Good afternoon. On April 8, the hottest ticket in retail livestreaming won’t be for a QVC special.

Retail Brew is gearing up for an exciting return to virtual events starting next month. Keep reading for the reveal of our new series name, first topic, and expert guests. And, of course, to RSVP. 

In today’s edition:

• Drive-through restaurants reimagined 
• Circular production at Rothy’s
• Arfa is no longer Arfa 

— Halie LeSavage, Katishi Maake

EXPERIENCE

A Through Lane

Where we’re going, we’ll definitely need roads. Drive-throughs are a mainstay for fast food and quick-service chains, but over the last year, their sales volume rose like every day was McRib szn. 

Drive-through sales accelerated in 2020, from 4% YoY growth in January to 22% by the end of the year. 

Driving by 

Taco Bell and Chipotle will roll out new restaurant models focused on the drive-through experience, both as a place to order food on four wheels and to easily scoop up an online order. The reason: They anticipate demand for contactless (or contact-lite) options to continue post-pandemic. 

• Taco Bell’s remodeling some restaurants to feature two drive-through lanes and smaller dining spaces. T-Bell plans to open at least 30 such stores by year’s end, after piloting its “Go Mobile” format in Oklahoma last year. 
• 70% of Chipotles opened in 2021 will have dedicated “Chipotlanes.” The stores are built to facilitate more digital orders via expanded drive-through lanes that serve both mobile (car) and mobile (phone) orders. 

By the numbers: Taco Bell’s parent company, Yum Brands, said its US chains, including KFC, saw “record-breaking drive-thru performance” in 2020. Meanwhile, Chipotlanes are meant to further drive Chipotle’s digital sales, which last year grew higher than the price of a burrito bowl with guac and double steak, accounting for 70% of its total sales versus the typical ~20%. 

And across all restaurants, drive-throughs accounted for 44% of off-premise sales.  

Shifting multiple gears

Drive-through upgrades aren’t usually implemented in a vacuum. They’re often combined with new investments and strategies, like mobile ordering, as noted above. 

• While Chick-fil-A, McDonalds, and Sweetgreen trim menus for more streamlined transactions, Starbucks is going against the grain and adding menu items.  
• The coffee chain’s goal isn’t to be the fastest, but rather to lean into customization. Still, Starbucks plans to test dual lane and drive-through only locations to handle increased volume. 
• Yum Brands just acquired Tictuk, a platform that allows customers to order using social media and messaging apps, per CNBC. 

Bottom line: Fast food chains and QSRs are leaning into drive-throughs to appeal to customers in search of contactless or low-contact options. 

SUSTAINABILITY

Rothy's Goes Full Circle

Rothy’s sold legions of fans on shoes made from recycled water bottles. Soon, it’ll ask them to hand back their used shoes to make new shoes, as part of a pledge to reach circular production by 2023. 

In theory…“The most perfect execution of circularity would be that there were no new material inputs into [our production cycle],” Saskia van Gendt, Rothy’s head of sustainability, told Retail Brew.  

In reality…"We know that it doesn't exist today,” van Gendt added. 

So to hit its goal, Rothy’s will spend 2021 in R&D mode, building reuptake solutions for its products.

• Early experiments will decide where and how Rothy’s needs to switch up its materials recipes or its supply chain facilities. 
• Van Gendt expects breakdown solutions will be easier for accessories than footwear because they’re made with fewer materials to begin with.

In business...Rothy’s remained profitable in 2020 and acquired 450,000 new customers—despite slashing marketing spend by 60%, per Footwear News. While going full circle comes with upfront costs, van Gendt told us it could “potentially be more profitable because we’re using the same materials multiple times.”

As for other brands...Circular production isn’t trending among retailers like carbon offsets. That’s because there hasn’t been regulatory or consumer pressure, van Gendt said. 

SPONSORED BY SAILTHRU

What it Takes to Rock the Retail Commerce Crown

Heavy is the head that rocks Sailthru’s retail commerce crown. Because money weighs a lot. And if you’re wearing the retail commerce crown it’s because you’re making a lot of money. Ok, you get it.

Sailthru’s fourth annual Retail Personalization Index is back to give you a look at the modern marketing capabilities of top retailers. The index ranks the best of the best, and more importantly, it’s also a roadmap to success in the next era of commerce.

We’re talking Sephora. We’re talking Wayfair. We’re talking Nike. We’re talking Nordstrom. You know, small shops just doin’ their thing, giving consumers the very best cross-channel experiences possible.

Check out Sailthru’s top 100 retail brands—and what it takes to stand among them—here.

E-COMM

Is Headless More?

Arfa opened its virtual doors last March to incubate DTC brands. One year later, it’s scrapping the new product model to sell the tech behind its former products.

The details: Arfa is reintroducing itself as Chord, a so-called “‘headless commerce”’ service. 

• Chord will provide e-comm tech and customer data tools to DTC brands generating up to $250 million in annual revenue.
• The new firm also acquired Yaguara, a data studio, to enhance its tech stack.

Pivoting from consumer goods to commerce tech may sound abrupt. But Chord CEO Bryan Mahoney and COO Henry Davis told Retail Brew the brands that transcend bland status build online experiences that plug-and-play storefronts can’t provide.   

• “We started working on [the tech] at Arfa before we started working on any brands,” Mahoney said. “It was always going to be the cornerstone of our business.”
• Chord launches with $18 million in Series A funding—suggesting some investors are just as optimistic that selling tech > selling products. 

As for Arfa...the Chord team said its two product lines, Hiki (sweat care) and State Of (menopause care) will live on, but declined to specify how. 

WHAT ELSE IS BREWING

• Fanatics is valued at $12.8 billion after its latest funding round.
• Whole Foods is piloting virtual beauty try-ons in some stores.
• Peloton acquired tech three companies, including a wearables maker. 
• Today in DTC expansions: Care/of vitamins head to Target and Topicals skincare lands in Sephora.

FROM THE CREW

Finally, the news you’ve really been scrolling for. Retail Brew is bringing back virtual events in a monthly interview series: The Checkout. 

Up first: On Thursday, April 8, at 1:30pm ET, we’re kicking off The Checkout with a live conversation about the present and future of social commerce—aka the movement making social media platforms more shoppable. We’ll be joined by two Extremely Online experts...

• Layla Amjadi, director of product management at Instagram Shopping 
• Jason Wong, founder of Doe Beauty and Wonghaus Ventures 

Together, we’ll explore the biggest social commerce questions facing retailers since “How do I get verified?” Specifically, we’ll dive into the latest social shopping updates, the user adoption gap, and the implications for e-comm writ large. And we’ll do it all in 30 minutes. 

Ready to RSVP? Click here to register and share your social commerce questions for our panelists. We hope to see you there. 

SPONSORED BY SAILTHRU

If you want to be the best, you have to read about the best. Brands like Best Buy, Adidas, and The Home Depot topped Sailthru’s fourth annual Retail Personalization Index this year. To see how these best-in-class retailers have responded successfully to this vital period of transformation in commerce, read the Retail Personalization Index from Sailthru.

COMMUNITY

On Wednesdays, we wear pink spotlight Retail Brew's readers. Want to be featured in an upcoming edition? Click here and introduce yourself.

In most Retail Brews, we count on industry analysts to tell us about major companies. This time around, we’re asking Jessica Ramírez, retail research analyst at Jane Hali & Associates, to tell us about herself. 

What does being a retail research analyst actually mean? We advise institutional investors on the consumer discretionary retail/brand landscape. We focus our research on global macro trends as well as consumer and product.

How’d you get there? I’ve worked in retail and trend forecasting for more than 10 years. Prior to my role at Jane Hali & Associates, I was a trend and data journalist at WGSN, which is where I met Jane Hali.

One emerging retail trend you’re bullish on: Sustainability practices across retail strategies. We believe new ESG goals are pushing companies to be innovative across product development, sourcing, manufacturing, delivery, and in-store experiences.

Favorite retail accounts to follow: FashMash and Patter.

SWAPPING SKUS

Amazon’s labor practices are in the spotlight as its Alabama workers push to unionize. While some workers continue to ramp up pressure, others, particularly younger workers, aren’t as invested in the fight. 

• The Retail, Wholesale and Department Store Union and its 100,000 members are leading the charge for labor rights against Amazon. (NYT)
• Younger workers who are not as familiar with unionization are more reluctant to join their older colleagues. (The Intercept)

ICYMI

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

• ‘Made in Italy’ Brands Are Ready for a Third Lockdown
• Post-Paper Source Bankruptcy, Stationery Sellers Rethink Wholesale
• Anthropologie Debuts Digital-Only Catalog on Pinterest