It was a summer of last-mile delivery and new subscription pushes. It was a season of fulfillment expansion and voice assistance (even Nike sneakers got involved). It was months of tariffs and trade wars. But most of all, perhaps, it was a time of meatless alternatives.
As PYMNTS prepares to BBQ and drink sangria and maybe even hum some union solidarity anthems in honor of this holiday weekend, we ask you to take a few moments to join us on a “greatest-hits tour” of this past summer of retail. The world of retail is never for the faint-hearted, given its fierce competition, constant innovation and disruption – not to mention the ongoing shift to digital.
Perhaps the most unexpected development to emerge during this past summer of retail was the frenzy sparked by the introduction of meatless menu items by fast-food operators. These product launches are not so important on their own, but together they serve as yet another example of the innovation and disruption taking place in the quick-service restaurant (QSR) space — among the hottest areas of retail, in fact, when it comes to innovation.
Indeed, Burger King’s Impossible Whopper became a full-fledged media event, surprising even some die-hard foes of vegetarianism with its flavor and overall quality. KFC also reportedly became the first fast-food restaurant to offer plant-based chicken, as one of its locations will begin offering meatless chicken from Beyond Meat.
Even so, readers of PYMNTS know that sizzle doesn’t guarantee success. It’s fair to ask whether meatless meat is a new way of eating for a new era of consumers – or just the latest in a long line of food fads that seem like the next big dietary shift, and then fizzle out quietly as consumers’ tastes, quite literally, change.
New Subscription Push
The subscription commerce wars kept raging, and new operations and businesses entered the market or tweaked their models. One example was provided by retail chain Urban Outfitters. Its new service, called Nuuly, gives consumers the option to pick up six items a month for a fee of $88, wear them and then return them to pick up their next six. The value of the offering, by Urban Outfitters’ estimates, represents about $800 in value monthly. Consumers also have the option of purchasing the outfits they want to keep – though the mechanics of that and any potential discounts are still up in the air.
The effort bears close attention. The challenge and the trick of subscription commerce as the 2020s approach, of course, is standing out in a crowded field where a lot of other players are attempting to make a similar move. Urban Outfitters does have the benefit of a well-established brand behind it – but there is also the reality that the well-established brand has been having trouble attracting the “cool-kid” audience it relies on to signal-boost its products.
Fulfillment Efforts
Moving from fashion to prescriptions – how’s that for a transition? – we see more evidence of the ongoing and vital work to solve the last-mile delivery problem that is common to so much of the commerce world. In a PYMNTS interview this summer, NowRx CEO Cary Breese described how his company “operates locally-based facilities with high automation and low, fixed overhead, so prescription medications can be rapidly filled and delivered to customers the same day free of charge, or within one hour for a $5 expedited fee.” It is better not only for the patient, he said, but also for public health. A contagious patient can wait for their medication at home, rather than standing in line potentially spreading dangerous contaminants onto everyone else in the pharmacy.
Target also demonstrated the power, appeal and importance of getting fulfillment right and making continual improvements in that area. The retail chain this summer said its Drive Up service is now available in all 50 states. The service reached this milestone after recent rollouts in Alaska, Hawaii, Washington, Oregon, Idaho, North Dakota, South Dakota, Montana and Wyoming. With the service, customers order products through Target’s app and drive to the store, where employees deliver the goods to their cars. Orders are usually ready within an hour.
Fulfillment done right can bring significant rewards. Last year, for instance, Target revealed it had experienced a 10 percent rise in orders since Drive Up’s launch. The service has been especially popular among families, with diapers and household supplies as top sellers.
Voice and Tariffs
Voice-assisted and voice-activated retail are also playing robust roles in retail – roles that promise to become even bigger during the 2019 holiday season and beyond. Nike offered proof of that over the summer. The brand’s new Adapt Huarache shoes work with voice commands on Siri and Apple Watch, allowing owners to adjust the fit and to lace and unlace their sneakers. This redesign of the 1991 Nike Huarache uses FitAdapt self-lacing technology, similar to the Nike Adapt BB shoes that were announced in January. The latest iteration of FitAdapt allows for more personal preferences, environments and situations.
This past summer – as will be the case in the coming fall and probably the winter as well – was a time of trade wars and tariffs, of course. News of the U.S.-China disputes dominated headlines and was top-of-mind for retailers, especially as their focus shifted to the upcoming holiday shopping season. Apple offers a decent way through which to view the ongoing trade war. Late this summer, news emerged that Apple is still dependent on China, despite using manufacturing plants in Brazil and India.
Apple is facing a 15 percent tariff for China-made smartwatches and wireless headphones on Sept. 1 and for the iPhone on Dec. 15. Although manufacturing has expanded into other countries, the factories outside China are smaller. At the same time, Apple has expanded its factories in China to accommodate additional products like watches and smart speakers. Of Apple’s suppliers that manufacture chips, glass, cables and more, 47.6 percent are in China.
Look for many more developments in all these retail trends in the coming months. Summer is certainly its own unique season, but what happens during that often magical time tends to influence the rest of the year.
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