ECONOMY

Room for Stimulus Seconds?

As $600 stimulus checks begin hitting bank accounts this week, retailers face an important question: Will the stimulus...actually stimulate purchases? 

Retailers’ outlook: Optimistic that spending > saving. “With additional funds, consumers are likely to reengage spending on non-durable goods and services,” the National Retail Federation said in a statement Monday. 

• After Congress passed a $2 trillion stimulus bill in Q1 2020, references to stimulus upticks joined “You’re on mute” and “You’re still on mute” among retail CEOs’ top earnings call phrases.  
• Retailers that logged increased consumer activity after the first wave of stimulus included Apple, Best Buy, Target, Home Depot, and Lowe’s. 

Retailers’ reality: In financial planners’ favor. In 2020, 44% of consumers in a Coresight Research study said their $1,200 payments went to recurring bills; more than one-third spent their extra funds on groceries and meals; fewer than 10% spent stimulus on clothing or beauty.

Payments are capped at $600 this time around, leaving less to spread between wants (daytime pajamas, portable hammocks, robotic vacuums) and needs (groceries, loan payments, utilities).

The bigger picture: Months without additional stimulus, paired with rising unemployment and the pandemic’s continued spread, culminated in disappointing November retail sales. December results, capturing the last leg of the holiday season, won’t arrive until next week.

Looking ahead...President-elect Joe Biden had referred to this week’s $600 payments as a “down payment” toward a third, larger round of stimulus. The likelihood that shoppers receive an extra boost depends on the outcome of Georgia’s special run-off Senate election. 

TRENDS

Shoppers Prefer Fewer Syllables

Some of retail’s most tolerated acronyms are catching on with consumers, new data show. Let’s take a closer look.

For payment options...buy now, pay later (BNPL) is back for another installment. Afterpay reports average basket sizes for U.S. purchases increased 30% YoY for the 2020 holiday season. 

• Retail Brew readers know the spiel: BNPL platforms have surged during an economic downturn, both for retailer and new consumer sign-ups. 
• Another indicator of BNPL’s staying power? Affirm tweaked its S-1 filing yesterday, nudging its valuation above $9 billion.  

For purchase experiences…any BOPIS (buy online, pick-up in store) holdouts may want to consider a curbside renovation in 2021. Nielsen reports omnichannel (online → in-store) spending in the U.S. rose by 50% in 2020. 

• Self-reported exclusive and heavy online shoppers increased by 133%. This shouldn’t come as a surprise.

Looking ahead...these two trends have crossover potential. Afterpay also reported that 2+ million customers have enabled its card feature, an option for using BNPL in-store, since it launched last fall. 

SPONSORED BY LISTRAK

A Year of Plenty With the Right Partnership

Coming in hot on the heels of a record-setting e-commerce year, 2021 holds aggressive revenue goals for e-commerce and marketing leaders everywhere. But how can brands and retailers own that potential?

Try a partnership with Listrak.

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RESTAURANTS

Chicken Sandwich Wars, Episode XXIV

The modern fast food playbook has a signature menu play: Put a bird on it.

• McDonald’s will add three fried chicken sandwiches to its menus in February.
• Shake Shack will sell Korean-style fried chicken sandwiches this spring. Small biz angle: it partnered with a Portland, OR, family-run kimchi brand to develop the glaze. 

Nutritional facts: Low original content, high saturation. Over the past year, at least two dozen restaurant chains released new or improved fried chicken sandwiches.

• The craze started in 2019, when Popeye’s released its updated sandwich to rival Chick-fil-A’s. The item led to a comparable sales surge at the chain—and hatched several imitators. 
• Quick-service restaurants including McDonald’s trimmed their menus last year, but steady sales for other chicken items encouraged their sandwich category expansion.

Dietary restrictions: Any chain can gather the ingredients, but not everyone can create heaven between two fluffy buns. Restaurant experts told Reuters that new entrants will have to overcome 1) frying equipment gaps and 2) rivals’ chicken expertise to win the category. 

WHAT ELSE IS BREWING

• P&G officially terminated its merger with Billie. 
• Macy’s will close another 45 stores this year.
• Amazon purchased 11 airplanes for its fulfillment network. 
• The Vitamin Shoppe partnered with WW for a supplement line. 
• Oh look, another celebrity beauty brand.

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. Or, hit reply to share a question you’d like us to ask future guests.

Our first guest of the year’s favorite way to accessorize is “wearing many hats,” as jewelry brand Bird + Stone’s director of marketing and partnerships. Caitlin Kawaguchi, welcome!

How would you describe your job to folks who aren’t in retail? I lead our marketing team, develop strategy, support with creative direction, and launch campaigns that drive growth and help our audience make an impact.

One thing we can’t guess about your career from LinkedIn: Although LinkedIn shows my nonprofit background, I've always been interested in ethical fashion! When I was in high school, I hosted a fair trade fashion show featuring brands making an impact — so this work has been a dream.

Favorite project you’ve worked on: Our campaign to get out the vote and protect voting rights this year.

One brand you’re obsessed with (that isn’t your employer): Aday — I love their designs, and their commitment to sustainability and ethical manufacturing.

SWAPPING SKUS

Got some space on your 2021 business vision board? Add these quick reads. 

• In light of Poshmark’s IPO, hear from founder Tracy Sun about the key biz advice that helped her build a leading resale platform. (Inc.)
• Hot take alert: Four experts explain why there’s still hope for experiential, in-person retail. (Fast Company)
• At least 12 new brands are preparing for takeoff in 2021. And they’re largely in feel-good categories. (Thingtesting)

ICYMI

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

• Two Omnichannel Strategies Retailers Relied on in 2020
• Face Masks, Sanitizers, PPE: How Retailers Pivoted for Covid-19
• Cole Haan x Slack: What Went Wrong?