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Baby-care startup Lalo is growing up.
Morning Brew January 06, 2022

Retail Brew

OpenStore

Welcome back. And cheers to our first Thursday newsletter .

In today’s edition:

  • Baby-care startup Lalo is growing up
  • Walmart and Amazon charge ahead with EVs
  • Best Buy introduces a revamped in-house media firm

Katishi Maake, Erin Cabrey, Jeena Sharma

STORES

Growth spurt

Baby-care startup Lalo's New York City flagship Lalo

Lalo’s growing up—with a new flagship in New York City.

The baby-care startup, co-founded in 2019, recently opened its new (and only) store, marking Lalo’s return to IRL retail.

  • It shut down its previous showroom in 2020.

As a DTC brand to start, the move didn’t hurt Lalo’s biz throughout the pandemic. Parents stuck at home scrambled to make the most of their space for themselves—and their little ones. That proved to be a boon for Lalo, and 2021 was even stronger: The company said it surpassed its 2020 revenue by mid-June and landed a $5.6 million seed round in July.

  • By Q3, sales were up 70% from the previous quarter, CEO and co-founder Greg Davidson told Retail Brew. (He declined to share specific figures.)

As successful as online has been for Lalo, there are components to an IRL space that e-comm can’t replicate, explained fellow co-founder Michael Wieder, who is also president and CMO.

Talk to me

Lucky for Lalo, it was able to use lessons from its prior space to help develop its new flagship.

“When we had the showroom in the early days, it was an amazing proof of concept for us—what being really close to the customer can do, the feedback we can get, and ultimately, the environment we’ve been able to provide,” Davidson explained.

For example, a mainstay at Lalo’s first showroom was in-person appointments, which let customers chat about childcare needs and learn more about the startup’s products. Davidson said 50% of those who booked a session ended up purchasing something, so it’s no surprise that Lalo brought that experience back to its New York location.

  • Pandemic in mind, Lalo’s flagship requires proof of vaccination, masks (for anyone over age two), and contact tracing.

A whole new world: Education plays a big role in the store, but so does fun. The flagship has a play area where kids can toy around while parents shop. There’s also a nursing nook, which is available to anyone, not just Lalo customers, plus classes throughout the day for both parents and kids.

“Our flagship has allowed us and our staff to walk people through the store and have real conversations...because we merchandised it in a way where it feels more like a home,” Davidson said.

Click here to read more on how Lalo is looking to its store to build relationships—and what’s next for the company.—KM

        

DELIVERY

Electric feel

Walmart adds electric delivery vans from General Motors subsidiary BrightDrop Walmart

Retailers are getting charged up about electric vehicles.

Walmart will add thousands of electric delivery vans from General Motors subsidiary BrightDrop to its fleet, GM announced yesterday, while automaker Stellantis said it’s set to sell its latest EV innovation to Amazon.

It’s electric: Walmart’s deal will bring on 5,000 BrightDrop vans, set to start hitting the road by 2023 and fuel the retailer’s goal to operate a zero-emissions fleet by 2040.

  • The move will support its plan to scale its InHome delivery service from 6 million to 30 million households by year’s end and hire 3,000+ delivery drivers.
  • FedEx also upped its 2020 order of 500 BrightDrop EVs to 2,000 yesterday.

“As important as it is that we save our customers time and money through convenient delivery options, it’s just as important that we focus on creating a more sustainable last mile delivery fleet that avoids emissions,” Tom Ward, SVP of last mile, Walmart US, said in a statement.

Meanwhile, with its new deal, Amazon will be the first commercial customer for Stellantis’s new Ram ProMaster Battery Electric Vehicle—debuting in 2023—which is optimized for last-mile delivery.

  • Amazon isn’t new to EVs: Stellantis has supplied it with thousands of them since 2018. The e-comm giant has also bought over 100,000 EVs from automaker Rivian, the first 10,000 of which are coming by the end of the year.

Full charge: With deliveries skyrocketing, companies are prioritizing EVs to cut greenhouse-gas emissions and save $$ on fuel. The Corporate Electric Vehicle Alliance—which counts Amazon as a member, alongside Best Buy, Clif Bar, Ikea North America, and more—formed in 2020 to help accelerate fleet electrification.—EC

        

TOGETHER WITH OPENSTORE

For Sale: Your E-commerce Biz

OpenStore

Selling your e-commerce brand is actually really easy, thanks to OpenStore. They’re the new, modern way to sell your Shopify business in—get this—24 hours. Happy New Year, indeed.

Here’s a rundown: OpenStore directly buys e-commerce businesses across every category. You’d be the right fit for them if most of your sales are made on your Shopify site and you’ve made at least $500k in annual revenue. They’ll get you a concrete offer in 24 hours—it’s totally free and no obligation. You close in weeks and get to avoid any lengthy sales process and expensive fees.

Plus, post-sale, OpenStore will absorb your brand to grow it to new heights with the team behind hims & hers, eBay, PayPal and more. Woot.

Claim your free offer before January 22, 2022 here.

STRATEGY

Bigger gains

Best Buy tablet Francis Scialabba

Retail media networks might’ve been overlooked last year, but not in 2022.

This week, Best Buy announced Best Buy Ads, its revamped in-house media firm, that will “help shoppers discover products, services, and offers.”

  • Best Buy said it interacts with its customers 3 billion times a year, according to the release, and can help brands—and not just ones in the electronics space—“cut through the clutter” and reach its audience.

Ad(d) ons: Plenty of other mega retailers—Lowe’s, Macy’s, and Dollar Tree, to name a few—are betting on the space, and it is only expected to grow. US retail media ad spend was estimated to reach $24 billion in 2021, per eMarketer, nearly doubling by 2024 to more than $41 billion.

  • 74% of brands surveyed in September by The Trade Desk, a digital ad company, said they had dedicated budgets for retail media networks, which ranked fifth in terms of spend.

The big picture: Experts recently told us they expect the strategy to be a win-win. Retailers enjoy another avenue for $$, while brands can draw in more customers via targeted ads.

“It’s going to be something that we are talking much more about, as retailers are really marrying in-store shopping data with online shopping data and having a really compelling value,” said Claire Tassin, retail and e-commerce analyst at Morning Consult.—JS

        

WHAT ELSE IS BREWING

  • Authentic Brands Group pulled its IPO plans, but hasn’t yet said why.
  • Bed Bath & Beyond reported Q3 earnings that fell short of expectations.
  • Taco Bell is bringing its monthly taco subscription ($10 for a taco a day) nationwide.
  • Coca-Cola and Constellation will introduce an alcoholic version of Fresca later this year.
  • Hasbro has found its new CEO in Chris Cocks, who headed up the toy company’s Wizards of the Coast and digital gaming division.

TOGETHER WITH YOTPO

Yotpo

Gaze into the ~future~ of e-commerce. Experts have spoken, insights have been gathered, and you won’t need a crystal ball to see these predictions. Yotpo’s annual report, The Future State of E-Commerce: 2022 Predictions, centers on pivotal strategies for driving retention and overcoming high acquisition costs in a time of third-party data changes. Read it here.

SWAPPING SKUS

Today’s top retail reads.

Fight for it: It took two years for Jessica Simpson to buy back her eponymous billion-dollar brand. Here’s the inside story of how she got it done. (Bloomberg)

FOMO: Xiaohongshu, sometimes called the “Instagram of China,” has made a name for itself among luxury brands. But competition from platforms like ByteDance and Alibaba’s Taobao—among other things—could slow its e-comm ambitions. (Jing Daily)

Grape expectations: Meet the startup bringing machine learning and data analytics to wine making. (Fortune)

Customer first: B2B or B2C or both, your e-commerce site is more important than ever. So check out dotdigital’s new e-book “Building the future of e-commerce” to learn how to create an ecosystem that supports growth and delivers a unique customer experience. Get the e-book here.*

*This is sponsored advertising content.

NUMBERS GAME

Earlier this week, we took you back in time. Today, our newest newsletter section will lay out the one big number that you need to know.

You can’t always want what you get.

Before retailers can catch their breath after the holiday push, they’ve got a record number of returns to sort through. UPS expects to process more than 60 million return packages in the 10-week period ending January 22, a 10% jump over the same period last year.

  • More than one-third of shoppers—38%—will return gifts this year, according to a survey by RetailMeNot.

How much will all those returns add up to? Some $114 billion this season, as you’ll see below, according to estimates from B2B online liquidation platform B-Stock Solutions.

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Written by Katishi Maake, Erin Cabrey, and Jeena Sharma

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