Morning Brew - ☕️ Buy buy buy

Best Buy expands its new membership program nationwide.
Morning Brew October 06, 2021

Retail Brew

VTEX

Good afternoon. We’ve been waiting for Piper Sandler’s fall teen survey to drop like most people wait for the latest Yeezy x Gap collection. Nike was the top-ranked apparel brand again, but Shein is on the rise (and it was beat out only by Amazon for fave e-comm site). What jumped out to you? Drop us a line in the inbox.

In today’s edition:

  • Best Buy expands its new membership program
  • Amazon is apparently developing a smart fridge
  • Brands respond to the Facebook outage

Katishi Maake, Jeena Sharma, Julia Gray

STRATEGY

A better buy?

Best Buy tablet

Francis Scialabba

Add another membership to the rotation: Yesterday, Best Buy said it would roll out its Totaltech program nationwide after a beta test that started in April.

  • The membership program costs $199 per year, and promises perks like unlimited Geek Squad support, free delivery, and extended return windows.
  • It will replace Best Buy’s previous program called, wait for it...Total Tech Support. (That one numbered 3.1 million members.)

“Data is showing that beta members interact more frequently and have a higher incremental spend than nonmembers,” CEO Corie Barry said during a recent earnings call, adding that “members are skewing younger than our Total Tech Support membership program.”

Rushing in: Members also get a timely advantage—access to harder-to-find items during the holidays. The offering is meant to court buyers ahead of a shopping season that will be mired in global supply-chain issues, as CNBC noted.

  • While holiday sales are expected to rise this year, shipping delays and port closures will lead to fewer deals for shoppers.

Zoom out: Retailers and restaurant chains across the board have been looking to make the most of their loyal customers of late—take McDonald’s and Athleta, for example—with new programs and new perks. The logic is straightforward: Creating a better customer experience often means more $$$.

Walmart+ is estimated to now have 32+ million members since it debuted last September.

  • Peter Keith, a retail analyst with Piper Sandler, expects Best Buy’s membership program to total between 6 million and 10 million, per a research note reported by CNBC.

Sucharita Kodali, principal analyst at Forrester, previously told Retail Brew that all these programs make things harder for big-box players. “If a significant part of your customer base is now in a paid loyalty program, you’re just further down on the list,” she said.—KM

        

TECH

Behind closed doors

Pizza gif

Giphy

What in the fridge?

Amazon apparently wants to know. The e-comm giant is working on a smart refrigerator that would monitor a consumer’s at-home inventory and even order items that are running low (usually pints of ice cream, in our case), sources told Insider.

The project would use some of Amazon Go’s computer-vision tech and has been in the works for at least two years.

  • The team that created Amazon’s Just Walk Out system is reportedly leading the venture, and the company has invested some $50 million a year into it. (Amazon did not respond to a request for comment.)
  • Amazon wouldn’t manufacture the fridge, but instead link up with an appliance company to preinstall the software.

Stocker...Elissa Quinby, a former Amazon executive and senior director of retail insights at Quantum Metric, called the technology a “data play,” as it would help Amazon understand people’s purchasing decisions.

“For the customer this can mean more personalized incentives, discounts, and bundled offers,” she told Retail Brew. “For Amazon, this can help with inventory planning, preventing out-of-stock issues, even during the busiest times.”

Come on in: The move also “reflect[s] Amazon’s desire to ‘win the home,’” Quinby said. “Food delivery and grocery services are a hot market right now, with brands focused on finding the most seamless way to offer services.”

  • An insider told Insider that there have been concerns within Amazon about its grocery biz and ability to keep up with fast-growing competitors like Instacart.

“This product would...set the pace for how brands become more embedded in their customer’s lives,” Quinby explained.

Now, if only the fridge would also tell us why we opened it in the first place...—JS

        

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SOCIAL MEDIA

Panic! on Twitter

Facebook logo

Pexels

If you were anywhere near a phone or computer or human who works in media (hello) this week, you know that Facebook and its family of apps, including Instagram and WhatsApp, were down for six hours on Monday.

Facebook eventually restored services, and influencers everywhere rejoiced. But a lot can happen in a day. As our friends at Marketing Brew reported, for brands and social media managers that rely on these platforms, a few hours could potentially set them back months.

Somethin’ to talk about: Still, some companies (and consumers) flocked to Twitter to share in the fiasco and score some easy engagement. Twitter got the ball rolling, tweeting, “hello literally everyone.”

Amazon’s Alexa account replied, “I don’t have hands so I’ll just say Hi five times... Hi Hi Hi Hi Hi!,” confirming suspicions that we live in the darkest timeline.

The incident spawned tweets both good and bad, LOL and cringe. Here are a few brand reactions that made us stop scrolling—for good reasons.

  • Zaxby’s fast casual restaurant chain cut right to the chase: “before Twitter crashes we love you please buy Zaxby's.”
  • Starburst got cheeky with it: “Free STARBURST on Instagram rn!”
  • And Velveeta yelled at us: “IG AND FB ARE DOWN SO POST YOUR QUESO PICS AND ARGUE WITH YOUR UNCLE HERE FOR THE TIME BEING”

Click here to see more of our favorites.—JG

        

WHAT ELSE IS BREWING

  • Home Depot is the first retailer to sign up for Walmart’s new GoLocal delivery service.
  • Burger King will test Impossible Foods’ meatless nuggets in the US.
  • Rent the Runway filed for its IPO, showing losses of $171 million in 2020.
  • Target will pay employees an extra $2/hour this holiday season to work on busy weekends and other peak periods.

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COMMUNITY

Coworking with Jodie W. McLean

Jodie W. McLean, CEO of Edens

Francis Scialabba

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

Jodie W. McLean is gearing up to celebrate 25 years at Edens, a Washington, DC-based retail owner, operator, and developer that manages $12 billion in assets. Over the years, she’s seen—and done—it all, becoming CEO in 2015. She tells us more here.

How would you describe your job to someone who doesn’t work in retail? My job is to develop and curate open-air retail spaces across the country—from Union Market in Washington, DC, to RiNo in Denver, Colorado.

One thing we can’t guess about your job from your LinkedIn profile: I started with the company as a junior analyst and worked my way up to CEO, and that’s pretty unusual in today’s job market. I only planned to stay with Edens for a few years but was continuously presented with new challenges and opportunities to learn.

What’s your favorite project you’ve worked on? Mosaic in Fairfax, Virginia, with a new roller rink! Also opening Bloomie’s new concept store.

An emerging retail trend that you’re most excited about this year: We’ve anticipated the rationalization of retail for years. But we’re now seeing the full integration of physical and digital retail as accelerated by Covid. This is the place where retailers can operate most efficiently. The one truth that’s remained through this era of change is that the store is the heart of both the brand and its community.

        

SWAPPING SKUS

Today’s top retail reads.

Press pause: Retail bankruptcies have slowed this year, but the reprieve might just be temporary. “Everyone is focused on the holiday. Nobody is really focused on what comes after the holiday.” (Retail Dive)

Story time: A deep dive explaining “the great book shortage of 2021.” (Vox)

Lease on life: Instant grocery-delivery startups are reshaping retail real estate across US cities—especially in New York. What do they look for in a space? (Modern Retail)

EVENTS

October Checkout event

Francis Scialabba

We’re about a week away from October’s The Checkout* event with Shipt’s Rina Hurst and Walmart’s Courtney Carlson. If you haven’t completed your (free) registration for next week’s event on October 14 at 11:30am ET, you better get on it. Particularly if:

  1. You’re an organization gearing up for the holiday season’s shopping craze.
  2. You’re navigating the difficult dance of customer expectations and overloaded fulfillment services.

Sign up right here.

*This event is sponsored by Square.

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Written by Katishi Maake, Jeena Sharma, and Julia Gray

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