DATA: My conversations with sportswear buyers indicated that they had bought for less growth in athleisure for spring, and that they were buying for no growth for fall. Does my small sample (certainly not statistically significant) prove that athleisure is rolling over? No, but it is an interesting anecdotal supporting data point. What did those buyers buy instead? Mostly denim, both straight legs and flares. With confidence? No. But, they didn’t buy athleisure. This is all anecdotal, and, yes, I have been out intentionally looking for evidence supporting my thesis.
BRAND: After reporting a 7 percent decline in its wholesale business during the fiscal first quarter, CEO John Idol told analysts that come February, the accessories brand will no longer participate in department stores' broad-based friends and family sales, or accept coupons for its products there. The label will also move forward with its strategy to cut back on the amount of merchandise it ships to these retailers, as it looks to rebuild the pricing power it's lost with shoppers. Because the brand is constantly on sale, consumers have forgotten the true value of the product, Idol said.
ECOMMERCE: The world's largest retailer has been getting a lot more aggressive in e-commerce over the past year, introducing an Amazon Prime-like unlimited shipping service called ShippingPass, expanding its online inventory and setting aside $2 billion over the next two years to grow on the web. On Monday, Walmart made its biggest move yet, signing a deal to purchase Jet, one of the hottest new names in e-commerce. The deal comes just over a year after the startup launched its site, which sells millions of items from toothpaste to furniture to potato chips.
RETAIL: To understand consumer preferences on how they research and purchase consumer goods products, and build loyalty with the brands they trust, Salesforce Research conducted its “2016 Connected Consumer Goods Report.” The survey was conducted online with the United States by Harris Poll on behalf of Salesforce with over 2,000 adult respondents. The report found that despite ease-of-use and lower prices when online shopping, consumers prefer shopping overall in brick-and-mortar stores.
ECOMMERCE: In 2010, Lore sold Diapers.com parent Quidsi to Amazon for $545 million. From there, a flurry of e-commerce sites followed — Soap.com, Wag.com, Yoyo.com, BeautyBar.com and Casa.com — which, Quidsi says, “make Mom’s life easier with fast, free shipping…and one shared cart and checkout.” But he wasn’t done there! Six years later, Lore is joining the Walmart family after selling another e-commerce property that, funny enough, offers baby, household, pet, toy and beauty products in a $3 billion deal.
BRAND: So when Coach, Michael Kors, Kate Spade, and Ralph Lauren all said in recent days they were pulling out of, or reducing inventory in, department stores, it became clear more disappointing news was in store for struggling department-store chains such as Macy's and Nordstrom. Indeed, on Thursday, Macy's reported a 2.6 percent drop in second-quarter comparable sales, its sixth straight quarterly decline. On earnings calls this week, brands assured department stores they still really care about the sales channel.
ECOMMERCE: Amazon’s longerterm goal is more fantastical — and, if it succeeds, potentially transformative. It wants to escape the messy vicissitudes of roads and humans. It wants to go fully autonomous, up in the sky. The company’s drone program, which many in the tech press dismissed as a marketing gimmick when Mr. Bezos unveiled it on “60 Minutes” in 2013, is central to this future; drones could be combined with warehouses manned by robots and trucks that drive themselves to unlock a new autonomous future for Amazon.
FINTECH: Of the major players in mobile and emerging payments, 76% of retailers plan to accept Apple Pay by the end of 2017, compared with 59% for PayPal. Fifty-three percent saying they have no interest in Venmo, 43% have no interest in Alipay and 38% with no interest in Pay With Amazon. “Retailers will have made significant progress and investments securing and reducing fraud by the end of 2016,” said Brendan Miller, principal analyst at Forrester. “With that foundation, they can now adjust much of their focus to optimizing the customer experience.
ECOMMERCE: People close to the company anticipate it eventually getting into businesses like home insurance and finance. Airbnb’s data on how successful hosts are on renting out rooms could help it determine what kind of prices to charge people for financial products. And any home-financing product could help Airbnb expand the number of hosts, as homeowners are more likely than renters to put their properties on Airbnb while following local laws. San Francisco recently required short-term-rental hosts to register their listings with the city.
BRAND: With the advent of this fitness boom, there are now dozens of different specific fitness ideologies to subscribe to. When you wear sportswear as fashion, you aren’t just representing the fact that you are fit, you are showing your allegiance to your CrossFit gym or your yoga studio by wearing Reebok or Lululemon, respectively. This specificity of fit culture is the very thing that threatens the Nike brand’s foothold on the sneaker industry. Think about it. Sportswear in essence has become a type of specialized equipment.— would you?
Last Word: Readers of 2PML Knew That This Was Coming
Today, Macy's announced that 15% of their stores will close, moving them closer to 2006 levels of sales per square footage. Dillard's, JC Penney, and Sears will surely cut costs but it's Nordstrom that will be the most damaging to A-Level Mall's like Columbus' Easton Town Center.
Nordstrom and Macy's are closely aligned with luxury brands: Ralph Lauren, Michael Kors, and Coach. Each brand has determined that they are pulling back from department store resellers to focus on direct to consumer marketing strategies (i.e. native eCommerce and potentially Amazon).
If a mall is anchored by Nordstrom and a Macy's and they both close doors, the mall will close with it. Not immediately, but certainly within the next 8-12 quarters.