It’s been two years since DTC brands such as Allbirds, Figs, and Warby Parker took Wall Street by storm in a flood of blockbuster IPOs, and when it was hard to leave the house without running into a slickly produced ad for some industry-disrupting product ready to be shipped to your home.

Higher interest rates, supply-chain snarls, and changes in the digital advertising market may have slowed certain brands’ roll since the peak of the DTC boom, but they’ve hardly fallen off the face of the Earth. Many are just trying to find their footing in a changing economy.

In this new world, Polly Wong, president of Belardi Wong, a marketing agency with 400 active retail clients, told Retail Brew there are two clear trends impacting the sales environment for DTC companies:

• Conversions are down despite continued customer engagement, indicating that brands are still connecting with customers.
• And in a historically uncommon turn of events, affluent shoppers are pulling back on their spending the most among consumers.

Still engaged: Tackling the first issue, Wong said her clients’ “sessions” (any digital interaction with a customer) are rising even as conversion rates (the number of the interactions that turn into sales) decline. In other words, shoppers are still browsing, but not clicking the buy button.

“The challenge is not that consumers are not interested in shopping,” she said. “The problem is that conversion rates are down across the board.”

Keep reading here.—AV

Here’s a classic retail head-scratcher: Your brand wants to pass off product manufacturing to an on-demand partner, but you’re unsure if the quality is there. Fulfillment solutions aren’t always straightforward.

Fortunately, Printful is here to put an end to that ol’ dilemma. They take care of fulfillment so you can focus on growing your biz—no inventory management needed. The best part? Printful puts quality at the center of their ethos.

Fresh off their 10th birthday, they’ve spent the last decade fine-tuning their printing practices, gaining partners like CBS, Comedy Central, Spotify, and NBC along the way. Even better? Printful will even ship you a sample shirt so you can experience their quality firsthand.

Start printing your brand’s legacy.

Beauty giant Coty reported strong revenue in its fiscal fourth quarter, supported by both its mass and prestige divisions, but missed profit estimates as it grapples with elevated input costs.

The company’s net revenue grew 16% year over year in Q4 and 5% for the full year.

In its prestige beauty segment, revenue was up 21% YoY, driven by a 20+% revenue boost for its prestige fragrance category in the quarter, supported by new products from Burberry, Hugo Boss, and Gucci. The company has also been making a prestige skin care push since the spring, CEO Sue Nabi noted, with a goal to double its skin care revenue over the next few years. This effort includes a “revamp” of its Philosophy brand, whose revenues grew by double digits in Q4.

• The company did not address reports last month that Kim Kardashian is in talks to buy back her skin care brand, SKKN.

On Monday, Coty also announced the return of Marc Jacobs Beauty after the brand’s two-year hiatus, after its partnership with LVMH-owned Kendo ended.

Keep reading here.—EC

H&M is calling it quits with suppliers in Myanmar following reports of labor abuses in local garment factories, Reuters reported.

“After careful consideration we have now taken the decision to gradually phase out our operations in Myanmar,” H&M told Reuters. “We have been monitoring the latest developments in Myanmar very closely and we see increased challenges to conduct our operations according to our standards and requirements.”

The retailer joins brands including Inditex, Primark, and Marks & Spencer that have also cut ties with Myanmar factories.

H&M has 39 factories in Myanmar and is currently looking into 20 alleged instances of abuse at them, including wage theft and forced overtime.

Keep reading here.—JS

Today’s top retail reads.

Relief pitching: An unfortunate consequence of the pandemic is that Americans are more stressed now, which means there’s now a growing market for products that offer some relief. (the Wall Street Journal)

Hooray?: Here’s the good news: Major CPG companies have signaled that they’re done raising prices. Here’s the bad news: Consumers are likely still going to pay those previous increases well into next year. (Financial Times)

Avengers, assemble: Tapestry’s latest earnings report was less than stellar but overshadowed by its acquisition of Capri Holdings, which performed even worse. Now, the company faces an uphill battle in a luxury market dominated by titans such as LVMH and Kering. (Forbes)

Feedback frenzy: Retail professionals know that tough conversations at work are required year-round, so we’re making our hit Difficult Conversations at Work course available on demand. Learn how to give, get, and use feedback effectively—on your own time. Buy it now!

Print power: Need a print-on-demand partner that won’t toss quality aside? Printful’s your go-to. They’ve produced top-notch printing for clients like CBS and Spotify for the last 10 years. Try ’em out.*

^{*A message from our sponsor.}

Are you an exec looking to make your next career move or join a board of directors? We’ve partnered with ExecThread, where you can find thousands of confidential job opportunities and board roles that aren’t listed anywhere else. Check out positions like:

• CEO of a food and beverage company
• Head of data analytics in consumer goods
• VP of transportation at a third-party logistics organization
• and more exec-level roles in the retail industry

The numbers you need to know.

This holiday shopping season figures to be one of the most unique in recent years considering e-commerce retailers are expected to navigate the typical hurdles—returns, discounts, and sales volume—using AI.

Salesforce predicts that global holiday sales will reach $1.19 trillion globally, essentially remaining flat on a year-over-year basis. But the company’s latest report says the “savviest” retailers will use predictive and generative AI to stand out from the competition.

• Personalized customer service, promotions, and experiential shopping experiences powered by AI will lead to $194 billion in global online holiday spending, according to Salesforce.
• The report also shared that 17% of shoppers say they’ve used generative AI to inspire purchases.

But consumer sentiment around AI is still fairly complicated. Just over half (51%) of shoppers say that AI is positively affecting their shopping experience, while 77% report preferring brands that offer “personalized recommendations” (a hallmark of generative AI), according to survey data from SAP Emarsys.

• That study found that nearly a quarter (24%) of consumers worry that AI negatively affects their shopping experience, and 86% want to interact with humans instead.
• But the improving technology is blurring those lines: Only 27% said they can tell the difference between humans and an AI chatbot when shopping online.

“The benefits of AI in retail can’t be overstated: not just for brands but for customers as well. It’s clear that, at present, shoppers aren’t entirely convinced on AI’s value—but when used responsibly, AI can truly enhance user experience in everything from receiving the right recommendations to easy purchasing processes,” Kelsey Jones, global head of product marketing at SAP Emarsys, said in a statement.