LOGISTICS

Sending Out a USPSOS

Retailers started a “December to Remember” in October. They plastered their websites with shipping deadlines and patience reminders. It wasn’t enough. 

Shipping routes are overwhelmed with packages in the two days before Christmas, every outlet reports. FedEx and UPS capped their daily deliveries weeks ago, shifting six million extra packages on average to the USPS per day. 

• Online sales rose 33% YoY during the second week of December, per NPD Group data. That pushed retailers closer to their Q4 rev goals...and clogged shipping routes further.
• ShipMatrix, a package delivery data provider, expects there’ll be more than one million packages stuck en route on December 25.

This isn’t leading to a Hallmark movie ending. Retailers with extensive store networks are pushing curbside pickup and expedited last-mile delivery, but that inventory and presumed capacity can only stretch so far. Best Buy is even asking its store employees to deliver packages, Bloomberg reports.

For those operating in the virtual world, over-communicating with customers is the best move left. Shining example: these personal cards Oui the People founder Karen Young wrote for shoppers to download and send to anyone whose gifts are stalled in transit.

Who’s ready for seconds?

Returns may start as the last gifts are unwrapped Friday, extending shipping network delays. 

• Typically, e-comm return rates hover between 25% and 30%. 
• Combine rising online shopping volume with greater bracketing rates (buying multiple sizes of the same item), and return rates are expected to shoot higher.

To gear up, some retailers are launching programs to smooth the process—ideally building loyalty for future purchases. Walmart, for example, has partnered with FedEx to offer at-home returns pickup. 

• Lasting solutions to reduce returns may start earlier in the purchase journey, like developing tech tools for finding an accurate fit before hitting “Purchase.” 

+ While we’re here: Amazon’s seizing on the shipping fracas to win over sellers. In a blog post, the company said it’s delaying annual logistics fee hikes.

STORES

Shelf Spotlight Programs

More than six months have passed since corporate America promised to take stronger action against racial inequality. For many retailers, improvement efforts are tied to their product assortments.

Getting started: In January, both in-store and online, Giant Food will begin labeling products from companies that are Black-, Asian-Indian-, Asian-Pacific-, Hispanic-, LGBT-, veteran- or women-owned. 

• Around 3,100 products from 280 brands will be included. 

In progress: Sephora shed light on its efforts to increase the share of Black-owned brands it carries, after becoming the first major retailer to sign the 15 Percent Pledge in June. 

Sephora has revamped its small business accelerator program to focus on Black-owned businesses, Fast Company reports. It will also double the number of Black-owned brands it carries within the next year. 

• After an internal audit, Sephora found that only 3% of its inventory meets this criterion. 
• Bloomingdale’s, Madewell, Macy’s, and West Elm are among the retailers that also took the 15 Percent Pledge. They haven’t yet elaborated on their progress.

Zoom out: Retailers are spotlighting overlooked founders to attract consumers who shop their values. But improvement efforts don’t stop there—many retailers are also working to address hiring inequalities. 

E-COMM

Shady Shops II

2020 has been good to Shopify, but even “3x your stock price” years aren’t perfect. New FakeSpot data reported by the Financial Times illuminates one downside of its rapid growth: dealing with fraudsters. 

FakeSpot analyzed 120,000+ Shopify sites and found that as many as 21% “posed a risk to shoppers.” The shady shops range from fronts for data collection to good ol’ fashioned counterfeiters, per the FT.

Sound familiar? In late March, Shopify confronted a Covid-themed version of the same issue. Hundreds of pandemic supply purveyors popped up on the platform. Some were dropshipping legitimate PPE, like masks, while others sold the product equivalents of “One Weird Trick to Protect You from Covid-19.”

• At the time, Shopify told the NYT that it had removed at least 4,500 unverified coronavirus-related shops. 

Now, Shopify told FT it has shut down “thousands of stores,” and that it’s continuously instituting new measures to combat the industry-wide issue that is fraud.

Bottom line: Amazon has already taught us that it’s tough to combat fraud on a sprawling commerce platform. As a decentralized marketplace, Shopify has faced less merchant and shopper scrutiny around the issue than Amazon, but that’s likely to change as its influence grows. 

WHAT ELSE IS BREWING

• Chipotle said it won’t require employees to get the Covid-19 vaccine.
• Walmart is being sued by the Justice Department for enabling the opioid crisis. Walmart called the suit an attempt to “shift blame” from doctors to pharmacists.
• Mango will open stores within Simon Malls in 2021.
• Peloton purchased fitness equipment maker Precor for $420 million.
• A new WSJ report unpacks how Amazon selects startup products to duplicate.

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COMMUNITY

It’s time for our segment highlighting the best part of Retail Brew: you, the readers. We’re now accepting self-nominations for 2021, so introduce yourself here.

We’re spending our last happy hour of the year with Erik Hillesheim, Senior Account Executive at P&G. Cheers. 

Describe your job like you’re on a date: I sell toothpaste. *pause and wait for laugh, hopefully* I co-manage the Crest/Oral-B/Arc account for P&G at Target, where I help build the category strategy, create three-year portfolio plans, and launch new brands.

Something we can’t guess about your job from LinkedIn: You also get to do really sexy work like creating denture adhesive strategy. Fun fact: The average denture wearer is only ~45 years old.

Favorite project you’ve worked on: Launching Arc, a DTC teeth whitening brand, exclusive to Target. Now over $8M and TikTok famous!

Retail accounts everyone should follow: Toss-up between Wendy's twitter and Malachite's Culture Matters Newsletter.

SWAPPING SKUS

’Tis the season for year-in-review content. Before I sign off for a long winter’s nap, here’s a look back at some of the objects and brands that shaped the past 365 days in retail.

• Revisiting where we’ve been by what consumers bought. (Marker)
• The year according to Telfar Clemens, 2020’s most in-demand designer. (NYT)
• Instant coffee. Emergency kits. Artisan puzzles. New brands stood for more than category disruption after launching this year, of all years. (Thingtesting)
• The big business of aesthetically pleasing cookware companies, explained. (Vox)
• Hundred-year-old brands could bounce back in 2020. They just needed the right TV placement. (WSJ)

ICYMI

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

• The Fastest-Growing DTC Brands by Web Traffic
• Untuckit Repurposed Its Stores for Online Fulfillment
• Sit-Down Restaurants Face Their Biggest Covid-19 Challenge Yet