazon is encouraging more brands to test out Amazon Live, it has yet to become a critical driver of sales during large shopping holidays like Cyber Monday.
This week, PayPal announced that it was acquiring Honey, a browser extension and mobile app that helps users find coupons when checking out on a retailer's site, for $4 billion. It's a pricey purchase, but one that will quickly give PayPal a lot of data on how shoppers search for products, and what ultimately makes them buy. That type of data will be critical for PayPal's ambitions to become more than just a payments processor.
Typically, the path to opening a permanent physical store for older DTC brands like Casper and Glossier looked like this: open a few pop-up stores in the cities where most of your customers are, make sure that they're stacked with highly Instagrammable displays and events, and use those pop-ups as a training ground for opening up your own physical retail stores. But even pop-ups that only run for a few months can be expensive. So, many younger brands are trying to strike partnerships with other DTC brands to display product in their stores for a limited period of time, or partner with companies outside of retail to display product or host events
In 2017, Home Depot unveiled "One Home Depot," which called for the company to invest $5.4 billion over the next three years to improve e-commerce capabilities, add more fulfillment capabilities like buy online, pickup in-store, and to redesign the website for its business-to-business customers, which the company refers to as "Pros." In return, Home Depot expected sales to hit $120 billion by 2020. But, Home Depot is finding that it's taking longer than expected to roll out some of its new capabilities.
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