HOLIDAYS

Unwrapping Holiday Retail Projections

36 hours into October, some retailers are already hanging tinsel and cranking Mariah Carey. So let’s take stocking of what to expect in the 2019 holiday season. 

There’s a battle in the dollhouse. Bloomberg reports that the three largest U.S. dollmakers—Mattel, Hasbro, and MGA Entertainment—all expect to release the next Princess Unicorn ahead of the holidays. On the line: potentially record-breaking holiday doll sales.

The reboot of Toys ‘R’ Us stores will have stiff competition. A CivicScience study released yesterday found that nearly 50% of consumers will only shop online this year, mostly on Amazon.

• Amazon Prime members in the U.S. were over 200% more likely to make the majority of toy purchases online—and 125% more likely to do their shopping mostly online than shoppers without an Amazon account.

Gift givers are considering green wrapping paper. An Accenture survey revealed that half of respondents would choose shipping options with smaller carbon footprints when possible. 45% said they’re looking for gifts from companies with social missions.

• Take that with a salted caramel cookie: When it’s 11:59pm on December 23, no one’s thinking about the polar bears.

The reason for the season is in flux

Retailers of all stripes joined Amazon’s non-denominational Christmas in July this year. Prime Day and other year-round discounts have taken away the attention from the traditional holiday shopping season. A study by OpenX found that half of U.S. consumers have already started holiday shopping before September.

And there’s not much time for holiday sales to catch up: This year’s calendar has the fewest possible shopping days between Thanksgiving and Christmas.

But there’s hope yet for Q4's all-important sales performance. 

• Coresight Research projects 4% annual growth in November and December U.S. retail sales.
• Deloitte estimates that holiday sales will pass $1.1 trillion, a record haul. 

My takeaway: We may have jumped the gun assuming on again, off again tariffs or warnings of an economic slowdown would dampen holiday spending.

M&A

Food52 Has the Funds to Load Up Its Plate

While I was shelling out a week’s pay at Trader Joe’s on Sunday, VC firm TCG was gobbling up a majority stake in Food52, a recipe and kitchenware website, for $83 million. 

Food52’s recipes are seasoned with insights from its NYT Cooking-raised founders. But it’s e-commerce that makes Food52 desirable to TCG.

• Food52 sells 5,000+ cooking items online, nearly half of which can't be bought anywhere else. 
• 75% of Food52’s revenue comes from e-commerce, and overall revenue has grown 50% annually on average.
• Food52 earns commission on affiliate links to sites like Amazon, but its in-house product line is more profitable. 

Readers are Food52's not-so-secret ingredient. The company's two bestselling products, a cutting board and an apron with built-in pot holders, were whipped up after conversations with Food52’s users.

TCG has an appetite for farm-to-table content. The firm also owns a majority stake in Barstool Sports, which has a lucrative merch business and is considering launching a Barstool booze brand to leverage its media presence. 

Looking ahead...Food52’s planning to hire engineers, launch new pop-ups, and open its first permanent store location.

RENTAL

Inside Rent the Runway’s Backstage Drama

Rent the Runway’s no good, very bad day turned into a week of supply chain misses and customer service missteps. Let’s review:

• Customers flooded Rent the Runway’s social media channels and customer service hotlines starting early last week, complaining that their clothing rentals were late or never delivered. 
• On Friday, CEO Jenn Hyman said the delivery delays were caused by an update to Rent the Runway’s fulfillment software. 
• The company promised to reimburse some customers up to $200 for missed orders. Its head of supply chain, Marv Cunningham, also stepped down. 

What’s next: Rent the Runway won’t accept new customers until October 15 at the earliest, the date it says its new software will be operational. 

Short-term pain for long-term gain? Possibly. The fashion rental unicorn says the source of all its trouble will eventually boost inventory capacity and allow it to process orders more efficiently. 

But those improvements may not keep dissatisfied customers hanging onto Rent the Runway. As I’ve noted in Retail Brews of yore, companies from Banana Republic to Nuuly have launched comparable services.

EXPERIENCE

Helzberg, Bed Bath & Beyond Say “I Do” to Experiential Retail

Beyoncé’s golden rule has made its way from passive aggressive significant others to retail this week. 

At Helzberg Diamonds: Couples who couldn’t decide between a family-only ceremony or a 500-guest blowout can now elope at their local Helzberg store right after buying their rings. More than 900 store associates nationwide have been ordained to let customers get “Hitched at Helzberg,” according to the company.  

At Bed Bath & Beyond: It’s partnering with VEBO, an experiences platform, to launch a Gift Experiences category in its wedding registry. Couples can essentially crowdfund their honeymoons; listings include visits to wineries, spa trips, and shark cage diving.

My takeaway: B-cubed and Helzberg are ushering in an intimate take on the experience economy by inserting themselves into a milestone event and its halo of purchases.