MACY'S SHOPPERS ABANDON SHIP
One thing to remember from history and Quentin Tarantino's '300' is that all empires fall. Today's technology could counter that statement, however, since it seems only a matter of time before Amazon executes a global takeover. Still, declines are inevitable for many, including the world's largest department store, Macy's, who has experienced a steady decline in sales and market share, losing three billion in revenue over the last five years. Coresight Research surveyed US consumers to investigate where spending is being channeled, and the results are surprising indeed.
From the survey, 26% of respondents spend less of their apparel budget at Macy’s than they used to or have stopped shopping there altogether. Among these consumers, less than half of them reported switching to Amazon. So what does it mean? Well, many US consumers agreed that clothing has become less of a spending priority in the past three years, but deals and steals are still incentives, explaining why after Amazon, consumers switched their spending to T.J.Maxx and Marshalls, with Target and Kohl's following.
Off-price stores and mass value merchandisers are popular options for switching from mid-tier department stores like Macy's, so what tricks can and will Macy's borrow from these retailers, in order to preserve (and regain) market share?
WALMART STRUGGLES TO KEEP UP
With its announcement this week of lower than ever operating margins and decelerating e-commerce growth, Walmart's attempts to keep up with Amazon may be crippling over the long run. The retail giant wants to attract a more premium customer to its e-commerce platform, laying its past 'savings' motto to rest. The focus? Brand elevation through the apparel category.
Amazon and Target both offer private fashion labels to attract price- and fashion-conscious shoppers. And Walmart's update to its private label apparel categories will attempt to rival them by improving clothing quality and changing brand perceptions. In our newest segment, Truth by Numbers, we found Walmart's average apparel price point to be $10 more than Target's, and assortment volume to be vastly larger (similar to Amazon's).
Walmart continues to play catch up to Amazon's massive marketplace, and until it solidifies an e-commerce strategy, the bottom line will likely continue to suffer.
LUXURY IS GETTING WITH THE PROGRAM
Many luxury retailers have resisted going full-in online and adopting direct-to-consumer models. Exclusivity and elevated in-store experiences define the very existence of what it means to be a luxury brand. So while Chanel still has no plans to sell its ready-to-wear or handbags online, they did recently announce a partnership with Farfetch.com to create an augmented retail experience for customers.
In another 21st century move, luxury retailer Christian Lacroix has decided to launch a digital marketplace on the eve of its 20th anniversary. The brand is eager to showcase limited collections digitally and engage with its global audience. Nicolas Topiol, CEO, recognizes there's a standard to uphold luxury customer experiences that still exists. It's challenging, especially for consumers who have historically experienced the brand's physical locations.
Nevertheless, Topiol encourages retailers to "forget the usual prejudice about selling online and jump into the digital world."
SNAPCHAT COMES TO ITS SENSES
Earlier this month Snapchat turned to retail to build loyalty among its users. Its in-app store was originally reserved for branded purchases like emoji pillows and Snap Ghost t-shirts.
That's cute, but the social platform has smelled the profit (coffee) and opportunity (toast). Its first collaboration with Shopify and Nike was hosted during All Star Weekend. The pre-sale Air Jordan III "Tinker" sold out on the app in 23 minutes, only available to those who attended the Jumpman All-Star party.
Even better, every purchase was delivered the same night.
With the rise of bots and unfair purchasing practices by resellers, social commerce is a safer and more influential way for consumer buying. Snapchat inadvertently sets a "times-up" archetype for its social competitors, as users are aware of the 24-hour window of Snaps, which could result in heavy FOMO and instant 'snap' purchasing.
THIS WEEK'S BRIGHT SPOT
Jet.com's President Liza Landsman received the title for one of the Top Women in retail from Total Retail.
Landsman takes a direct, empathetic, and empowering approach to her leadership style, and believes "You can get anything done in this world you want as long as you don't care who gets the credit." Her "outcome over ego" thought process has helped her rise to success at Jet.
Landsman also believes smart usage of augmented reality will have the biggest impact in 2018. She's excited about providing exceptional customer and knows combining physical and digital channels to provide AR will create value and consumer happiness.
Does this mean we can expect AR functionalities in the near future from Jet.com? 🤔