Morning Brew - ☕ Defying subscription

DTC brand Jolie’s subscription strategy.
August 16, 2023

Retail Brew

Hello, hello. Target today said its sales dipped for the first time in six years in Q2 as consumers spend more $$ on travel and entertainment than clothing and home decor. But Taylor Swift continues to carry the US economy on her back: Among the Target products consumers couldn’t resist was an exclusive vinyl of Speak Now (Taylor’s Version).

In today’s edition:

—Katishi Maake, Erin Cabrey

DTC

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Jolie's modern chrome filtered shower head Jolie

“Set it and forget it”: This common phrase demonstrates the desire for convenience and a worry-free consumer experience.

For e-commerce retailers, subscriptions can provide a more reliable revenue stream. A 2022 report found that 75% of DTC brands will offer subscriptions this year, but as to what percentage of those programs are effective? That’s a different question.

Jolie, a beauty and wellness brand that sells shower filters, believes it’s found a model that works given its product offering, a subscription software platform, and the diversity of its distribution channels. Founder and CEO Ryan Babenzien told Retail Brew a major pitfall for brands offering subscription services is the lack of value added for the consumer.

“There [are] many, many subscription businesses, and they pretend or communicate that they’re out of convenience—and that’s partly true—but there are just certain things that you don’t need on some frequency,” he said. “Apparel is probably the greatest example. Yeah, there are subscription apparel services, but you really don’t need that.”

Time for a reset: Jolie’s shower filters, which appeal to those who don’t want materials like chlorine and heavy metals in their water that can damage or irritate the skin and hair, need to be replaced every 90 days, so it makes sense that customers who value the product will want to sign up for a subscription, Babenzien said.

Keep reading here.—KM

     

FROM THE CREW

How to work with influencers

The Crew

Did you know 69% of creators report that a brand’s relevancy to their audience is a top priority when considering a partnership? Each influencer has a unique voice, perspective, and ability to connect with audiences ranging from niche communities to millions-strong followings. Tapping into these influencers and forging powerful partnerships can be a major boost for your brand.

But creating a beneficial partnership can be challenging, so Marketing Brew created a comprehensive guide to drafting contracts, measuring KPIs, and picking the right influencers to represent your brand. Equip your team with the essential knowledge to venture into this thriving landscape.

Download the guide here.

STORES

Set sale

US retail shoppers Spencer Platt/Getty Images

US consumers upped their spending at retailers in July, with retail sales beating expectations with a 0.7% rise month over month, according to Census Bureau data.

Year over year retail sales were up 3.2%, in line with the higher prices indicated by the July Consumer Price Index released last week.

Grocery store sales were up 0.8% from the previous month and 2.3% year over year, which aligns with the price hikes and strong earnings reported recently by CPG giants like The Coca-Cola Company and Mondelez. Food services and drinking places got a 1.4% bump from June, and had the highest year over year rise: 11.9%.

Online retail sales rose 1.9% from June and 10.3% year over year, likely boosted by Amazon’s “biggest ever” two-day Prime Day event in July, when US online sales rose 6.1%.

Sales at health and personal care stores notched a 0.7% sales increase from the previous month, while clothing and clothing accessories store sales rose 1% and sporting goods stores were up 1.5%. Month over month sales increased 0.8% at general merchandise stores and 0.9% at department stores.

Keep reading here.—EC

     

COMMUNITY

Coworking with Alyx Kaczuwka

Alyx Kaczuwka headshot Alyx Kaczuwka

On Wednesdays, we wear pink spotlight Retail Brew’s readers. Want to be featured in an upcoming edition? Click here to introduce yourself.

Alyx Kaczuwka is director of AI product development at XY Retail, a cloud platform helping retail brands manage stores, customers, and products.

How would you describe your job to someone who doesn’t work in retail? I work at the intersection of tech and retail, understanding the needs of a retail business, the behavior of shoppers, and then creating solutions that bridge the gap between the two—all while keeping customer data privacy and global legal frameworks in mind.

One thing we can’t guess about your job from your LinkedIn profile? I think many people would be surprised at how much creative thinking is involved in my role. Sure, it can be technical, but imagining what’s possible in terms of new ways to improve the retail experience—from the customer experience to every aspect of the supply chain—is a huge part of what I do.

What’s your favorite project you’ve worked on? I’m excited by every implementation we do at XY because the brands we work with are constantly pushing the envelope to deliver the best possible experiences for their customers. We recently deployed at Fender’s new flagship store in [the Tokyo neighborhood of] Harajuku and it’s an honor to be trusted with the in-person, transactional customer experience in such a seamless, immersive, experientially focused store.

Keep reading here.—EC

     

TOGETHER WITH PAYSAFE

Paysafe

Easy payments are always in style. Know how we know? We partnered with Paysafe to learn how their streamlined payment solutions help SMB owners like Keri Blair grow their businesses. Keri used Paysafe’s payment tools to become Denver’s premier personal stylist and image consultant. Get the deets right here.

SWAPPING SKUS

Today’s top retail reads.

Hire-archy: Top retailers from Gap to Victoria’s Secret are choosing men to fill CEO positions previously occupied by women, despite women driving consumer spending and making up the majority of the industry’s entry-level positions. (the New York Times)

Return to form: While some have made efforts to make the process less wasteful and more sustainable, beauty product returns continue to be tricky for retailers. (Beauty Independent)

In hot water: A deep dive into the ongoing sriracha shortage, spurred by the tenuous red jalapeño supply chain. (The Atlantic)

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Written by Katishi Maake and Erin Cabrey

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