TRENDS

Vacation, All Brands Ever Wanted

Last summer, airline customer service centers were flooded with flight cancelations. This summer is shaping up to be the opposite: In March, Adobe Analytics reported flight bookings grew 111% YoY, and hotel bookings jumped 50%. 

As Covid-19 vaccination rates rise and travel inhibitions fall, retailers are giving shoppers the same nudge I got from my manager: Book some PTO (and buy some extra sunscreen or a new swimsuit to go with it). 

According to Katherine Cullen, senior director of industry and consumer insights at the National Retail Federation, a return to summer experiences is an encouraging sign for retailers. “We see an inclination to spend on categories that might've been a little bit on hold last year, [and] a lot of those spur related purchasing,” she told Retail Brew.

• Retail segments expecting a bump can range from lawn and garden supplies (to impress long-lost house guests) to sandals and shorts (to outfit an overdue beach trip). 

Itinerary? Check. 

Brands usually found in Palm Springs carry-ons are prepared for a summer activity boom. “It’s going to be the roaring twenties all over again,” Melanie Travis, CEO of swimwear brand Andie, told us. 

• From late May to August, Andie will release new collections every few weeks, including 38 new swim styles—a 216% sku increase from last year. “We've never launched this many styles and collections throughout summer before,” Travis said.
• Andie’s also offering same-day delivery in NYC and LA, as the brand anticipates extra demand from its target markets. 

Supergoop!, a sunscreen label, wasn’t set back by extended indoor time last year: While it didn’t provide revenue figures, CEO Amanda Baldwin told Retail Brew its DTC business more than doubled from 2019 to 2020, and store sales remained strong. This year, “the combination of increased brand awareness, consumer spending picking up on a wider scale, and stores reopening means we’re definitely expecting increased demand over the next few months,” Baldwin said. 

More activities = more brands involved

...even ones that weren't usually found out of office pre-2020.

Brooklinen, home of podcasters’ preferred sheets, expanded its 2020 assortment to include beach towels. Deanna Wu, VP of merchandising, told us the towels sold out within five weeks last year. As customers get more comfortable traveling, Brooklinen anticipates a 40% increase in category sales this year.

And last summer, home chef marketplace Food52 added inflatable pools to its outdoor living category partially in response to pandemic trends. Aja Aktay, senior merchandiser, told us the pools and other yard accessories’ sales have grown 200% YoY, outpacing kitcheny categories like food storage and frying pans. Food52 is expecting similar results this year: Aktay said Food52 began planning its summer 2021 assortment last September, and made orders with vendors “earlier than ever.” 

Bottom line: As OOO messages return en masse, summery retailers can expect a halo of purchasing activity. — HL

DELIVERY

Same Day, but Different

Yesterday, Walgreens said it would offer same-day delivery for ~25,000 items across ~9,000 stores. When new members of the Pfizer fam need a Tylenol and Pedialyte cocktail...

• Walgreens store employees pick and pack orders that customers place through the Walgreens app. 
• Then, third-party services including Uber and Act Fast handle last-mile delivery.

One big DoorDash: The list of competing same-day delivery services is getting longer than a CVS receipt. 

• Many brands are double-dipping, just like Walgreens, “to balance out base and peak demand and achieve overall optimal costs as volumes scale,” said Sumit Chadha, principal, strategic operations, at Kearney.

Stefanie Kruse, head of digital commerce at Walgreens, told Retail Brew that Walgreens’ service has two customer magnets other pharmacies don’t: It’s drawing inventory from a larger physical footprint, and it’s starting with a lower price ($7.99 delivery with no order minimum). 

“We think that this will not only bring new customers to us...but we also think it will drive greater frequency and retention,” Kruse said. 

Will it...deliver? Chadha said that two- to four-hour delivery is becoming “table stakes” for many retailers. But Walgreens plays in so many categories—from general merchandise to prescriptions—that competition comes from every direction. — HL

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APPAREL

Closing the Gap

Gap is shedding layers just in time for summer. The company agreed to sell luxury apparel retailer Intermix to private equity firm Altamont Capital Partners in order to focus on its own brands. Deal terms were not disclosed. 

Self care: In April, Gap sold Janie and Jack, a children’s fashion brand, to Go Global Retail. That, plus the signing of Simone Biles to Athleta and the highly anticipated Yeezy collection, shows its commitment to growing its lifestyle brands versus scaling a luxury retailer. 

• “The sale of Janie and Jack and planned transaction of Intermix demonstrate how we are prioritizing our strategic focus and resources behind the growth and potential of Old Navy, Gap, Banana Republic and Athleta,” Gap Head of Strategy Sally Gilligan said. 

As for Intermix... 

The retailer mostly curates high-end fashion brands like Isabel Marant, Gauge81, and Golden Goose through its online and physical stores. Intermix President Jyothi Rao told Retail Brew that as the US reopens, she wants to expand the company’s e-commerce business, which grew 35% before the pandemic. 

• Rao views the omnichannel customer as much more valuable than a single channel customer. 
• And while the pandemic was a setback, Rao said Intermix has brought business back to pre-Covid levels. 

Looking ahead…Rao said Intermix will “focus on our business fundamentals and what makes Intermix unique,” which are its “hyper-curated and hyper-localized” offerings and “highly personalized” customer service. — KM

WHAT ELSE IS BREWING

• Peloton issued a voluntary recall for its two treadmill models. 
• Five Guys opened its first ghost kitchen. 
• Under Armour raised its outlook, responding to reopening economies.
• Pandora, the largest global jeweler, will no longer use mined diamonds.
• Zara now has a 130+ product beauty line.

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COMMUNITY

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

What separates the clickable product emails from the ones headed straight to the trash? Jerry Jao, SVP of advanced marketing and e-commerce at Constant Contact, has some pointers—and an incredible entrepreneurship journey, which you can read here.

Tell us a little about your current role. I get to work with talented engineers and mathematicians to figure out how to crunch data to create more meaningful and personalized experiences for customers. We use machine learning and AI to understand preferences and present relevant content and products that you might enjoy learning more about.

Which retailer’s emails should we be reading? Shinola does a really good job with their retention emails. Key differentiators are their attentiveness and understanding of who their customers are. Their emails are targeted, well thought through, and they feel more tailored than a typical "batch and blast.” 

An example of a poor retention strategy is sending out generic content or product promotions to all your customers, regardless of who they are and what their personal preferences might be.

Favorite project you’ve worked on: As a side project, I helped a brand launch a keto-friendly bread company called Uprising Food. The products are delicious and I believe in this so much that I invested before the first loaf was baked.

Favorite brands to follow: Figs Scrubs and Corpus Naturals. Each has a clear mission with a unique and inclusive voice.

SWAPPING SKUS

A roundup of today's top retail longreads.

Content is king: Why fashion brands are courting influencers to win Gen Z customers.  (Vogue Business)

Manhattan blues: New York City storefronts continue to reel from the effects of office closures. (NYT)

Faux pas: Some fashion retailers are still lagging behind when it comes to serving plus-sized customers. (Business of Fashion)

ICYMI

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

• Macy’s, Klarna Extend In-Store Partnership
• Retailers Lean on Experiential Offerings in Store Reopenings
• Three Social Selling Tips Fashion Brands Need to Know