This Week in Retail #75
Walmart "Stores of the Future", Amazon hints at July Prime Day, and an early Mother's Day outlook
Hey Friends,
I apologize for this going out late this week. I am in the process of moving and this has unfortunately taken a back seat this week. In saying that, we have some great updates for you guys from the past week.
Earnings season is coming up, as always I will be posting my quarterly earning roundup for Q4 of last year with my analysis on winners, losers and things to watch.
Mother’s Day 2025 spending in the U.S. is projected to reach $34.1 billion, according to the National Retail Federation (NRF) and Prosper Insights & Analytics. This figure represents a modest increase from last year’s $33.5 billion, though it remains slightly below the 2023 record of $35.7 billion.
According to the NRF, Key Spending Insights are below:
Average Spend per Person: Those celebrating plan to spend an average of $259.04, approximately $5 more than in 2024.
Participation Rate: 84% of U.S. adults are expected to celebrate the holiday.
Top Shopping Channels: Online (36%), department stores (32%), specialty stores (29%), and local or small businesses (25%) are the primary shopping destinations.
Despite economic uncertainties, consumers continue to prioritize meaningful gifts and experiences to honor the special women in their lives. The NRF notes that Mother's Day ranks just behind the winter holidays in terms of average spending, underscoring its significance in the retail calendar.
Walmart is launching its "Stores of the Future" initiative in 2025, remodeling over 650 stores across 47 states and Puerto Rico and building or converting more than 150 additional locations. The upgrades aim to enhance the shopping experience with improved store layouts, expanded product selections, updated pharmacy areas, and better support for online pickup and delivery.
Sustainability is a major focus, with energy-efficient lighting and equipment and the addition of electric vehicle fast-charging stations. The project is expected to create tens of thousands of jobs and contribute to local communities. Walmart has shared a partial list of remodeled stores in North Carolina, Virginia, New York, New Jersey, and Pennsylvania, with more updates to come.
Amazon has teased its upcoming July Prime Day, promising “deep discounts” across 35+ categories like electronics, beauty, and apparel. While the company hasn't confirmed exact dates, it emphasized support for small and medium-sized businesses, which now make up over 60% of its marketplace sales. However, many small sellers are scaling back participation due to profit pressures from ongoing tariffs—policies associated with President Trump—which disproportionately affect smaller firms.
Adding to tensions, a Punchbowl News report suggested Amazon might display tariff costs alongside prices, prompting a sharp rebuke from the White House, which called it a "hostile and political act." Amazon denied the plan, attributing it to an unapproved internal proposal. Meanwhile, consumer expectations have plummeted 32% this year, according to the University of Michigan, with inflation expectations at their highest since 1981.
We don’t talk much about marketing campaigns but On Running is investing heavily in it’s partnerships, trying to bottle up as much of their current hype cycle as possible. Their latest campaign, "Zone Dreamers" expands on their partnership with celebrity icon Zendaya, featuring a cinematic project that presents a fictional sci-fi adventure. Directed by Nadia Lee Cohen and styled by Law Roach, Zendaya portrays a space explorer, showcasing On's latest activewear, including the Studio Knit Bodysuit and Cloudzone sneakers. The campaign emphasizes themes of confidence, community, and the power of movement, blending high-fashion aesthetics with a narrative-driven approach.
In 2024, On Running reported sales of approximately $2.6 billion USD, marking a 29.4% increase from the previous year. Net profit surged by 204.5% to CHF 242.3 million. The brand's direct-to-consumer sales grew by 40.3%, with significant growth in the Asia-Pacific region (84.5%) and the Americas (over 25%). On Running's strategic focus on innovation, direct consumer engagement, and lifestyle branding has not only propelled its growth but also disrupted the market dynamics, compelling established brands like Lululemon to reassess and adapt their strategies in an increasingly competitive landscape.
In comparison, Lululemon's market share in the U.S. athleisure sector has decreased, with its website visit share dropping from 15.6% to 14.5% in 2024. Emerging brands like Alo Yoga, Vuori, and Gymshark are capturing consumer interest with fresh styles and competitive pricing.
Zales has launched the "Own It" campaign to resonate with Gen Z consumers by redefining fine jewelry as a form of everyday self-expression rather than just for special occasions. The campaign features bold visuals and messaging that encourage individuals to wear jewelry confidently and authentically. Directed by Marie Schüller and photographed by Hannah Sider, the campaign marks a strategic shift in Zales' branding to appeal to a younger, fashion-forward audience.
Coty Inc., the beauty conglomerate behind brands like Kylie Cosmetics and Burberry fragrances, has announced plans to cut approximately 700 jobs globally. This move is part of its "All-in to Win" transformation program aimed at streamlining operations, reducing complexity, and focusing on innovation. The company has not specified which positions will be affected but emphasizes that the restructuring is designed to create a more scalable and efficient operating model.
Tesco is piloting the use of GS1-powered QR codes in select stores across southern England, replacing traditional barcodes on 12 own-brand meat and produce items. These QR codes store detailed information such as use-by dates and batch numbers, aiming to enhance date code accuracy, reduce food waste, and prevent the sale of expired products. This initiative is part of a broader move towards a more connected and transparent supply chain.
Peloton's Chief Marketing Officer Lauren Weinberg has exited after just a few months, marking continued executive turnover as the company restructures its marketing team. Peloton will now split marketing leadership between a CMO and a Chief Communications Officer, both reporting to new CEO Peter Stern, who joined in January. The shakeup comes as Peloton tries to rebound from post-pandemic struggles and a shifting fitness market.
Weinberg had led recent campaigns to diversify the brand’s appeal—such as an NFL-themed campaign targeting millennial men and a Coors Light Super Bowl collaboration. Historically female-focused, Peloton has been expanding into areas like strength training and yoga to reduce reliance on its hardware. Despite some improvement in sales, profitability—especially in hardware—remains a challenge. Marketing costs were cut by 34% in Q2, and improving efficiency has become a top priority.
Variety Wholesalers has acquired 219 Big Lots stores out of bankruptcy and is reopening 132 of them in May as part of a revitalization strategy. The company finalized the acquisition in January after Big Lots filed for Chapter 11 in September 2024. The reopened stores—spanning 17 states—will relaunch in two waves on May 1 and May 15.
Variety Wholesalers, which also operates Roses Discount Stores and Maxway, is expanding Big Lots’ offerings to include a broader assortment of apparel, home goods, pantry items, and branded merchandise. CEO Lisa Seigies praised the customer response and emphasized the company's commitment to value and community reinvestment.
This reopening marks the second phase of a four-step plan to bring Big Lots locations back to life.
U.S. online retailers spent an average of $403,000 last year on AI for customer experience, but many executives are underwhelmed by the results. According to a Storyblok survey of 300 U.S. and European e-commerce leaders, 30% said AI only slightly improved the shopper experience, though 97% reported a good return on investment. Common AI use cases include customer service (61%), marketing analysis (60%), and content creation (40%).
Despite heavy investments—30% of companies spent over $500,000—executives are seeing more incremental improvements than transformative change. Still, major players like Walmart and L’Oréal are actively exploring generative AI tools, with Walmart launching "Wally" to support merchant operations and L’Oréal using AI to develop marketing assets.
At industry events like Shoptalk and NRF's Big Show, executives emphasized AI’s potential in areas like personalized ads and customer support, but acknowledged its current limitations. Retailers remain in the testing phase, with leaders like Target's CEO noting that the human element will remain crucial for now.
That’s all folks…..Have a great week.