E-COMM

The Home(made) Edit

One thing’s clear about the pandemic’s DIY boom: No one’s buying their intro to knitting syllabus on Amazon Handmade.

They’re going to Etsy. Revenue at the home of the bridesmaid font more than doubled to $451.5 million YoY in Q3, outpacing Wall Street’s estimates. Similar gains were the common thread across its earnings quilt. 

• The entrepreneurial patch: Active sellers grew to 3.7 million in Q3 from 3.1 million in Q2. 
• The mask patch: Etsy sold 24 million last quarter. 
• The everything-but-masks patch: Sales across its non-pandemic categories jumped 93% YoY. 

Short-term advantages: Heading into the holiday season, Etsy customers know a hand embroidered fanny pack isn’t stitched and delivered overnight—meaning delivery delays plaguing other retailers won’t faze them.

And sellers, CEO Joshua Silverman said, aren’t “constrained in terms of having a supply chain dependent on a few factories or having everything shipped through one or two fulfillment centers.” 

About those 3.7 million sellers...

Whether they’re bedazzling headbands in a walk-in closet or stamping scrapbooks in a college student’s abandoned bedroom, Etsy sellers are largely businesses of one. 

It’s partially because the platform works for them. Schmidt’s Naturals founder and Supermaker: Crafting Business on Your Own Terms author Jaime Schmidt told Retail Brew that selling on Etsy in her business’s early days brought high affinity customers and exposure to wholesale partners. 

• She also notes a high return on ad spend—which could explain the 91.4% surge in ad revenue Etsy generated last quarter.

Here’s the thing. Social commerce is encroaching on Etsy’s DIY storefront territory. So for the site to maintain its momentum past the holidays, it needs more interactive features. Right now, engagement is limited to searching, scrolling, and the occasional product video—leaving Etsy’s 138 million customers hanging post-purchase.

“[Etsy needs] to build on the ‘experience’ of Etsy and also provide sellers the tools for sustaining customer interest, like going live, stories, etc.,” Schmidt said. “There could be more emphasis on the draw of on-demand and small batch manufacturing, allowing for custom, personalized products with fast turnaround.”

WHOLESALE

When Blending Categories Makes Scents

I may not travel farther than the other end of my couch for the holidays, but now I can make it smell like a manor house. DTC candle brand Otherland is headed to IRL shelves in a new Sephora partnership. 

• Otherland’s $36 candles will be sold in 140 stores and on Sephora.com.
• It’s the first DTC candle brand to grace Sephora’s shelves. 

I don’t think anyone repurposes burned candle wicks for eyeliner. So why’s Sephora getting lit?

“We think of our candles as more than just a home decor product—they meet at the intersection of design and beauty,” Otherland CEO Abigail Cook Stone told Retail Brew. 

• “With Sephora’s incredible track record of curating beauty and wellness products [...] expanding our wholesale presence into beauty was a natural next step,” Cook Stone said.
• Plus, the customer who’s splurging on $60 eyeshadow palettes is likely one who appreciates upscale ambiance.

Zoom out: Candles are the exception to a slump in premium scents. Overall fragrance sales dipped in Q2 per NPD data, but candle sales jumped 13%. Sephora’s VP of fragrance merchandising told Glossy that candle sales have climbed at the retailer since March. 

SPONSORED BY ORACLE NETSUITE

Oh Sweet Physical Inventory Relief

Some bad news: Physical inventory counts are a necessary evil for just about every company that manufactures, distributes, or sells products. 

Some good news: The masterminds at Oracle NetSuite created an infographic to take the pain out of physical inventories. 

Their infographic: Avoid the Pain of Manual, Physical Counts highlights 6 tips for tackling physical inventory counts to teach you how inventory and warehouse management systems can help make physical counts faster, easier, and less frequent.

Download the infographic to learn how physical counts enable businesses to:

• Confidently rely on a demand-based production model.
• Keep less inventory on hand.
• Decrease overhead costs associated with storage.

Download Oracle NetSuite’s infographic today. 

APPAREL

One Expansion Doesn't Fit All

Two athleisure brands confirmed their entry into extended sizes this week. But can we call them “size inclusive”? 

Hitting the mark: Ivy Park, the Beyoncé-fronted collection from Adidas, released its second capsule in sizes XXXS–4X this week. The expansion arrives after customers criticized a narrower size range in Ivy Park’s February debut. 

• Ivy Park now uses a system called “Unite Fit,” a new sizing method for gender neutral clothing. 

Not quite there: Lululemon is rolling out extended sizes as part of a broader merchandising overhaul. 

• It’s only for select items and stops at size 20 in women’s—below the range of comparable extended size launches. 
• The expansion comes seven years after former CEO Chip Wilson said Lululemon wasn’t intended for women who wear larger sizes.

Why the difference matters: Shoppers who wear extended sizes are underserved by major apparel brands, despite their spending power. Brands don’t have a universal definition of an “inclusive” size range, but Lululemon’s is more limited than others making similar claims. 

My takeaway: When newer players can quickly add a larger range within months, it’s hard not to wonder why a brand generating $4 billion in annual sales doesn’t do the same.

WHAT ELSE IS BREWING

• Amazon reported third-party sales outpaced its first-party business in Q3.
• JCPenney is officially under new ownership. 
• Pier 1 Imports is back—but online only.
• Walmart is piloting AR-enhanced stores.
• Tapestry finally figured out how to ease off the discounts.

SPONSORED BY ITERABLE

This Halloween, bring your customer journey back from the dead. Iterable’s Lifecycle Mapping Guide explains how you can build a customer journey that engages and retains your customers for life. Their white paper has no tricks, only treats to help you lead your customers down the perfect path. Download Iterable’s Lifecycle Mapping Guide today.

SPOOKY SKUS

Sorry, I couldn’t resist the title change. Here are the best Halloween retail reads to send you into the weekend. 

• Home Depot’s fall hit wasn’t an outdoor heater or bathroom tile. It was a $300, 12 ft. tall decorative skeleton. (WaPo)
• Dogs dressed as Minions. Cats wrangled into Stranger Things outfits. In a challenging year, pet Halloween costume sales are more resilient than analysts expected. (Business Insider)
• As for the adults, they’re ditching the sexy costumes and dressing as...toilet paper? (NYT)

FRIEND OR FAUX?

Below are three true retail stories and one lie dressed up as clickbait. Which is fake?

1. The NRF issues holiday warning that ugly sweater sales could tumble.
2. Classic toy brands aim holiday marketing at nostalgic parents.
3. White Castle will staff its kitchens with burger-flipping robots.
4. Celebrities pour investments into weed-infused soda brand.

Keep scrolling for the answer.

ICYMI

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

• Everything Retailers Need to Know About TikTok’s Shoppable Ads
• How Telfar’s Shopping Bag Won Q3
• DTC Brands Share Their Hacks for Building Sticky Referral Programs

FRIEND OR FAUX? ANSWER

1. Nope, the NRF hasn’t shared any insights about ugly sweater sales this year.