In part one of this series, we toured New Balance's Methuen, MA factory, the latest component of New Balance’s “made in America” vision. In part two of this series, we detail their broader vision and the company's challenges with domestic production.

“Made in America” sounds nice, but what does it take to fulfill the promise of manufacturing products in the US? It’s not easy, but New Balance is stepping up to the challenge. The 116-year-old Boston-based footwear manufacturer has five US facilities between Massachusetts and Maine that employ roughly 1,000 workers.

Joe Preston, New Balance’s CEO, summed up the top-line benefits of “Made in America” production in three words: “control our destiny.”

New Balance aims to strike a…well, balance between domestic and overseas production in a meaningful way. From a supply-chain perspective, it’s easier to reach the market. And second, from a consumer standpoint, the company can get closer to shoppers.

• “The closer we can get from when they’re purchasing the product and using it, and being able to react from that, makes us much stronger,” Preston told Retail Brew in an interview.

Prior to the pandemic, New Balance had ramped up production, COO Dave Wheeler told Retail Brew. But disruptions of the global supply chain have made it abundantly clear that local production is extremely critical to the overall resilience of the company’s supply network.

Keep reading here.—KM

Well, it’s that time of year again….halfway-earnings calls time, that is. Dire warnings from Walmart and mass layoffs at Shopify dominated the first few rounds of calls, but marketplaces like eBay, Etsy, and Amazon were among those that outperformed analyst projections in Q2, due in part to third-party sales and ad spending.

Setting the scene: “There was a lot of concern on the e-commerce side because we saw some pretty weak numbers coming out of Target, Walmart, they’re cutting guidance…they’re also noting slower consumer spending,” Arun Sundaram, VP of equity research at CFRA told Retail Brew.

• Walmart stock tumbled in July after the retailer cut its profit outlook for the rest of the year, and Target, which is expected to announce Q2 results later this month, warned that dealing with excess supply would mean a “short-term hit” to profits.
• “We thought a lot of that would trickle in and impact Amazon but we were actually kind of pleasantly surprised with Amazon earnings,” Sundaram said. “They don’t seem to be as impacted by some of these macro factors.”

Mixed sales: Amazon’s third-party sales are an important data point, Sundaram said. While first-party sales (inventory owned by Amazon) dropped, revenue from third-party sellers increased by over 9%.

That’s partly because of a fuel and inflation surcharge for sellers Amazon implemented back in April, he explained. But that doesn’t mean third-party sellers weren’t still winners in Q2.

• “Even excluding that, I think that third-party businesses are doing a little bit better than their first-party business,” Sundaram said. 57% of all goods sold were third party, “and that’s actually the highest in Amazon history,” he explained.
• The increase in third-party sales was also good for Amazon’s ad services, which was partly responsible for the platform’s overall revenue growth, because those sellers tend to be ad purchasers, Sundaram added.

All about the ads: Elsewhere in e-commerce land, while Etsy reported a small decline in gross merchandise sales, it posted 10% YoY revenue growth overall, plus around 6 million new customers. The platform’s execs attributed part of that growth to ad revenue.

• “Etsy Ads revenue has grown 516% over the last five years,” CEO Josh Silverman said on the Q2 earnings call.
• EBay reported a dip in online sales, but surpassed overall revenue expectations, in part thanks to advertising services. EBay’s first-party ads grew 2%, the company said.

“We’re seeing marketplaces outperform expectations because brands are looking for alternatives to paid media,” said Kurt Elster, whose agency, Ethercycle, works with Shopify merchants to increase ROI. “Marketplaces are a low-risk way to reach new audiences and drive up brand impressions.”—MA

Earlier this year, Retail Brew looked into how companies like Chipotle are experimenting with BeReal, the social media platform that, just until May, had surpassed 7.5 million in downloads. Last week, Marketing Brew’s Maia Botek dug into how even though the app prohibits advertising, brands are finding ways to be creative with it regardless:

“BeReal champions steering away from influencer culture and prohibits advertising, but some brands have gotten creative, especially with real-time posts.

Chipotle has posted promo codes for free entrées (which were gone in about 30 minutes the first day and subsequently ran out almost immediately) to its then-2,000 friends on the app, its director of social and influencer told Retail Brew in May, though its following there pales in comparison to its 1.1 million followers on Instagram and 1.7 million TikTok followers. Trident, PacSun, and Love Island, among other brands, have hopped on the trend of posting BeReal-style photos to Twitter.”

Read more on how companies are using BeReal’s trendiness to their advantage.—JS

Today’s top retail reads.

Dragging their feet: Long overdue, brands are introducing lines of running shoes specifically designed for women’s feet that are not just resized men’s shoes. “For the most part, it wasn’t happening at all before,” said NPD’s senior industry adviser for sports Matt Powell. “I think it’s been a secret for the industry that brands were selling women’s shoes that were made for a man’s foot.” (Retail Dive)

Kettle of fish: Fish oil has become a billion-dollar seller in the supplement industry, but studies about its health benefits can be contradictory and underwhelming. (The Atlantic)

Kelp is on the way: A seaweed-farm pilot program is underway in European waters, and companies, including Unilever, are backing the effort to harvest the food and cosmetic staple. (BBC)

Learn: Connect with other leaders and dive into the tactics of leadership—including hiring, delegating, strategy, and execution—with the Brew’s Leadership Accelerator, starting in September.

A reminder about Retail Brew’s newest debut: The Sku: A Retail Brew Summit. FOMO is real, friends.

Here’s what’s on the agenda:

• Meeting demand and maximizing profit
• Managing your organization across channels
• Creating omnichannel engagement with customer journeys
• Sustainability: who is doing what and how?
• Using technology to drive sales

Advanced pricing ends soon! Register now to save your seat (and some $$). Only $549 for a limited time!

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Buy now, pay later—better known by its dull-bladed acronym that shaves off only a syllable, BNPL—is something that many shoppers, in every sense of the word, have bought into.

• BNPL transactions in the US will reach $75.6 billion in 2022, a 77.3% YoY increase, according to Insider Intelligence.
• Gen Z is more likely than any other age group to use BNPL, with 55.1% of them using BNPL for digital purchases, Insider Intelligence also found.

But BNPL also is facing challenges.

• Klarna, the Swedish company specializing in BNPL, saw its valuation drop to $6.7 billion in July, down 85% from $46 billion in 2021.

Some consumer advocates and economists caution that BNPL, initially popular for big purchases, is being used for everyday purchases, like groceries and gas, which may foretell consumers getting into debt.

You tell us: What do you think about BNPL?

Circling back: Last week, we prompted you about the fact that more retailers—including Zara, Abercrombie & Fitch, J.Crew, and Kohl’s—that once offered free online returns were no longer doing so. Retailers have cited the expense and increasing rate of returns and the environmental impact of shipping merchandise hither and yon. We asked you what you thought:

• 40% of you said that free-online-returns-by-mail policies should remain in place.
• Almost as many, 36%, thought these policies should be eliminated.
• Another 24% were unsure.

Catch up on the Retail Brew stories you may have missed.

• Hard seltzer sales go soft as low-price beers pick up
• GoFundMe fundraisers for groceries, baby formula, and gas are soaring
• Cleanical skin care promises science-backed effectiveness. Does it work?