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After a year and a half of unevenly applied US Covid-19 regulations as well as various city exoduses, Miami, Los Angeles and Chicago’s retail scenes fare differently. While many hope for a return to store in 2021, retailers' fates rest somewhat on location. Here's our look into how the three cities are faring.
Online-only, super-fast, super-cheap fashion dominated the pandemic, spurred by TikTok trends. Now, traditional fast fashion retailers will have to keep up. While brick-and-mortar retailers like H&M and Zara are struggling to return to pre-pandemic sales level, online-only fast fashion retailers like Blushmark and Shein are rising in popularity, becoming some of the most downloaded shopping apps in Apple's store. Taking cues from Blushmark and Shein, traditional retailers are reallocating investment to ecommerce, adding features like buy-now-and-pay-later to their sites, and expanding e-commerce to new geographies. Still, digital players have unique advantages of production in an online only model.
Last year, the death of George Floyd and subsequent Black Lives Matter protests created a call for brands and retailers to do more to support Black-owned business. The answer, for many, was to create mentorship and grant programs for Black-owned businesses last year, for the first time. A year later, five Black business owners offered their reflections on these programs to Modern Retail.
On Friday, Staples made a fourth attempt to acquire ODP, home to the combined Office Depot and Office Max, via a billion dollar offer for the company's consumer-facing businesses. Staples and ODP's businesses have been declining for years. They have sought to grow their businesses by investing in partnerships, experiential stores, and e-commerce. However, in Staples' eyes, the quickest -- and most surefire way -- to grow its business is to acquire assets from its biggest competitor. As such, Staples continues to be hellbent on getting a deal done, though ODP keeps rejecting its offers -- and shows no signs of changing its mind.
People are continuing to embrace the outdoors after a year of being stuck at home, and brands are responding accordingly. In June 2020, year-over-year sales of outdoor equipment like bicycles, paddle sport gear, golf equipment, camping gear and binoculars were up between 63% and 22%, according to the NPD Group. Now, as demand continues into 2021 brands and retailers across categories are entering the space in a variety of ways.
As Nordstrom and Macy's are still struggling to return to 2019 sales levels, they are investing more in their off-price businesses to acquire new customers. Nordstrom is focused on driving more Nordstrom Rack sales with the help of its e-commerce business. Macy's meanwhile is opening more off-mall locations and store-in-store locations.
As first quarter earnings calls come to a close, department stores and apparel retailers report that dresses, handbags and activewear drove first quarter sales boosts, while footwear was a mixed bag. To get a better sense of what subcategories are driving success, and which categories are falling behind, Modern Retail rounded up recent earnings call comments from apparel retailers.
Gig workers have always faced issues related to pay and workload, but many of those came to a head during the pandemic. In retail, the pandemic drove demand for delivery services. Now, as the United States begins to reopen, platforms that facilitate rideshares and deliveries are offering short term incentives to workers amongst workforce shortages, but many don’t think these changes will be enough to support them financially.
In a bid to ride the post-pandemic sales boom, Bacardi North America is launching a record amount of new products this year. The privately-held parent company of brands like Bacardi Rum and Patron is set to launch over 40 new products this year, which a brand spokesperson said is the most launched in a single year in the company's 159-year history. Many of the launches have been and will be in trending subcategories like ready-to-drink (RTD) and low-alcohol-by-volume (low-ABV).
Auction house Christie’s says its pre-pandemic investment in digital marketing as well as a willingness to experiment with high-production livestream auctions and virtual reality product merchandizing during the pandemic helped it navigate uncertainty. Over 90% of Christie's tradition client base started "engaging with us digitally" over the past year, Christie’s global head of corporate and digital marketing, Matt Rubinger, told Modern Retail.
On May 17, Shein surpassed Amazon as the most downloaded iPhone shopping app in the US, something it had already done in Google Play downloads the week prior, according to analytics firm App Annie. The online-only retailer was formed in Nanjung, China, but ships its products, primarily inexpensive women’s apparel, to more than 220 countries worldwide. Researchers and consumers site innovative digital strategies and low-priced, trendy products that appeal to a Gen-Z mindset as key to the retailer’s success.
As the United States begins to reopen, small fashion startups navigate new consumer interest in dressing up, bright colors, and in-store experiences. The fashion industry struggled in the pandemic, with economic uncertainty slowing discretionary spending and leading to store closures. Small fashion brands, with limited assortments and nimble business teams, pivoted to e-commerce and comfort. Now, small fashion start-ups are offering bright colors, dressed up silhouettes and in-store experiences that consumers are flocking to.
Kohl’s joins Macy’s and Dillard’s in revealing revenue increases and performance exceeding predicted expectations in the first quarter of 2021. Kohl’s attributes some of this success to optimized merchandizing strategies, returning consumer interest in the apparel category and increased foot traffic. However, the retailer is cautious in its predictions of future performance.
Over the last few days, major retail businesses released a flurry of statements over the weekend updating to a no-mask-policy or doubling down on continued mask usage for customers and employees alike. However, most of these businesses didn’t address their plans to support their sales associates amongst the confusion, and some employees are concerned about enforcement, health, and safety moving forward.
Last week, McDonald's joined Chipotle in an increasing list of companies that are raising wages and offering other benefits like on-the-spot hiring to attract new employees amidst a post-pandemic worker shortage in retail. In 2020, more unemployment claims were filed than in the Great Recession, thanks to both temporary and permanent store closures. Today, businesses are beginning to see sales return to pre-pandemic levels: food and retail sales were up 36% and 26%, respectively, in the first quarter of 2021 compared to the same time period the year prior according to the U.S. Census Bureau. However, businesses like McDonalds and Chipotle are facing PR crises over workplace treatment, and are struggling to find workers. To meet demand, businesses are raising wages, using on-the-spot-hiring and offering one-time bonuses to interest potential candidates.
After the successful IPOs of Beyond Meat and Oatly, plant-based behemoth Impossible Foods is reportedly preparing to enter the public market -- and Asia is key to its success. “The bigger a footprint Impossible has in the Asian market, the bigger their expected long-term value is going to be,” said one investor.
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