Morning Brew - ☕️ Full circle

The Korres in-store recycling lab is giving beauty empties a second chance.
Morning Brew June 07, 2022

Retail Brew

Black Crow AI

Hey there. You might not have seen it coming, but today is National VCR Day. Roll the tape on Blockbuster and Family Video, two companies that we never got to cover.

In today’s edition:

Erin Cabrey, Jeena Sharma

SUSTAINABILITY

Cap it off

Korres in-store recycling lab Korres

At the new Korres store in Manhattan, it’s not just about selling bottles of its Greek-inspired serums, creams, and cleansers, but also giving empties a second life.

If you head past the shelves of skincare products to the back of the brand’s 750-square-foot Nolita store, which opened last month, you’ll find a recycling lab, where Korres, in partnership with the New York City chapter of recycling nonprofit Precious Plastic, converts used plastic packaging into new products.

  • Consumers can bring containers from any brand, not just Korres (whose packaging is 90% recyclable), to be recycled at the lab; they’ll be made into soap dishes given as a gift with purchase.
  • The store—which also features jar lids and drawer pulls made from recycled plastic—will be hosting recycling events for shoppers to see the ~15-minute process in action.

It’s the company’s second recycling lab, a much more intimate one compared to its Athens-based facility, which opened in 2020. There, used packaging is transformed into a number of items—like combs—and the lab has recycled one ton of plastic, one ton of paper, and almost 450 pounds of glass thus far.

Break it down: As Precious Plastic NYC co-founder Gary Dusek puts it, the new lab is essentially a “Play-Doh fun factory for plastic.” In an in-store demonstration, cleaned and sorted plastic—in this case, caps—were shredded through a machine into large plastic flakes, which were then moved to a machine with a heated tube for 10 minutes to be crystallized and liquified. Finally, that melted material was injected into an aluminum mold to produce a soap dish.

The machines, created by Precious Plastic, are open-sourced for anyone to replicate. “It enables us not to necessarily change as much the consumer model, it enables us to actually improve the consumer model in that [they] consume the same and waste less,” Dusek said.

The Korres in-house recycling lab is aimed at making the 26-year-old brand’s circularity claims “tangible” for consumers, co-founder and chief innovation officer Lena Philippou-Korres told Retail Brew. That participation in the process is something that consumers are “hungry for,” she noted.

Click here to read why stores need something “extra” to draw in shoppers.—EC

        

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INTERNATIONAL

Let’s go to the mall

Reopening sign Francis Scialabba

China’s zero-Covid policy meant that, for months, malls in the country were shut, people were stuck inside their homes, ports were crowded, and all in all, retailers were having a hard time.

But now, the country is easing up.

Renewed hope: Shanghai, for example, recently said that it will forgo “unreasonable” restrictions on businesses, allowing some malls to reopen and customers to return to shopping.

  • Beijing is also loosening some restrictions this week—though a few remain, like businesses being capped at 75% capacity.

Reopening malls will help retailers “substantially,” John Mercer, head of global research at Coresight, told Retail Brew in an email, “as evidenced by [the] corresponding slump in retail sales that occurred in April in response to lockdowns.”

  • Retail sales in China dropped ~11% that month, he noted, “with key discretionary sectors such as fashion, beauty, and jewelry each down by around one quarter, year over year,” citing Coresight data.
  • Burberry said in May that ~40% of its distribution in China was impacted as stores were shuttered, while Estée Lauder lowered its forecast.

Slow and steady: But it’s not just the foot traffic in stores that will pick up. With workers returning to ports, Mercer believes that the global supply-chain crisis is likely to see improvement. This might be especially significant for ports like Shanghai, which processed 3.4 million 20-foot containers in May alone, according to the Shanghai International Port Group.

The recovery, however, might not be swift as Covid outbreaks could spark more restrictions, Mercer added. “Two years ago, we saw something of a ‘revenge spending’ trend, but retail in China now appears to be operating with the sword of Damocles hanging over it, with any further Covid-19 outbreaks likely to prompt further lockdowns,” he said.—JS

        

WHAT ELSE IS BREWING

  • Target said its profits will drop due to extra inventory. The company will mark down unwanted items and cancel orders in response.
  • Kohl’s has entered talks to be acquired by Franchise Group Inc., the owner of Vitamin Shoppe. The deal could value the retailer at about $8 billion.
  • J.M. Smucker warned it could lose out on $125 million this year due to the recall of Jif peanut butter.
  • Apple Pay is introducing a buy now, pay later feature.
  • Peloton’s CFO is leaving the company; Amazon Web Services exec Liz Coddington will take over.
  • Taco Bell will open a new Minnesota location with a four-lane drive-thru to cut back on service time.

TOGETHER WITH SALESFORCE RCG

Salesforce RCG

Survival mode  thriving mode. Retailers had to get crafty to stay afloat these past two years. But what now? Salesforce talked to 1,600 global shoppers and more than 1,000 retail execs about brand loyalty and the new rules of engagement—and laid it all out in the Connected Shoppers ReportStaying relevant starts here.

SWAPPING SKUS

Today’s top retail reads.

Back to back: 11 years after selling Honest Tea to Coca-Cola—which discontinued it last month—the brand’s founders are getting back into the tea biz. (Insider)

A new approach: From diversifying customer communication methods to introducing drop models, here are some ways that clothing retailers can tackle supply-chain issues. (Business of Fashion)

Logged in: Upcycling is going digital as the world’s first AI designer debuts her first line of sustainable clothing this Sunday exclusively in the metaverse. (WWD)

Have a say in what you see around here. Join The Breakroom, an elite group of Brew readers who share insights and ideas to help us put out the kind of content you’ll love. Psst: You also get exclusive Brew benefits for taking part. Learn more here.

TIME MACHINE

a vintage Pepsi gif PepsiCo via Giphy

What happened in the world of retail this week in…1898 and beyond? Retail Brew takes you way, way, way back.

This week you won’t believe you read the whole thing:

  • On June 5, 1898, Italian luxury-shoe designer Salvatore Ferragamo was born, the 11th of 14 children.
  • On June 5, 2018, Kate Spade, the fashion designer known for her handbags and other accessories, died by suicide at age 55. (Last month, Ulta apologized after it sent a promotional email for a fragrance named for the late designer with what it called “a very insensitive” word choice: “Come hang with Kate Spade.”)
  • On June 8, 1965, Pepsi-Cola merged with Frito-Lay to form the company we know today as PepsiCo.
  • And, in case you overdo it on the Pepsi and Fritos, on June 9, 1931, you’ll be relieved to know that the trademark for Alka-Seltzer was registered.

If you, or someone you know, are having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK). For more resources, click here.

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Written by Erin Cabrey and Jeena Sharma

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