EXPERIENCE

SparkNotes for Shopping In-Store

Without even trying, in-store shopping in the pandemic era became a game: Trips can’t last more than 20 minutes. Touch only what you need to buy. Everything else is lava.

Retailers noticed the mindset shift—and that Covid-19 cases are still rising. So some are tweaking their holiday store experiences for faster checkout times and overall safety.

The small format approach: Apple is opening 50 Apple Express stores, Reuters reports. It’s like a Milk Bar stand, but for iPhones. 

• Stores will have walk-up, plexiglass additions built by the entrance. They’re stocked with small accessories and customer service counters.
• Shoppers will make appointments to pick up preordered items, without having to enter the regular store. 

The big box approach: Target’s expanding contactless payment features, allowing employees to process purchases anywhere in the store on handheld devices. It’ll also double the parking spaces dedicated to curbside pickup and allow shoppers to book store reservations.

• Rest easy, fellow fans of the spontaneous Target run: CEO Brian Cornell suggested that appointment shopping will be a holiday-only feature. 

In-N-Out only

Hitting fast forward means fewer touchpoints for retailers’ typical holiday magic . But it also means retailers can address consumers’ health and safety concerns. 51% of U.S. shoppers in a recent Deloitte study said the pandemic’s making them anxious about visiting stores this holiday season. 

Zoom out: Even the most tradition-bound retailers are recalibrating their Yuletide store experiences to eliminate close contact. Saks Fifth Avenue is dividing its flagship holiday window reveal into small, live-streamed events; Bloomingdale’s is canceling its annual event altogether.

My takeaway: This time last year, retailers introduced features that encouraged shoppers to dawdle in the electronics aisle. Now, the best retail experience is one where customers get in and out efficiently. 

STRATEGY

Time to Change the Channel

Gap’s packing its bags, saying its goodbyes, and leaving home behind—home being your nearest mall. Yesterday, Gap said it will...

• Close ~350 stores across its namesake and Banana Republic brands.
• Generate 80% of revenue from off-mall stores and e-commerce by 2023.

Emphasizing digital sales is retail’s Pomodoro Technique: It’s nothing new or particularly special, yet we’re still a little surprised when it works. In Q2, Gap gained 3.5 million new customers and its digital sales grew 95%. 

Meanwhile, moving stores closer to grocers and nail salons has timely advantages. Open-air centers are more appealing to virus-wary consumers...and rent may be lower than what Simon currently says. 

Another outlet: This one goes out to anyone who grew up at the Exchange instead of the mall. () Gap is also expanding its wholesale presence by partnering with 50+ stores on U.S. military bases. 

My takeaway: Cutting underperforming distribution channels could bring Gap closer to its customer—but to keep them, it’ll need to take the same shears to its product mix. 

SPONSORED BY LISTRAK

When Closing Is Good

Lately, when you hear the word “closing” in a retail context, it's bad news. But today closing is good—especially when it’s about closing the revenue gap.

Have questions about how to do that? We figured, so we’ve teamed up with the masters of digital marketing automation at Listrak to discuss just that.

Trusted by 1,000+ leading brands, Listrak has helped retailers of all shapes and sizes see the power of integrating email, SMS, and behavioral triggers on one platform.

So if you’re looking to close your revenue gap, or wondering how a furniture brand like Jonathan Adler saw 109% revenue growth in just a year, this is an article you must read. 

Check out our article with Listrak here.

LUXURY

October Surprise, But Make It Fashion

I commemorated this bizarre year with an at-home tie-dye kit; the ultra-rich bought souvenir Birkins. Hermès reported revenue jumped 7% in Q3, making it the first luxury brand to return to growth. 

How we got here: When wealthy shoppers couldn’t day-trip to Monte Carlo, they settled for online shopping excursions. E-comm became Hermès’s biggest revenue driver in Q3, even after stores reopened in most regions.

• Online sales increased by nearly 100% in every market.
• Still, Hermès isn’t fully digital. “Very iconic products” will remain in-store only.

Zoom out: In times of uncertainty, luxury shoppers still want to secure the bags. At LVMH, fashion and leather goods sales rose 12% despite a 7% overall revenue decline, led by Louis Vuitton and Dior. 

My takeaway: Analysts originally expected luxury sales to plummet up to 35% this year. If the wealthy keep deploying Vuitton Neverfulls as reusable grocery bags, losses may not be quite as steep.

WHAT ELSE IS BREWING

• Amazon warehouse workers are petitioning for time off to vote, but execs haven't responded.
• Adidas may sell Reebok. 
• Instacart will accept SNAP benefits for online Aldi orders.
• American Eagle will spend $5 million on grants for employees’ higher education. 
• Zara expands to lingerie with a 125+ piece line.
• Etsy is piloting a flexible payments program. 

SPONSORED BY CRITEO OMNICHANNEL SOLUTIONS

Sixty-four percent of shoppers miss going to physical stores, according to a recent survey by Criteo. While online shopping is on the rise due to the pandemic, many physical stores are still open with appropriate safety measures. And if you’re an omnichannel retailer with open stores, you can’t forget about the in-store shoppers who make up a big chunk of your revenue. Oversee all your retail data with Criteo Omnichannel today.

SWAPPING SKUS

Ahead of another Small Biz Saturday, here are my top picks for stories about neighborhood retail fixtures around the U.S. 

• Manhattan’s Koreatown spans two blocks, but it’s home to 100+ small businesses. Those close quarters make adapting to Covid-19 restrictions a challenge. (Grubstreet)
• How the U.S.’s ~120 Black-owned bookstores are fulfilling a crush of orders for books about racial inequality. (Businessweek) 
• Erewhon was once just a very expensive, all-organic grocer. But the pandemic’s converted it into a paparazzi hot spot. (Vanity Fair)

FRIEND OR FAUX?

Like three truths and a lie, but with retail stories instead of dating histories or celebrity sightings. Can you spot the fake headline in the lineup below? 

1. Spirit Halloween is in talks to purchase closing JCPenney stores. 
2. Influencers are buying empty shopping bags from Tiffany and Hermès to appear wealthy.
3. Walmart.com accidentally listed a fetish mask as a Halloween costume.
4. For its 50th birthday celebration, a grocery chain sent a chicken nugget to space.

Keep reading for the answer.

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Nordstrom’s Holiday Shopping Plans Prioritize Customer Service
• Allbirds, Madewell, and Casper Are Testing New Product Categories
• Crocs Won 2020. Where Does It Go From Here?

FRIEND OR FAUX? ANSWER

1. Nope, Spirit Halloween isn’t in official talks to take over underperforming JCPenneys. But it is opening a lot of stores where other businesses used to be.