This is Episode One of Simplr's E-Commerce Retail Briefing podcast. This week's topics include consumer spending this holiday season, Amazon's new headquarters, Nike's "House of Innovation," and the devastating California wildfires.
October was a rough period in the stock market with the S&P 500 logging its largest monthly decline in seven years. For most people, seeing a portion of their net-worth disappearing could give people pause going into the holidays. But what should retailers expect for consumer spending? We’ll hear more in a moment.
First, here are some retail headlines.
Amazon announced the location of their second headquarters, saying it will split the site between New York City and northern Virginia. The company promised to create 25,000 high-paying jobs in each location. The company also said it would create a third, smaller operations hub in Nashville, Tennessee, that will hire up to 5,000 full-time workers. These campuses will play host to more than 50,000 jobs with an average salary of one hundred and fifty thousand. Hiring begins next year.This announcement comes months after state and local governments started public campaigns to attract the retail giant while offering economic incentives.
New York City Mayor Bill de Blasio tweeted “New York City is about to get tens of thousands of new, good paying jobs and Amazon is about to meet the most talented workforce in the world in one of the most diverse places on the planet.” While politicians celebrated the big wins, not everyone is happy. Many locals are concerned about losing housing due to raising housing costs and the increased overcrowding on subway cars.
As regulations start allowing recreational marijuana to be sold in more locations, the FDA has taken a strong stance restricting the sale of e-cigarettes flavors, except for mint and menthol. This comes amidst a survey from the Center for Disease Control and Prevention showing that 3.6 million middle and high school students use e-cigarettes, which is 1.5 million more than last year. Researchers suggest the popularity of “certain types of e-cigarettes, such as JUUL” likely caused the surge in e-cigarette use.
Juul Labs announced on Tuesday that it would suspend sales of most of its flavored e-cigarette pods in retail stores and discontinue its social media promotions. The San Francisco-based company has over 70 percent of the e-cigarette market share in the United states.
Juul said it would keep mint, tobacco, and menthol flavors for its devices in retail stores to prevent some users from reverting to menthol cigarettes.
E-cigarettes were originally developed to help smokers quit by giving them a way to satisfy their nicotine cravings without the tar and deadly carcinogens that come with burning tobacco.
Forbes announced this week the 30 under 30 2019 for Retail & E-Commerce, which includes companies like BOXFOX, Parachute Home, Glossier, and Peloton. The youngest on the list? Caroline and Isabel Bercaw at 16 and 17 years old who founded Da Bomb Bath Fizzers after creating a bath bomb that doesn’t leave stains and sticky residue. The high schoolers now run a multimillion dollar company with $20 million in projected revenue in 2018.
Omni-channel retail is the buzz word of 2018, but Nike has opened up a cutting-edge, 68,000 square foot flagship store in New York City that changes the way that consumers shop for sneakers and apparel.
The company calls it the “house of innovation 000” which is an immersive shopping experience that combines traditional shopping with the company’s digital futuristic app. Using Nike’s app, shoppers can scan QR barcodes on mannequins and apparel to see if their size is available.
The items show up in a fitting room, freeing up the customer from having to carry clothing.
“Personalization” is the name of the game for this new Nike concept. Their product concierge helps shoppers find the perfect fit with tailoring, alterations, and bra fitting services in a high-end dressing room on the top floor of the store.
Like Amazon Go stores, there are no cash registers. Shoppers can check out anywhere by scanning, paying, and that’s it.
Retail sales were strong last month, according to the Commerce Department reporting on Thursday with sales rising 0.8% from September and 4.6% from a year earlier. Clothing stores and sporting goods stores both registered sales growth of 0.5% on the month, with department store sales up 1.3%
Consumer spending is expected to be a bright spot in the U.S. economy this holiday season.
With unemployment at just 3.7% and wage gains starting to take hold, most consumers aren’t letting a dip in their 401(k) slow them down. This is clear in Thursday’s retail sales report reinforced by strong results from Walmart on Thursday and Macy’s and Home Depot earlier in the week.
Some investors are expecting updates on the trade policy with China to provide more clarity about growth by the end of the year, easing some concerns about the health of the economy as retailers anticipate the possibility of 25% tariffs in the future.
We’re wrapping up this briefing with the California wildfires, which have taken dozens of lives, destroyed nearly 10,000 homes and burned over 250,000 acres. Many around the fires are dealing with heavy smoke and hazardous air pollution. Celebrities including Robin Thicke, Stephanie Weir, Pink, Miley Cyrus and Liam Hemsworth have all helped with fundraising.
Lots of California-based e-commerce brands are carving out space amid Black Friday madness for wildfire awareness and relief efforts. Malibu-based beauty brand Osea (oh-see-ah) - whose founder Jenefer Palmer lost her home in the Woolsey Fire - donated 100% of profits to victims of the blaze. Thrive Causemetics, which already donates a portion of its sales to organizations that support women and their families, also had a 24-hour blitz where are all profits went straight to fire relief.
One e-commerce brand, Pura Vida Bracelets, launched a Fire Relief Bracelet with 100% of the net sales being donated to the California Fire Foundation’s SAVE program. I sat down with CEO Griffin Thall to talk about this fundraiser.
In light of difficult times, this is a reminder that one person with a vision can make a difference and give back to the community in a big way. To support this cause, check out puravidabracelets.com.
This has been your retail and e-commerce briefing. Until next time.