WORKFORCE

Rising Hazards, Plateauing Pay

The modifications that defined in-store shopping this spring are returning for another round as Covid-19 cases reach record highs. Shelves normally piled with toilet paper or disinfectants sit empty; stores are closing early for deep cleans; and some chains are limiting foot traffic.

What’s missing? Another widespread round of hazard or “thank you” pay for those frontline retail workers, the NYT reports. 

According to Brookings Institute data, the average hazard pay period in retail started in March and ended in June. And as the NYT notes, in 2020 many companies have spent significantly more on stock buybacks than on their employee compensation packages.

• Amazon does not plan to reinstate the $2/hour hazard pay raise that ended in June, despite its nearly 200% quarterly profit increase.
• Kroger is not raising wages following the end of its hazard pay period, but will give out $100 “holiday appreciation” gift cards.
• Walmart, which also reported a healthy quarterly sales increase, has paid one-time bonuses to workers. But it hasn’t increased hourly wages. 

Some exceptions: Dollar General this week said it will distribute another $50 million in frontline bonuses during Q4, and Home Depot will spend an extra $1 billion per year to raise wages. 

Pandemic policies Payment policies 

           They're areas where retailers tread carefully. 

The reason: Raising hourly wages means sustained, increased pay and longer-term expenses, while bonuses are (usually) viewed as a one-off. That may explain why even fewer companies have permanently bumped their starting pay rates this year. 

• Those that have include Best Buy, which raised its minimum wage to $15/hour in August, and Starbucks, which is raising wages between 5% and 11% for workers, depending on their tenure. 

Retail may lack consensus on whether it should raise employee pay, but some states are coming around to raising the minimum wage. This month, Florida voted to eventually instate a $15/hour minimum wage, joining states like Illinois, Massachusetts, and California. 

Another angle: As retailers continue to navigate the pandemic, they’ll do well to remember that shoppers are more aware of their employee policies than ever. 81% of U.S. adults believe companies should “take care of and treat employees well, even in tough times,” according to a Morning Consult survey shared with Retail Brew. 

E-COMM

TJX Makes a Policy Return

In the spirit of Ross Geller, tight circumstances are forcing a TJX retailer to pivot. HomeGoods, previously IRL-only, will launch an online storefront in 2021. 

About the swerve...TJX CEO Ernie Herrman had said in May that his brands wouldn’t use e-comm as a “major leveraging point” during pandemic store closures. But sales have fallen without an online channel this year—requiring a second look at the retailer’s anti-internet policy.

But HomeGoods stores aren’t going anywhere. TJX said any online offering “complements and encourages” treasure hunts at its brick and mortar locations.

Forgetting Marshalls? Not quite. It’s unlikely that TJX’s apparel-focused arms will join HomeGoods in a larger online push. 

• For one thing, home furnishing and decor sales have outpaced apparel, justifying the investment in a new channel. 
• For another, apparel brands that sell their wares to TJX prefer to keep their partnerships analog—so the discounts don’t spread online and cheapen their image.  

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DTC

Series A-List

In the world of DTC brands, “celebrity investment” usually refers to backing by a Warby Parker or Glossier alum. This week, it’s referring to actual celebrities. 

• Aurate, a fine jewelry line made with sustainable materials, now counts Little Fires Everywhere actor Kerry Washington among its lead investors. 
• Maude, a sexual wellness brand, has named Fifty Shades star Dakota Johnson an investor and co-creative director. 

There’s more to these backers than People magazine placement. For one, history’s being made: Maude founder Eva Goicochea is now one of only 60 Latinx women to raise $1+ million in VC funding. 

The category angle: Both brands are leaders in quietly strong segments, encouraging fresh investments. A rise in Zoom jewelry helped Aurate reach profitability; Maude’s sales have risen 50% quarter-over-quarter this year. 

The influencer angle: I’ve mentioned before that loyal fans become future customers with the right person x product crossover. So celeb investors’ involvement won’t end with signing their angel checks. 

• Washington co-designed a capsule for Aurate that’s already available on its website.
• Johnson has already alluded to overseeing new product launches at Maude—as well as developing educational content for the brand.

WHAT ELSE IS BREWING

• Amazon is postponing Black Friday in France.
• Walgreens now offers 30-minute pickup for online orders.
• $52 billion. That’s the combined rent retailers currently owe.
• Affirm generates 30% of its revenue from its Peloton partnership.
• Macy’s plans to invest further in small-format, off-mall locations.
• Brideside, a wedding apparel startup, has shut down.

SWAPPING SKUS

Just in time for Friday’s reading list, brand startups are up to their old shenanigans.

• The most pressing kitchen question since “Who ate my leftovers?”: What sets one stovetop essentials brand apart from the others? (Thingtesting)
• Where there’s an aesthetically pleasing palette, there are copycat accusations. How do brands draw the line between harmless inspo and something more sinister? (Modern Retail)

+ Shoot your shot: Do you have what it takes to turn a bland into a brand? DTC Jobs knows who’s hiring.

FRIEND OR FAUX?

Find the fake headline and you could run The RealReal’s authentication department. Which retail story below didn’t happen?

1. Home Depot’s gift to superfans: a holiday restock of its 12-ft. skeletons.
2. Walmart sells booze-filled Advent calendars for the first time. 
3. Neiman Marcus enlists Santa Claus to deliver holiday curbside orders.
4. Grocery chain apologizes for calling holiday appetizers a “super spread.”

Keep reading for the answer.

ICYMI

Catch up on the top Retail Brew stories this week. 

• The Hidden Emerging Technologies Behind Your Online Orders
• Is Amazon Pharmacy a Threat to DTC Health Brands?
• Inside The Verticale, Retail’s Most Exclusive Marketplace

FRIEND OR FAUX? ANSWER

1. No, Home Depot’s giant skeletons aren’t coming back for the holidays.