Morning Brew - ☕ Here comes (more) trouble

FTC lawsuit adds to Amazon’s recent woes.
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June 26, 2023

Retail Brew

Square

It’s Monday, and some of you might be just getting back to your desk after attending the psychedelic conference in Denver last week. One question: Did you have a good trip?

In today’s edition:

—Katishi Maake, Andrew Adam Newman

E-COMMERCE

Tough look

Gavel coming down on the Amazon logo Francis Scialabba

Suffice it to say, Amazon CEO Andy Jassy is straight up not having a good time right now.

Last week, the Federal Trade Commission filed a lawsuit against Amazon, alleging the company manipulated its customers into signing up for Prime and purposely made it more difficult to cancel the subscription service.

The suit alleges Amazon implemented deceptive design tactics called “dark patterns” that duped users into signing up for Prime, made it more difficult for customers who didn’t have the service to make purchases, and purposely complicated the cancellation process.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina Khan said in a statement to the New York Times.

Amazon denied the allegations in a statement that appears in the New York Times and other outlets (and that was emailed to us). “The FTC’s claims are false on the facts and the law…we make it clear and simple for customers to both sign up for or cancel their Prime membership,” it claimed.

The FTC lawsuit is the latest in a bevy of legal and regulatory battles Amazon has faced. The Everything Store is also facing labor and cost difficulties, as Jassy highlighted in a letter to shareholders in April.

Keep reading here.—KM

     

SPONSORED BY SQUARE

The thrill of the shop

Square

In the constantly changing retail industry, there’s one thing we know for sure: Customers want experiences. They’re looking for exciting, exclusive, and interesting new ways to interact with your brand.

Think text message shopping, in-store events…*anything* to bridge the gap between online and traditional in-store shopping. And Square breaks it all down for you in their Future of Retail Report.

Square teamed up with Wakefield Research to survey 500 US retailers and 2k consumers ages 18 and up for insights on:

  • the top retail trends of 2023, from virtual reality experiences to the emergence of the multi-hyphenate retailer
  • tools and strategies to help you bring your ideas to life in store

Up your retail game.

RETAIL

Glass ceiling, shattered

Piles of clothes Francis Scialabba

Certain segments of retail are more popular with men (or women) than others, both in terms of the customers the brands in the space target and those leading the brands themselves.

The men’s clothing market has historically been smaller than women’s clothing, and women CEOs in the energy drink industry are few and far between. Here, we’re highlighting a handful of retail startups that are attempting to shift the narrative and stand out.

In apparel: Collars & Co. founder Justin Baer won over Mark Cuban with a $300,000 investment on an episode of Shark Tank that aired last November. In the time since the episode, the menswear brand has seen a nearly 400% increase in sales.

  • Riding this newfound success, Collars & Co. opened its first retail store in Chicago on June 9.
  • The company started out by specializing in polo shirts but has since expanded to sweaters, button-downs, accessories, and also a women’s collection.
  • The IRL retail location allows customers to see and feel the brand’s products up close before making a purchase. Baer specifically touted their performance dress shirts that use a “stretchy material” to retain their shape.

“As an online business, we’re seeing rising acquisition costs in online marketing,” Baer told Yahoo. “We’re still driving the majority of our business through Facebook and Instagram, but we’re always looking to find new customers and channels.”

Keep reading here.—KM

     

CUSTOMER EXPERIENCE

Best in show

image of a dog in a rain coat from a Chewy ad Chewy

Nothing makes Buster happier than when you open up the just-delivered Chewy box and, because he’s such a good boy, reward him with a Pup-Peroni.

But it’s Chewy itself that’s feeling like your best friend these days.

Chewy was recently named the top company for customer experience (CX) in Forrester’s annual US Customer Experience Index Rankings, its second year in a row clinching the top spot. The other retailers that ranked in the top 10: HEB, the supermarket chain (third); Etsy (fourth); Trader Joe’s (sixth); and Tractor Supply (10th).

Belly rub: The rankings covered 221 brands across 13 industries, and were based on an online survey of 96,134 consumers who’d interacted with a specific brand within the last 12 months.

  • Among the 41 retailers in the survey, on a scale of 100, the average rating was 74.4.
  • Chewy’s rating was 84.2, up from 83 last year.
  • In 22nd place was Amazon, with a rating of 73.9.
  • Walmart’s rating was 69, ranking it next to last; Dollar General, at 66.5, was the caboose.

Keep reading here.—AAN

     

TOGETHER WITH IMPACT.COM

Impact.com

Increase your influence(rs). Consumers want authenticity and meaningful connection, and they love to find it with their fave influencers. Need a road map to the intricacies of influencer marketing? Consult impact.com’s Ultimate guide to influencer marketing. Learn how to set impactful influencer content into motion that’ll captivate and convert.

SWAPPING SKUS

Today’s top retail reads.

Thru for a loop: Some cities are banning new drive-thrus, citing congestion and the diminishment of pedestrian environments. (CNN)

On the Dole: Why bananas are so cheap: “The short answer is basically labor costs: Even though workers in US agriculture do not earn much, farmers and workers in places like Ecuador and Guatemala earn even less,” said John Soluri, an associate professor of history at Carnegie Mellon. (Marketplace)

Poking The Bear: Celebrity chef Rick Bayless criticized The Bear, the critically acclaimed FX show about a family restaurant in Chicago, for making the restaurant trade look “like the worst profession in the world.” (Eater)

Decrease drop-off: A 5-star customer experience makes the difference between a completed sale…and a complete flail. Tune in to Retail Brew’s virtual event for retail’s latest and greatest do’s and don’ts, sponsored by Cloudinary.*

*This is sponsored advertising content.

HOT TOPIC

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.

Last week, the FTC filed a lawsuit against Amazon for allegedly “tricking and trapping” customers concerning Amazon Prime. The lawsuit alleges that Amazon deploys “dark patterns” to get consumers to enroll in Prime without their consent and that the process of canceling Prime, which requires six clicks, is onerous.

You tell us: Are you rooting for the FTC or Amazon in the lawsuit that claims Amazon violated consumer-protection laws? Cast your vote here.

Circling back: Last week, we told how, in France, Finance Minister Bruno Le Maire said that 75 major food companies had agreed to cut prices on hundreds of products, a response to prices hitting record highs in recent months even though the costs of many ingredients in the products have been dropping.

So we asked you: If US federal officials determined food brands were making undue profits during an inflationary period, would you be in favor of the government stepping in to get food companies to drop prices? More than two-thirds of you (66.1%) said yes, you would be in favor of the government stepping in to get the food brands to lower prices. Another 30.4% were laissez-faire, saying no, you’d be against the government stepping in, while 3.6% didn’t know or weren’t sure.

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Written by Katishi Maake and Andrew Adam Newman

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