More than nine months into the coronavirus pandemic, people are still shopping online more than they did last year. This has created an opportunity for companies focused on creating the tools that these e-commerce providers need to run their businesses. Those are the types of businesses that Mike Duboe, general partner at venture capital firm Greylock, told Modern Retail he is most interested in investing in.
Levi Strauss & Co has been building out its direct-to-consumer business for years, seeking to lessen its reliance on struggling wholesale partners. But that still didn't fully prepare the denim brand for the new shopping methods every retailer would have to embrace during the coronavirus. For example, Marc Rosen, who joined the company six years ago from Walmart and is now the president of Levi's America's business, told Modern Retail that Levi's had yet to roll out buy online pickup in store. But once its stores closed due to stay at home orders, it had to get the service up and running in a matter of weeks. Rosen spoke with Modern Retail about how the coronavirus has accelerated Levi's tech roadmap.
Even before the pandemic, Abercrombie & Fitch has been on a mission for the past several years to close some of its flagship stores in expensive cities. But now, those plans have been accelerated in order to focus more on the company's growing e-commerce business. CEO Fran Horowitz announced during the teen apparel retailers' third quarter earnings that the company will be closing eight flagship stores by the end of January. Going forward, the company will focus more on serving the local customer, through services like curbside pickup.
One year ago, Clorox launched a direct-to-consumer supplement label called Objective Wellness. Now, Objective is taking another page out of the DTC playbook by partnering with Gravity Products, the maker of the weighted Gravity Blanket. The two are selling 'beauty sleep kits' on each of their respective websites. The move shows that even big CPGs are taking cues from the DTC playbook.
Dutch grocery chain Ahold Delhaize has more than 1,900 stores in the U.S., under its various banners Food Lion, Stop and Shop and Giant Food. But the future of its grocery delivery business currently lies in the New York, Washington, D.C. and Philadelphia metropolitan areas. That's evidenced by the news last week that Ahold Delhaize is acquiring a majority stake in FreshDirect, an online-only grocery delivery chain which launched in 1999. Ahold Delhaize's goal: to get as many hooks in the profitable East Coast grocery delivery market as possible.
In the five days following Thanksgiving, there's usually a wave of retailers offering anywhere from 20% to 50% off of their products. But this year, the wave of brands offering deals between Black Friday and Cyber Monday will feel more like a never-ending tsunami as brick-and-mortar retailers try to make up from revenue lost during the spring. Still, eight direct-to-consumer startups Modern Retail spoke with said that they plan to swim against the current, and don't plan to offer any steeper discounts during Black Friday than they did last year.
As more Americans order their prescriptions online, pharmacies are seeking to grab a bigger slice of the digital health and wellness space overall. On Thursday, Walgreens Boots Alliance announced a rebrand of its app and loyalty program. The app will include new features like the ability to chat with a pharmacist 24/7, schedule vaccination appointments, and get real-time local health information, like flu alerts. The news comes a day after Amazon announced that it was finally launching a long-rumored prescription delivery service.
During its third quarter earnings on Tuesday, Walmart reported slower sales growth compared to the prior quarter. America's biggest retail chain is seeing fewer people panic-buying compared to the earlier days of the pandemic, and its shoppers have less money to spend as any enhanced benefits from the CARES Act have no run out. However, Walmart's e-commerce business in particular continues to make steady gains against competitors.
This year, Black Friday has been replaced by a season of savings. Retailers are now advertising multiple days of deals ahead of Black Friday, rather than just offering sales between Thanksgiving and Cyber Monday, as they've mostly done in years' past. Walmart is advertising "Black Friday Deals for Days," while Lowe's is calling its promotional event a Season of Savings. But in order to get customers to start shopping earlier, retailers also have to convince them that they won't get a better deal by waiting until the last minute.
Eight years ago, startups turned to Shopify primarily to sell products online. Now, a startup might turn to Shopify to help fulfill orders, get some cash for their business, or use its point of sale system when it opens a physical store. As the startups that launched on Shopify, like Allbirds and Glossier, have grown up, Shopify's influence over the e-commerce ecosystem has ballooned. Now, the company is at an inflection point. The bigger that Shopify gets, the more calls the company faces for it to launch services that solve the biggest pain points of its merchants -- but it could risk diluting Shopify's focus.
Podcast advertising is booming -- particularly in light of the news Spotify recently announced that it is acquiring podcast advertising and publishing platform Megaphone. And direct-to-consumer startups are helping fuel that boom, considering the long-running joke that Blue Apron, MeUndies and Casper are essentially underwriting the shows they advertise on. The Spotify-Megaphone deal could have significant implications for what types of DTC brands are able to advertise on podcasts.
Retailers across all sectors are having to rethink how they approach the holidays, and grocers are no exception. The challenge they face is two-fold: grocers preparing for an uptick in demand for grocery delivery, as coronavirus cases rise in the U.S. And, they're anticipating that certain items like baking supplies and smaller turkeys will be in demand, as people spend more time at home and have holiday gatherings. But what remains to be seen is whether or not grocers will experience the same rush of shoppers as they did in the spring.
This week, during Alibaba's Singles Day, livestreaming is expected to play a huge role in China's biggest shopping event. But in the U.S., livestream shopping has yet to become mainstream. According to Coresight Research, livestream shopping generated an estimated $63 billion in sales in China in 2019, compared to less than $1 billion in the U.S. While Amazon, YouTube Instagram have all sought to replicate Alibaba's livestream success, none have come close to making livestream shopping a mainstream activity in the U.S.
For many direct-to-consumer brands looking to sell and ship their products through someone's website besides their own, there's still only one dominant choice for them in the U.S., and that's Amazon. Despite the emergence of dozens of direct-to-consumer startups in every category from cookware to mattresses to pet food, no marketplaces have emerged to focus solely on these direct-to-consumer brands. That, in theory, leaves an opening for a new marketplace to create an alternative to Amazon for these direct-to-consumer brands.
Under Armour is paring down its ambitions in the digital fitness space. Last week, the athletic apparel retailer announced it was doing away with two apps that it had previously acquired in 2015. The company is selling MyFitnessPal, and shutting down Endomondo by the end of the year. When Under Armour these two apps, alongside MapMyFitness several years ago, the company hoped that by owning a variety of digital fitness apps, it could get the tens of millions of people who used these apps to subsequently buy their workout gear from Under Armour. That hasn't panned out.
At the Modern Retail Virtual Forum, we’ll bring together senior retail marketers to discuss the challenges they’re facing and the solutions they’re seeking in the era of smarter retail.Book Passes