Morning Brew - ☕ Rocking the boat

Coyuchi’s COO on the importance of taking up space.
June 07, 2024

Retail Brew

LTK

It’s Friday, and we’re enjoying this extraordinary pescatarian gesture from hip-hop artist Flavor Flav: A devotee of Red Lobster, which filed for bankruptcy last month, he took family members to a Red Lobster recently and ordered every item on the menu.

“Ya boy said he wuz gonna do everything to help Red Lobster and save the Cheddar Bay Biscuits,” he explained in an Instagram post. We appreciate this enthusiasm for biscuits.

In today’s edition:

—Jeena Sharma, Ryan Barwick

STRATEGY

Shifting perspectives

Coyuchi COO Marcus Chung Coyuchi

Voices of Tomorrow is a recurring feature highlighting PoC who are reshaping the retail industry.

As a brand that’s been around for 30 years, Coyuchi has established itself as a purveyor of sustainable home textiles with everything from organic bedding to bathrobes.

The retailer has also expanded into areas like home decor and kitchen linens in recent years. At its operational helm is COO Marcus Chung, who joined two years ago and has since taken on projects like integrating secondhand products into its site. Prior to Coyuchi, Chung also worked at retailers such as The Children’s Place, Stitch Fix, and ThirdLove.

In an exclusive with Retail Brew, Chung opened up about his work at Coyuchi, how the home goods industry has changed, and the challenges PoC in the industry face.

This interview has been lightly edited for length and clarity.

How do you feel the home goods industry has changed in recent years alongside the focus on sustainability?

I think [sustainability] has definitely become a trend. You see more and more brands talk about “organic” in particular, or different sustainable materials. There’s a customer out there who absolutely cares about sustainability and impact. We consider ourselves to be differentiated in a few ways. One is that we’re very focused on certifications. So I don’t know how many brands can say that they’re GOTS, which is the global organic textile standard. That’s a degree of rigor that’s really hard to achieve and really requires you to look at not only your supply chain, but also your own operations.

Last month, we had our auditor come on site and look at our headquarters to make sure that our practices and how we treat our own employees is consistent with their standards. So it’s not an easy certification.

But for the consumer, that’s one way they can tell that the company or brand is really doing what they claim to be doing. Because there’s so much opportunity in the supply chain for people to claim one thing, but the practices aren’t actually happening.

Keep reading here.JS

   

PRESENTED BY LTK

Unlock creator marketing

LTK

Ready to take your retail media strategy to the next level? Tap into the power of creator marketing with The Creator 360 for Retail Media from LTK.

In this collaboration with Northwestern University’s Retail Analytics Council, The Creator 360 for Retail Media explores insights about the state of retail media. You’ll learn about the benefits of creator marketing programs and best practices based on real-world examples.

Get the full scoop on:

  • data from the LTK x Retail Analytics Council study
  • predictions for the year ahead
  • best practices + real-life retail media network examples

And to help you dive right in, you’ll get information on how to create a pilot package. Grab your copy here.

OPERATIONS

Retail-oriented

Shopper at mall Mark Makela/Getty Images

Following a “fairly flat 2023,” Moody’s latest consumer products and retail and apparel global outlook reports predict a “modest adjusted EBIT” for the global retail and apparel industry, along with physical retail revenue growth of 1% to 3% over the next 12 to 18 months.

The current consumer spending pullback may impact a large portion of the retail industry, particularly in discretionary sectors. However, this also means food, drug, value, and off-price retailers will likely benefit from cash-strapped consumers looking for deals, the financial intelligence company observed.

In fact, Moody’s predicts “an earnings boost” for off-price and value stores. Meanwhile, the home improvement sector may take a hit, particularly in North America.

Steady but slow: Another area of retail that will likely see slower growth is the beverage category, whose operating profit is estimated to grow 3% to 6% over the next 12 to 18 months.

To consumers’ relief, everyone’s (read: our) favorite sector—packaged food companies—won’t rely as much on raising product prices, according to Moody’s forecast, and are likely to grow operating profit 3% to 5% in the next year and a half. Big international companies are also likely to see more growth.

And while this year might not bring good news for all categories, durable goods will see profits grow 3% to 7% by 2025, thanks to better demand, Moody’s noted.

Still, it looks like retailers should be prepared for “significant risks” this year as consumer recovery could be hindered by factors like high interest rates, inflation, and an unstable global geopolitical environment.—JS

   

MARKETING

Targeting practice

Costco earnings Cris CantóN/Getty Images

Advertisers could soon be targeting hot-dog-combo enthusiasts who buy toilet paper by the truckload.

Costco is building out an ad network built on its trove of loyalty membership data, using its 74.5 million household members’ shopping habits and past purchases to power targeted advertising on and off its website.

The wholesale retailer is still testing such capabilities, and it’s fielding offers from potential ad-tech vendors, but the move signals that the third-largest retailer in the US could become a formidable player in the already deeply fragmented retail media space, which is estimated to reach $166 billion by 2025, and responsible for 20% of all digital media spend this year, according to eMarketer.

Keep reading at Marketing Brew here.RB

   

TOGETHER WITH NIFT

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SWAPPING SKUS

Today’s top retail reads.

Claw and order: Red Lobster announced it intends to close dozens more restaurants if bankruptcy court approves. (CNN)

Grande prix: Starbucks will partner with Grubhub for coffee delivery, adding to the coffee giant’s availability on DoorDash, Uber Eats, and Postmates. (Reuters)

Blazing saddles: How e-Cargo bikes could reshape last-mile delivery. (Marketplace)

Ready for launch: Get a crash course in launching a creator marketing program for your brand or retail media network with LTK’s white paper. Learn about the state of retail media, best practices, + more. Read on.*

*A message from our sponsor.

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