Good afternoon. The Brew is currently hiring for several roles, but we’ve got some competition for writers. Domino’s, for reasons unknown, is hiring a data journalist. 

That said, we could use an investigation into the prime cheese-to-sauce ratio...

In today’s edition: 

• Fallout from China boycotts
• Exclusive Harris Poll survey
• Lowe’s extends spring promotion

— Halie LeSavage, Katishi Maake

SUPPLY CHAIN

Implications Abound

Cinnamon Toast Shrimp, clogged canals, and Chinese retail boycotts: All three stories dominated the internet this week, but only the last one gets a Retail Brew breakdown. 

The backstory: Months ago, retailers including H&M and Nike released statements distancing their cotton sourcing from China’s Xinjiang region. There, researchers say, at least 1 million members of the Uyghur ethnic minority are held in forced labor camps. The US government and human rights organizations have called for outright divestment from Xinjiang cotton as a result. 

Flash forward to Wednesday, when H&M’s 2020 statement resurfaced on Chinese social media. Some users and state media called for a total H&M boycott. By Thursday, calls rose for boycotts of several retailers that had previously expressed concern about Xinjiang cotton. 

The backlash: Retaliation first fell on H&M, which was removed from e-comm sites including Taobao, Pinduoduo, and JD.com. 

• Later, H&M’s mobile app was banned on Huawei, Xiaomi, Vivo, and Tencent.
• Users of ridesharing app Didi can no longer be dropped off at H&M stores, and the retailer disappeared from services like Apple Maps in China.  

Beyond H&M, 50+ Chinese celebrities severed brand endorsements with Nike, Adidas, Uniqlo, and more over their past supply chain statements. Fallout stretched as far as the metaverse, where Tencent pulled a forthcoming Burberry collaboration for custom character “skins” in its Honor of Kings video game.  

Some exceptions: Muji and Hugo Boss both said they’ll continue to use Xinjiang cotton. Muji even updated its e-comm product listings to highlight the material.

What comes next? 

While US shoppers are just starting to buy hard clothes again, consumer spending is beyond pre-pandemic levels in China. Pre-boycotts, many retailers considered China their key growth market in 2021. 

• H&M has 500+ stores in China and planned to open its first stores for sister brands & Other Stories and Arket there later this year. 
• Adidas called China its fastest-growing market earlier this month.

But business opportunities are a low priority for the governments and NGOs calling for bans. So implicated retailers have an impossible balancing act: divesting their products from Xinjiang sourcing, while placating valuable shoppers. 

Looking ahead...retail experts told Quartz that the situation could encourage retailers to operate their businesses in China as separate entities, complete with standalone branding.

CONSUMER

IRL Shopping Will Return

We all know shopping habits have changed over the last year, but we wanted to know how they’ve changed. So we teamed up with Harris Poll to run an exclusive, nationally representative survey of 1,078 US adults. 

Mask off

Across activities, respondents did report a major shift toward digital during the pandemic:

Dan McCarthy

But it turns out being very online isn’t for everyone. A plurality of respondents (43%) said they’ll mostly shop in-person once Covid restrictions are lifted. Just 24% said they’d mostly shop online, with 33% saying they’d do both equally. More post-pandemic plans below...

• 77% of respondents are at least somewhat likely to shop at their local mall or department store. 
• Less than half (47%) of respondents said they’re at least somewhat likely to use delivery apps post-pandemic. Though younger people reported a much higher willingness to keep the GrubHub and Uber Eats orders coming. 
• More respondents (67%) plan to make big-ticket purchases IRL versus online (54%).

Big takeaway: It’s obvious that e-comm will remain a bigger part of everyday shopping than before. But Americans want to return to the physical realm too. 

+ While we’re here: There’s more exclusive data to come on Monday, specifically about grocery e-comm. For now, check out the results summary and methodology here. 

SPONSORED BY SAILTHRU

Extraordinary Times Call For Extraordinary Marketing Capabilities

The past year was not business as usual—especially for retailers. And Sailthru has the scoop on the modern marketing capabilities of top retailers and how they thrived in a year that was unlike any other. 

The fourth annual Retail Personalization Index is back to give you an inside look at the retailers that are flourishing or finding new paths forward in the next era of commerce. 

Get a peek behind the cross-channel curtain from brands like Sephora, Fabletics, Best Buy, and more to discover the pandemic-era consumer insights that worked.

And while there’s never a good time to skip out on a curated list of today’s top 100 retailers, Sailthru knocked it out of the park this time around. With 5,000 customers surveyed, 2,500+ hours of research, and 260 brands evaluated, this year’s Top 100 cannot be missed. 

Download the Retail Personalization Index today.

STRATEGY

From Highs to Lowe’s

Lowe’s is trying to turn its “Never Stop Improving” tagline into a mandate this spring. It’s capitalizing on the home improvement boom by extending its typically weekend-long spring sale through all of April. 

Rewind: From May to July 2020 alone, Lowe’s brought in nearly a third of its 2020 revenue, thanks to WFH office upgrades and other “stuck at home” projects. April is always a critical time for the company as spring-feverish customers begin DIY projects; Q2 2020 blew past expectations, with a 30% revenue increase.

Fast forward: Recapturing that magic will be difficult in 2021. A recent Wells Fargo survey found only 33% of consumers expect to purchase home goods in the near future. In contrast, a separate survey reported on last October found nearly 80% of homeowners had taken on a DIY home project by June. 

• Still, Lowe’s won’t necessarily be in a bad spot, especially if it can reuse seasonal marketing strategies from last year, Neil Saunders, GlobalData managing director, told Bloomberg. 

On the flip side: Other segments like beauty and apparel anticipate a 2021 bump. The Wells Fargo survey found 40% of shoppers expect makeup to be their first post-pandemic purchase, while 37% say it will be going-out apparel. 

WHAT ELSE IS BREWING

• ThredUp is valued at $1.3 billion after this morning’s IPO. Check back here Monday for an interview with CEO James Reinhart. 
• L Brands raised its profit forecast, thanks to promising stimulus spending and relaxed Covid-19 restrictions.
• Gap is selling its children’s label, Janie and Jack, to Go Global Retail. 
• Boohoo cut its UK manufacturers from ~500 to 78 firms following supply chain audits.
• Clorox seeks to sustain pandemic momentum with increased marketing spend and new production lines, Bloomberg reports. 

SPONSORED BY SAILTHRU

The holy grail of retail. Sailthru’s Retail Personalization Index highlights this year’s top 100 retailers who turned traditional marketing capabilities on their head during the pandemic era and found ways to thrive. Learn how leading brands like Adidas, Thrive Market, and Nike shined during a year that was anything but ordinary. Explore the winners today.

SWAPPING SKUS

You may not have had any luck securing a pair of Dior x Air Jordans, but you've at least got our handpicked reads about online sneaker sellers. 

• Bad news for those taking Ls on the latest and most-hyped drops. Sneaker bots are still outsmarting brands’ efforts to get exclusive products into shoppers’ hands. (Insider)
• To battle the boys’ club that’s sneaker culture, women SNKRheads are building their own Slack channels, Instagram accounts, and more online spaces for resale and drop discussions. (Input)

FRIEND OR FAUX?

We were going to go with the Cinnamon Toast Crunch shrimp tail fiasco as a potential Friend this week, but since that’s a widely reported PR nightmare, we’ll pass. Can you spot the fake story below? 

1. Pepsi and Peeps have joined forces to create a marshmallow-flavored soda. 
2. A jewelry company has created a $3,400 gold mesh chain to hold your AirPods. 
3. The day of the Snuggie may be long gone, but Ikea has released a wearable quilt-pillow hybrid.    
4. Kraft Heinz is getting in on the NFT craze, auctioning an image of Kool Aid’s first print ad for $300,000. 

Keep reading for the answer. 

ICYMI

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

• Is 2021 the Year Social Commerce Truly Takes Off?
• Fast Food Chains Pilot Drive-Thru Innovations
• Rothy’s Commits to Circular Production by 2023

FRIEND OR FAUX? ANSWER

4. Honestly, not even 100% sure that’s how NFTs work.