2PM - No. 750:  Will it play in Peoria?

Luxury retail’s migration / Washington Post: Luxury brands are flocking to the suburbs as "sanitized urbanization" continues in retail development. Gucci opened a two-story boutique. Christian Louboutin and Dolce & Gabbana set up pop-up shops. And Watches of Switzerland showed up this summer in a vintage Airstream trailer filled with watches retailing for as much as $50,000. The aluminum vehicle was most recently parked at the Hampton Classic, a week-long horse show, where it was stocked with timepieces from Grand Seiko, TAG Heuer and Ulysee Nardin. “We want to be where our clients are — and right now, a lot of them are in the Hamptons,” Hurley said.

Short Analysis: Luxury stores are resettling across the US, following their customers to suburban locales where rent is cheaper and to vacation destinations that, once limited to seasonal spots, are becoming year-round go tos. It’s a land grab, the Washington Post reports, representative of the ways the pandemic reshaped the lives of consumers.

Brands setting up stores in less likely locations include Hermès in Detroit, Dior in Scottsdale and Louis Vuitton in Plano, Texas. While it’s not new for brands to have a presence in ski and beach resort towns, realtors say they are settling in for longer with permanent leases over pop-ups. Shopping avenues and neighborhoods in cities like New York, LA and Miami aren’t completely deprioritized, but lease agreements are needing to adapt to account for the fact that brands are putting their eggs in more baskets across the country, and that foot traffic is still uncertain. As an analysis of this greater trend, we looked at the housing market. Notice the disparity between the black, green, and gray lines vs. the blue line: 

This is an overall shift 2PM predicted last year, when it became clear that some knee-jerk reactions to the pandemic would distill into real change:

But there is a larger interruption to consider, where the short-term gives way to long-term implications. The characteristics that once defined rural, suburban and city spaces are changing, and the lines across them are blurring. This will result in long-term changes to how we live and shop.

One clear trend of the pandemic is that wealthy luxury consumers saw little to no impact to their income, but found some ways to spend it were cut off. This meant long-term stays in vacation homes and more time spent idly shopping – an overall win for luxury brands who then set out to meet them where they are. While e-commerce sales have flourished, stores and clienteling still remain a big piece of the equation. A delayed return to the office for many, as the Delta variant spreads, has only underscored these trends.

But outside of vacation homes, what the pandemic has done is revealed where there are pockets of spenders in less obvious parts of the country. eCommerce sales signalled where demand was, all brands had to do was follow the online customers. In turn, more of America’s cities and suburbs will see a shift. Luxury stores are real estate halos and perhaps we should take note to prepare for more lasting shifts. 

By Hilary Milnes and Web Smith

People liked malls

B. Retail Real Estate / The Atlantic: During a pandemic, when online shopping has grown explosively and millions of people have gotten used to ordering even their groceries on the internet, why would the world’s most powerful retailer snap up the expansive brick-and-mortar storefronts that have long been a financial albatross for many of its competitors? 

By 2PM: perhaps my favorite essay written here. It's on the original vision for American malls (which is now becoming popular). 

Luxury retail's evolving map

C. Retail Real Estate / Vogue Business: Over the past 18 months, Valentino and Tory Burch both shuttered uptown New York flagships, only to open new stores several miles downtown in the city’s Soho neighborhood. In Paris, Saint Laurent has obtained a green light from public authorities to open a new flagship on the Avenue des Champs Elysées, according to industry sources, while Mulberry, Coach, Kate Spade and Stuart Weitzman shut down their boutiques on the Rue Saint Honoré.

September 14th at 12 EST: Join 2PM in tuning into this event featuring Shopify executives, Yotpo's team, and Nik Sharma. Shopify's recent investment in Yotpo is an important development to say the least. This "Disrupting the future of eCommerce" session will explain their plans. To celebrate, we mocked up what 2PM's Yotpo-integrated Shopify store could look like someday. Hey Rimowa, it would be a great bag. 

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The DTC reckoning that never came

DTC Brands / Modern Retail: Many of these companies were, at their core, retail brands. They had slimmer margins than software startups, and investors were expecting them to scale to unforeseen heights. Casper, which had raised over $350 million before going public, reported increasing losses atop slowing growth as it IPO’d in early 2020. At the time, Casper was considered a bellwether of sorts. It had received massive amounts of attention — and VC funding — but was unable to grow at the rate it needed to please investors hoping to someday make a return.

Why Telfar is launching a television channel

Linear Commerce / Business of Fashion: Viewers who download the Telfar TV app can watch video footage from both the brand and the public — anyone can upload their own videos featuring Telfar products through a QR code that, if selected, will appear on the channel. 

Target takes ownership of the eCommerce experience

eCommerce / Freightwaves: 95% of Target’s online orders are fulfilled through stores, and the company is now the fourth-largest eCommerce grocer in the nation. With 75% of the U.S. population within 10 miles of one of its 1,900 stores, Target was already well positioned to grab market share, but its approach — from acquiring technology and routing firms, to owning its own delivery network — helps set it apart and has been a key that allowed digital sales to grow 150% in 2020.

By 2PM: Out of Stock is relevant to this topic

Preppy fashion is back, but it has a new name

Trends / Vox: Lithe white people in khaki pants and oxford shirts lounging on a sailboat; tweed blazers inside an Ivy League library; tennis skirts and croquet in front of someone’s summer home; Blair Waldorf and The Talented Mr. Ripley. It goes by different monikers online, sometimes categorized as dark academia (or light academia if it’s a picture of a sunny setting), the WASP look, or the socialite lifestyle, but the descriptor I’m seeing most often is “old money aesthetic.”

By 2PM: The New Prep is relevant to this topic. 

The long game of DTC and eCommerce

DTC Strategy / McKinsey & Company: The desire to launch e-commerce capabilities rapidly is understandable—and important, given the changes in consumer behavior. But ensuring that decisions are considered carefully from day one is critical to building a foundation for long-term success.

The best online grocery stores for shopping needs

DTC Grocery / Bon Appetit: For those who follow a certain diet, want a specific brand of fonio, or seek sustainably and ethically sourced ingredients, smaller, specialty online grocery stores offer a wide selection of items that you probably won’t find at your neighborhood bodega — or Fresh Direct, Instacart, and Amazon Fresh. Below, we’ve rounded up the best online grocery stores where BA staffers fill their virtual shopping carts.

One line from a book written 130 years ago would influence marketing and branding for ages to come. In his novel Five Hundred Dollars, Horatio Alger writes: "I don't know but I can wait two or three weeks," he said slowly, "if you are sure we shall play at Peoria." This line gave the advertising industry "Will it play in Peoria?", an old adage that is traditionally used to question whether a product, person or theme will appeal to the average person in middle America. It's a question that answers a product's potential role in the lives of a broader demographic or psychographic. In today's digital age, Peoria is worth your time and here is why. 

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