Today in retail, the roller-coaster ride continues for Warby Parker’s stock, while relationship commerce is helping brands reduce their customer acquisition costs. Plus, Williams-Sonoma is reimagining its stores to appeal to omnichannel shoppers.
Retailers Pull Back as Shoppers Tighten Wallets
Shoppers are showing the power of the pocketbook by rebuffing efforts by some apparel retailers and department stores to raise their prices as inflation continues at its highest level since the 1980s, and consumers scale back on the spending that had been on the rise for several months.
U.S. retail sales slowed in February, according to the Commerce Department, even though the figures say they were up 17.7%, since most of that increase is because things now cost more than they did in the past. That’s especially true with gas and food.
About 43% of consumers surveyed by market research firm NPD Group in February said that if prices continue to rise, they will delay less important purchases to stick to a budget.
H&M Selling Other Fashion Brands on its Website to Better Compete
H&M is selling external fashion brands on its central website in Sweden and Germany and plans to add additional labels and geographic markets, according to reports.
The new brands were added to hm.com at the start of March to better compete with eCommerce markets including Amazon, Zalando and Asos. Brands available on the site have grown to 13 labels for womenswear and 15 for menswear, in addition to about 20 labels in H&M Group’s growing portfolio of brands, which includes &Other Stories, Arket, Weekday and Monki. A little more than one-third of H&M’s sales were generated online last year.
External labels featured in H&M with Friends include Lee, Wrangler, Fila, Superdry, Crocs, Eastpak, Aimn, Kangol, Chimi, Houdini, Ecoalk and Buffalo.
Mobile Outshining Laptops and Desktops as Consumers Venture Out in 2022
In PYMNTS’ “Digital Economy Payments March 2022 U.S. Edition: Going Digital To Pay For Travel And Restaurant Dining,” we surveyed 3,250 consumers about their attitudes towards these activities in 2022, to find mobile not surprisingly ascendant.
After two years of work from home for millions and a general sense of being homebound, perhaps it’s to be expected that when we shop online or go out to eat, we’re picking up our phones, ignoring desktops and laptops.
Usage of mobile devices to purchase travel services has risen steadily during the past few months, according to our research. Travel service purchases via mobile device climbed to 48% in January 2022 from 44% in December 2021 and 43% in November 2021. Laptop and desktop computer usage, on the other hand, reached all-time lows in every survey area in February, our study shows.
Ocado Retail Sees Sales Downtick as Consumers Return to Pre-COVID Habits
The online grocery market in the United Kingdom is significantly more mature than it is in the United States, according to data from the November 2021 study, What U.K. Consumers Expect From Their Grocery Shopping Experiences, a PYMNTS and ACI Worldwide collaboration. The study, which drew from a survey of more than 2,500 U.K. consumers about their grocery shopping habits conducted in September 2021, found that 52% report purchasing groceries online more often than they were before March 2020.
The report also revealed that about one in three U.K. consumers prefer shopping for groceries online to shopping for groceries in stores, a share well above the 18% of U.S. consumers that prefer the same. The most popular eGrocery channel in the U.K. is buying online and having the products delivered to their homes, with 26% of shoppers ranking this their most preferred. In contrast, U.S. consumers favor buy online, pickup in store (BOPIS) options.
Target, Amazon Unveil Environmentally Friendly Store Models
Target and Amazon on Thursday (March 17) both announced environmentally friendly store models, according to company press releases.
The net-zero energy Target store in Vista, California “will generate more renewable energy than it needs annually to operate and will test multiple innovations to reduce the building’s emissions,” the company press release says. It will generate renewable energy through 3,420 solar panels across its roof and new carport canopies.
Amazon expects its Seattle Amazon Fresh store will save almost 185 tons of carbon dioxide emissions each year, equivalent to driving around the Earth 18 times. Updates to the store include transitioning to a CO2-based refrigeration system, which reduces greenhouse gas emissions by 38 metric tons per year compared to a conventional system.
Warby Parker: Solid Business, Shaky Stock
From a peak of $60 in early October shortly after its much-hyped trading debut, to its present price that has now slipped below $23, eyewear retailer Warby Parker’s stock has fallen 60%, losing more than $4 billion in market value.
Although the company’s Q4 sales grew 17% to $132 million, the costs associated with building out its brick-and-mortar location alongside its original free “Home Try-On” direct-to-consumer business saw it finish the quarter with a $45 million loss.
While Warby Parker is projecting 20% to 22% revenue growth this year, analysts and investors had been looking for a 25% increase in sales, and subsequently delivered another round of selling that saw the stock fall as much as 20% in pre-market trading before rebounding.
Dollar General Struggles to Capture Bargain-Hungry Shoppers to Close FY21
Bargain hunters found other alternatives to get the products they needed at reasonable prices to close out 2021, as Dollar General’s same-store sales dropped 1.4% in the three-month period ending Jan. 28 and dipped 2.8% in the full fiscal year, according to a Thursday (March 17) press release.
Net sales for the fourth quarter were up 2.8% for Q4 and up 1.4% for the full year.
Dollar General finalized the initial rollout of DG Fresh, opened its 18,000th store and 50 standalone pOpshelf locations in 2021.
Williams-Sonoma ‘Reimagining Stores’ as Omnichannel Shoppers Spend 4x More
Kitchen and home furnishing retailer Williams-Sonoma says it is reimagining its digital businesses, which already accounts for 70% of its sales as part of a “store evolution” that includes the Pottery Barn and West Elm franchises.
Williams-Sonoma says it’s well-positioned to boost its top line 25% to $10 billion over the next the three years and is confident it can continue its momentum into 2022, largely on the backs of loyal cross-brand existing customers that accounted for a record 60% of its sales for the year that ended Jan. 30.
Bolt CEO: Commerce Identity, Checkout Operating System Makes One-Click Checkout Ubiquitous
Unified commerce focused FinTech Bolt CEO Maju Kuruvilla told PYMNTS CEO Karen Webster that a single “commerce identity” that customers can use wherever they’re shopping online may hold the key to unlocking anywhere, anytime payment.
Amazon, Shopify and others have built entire ecosystems based on one-click convenience. That’s only available for merchants within their ecosystems. Retailers that don’t want to sacrifice a bit of their brand experience have traditionally had to offer customers an experience that’s a bit more disjointed.
Relationship Commerce Helps Brands Reduce Customer Acquisition Costs
As data privacy laws go global and governments adopt a seriousness toward anything that looks out of bounds, customer acquisition finds itself at a crossroads.
Companies can’t rely on browser cookies or unrestrained use of first-party data anymore and it’s driving customer acquisition cost (CAC) higher without a commensurate return on investment. This is forcing innovation — and a fresh look at how to grow revenues.
Many companies see “a flip of the script” as retaining customers becomes more important than acquiring them.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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