BRAND: Adidas shares have soared despite the FIFA scandal and weakness in its golf unit. Sales are surging around the world. And Adidas has snagged some high profile athletes as endorsers to step up its game against Nike and Under Armour. Also of note: the Kanye effect.
BRAND: Emotional engagement, a measure of how well brands meet consumer expectations, is a leading indicator of consumer loyalty and brand profitability. 10 brands – in the automotive, tech, retail, food and beverage categories – substantively disappointed their own customers.
ECOMMERCE: Retailers are growing their store base by about 2 percent each year, on average, but accompanying sales increases are not keeping up, according to new research from Morgan Stanley analyst Simeon Gutman. The combination of slower in-store sales growth, an increase in less-profitable online sales, and steady spending on stores has made it harder for many retailers to maintain healthy profit margins.
BRAND: Talk about doubling down—even the original 2020 goal was considered a long shot by Wall Street. This new target would pledge the carmaker to a faster production growth rate than Ford Motor Co. managed in the early 1900s. That's when Henry Ford pioneered the production line with the Model T, the first mass-market combustion-driven car.
ECOMMERCE: This summer, the New York Times will begin selling ingredients for recipes from its NYT Cooking website as the newspaper publisher seeks new revenue sources to offset declines in print. The Times is partnering with meal-delivery startup Chef’d, which will send the ingredients to readers within 48 hours. The Times and Chef’d will split sales from the venture.
ECOMMERCE: Hosted platforms are becoming increasingly popular among retailers for a slew of advantages. According to Forrester Research, eCommerce SaaS spending will nearly double in the U.S. by 2019. Retailers are shifting from traditional legacy solutions to a nimble and scalable hosted platform. In fact, U.S. firms are expected to spend over $2 billion on eCommerce software by 2019.
DATA: Essentially, too many companies have taken too much money at unsupportable valuations. A lot of the money they raised came with huge caveats that would protect late-stage investors. A lot of these businesses now have limited options, Gurley wrote. They can't raise more money from the private markets because their last rounds came with such strict conditions.
BRAND: The winning bidder in the eBay auction, which closed Thursday, was T-Mobile CEO John Legere, who took to Twitter to ask his more than 2.4 million followers what he should put on the two-time Olympian as a temporary tattoo. The leading choice in the Twitter poll is an emoji of Legere with a profane reference to T-Mobile competitor AT&T. He has not said what tattoo he will use.
MEDIA: Ripp estimated that industrywide native advertising is a $4 billion-a-year market. “We think it’s growing to about $9 billion over the next several years,” he said. Time Inc.’s revenue in the first quarter rose 1 percent, to $690 million, its best quarterly revenue increase in two years.
BRAND: Outdoor Voices has gained traction. After the line was featured in a London boutique, Garbstore, J. Crew reached out to place the clothing in the retailer's "brands we love" section in spring 2014. Since then, Haney says her line has grown a "cult following."
Last Word: The Market Forces Influencing 'Victoria's Secret' Pull on L Brands.
One of the continuing themes in 'bricks and mortar retail v. eCommerce' is the gauging of how well positioned each channel is, relative to the overall mission. Columbus, Ohio's Victoria's Secret is the number one brand in apparel retail according to Brandkey's customer loyalty engagement index.
A look at the data will reveal that while comparable sales were up 1% in Q1, analysts were expecting a 4.8% increase. A closer look reveals that in the month of April, comparable in-store sales fell 1%. The stock is now trading at ~ $69.50/share, down $10 in just a few days. This is not a bricks and mortar is a bad investment piece. Victoria's Secret is the top of the heap when it comes to the practice of attracting new and repeat business to physical doors.
One thing to study, however, is their approach to eCommerce in a market that is swiftly changing around them. Younger startups are using data to bolster eComm bra / panties sales. You can read more here.
Victoria's Secret's challenges mirror those of most brick-and-mortar retailers. Consumers increasingly prefer to order goods online. Even when they are in stores, they window shop from their smartphones. And as VS has focused on competing in swimwear and in athleisure, younger companies have inched closed the wide margin between them and the Queen of lingerie.
In 2008, Victoria's Secret had a very public breakup with N2N - a now defunct eCommerce dev house - who botched an early eCommerce launch. Enterprise eCommerce has always been an issue for legacy brands like VS. Brick and Mortar companies like Dick's Sporting Goods are also decreasing in comparable sales (and foot traffic). However, they are accounting for this drop by increasing eCommerce productivity for a net positive gain in business.
It is a tricky proposition to address but it's clear that there are basic problems that can be addressed by their amazing teams that can help them address digital marketing and omnichannel woes.
2PML'ers: respond to this letter to be one of the (5) added to a 4 PM EST Talkshow on the above topic.