Morning Brew - ☕️ Paper trails

The supply-chain crisis doesn’t end with scoring the perfect present.
Morning Brew October 29, 2021

Retail Brew

Square

Happy Friday. Are you planning to go trick or treating this weekend? Or spend your days on Meta? (We tried, but that’s going to take a while to stick.)

In today’s edition:

  • Don’t forget to wrap your presents
  • Inside Petco’s new flagship
  • A bump in Halloween spending bodes well

—Jeena Sharma, Katishi Maake, Julia Gray

HOLIDAYS

Wrapped up?

Wrapped presents

Artifact Uprising

Most shoppers right now are focused on finding gifts, worried that the perfect present might not be available a few days from now. Wrapping is an afterthought. But that doesn’t mean paper hasn’t been plagued by the same supply-chain issues taking over the holiday season.

“Raw materials such as wood and paper are continuing to be materials that we have to order early and often to stay ahead of our needs,” said Anna Westerholm, chief experience officer at Artifact Uprising, an online retailer of photo books, photo cards, prints, and gifts. “Anything ordered from overseas has had long delivery times.” She added that the company started ordering materials like paper back in April this year to stay ahead of potential delays.

  • Ocean shipments across all goods took an average of 73 days to get to the US from China in September 2021, 83% longer than in September 2019, according to digital global shipping marketplace Freightos.

Better watch out: Wisconsin–based Waldan Paper Services has been manufacturing gift wrapping paper and other paper products for 30 years. While the company saw a slowdown in its business last year, largely due to the uncertainty around the pandemic, this year, retailers were placing orders months ahead of time, Kristin Manteufel, the company’s director of sales, told Retail Brew.

“We’re anticipating a rebound,” she said. “This year, we did more wrapping paper than we have in the past two years.”

That doesn’t mean all retailers are prepared.

“I’ve already had some inquiries from clients we don’t normally work with, saying, ‘Hey, I’m looking at a program for next year already. What would you be able to do for us?’” Manteufel said. She also expects last-minute orders in the coming weeks with retailers offering to pay a “rush fee.”

“We usually see [these kinds of requests] around Black Friday, where we get people that are just beside themselves, asking ‘Can I pay extra? I don’t have enough, or I don’t have what I need,” she said. “I’m anticipating some more of that rush here in the next few weeks as well.”

Click here to read more about why the supply-chain crisis doesn’t end with scoring gifts.—JS

        

STORES

Reddy, set, go

Petco's Reddy flagship store

Petco

Don’t tell Petco that you can’t teach an old dog new tricks.

Yesterday, in a first for the pet-care giant, it opened a flagship store for one of its owned brands: Reddy.

  • The millennial-centric lifestyle brand, which sells everything from dog leashes and collars to denim jackets and travel bags for pets, was introduced in 2018.
  • While all of Petco’s owned brands have experienced double-digit growth YoY, according to the company, Reddy has led the pack in popularity.

What’s inside: Beyond traditional pet supplies, Reddy is billed as a 1,774-square-foot experiential store that includes...

  • A fitting station for pet clothes
  • On-site product monogramming
  • A nutrition station with treats and supplements
  • A lounge area

The store, located in New York City’s Soho neighborhood, also plans to host events in the coming months like adoption drives, Jason Burris, Reddy’s store manager, told Retail Brew. He said creating a sense of community through the shop is important for bringing in repeat customers.

“We want to strengthen that bond—both pet parent and pet, but also with the community. That’s something here in Soho we’re going to be able to do on a different, elevated level,” Burris said.

In the coming months, Reddy’s in-store customers will also be able to sign up for Petco services like grooming and vet visits, which CEO Ron Coughlin previously noted are reliable recurring revenue streams.

The big picture: Petco told us that it wants to deliver new ways for customers to buy, including via “shop-in-shops” in Petco pet care centers for Reddy and other owned brands. In an August earnings call, for example, Coughlin said that 39% of their customers say they want both online and in-store experiences.

  • “We have a significant runway for continued growth as we execute against our proven multi-year transformation strategy across services, veterinary care, digital, owned and premium brands, and more,” he said in the call.—KM
        

TOGETHER WITH SQUARE

QR Codes: The Secret Ingredient

Since the start of the pandemic, the restaurant industry has had to deal with problems that go far beyond “S’cuse me, is it possible to split the check...eight ways?”

But in response to all those new challenges, an oft-unsung hero appeared: the QR code.

What started out as a mere safety measure quickly became an essential tool with major staying power. According to Square, self-serve ordering businesses are seeing an average 35% increase in sales within the first 30 days of implementing self-serve ordering with QR codes.

And that’s just for starters (aka appetizers). Square’s recent article on QR code ordering breaks down all the benefits this tech offers, including: lower staffing costs, access to customer insights, and an improved customer experience.

Click here to read the article in full.

SPENDING

Just treats

A gif of a man grabbing an armful of Halloween candy bags and throwing them into his shopping cart

Giphy

We’re heading into the Halloweekend, and consumers are ready to get their (store-bought) spooky on. According to NRF, 65% of the US will celebrate Halloween this year, nearly rebounding to the 68% who participated in 2019. And those ghouls and goblins are ready to shell out cash for treats.

Halloween spending in the US will reach an all-time peak of more than $10 billion this year, up from $8 billion during 2020 Covid-ween and $8.8 billion in 2019.

  • Candy, costumes, and decorations will each account for around $3 billion of that number.
  • GoPuff told Retail Brew that the delivery platform has seen a 30% increase in both order and unit volume for candy, comparing October 2020 to this month.

No tricks: This isn’t to say consumers aren’t Covid-conscious. Fewer people plan on attending or throwing parties compared with 2019—25% versus 32%, respectively.

“They’re staying home...yet they’re still spending more money,” eMarketer’s Nina Goetzen told us. “You’re already seeing a lot of optimism,” adding that it bodes well for the upcoming festivities. “Holiday spending...is going to continue to rise.”

  • eMarketer predicts holiday sales will hit $1.1 trillion in the US this November and December, up 9% YoY. (Deloitte also expects a similar bump this season.)

“The past couple years of celebration opened people up to alternative forms of celebrating,” Goetzen said. And even with new kinds of celebration, of course, there are still plenty of reasons for people to spend on the holidays.

+1: Marketing Brew digs into candy corn’s marketing strategy here for more Halloween reading.—JG

        

WHAT ELSE IS BREWING

  • Amazon missed on Q3 earnings expectations, as the e-comm boom evens out.
  • Costco bumped its minimum wage up to $17/hour for US workers, while Starbucks raised its to $15/hour.
  • Dollar Tree expanded same-day delivery via Instacart to 7,000 stores.
  • REI announced a $30 million fund to support founders of color.
  • Fanatics is partnering with the International Olympic Committee on a merch deal.

SPONSORED BY SAILTHRU

Sailthru

It’s the most wonderful time of the—already?! Yep, especially if you’re starting to plan holiday marketing campaigns. No need to go it alone, though: Sailthru’s Smart Marketer’s Guide to 2021 Holiday Success can help you improve this year’s results with low-effort, high-impact tactics designed to deliver value to you and your buyers. Get their guide here.

SWAPPING SKUS

Today’s top retail reads.

Secret sauce: An inside look into Chick-fil-A’s franchise model. (Wall Street Journal)

Emergency care: Health startup FemTech will acquire Birchbox with plans to pivot to health and wellness products. (Forbes)

Gone to waste: A new study found that food from quick-service restaurants like McDonald’s, Chipotle, and Pizza Hut sometimes contain small traces of industrial chemicals. (Washington Post)

FROM THE CREW

Holiday promo with Square logo

Francis Scialabba

Want even more on the holidays? In addition to the earlier piece on wrapping paper, here’s what we covered throughout the month:

You can see it all in this hub.

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

  1. A new Instant Brands collab puts a streetwear spin on products like the Instant Pot, courtesy of Rhude.
  2. Kanye West will hold a limited number of personal training sessions in partnership with Peloton.
  3. Hasbro is rolling out a life-sized Ghostbusters proton-pack prop that you can actually buy.
  4. Rimowa dropped a space-inspired, moon-crusted suitcase.

Keep reading for the answer.

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FRIEND OR FAUX? ANSWER

As fun as that would be, Kanye West is not going to be your personal trainer. But can you imagine?

Written by Jeena Sharma, Katishi Maake, and Julia Gray

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