Happy Friday. We know you still have holiday shopping to do (it can’t just be us, right?), so let’s get into it.
In today’s edition:
- The year’s most overhyped retail trends
- Retailers are good with gift cards
- DTC brands see a slowdown
—Julia Gray, Jeena Sharma, Katishi Maake
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Francis Scialabba
In 2021, the retail industry took Covid-era conveniences and tried to make them fit into a post-vaccine world. Fifteen-minute grocery-delivery startups claimed supermarket trips are a thing of the past. Gamified commerce reasoned people only buy things when they’re scrolling TikTok or playing Candy Crush. And fashion houses jumped into the metaverse before consumers could google “What is NFT.”
So, which trends made a mark and which just made noise? To close out 2021, we spoke to a few analysts and insiders and got their opinions on the most bloated buzzwords of the year.
Live dreams
Livestream shopping is still getting its footing in America, but the fad has already made retailers and social media companies alike rethink their e-comm strategies. To name a few: Facebook introduced a live-shopping event series, Saks debuted holiday livestream shopping shows, and Albertsons partnered with a short-form video platform.
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A slew of live-shopping platforms like Ntwrk and Supergreat, too, have popped up to compete in the space.
But livestream shopping, expected to be an $11 billion industry in the US by the end of 2021, hasn’t yet taken off here like it has in China. There are doubts it actually will.
Get real: “I don’t think we’ll ever be where China is with livestream shopping...[Our expectations will] settle in at something a little more reasonable,” eMarketer’s Andrew Lipsman told Retail Brew.
“People have compared livestream shopping to QVC, but QVC works because it’s on TV. With livestream, people have to lean in and really want to engage with it,” he continued. “So the question is, how many people really want to spend a significant amount of time watching these?”
Neil Saunders, managing director and retail analyst at GlobalData Retail, concurs: “Livestream shopping has become more important...but now that people can go into stores, [it’s] not quite as important. It was a stand-in.”
Screen time: Which brings us to our next trend…online shopping. Don’t look so shocked! We have our reasons.
Click here to read ’em—and see which other fads were way, way, way overhyped this year. And click here to cast your own vote.—JG
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Jeff Greenberg/Getty Images
’Tis the week of holiday-shipping deadlines. Nordstrom and Saks Fifth Avenue, for two, marked December 16 as the last day shoppers could put in online orders to get their gifts by Christmas (without paying exorbitant shipping fees)—but there will always be procrastinators. Jam-packed stores are always an option. So are gift cards.
And they’re more popular than ever.
Gift cards ranked in the top three online categories this season (behind toys and video games), according to Adobe—sales increased 263% from November 1 to December 9, compared to September.
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Shoppers plan to buy 15 gift cards on average during the holidays, a number up 50% from 2020 and 200% from 2019, per branded payment service Blackhawk.
Backed up: Not to blame everything on the supply chain, but in this case, it has played a role.
“The front-page coverage [of the] crisis has people defaulting to just giving gift cards,” Tyler Higgins, retail practice lead and managing director at AArete, told Retail Brew.
Cashing in: All those gift cards are A-okay by retailers. Not only are they a way to combat everything basically being out of stock, but gift cards can help draw in shoppers.
“This is great for them as they attract new customers,” Deborah Weinswig, CEO and founder of Coresight Research, told Retail Brew. “If the customer has a great experience, you might have had the cheapest customer acquisition cost ever.”
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Those shoppers often spend more, too. A Blackhawk study found that 60% of consumers tend to shell out more $$ than what their gift cards are worth.
Click here to read more about why retailers are into gift cards.—JS
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...doesn’t mean an e-commerce strategy from ’99—or even the one you’re using from last year—is gonna be any more effective. (Unless you’re giving away scrunchies with every order. Scrunchies might work.)
As we enter the new year, now’s the time to start thinking about better ways to engage your customers so you can drive growth and build brand loyalty.
Take a page from Route’s book. In fact, take all 17 pages in this free guide they built on modern customer engagement. It’s got the how, when, and where you should be engaging with customers—the info you need in order to scale better.
According to Route’s guide, a staggering 93% of customers want to hear from you—from the minute they make their purchase to the day they receive their order and beyond.
Take a moment to think about the scrunchies. In the meantime, download and read through Route’s guide here.
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Giphy
That DTC shine might be wearing off.
This year, nearly six in 10 Americans bought at least one DTC product, according to Diffusion’s latest Direct-to-Consumer Purchase Intent Index. But going into 2022, only 65% expect to purchase something from a DTC brand, down from 79% heading into 2021—the first drop since Diffusion began surveying shoppers in 2018.
- Nearly half (43%) of Americans don’t plan to shop from a DTC brand during the holidays.
What’s with the slowdown?
Ship-shop state: DTC brands “almost became synonymous” with fast (and free) shipping before the pandemic, explained Kate Ryan, Diffusion’s US managing director. Supply chains made that tough this year.
“Through no fault of their own, it’s been impossible to guarantee that kind of thing,” Ryan told us. “What I think consumers have wanted out of DTC was the original promise, and DTC brands just couldn’t deliver that in the way that they had hoped.”
- Shoppers are leaning toward traditional big-box retailers, believing them to be more reliable amid the chaos, she added.
Looking ahead...Ryan isn’t necessarily alarmed by the slowing growth, but she does think there’s room for improvement. She called out customer service as a big focus for 2022.
“All of these brands are all still trying to get people in the door to meet that demand. Customer service is something that you’re going to see wholesale [innovation] on—what kind of technology and tools [that] help to do that,” Ryan said.—KM
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TikTok is teaming up with Virtual Dining Concepts for its own (delivery-only) restaurants.
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Alibaba wants Lazada, its Southeast Asian arm, to hit $100 billion in gross merchandise value.
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Affirm and Klarna are among the buy now, pay later platforms that the Consumer Financial Protection Bureau plans to look into.
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McDonald’s former CEO will return more than $105 million in compensation after reaching a settlement with the fast-food giant.
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Modern merchants sell for tomorrow. If you wanna really connect with your customers in 2022, you need to update your e-commerce strategy to reflect the times. Route’s Guide to Modern Customer Engagement breaks down the journey today’s shoppers take and how you can connect with them in meaningful ways. Download the guide for free here.
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Today’s top retail reads.
Tied together: In the aftermath of Virgil Abloh’s death, sales for his designs on sneaker-resale sites skyrocketed, raising questions about how the market can be manipulated when someone influential passes away. (The New York Times)
Fine print: From ginger-less ginger ale to vanilla ice cream with no vanilla, class action lawsuits against food and beverage makers are on the rise. Here’s why. (Food Dive)
Do the math: Retail-theft statistics are exaggerated. This breakdown explains why it’s actually a much smaller problem than the current narrative would have you believe. (Los Angeles Times)
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Catch up on the Retail Brew stories you may have missed.
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Three of the stories below are real...and one is most definitely not. Can you spot the fake?
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Kraft is offering home cooks a $20 reimbursement to not make cheesecake to help with cream-cheese shortages.
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Party City warned it might run out of balloons as early as next week, as people ready for New Year’s Eve celebrations.
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Uber Eats made its first-ever delivery to space, sending canned beef and boiled mackerel to the International Space Station.
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Lay’s released its own vodka for the holidays.
Keep reading for the answer.
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We all remember the helium shortage from a few years back, but it looks like balloons are safe for the time being.
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Written by
Julia Gray, Jeena Sharma, and Katishi Maake
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