CONSUMER

How Retailers Are Handling Election Week

Retailers prepped for every possible result in the run-up to Election Day 2020, including what we’ve got: a morning after without a winner.

Online…brands pushed sales over the weekend before hitting a promo pause on Election Day. The reason? Regardless of outcome, U.S. voters typically skip shopping the day after.

• In 2016, online sales declined 14% on the day following the presidential election, according to Adobe Analytics data shared with Retail Brew. 
• Overall consumer spending fell 6% YoY during the weeks of the past two presidential elections, per Epsilon’s Abacus data.

In-stores…retailers from Macy’s to Tiffany to Target boarded up windows at select locations, in case of social unrest following election results. 

• Luxury brands and flagship stores in large cities are leading orders for enhanced security materials, Bloomberg reported.
• It’s unclear when retailers plan to roll back these measures.

With workers...many had their employer’s blessing to spend the day at the polls. The nonpartisan Time to Vote initiative had 700 co-signing businesses when Retail Brew first covered it in August; by Election Day, there were 1,900+ participants.

No spend November?

Not quite. Early estimates from Adobe Analytics suggested the presidential spending dip would return this year, but only for election week. The firm expects online sales this week will decline by $300 million compared to the previous week, an 11% slowdown.

• Still, pre-election, 63% of retailers believed consumers will be more confident in spending after the presidential polls closed.

How should retailers respond now? “Our research shows that consumers value authenticity, meaning retailers that have carved out positions on specific issues should remain true to those points of view,” said Greg Portell, lead partner in the global consumer practice of Kearney, a strategy and management consulting firm. 

Action item: Promote safety and confidence, Portell told Retail Brew. Until a winner is called, there will be near-term effects. “An undecided or contested election will cool consumer spending and slow the return of out of home shopping and entertainment,” Portell said.

FURNITURE

There’s Always Room for Home Improvement

After years of shopping for furniture in stores, consumers have finally figured out how to couch surf from their actual couches. Guess which retailers benefit most? 

Wayfair, home of the Room Rater-approved floating bookshelf, turned a profit for a second consecutive quarter. 

• Revenue rose nearly 67% in Q3, buoyed by its annual company-wide sale, Way Day. 
• Wayfair had previously operated at a loss since going public in 2014. 

Ikea’s armoire assembly instructions end relationships, but shoppers keep coming back. Owner Inter Ikea Group’s profit rose 13% to $2.4 billion for the twelve months ending in August; sales also climbed in September and October.  

• One in 10 Ikea stores are currently closed due to second-wave lockdowns, but the company said it’s enhancing curbside pickup options to meet online demand.

Why it matters: Consumers have turned the spring’s WFH office updates into extreme home makeovers—exceeding analysts’ expectations. Spending in the category overall increased 13.2% in the U.S. this quarter, per GlobalData Retail’s estimate. 

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EXPERIENCE

No Samples, No Problem

With sample counters worldwide still wrapped in caution tape, two beauty brands are tricking out their digital storefronts.

• Charlotte Tilbury built a 3D virtual store complete with on-site beauty tutorials and personalized recs. There’s also an option for shoppers to invite friends to private shopping calls.
• Groupe Clarins built a virtual blueprint of its soon-to-open stores in Europe and Asia—with services ranging from virtual try-ons to private consultations.

The bells and whistles on Clarins and Charlotte Tilbury's new storefronts are so much more than unseasonably early digital holiday decor. 

The consumer angle: Shoppers are more likely to commit to a bold lip with a virtual test. 76% of shoppers said they’re more confident in their purchases after using augmented reality to try on an item. Anecdotally, brands that implemented VR tools said they improved conversions in a Glossy report.

The Covid-19 angle: Partial retail lockdowns are resuming in Western Europe as coronavirus cases increase. With enhanced online experiences, these Europe-based brands hope they can capture purchases that normally depend on IRL samples.

WHAT ELSE IS BREWING

• Florida voted to raise the statewide minimum wage to $15 by 2026.
• Primark still refuses to open an online store.
• Nike said it will lay off 700 HQ staffers by January as part of its ongoing restructuring. 
• Walmart is axing some of its store robotics workforce—because it found humans are more efficient.
• Alibaba could invest up to $300 million in Farfetch, The Information reports.

COMMUNITY

It’s time for Coworking, our segment highlighting the best part of Retail Brew: you, the readers. Want to be featured? Fill out our quick nomination form, or share it with a friend who reads Retail Brew.

Give a warm Retail Brew welcome to Claire Tran, senior category development analyst at Johnson & Johnson.

How would you describe your job on a date? I work on a brand that would be great to have around for any first date, Listerine! I leverage data to influence retailers to make 4P decisions (product, placement, price, promo) that will optimize growth and consumer experience.

One thing we can’t guess from your LinkedIn: It was a very hard decision to switch from finance to retail. In hindsight it was a no-brainer!

A brand you’re obsessed with (that isn’t your employer): Dyson...their tech is AMAZING. 

One account everyone should follow: National Retail Federation on Instagram, for quick, digestible retail insight.

SWAPPING SKUS

Brands with rocketship growth sometimes have to come back down to Earth. Today’s reads are all about what comes after a fall—and a second rise.

• Ty Haney speaks about Outdoor Voices’s tumultuous year: “We were a Ferrari brand with a Honda engine.” (Inc.)
• Juicy Couture’s bedazzled velour tracksuits went from must-have item to fashion punchline to a murky middle ground. Here’s why some experts are still betting on the early 2000s staple. (Vogue)

Bonus: For anyone else who could use a pure distraction story, I recommend this journey into the world of $590 scratch-and-sniff t-shirts. (NYT)

ICYMI

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

• DTC Brands Are Resuming Store Opening Plans
• Why Otherland Is Heading to Sephora
• Under Armour Is Exiting Thousands of Wholesale Partnerships