DTC brands are losing their competitive edge over traditional retail, as difficulties with supply-chain management make it harder to compete with major players. According to Diffusion’s annual Direct-to-Consumer Purchase Intent Index, just 12% of consumers preferred to shop with DTC brands because they offer fast and free shipping, down from 57% in 2022.

Brick-and-mortar retailers, such as Walmart and Target, continue to invest in expanding their e-commerce and delivery capabilities—chipping away at what was once a crucial differentiator for DTC brands—at the same time that supply-chain challenges hamper the entire industry.

Indeed, many big-name DTC brands emerged prior to the Covid-19 pandemic, when supply chains were under less pressure globally. Now, they have to adapt to survive and thrive in the post-pandemic economy.

Supply chain middlemen

These circumstances have required some DTC brands to walk back one of the core tenets of the DTC model: making direct sales to customers. Rather than controlling the entire sales process from online purchase to shipping, brands such as Allbirds, Solo Brands, and Peloton are relying more on wholesalers.

The motivation for this pivot is that wholesalers allow companies to buy in greater volume, creating cost efficiencies on the supply side—if not big profits.

Fabricio Miranda, founder and CEO of Flieber, a technology company serving omnichannel businesses, told Retail Brew that “in some cases, they even lose money on the wholesale sale, but the quantity and the volume that they bring allow them to have much better efficiency on the supply-chain side.”

Keep reading here.—AV

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Operating a business is about making money, but creating a workplace where employees feel welcome is an important piece of the money-making puzzle.

That was the topic of discussion when Todd Corley, SVP of inclusion, sustainability, and community at Carhartt, took the stage at the eTail Boston conference last week. Corley laid out why diversity, equity, and inclusion (DE&I) are valuable for retailers, and how those efforts work in tandem with Carhartt’s sustainability and community development initiatives.

• At its core, DE&I work, as Corley explained it, is about creating an environment where employees feel like they belong in the organization, while taking into account individuals’ skill sets and ability to add value.
• And workers value companies that stay true to their DE&I efforts: 80% of respondents to a July survey from The Muse said they’re more likely to search for new work in the next year because their companies have pulled back on their “diversity commitments.”

“Doing more means all those work streams that we’ve talked about, adding business value, but also hopefully adding value to the communities in which we serve, and people feeling good about coming back, shopping more,” Corley said.

Keep reading here.—KM

Tinned fish like sardines and smoked mussels, as Retail Brew reported recently, has gone from being something relegated to your grandparents’ pantry to an exploding trend with Gen Z consumers, thanks to viral videos extolling the products on TikTok.

• Videos tagged #tinnedfish have been viewed 82.7 million times, as of August 30.
• Sales of canned seafood in the US grew nearly 10% last year, to $2.7 billion, according to Euromonitor International data cited by the Wall Street Journal.

While tinned fish might be enjoying a resurgence on these shores, the fervor has been a constant in southern Europe, particularly Spain and Portugal, where it’s known as conservas.

So it’s fitting that it’s a Portuguese brand that just made the most big-fish retail-store statement you can make in the US: opening a store in Times Square.

Keep reading here.—AAN

Today’s top retail reads.

Keeping up: Trends in retail are always evolving and don’t just need to be examined at the end of the year; what was hot five minutes ago might be an afterthought now. (The Robin Report)

Talk to me: Logistics firms have been examining how AI can better streamline the fulfillment process, but they’re running into some snags when attempting to incorporate chatbots. (the Wall Street Journal)

Check, please: The Cheesecake Factory was once a small, family-owned bakery, but in 45 years has evolved into one of the largest restaurant chains, known for its expansive menu. (Insider)

Hiring an influencer? Crafting the perfect partnership can be tricky, so Marketing Brew crafted a handy guide to the creator economy. Download it here.

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The numbers you need to know.

Labor Day is just around the corner, and it marks the last major spending holiday ahead of the holiday shopping season. But data suggests retailers and small businesses should temper their expectations when it comes to consumer spending this Labor Day, as inflation, job security, and pay weigh on consumers’ minds.

More than half (55%) of Amerians say they will spend less on Labor Day this year compared to 2022, according to a WalletHub survey. Also, compared to last year, 14% fewer people said they’ll go Labor Day shopping in 2023.

• A whopping 61% of respondents said they are less likely to travel for Labor Day this year.
• In fact, it seems people have already scratched that travel itch: A separate survey from Accrue Savings found that 45% of Americans overspent on vacations this summer.
• And nearly a fifth (17%) said they went into debt because of traveling, which includes 1 in 5 Zoomers.

The breakdown of how people spent their summer travel money this year is food (25%), gas (19%), and entertainment (15%), according to WalletHub. People also want better financial compensation from work to keep up with inflation—87% reported wanting a raise this year.

• For some others, it’s not a matter of receiving a raise but rather simply keeping their job: 23% more people said they are worried about their job security this Labor Day compared to last year.

“Although the government has been successful in decreasing inflation, many Americans’ wallets are stretched thin from the past few years,” WalletHub analyst Jill Gonzalez said in a statement. “Important Labor Day costs like food (especially meat) and gasoline for travel remain high, which is likely forcing many people to cut costs and have more restrained celebrations.”