This Week in Retail #46
Hey Friends,
Halloween is right around the corner and spending prediction data is flowing in. According to the National Retail Federation, Halloween spending is expected to surpass $11.6 Billion. According to the data categorical spend is as follows: 72% of survey participants said they would celebrate Halloween this year in some way or another, whether participating day of or decorating, about $3.5 billion will be spent on candy, $3.8 billion on decorations and $3.8 billion on costumes.
Spirit Halloween has partnered with Uber to offer on-demand delivery of Halloween costumes, decorations, and accessories. Shoppers across the U.S. and Canada can now order items from Spirit Halloween's catalog through Uber Eats, Postmates, and the Uber app. The prices match those in-store, and Uber One members get perks like free delivery and a 5% discount on orders over $35. Additionally, all customers can enjoy a 40% discount on orders over $50 through October 31, 2024.
Amazon has introduced five new visual search features to enhance product discovery and improve search precision. Key updates include visual suggestions and the "more like this" feature, which showcase similar products, and the ability to view product videos directly from search results. Shoppers can also refine Amazon Lens searches by adding text or isolating specific items within an uploaded image. These features build on Amazon’s ongoing search improvements, following the July rollout of its AI shopping tool, Rufus. Visual search queries have risen 70% globally year over year, with Amazon seeking customer feedback to further enhance the tools. Competitors like Google and Etsy have also launched visual search tools, while eBay and Google have introduced tools for sellers to enhance product images.
DirecTV has struck a deal to acquire Dish Network, creating one of the largest pay-TV distributors in the U.S., pending regulatory approval. Dish, which is struggling with $2 billion in debt due in November and limited cash reserves, sees the deal as a financial lifeline. The transaction involves private equity firm TPG acquiring a majority stake in DirecTV from AT&T for $7.6 billion, while DirecTV will acquire Dish for $1 and assume its debt. EchoStar, Dish's parent company, will retain its wireless spectrum investments and operate separately.
PepsiCo has acquired Siete Foods, a rapidly growing brand specializing in grain-free, gluten-free, and dairy-free Mexican-American-inspired products, for $1.2 billion. Siete, a family-owned company known for its clean-label products such as tortillas, chips, and hot sauces, has seen increasing popularity among health-conscious and multicultural consumers. The acquisition marks Pepsi’s continued expansion into the health and wellness food market, responding to growing consumer demand for alternative, natural ingredients and ethnic flavors. This move is expected to enhance PepsiCo’s portfolio in the better-for-you snack category, tapping into the surge in demand for allergen-friendly and diet-specific products.
UPS Expands Standard Service to Saturday: UPS has announced the expansion of its Standard delivery service to include Saturday deliveries, a significant move aimed at enhancing its shipping capabilities and improving its customer service offerings. This extension allows for more flexibility in delivery schedules, particularly benefiting e-commerce businesses and consumers who need weekend delivery options. The addition of Saturday services comes in response to the growing demand for faster and more reliable shipping, especially as online shopping continues to surge. UPS’s move is expected to provide a competitive edge over other logistics companies and cater to the needs of businesses looking to meet consumer expectations for quicker deliveries.
The expansion makes UPS the only carrier to offer Saturday Standard delivery for residential packages without a surcharge across 8 leading European markets: Belgium, France, Germany, Italy, Netherlands, Poland, Spain, and the United Kingdom.
LVMH Acquires 10% of Double R, Strengthening Ties with Moncler: LVMH, the global leader in luxury goods, has acquired a 10% stake in Double R, an investment that reinforces its strategic partnership with Moncler. Double R, known for its high-quality craftsmanship and outerwear, has been closely aligned with Moncler in both its market positioning and style, appealing to luxury consumers with similar preferences. This acquisition is seen as part of LVMH’s strategy to strengthen its portfolio in the premium fashion sector, with a particular focus on outerwear, a growing segment in the luxury market. By deepening its ties with Double R and Moncler, LVMH aims to capitalize on the rising demand for high-end outdoor fashion.
Costco is expanding its precious metals offerings by adding 1-ounce platinum bars to its lineup, following the success of its gold bars, which often sold out quickly. The new platinum bars, made in Switzerland and 99.95% pure, come from a refiner accredited by the London Bullion Market Association (LBMA). Costco's gold bars were so popular that the retailer struggled to keep them in stock. After introducing silver coins, Wells Fargo estimated that Costco was selling up to $200 million worth of gold and silver monthly to its members.
Returns are still a risky business…..Appriss Retail, a leader in data and analytics solutions, has released a new report with Retail Dive titled "How Important Are Returns to Customers?" This report examines how return policies impact consumer shopping decisions and the challenges retailers face in managing returns fraud. Based on surveys of 150 retail executives and over 1,000 North American consumers, it highlights that 84% of retailers have recently adjusted their return policies to combat fraud. However, stricter policies can negatively affect customer satisfaction, with 55% of consumers avoiding retailers due to restrictive return policies, and 31% stopping their shopping altogether after negative experiences.
While nearly all retailers believe they are handling returns well, Appriss Retail warns that overly strict policies can alienate customers. Instead, they recommend using AI-powered solutions to balance fraud prevention and customer retention by analyzing return histories to make smarter, real-time decisions. The report notes that fraud, including claims and appeasements fraud, costs retailers billions annually, but AI-driven technology can help reduce these losses and improve customer experiences, with 90% of consumers saying positive return experiences would increase their likelihood of repeat purchases.
Microsoft and Rezolve AI have formed a strategic partnership to enhance retail commerce through AI-powered solutions. Rezolve AI's Brain Suite—including Brain Commerce, Brain Checkout, and Brain Assistant—will be powered by Microsoft Azure and distributed globally via Microsoft's Azure Marketplace. The collaboration will benefit from Microsoft's global reach, infrastructure, and incentivized sales teams, providing extensive Go-to-Market (GTM) and co-sell support for five years. This partnership aims to improve customer engagement, streamline operations, and increase market penetration for retailers, while strengthening Microsoft's leadership in generative AI solutions for the retail industry.
Another win for wage increases….Hobby Lobby announced it will raise its minimum full-time hourly pay to $19.25 starting Tuesday October 1st, marking the 13th increase since 2009. This new rate significantly exceeds the federal minimum wage of $7.25 per hour. The company also highlighted benefits for eligible employees, including medical, prescription, dental plans, a 401(k) with company match, vacation and sick pay, paid holidays, and an employee discount.
Nike has postponed its November investor day and reported mixed fiscal first-quarter results as it prepares for a CEO transition. Outgoing CEO John Donahoe will be replaced by longtime Nike veteran Elliott Hill in mid-October. While China sales slightly exceeded expectations at $1.67 billion, Nike's overall performance fell short of analyst revenue estimates, reporting $11.59 billion versus a projected $11.65 billion. Earnings per share beat expectations at 70 cents, though net income declined year-over-year. Sales dropped 10% compared to last year, and Nike has been criticized for lagging in innovation and struggling with wholesale partnerships. Hill will face challenges in revitalizing innovation, improving morale, and navigating stagnant U.S. consumer spending when he takes the helm.
Fashion brands Ann Taylor and Loft are returning to Canada through shop-in-shops at Hudson’s Bay stores, the first time since 2020. Developed by Centric Brands, the partnership includes 30 Ann Taylor and 60 Loft shop-in-shops, also available online at TheBay.com. Ann Taylor will offer trend-focused workwear, while Loft will feature fun, feminine styles. This collaboration aims to reconnect with loyal Canadian customers and attract new ones.
And to wrap the updates this week……QVC and USA Pickleball have formed a multi-year partnership, making QVC the exclusive retail and broadcast partner of USA Pickleball. QVC will offer curated shoppable entertainment and exclusive livestream coverage of major pickleball events, including the 2024 Biofreeze USA Pickleball National Championships in November. The collaboration aims to promote pickleball, especially among women 45+, a key demographic for both organizations.
QVC's "On the Court" page will feature USA Pickleball-approved products. This partnership aligns with QVC’s mission to empower women 50+ through its "Age of Possibility" initiative, which celebrates inspiring women like Q50 Ambassador Jennifer Dawson, a former Tennis Pro turned pickleball champion. The partnership seeks to increase pickleball’s visibility while reinforcing USA Pickleball’s goal to make the sport more accessible globally.
Thats all folks…..have a great week.