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December 14, 2020

TOGETHER WITH

Good afternoon. This holiday season, a Retail Brew subscription is the only present that’s 1) guaranteed to arrive on time and 2) free. To give a friend or colleague the gift of retail news, and yourself points toward exclusive prizes, you can start sharing right here.

In today’s edition:

Inside Retail Ecommerce Ventures
Vaccine preparedness
A surprise decor surge

— Halie LeSavage

E-COMM

Where Second Chances Can Be Bought

Francis Scialabba

Dressbarn, Pier 1 Imports, RadioShack, Stein Mart: They’re all retailers that suffered public, messy falls into disorganization and/or bankruptcy. They’re also retailers that holding company Retail Ecommerce Ventures (REV) invested millions in to revive online.

Why’d they get a second chance? It’s a question I’ve wondered about with every REV acquisition press release, and one that REV Executive Chairman Tai Lopez answered for Retail Brew.

Never say die

Lopez doesn’t. Brands, he told me, are eternal if shoppers recognize and trust them. And trust is measured in dollars: “In general, we’re buying things that are doing over $500 million minimum in revenue before we bought them,” Lopez said. “Most entrepreneurs are reinventing the wheel when I think you could just buy a trusted wheel and get it spinning again.”

Once the engine’s REV’d...each comeback tour is tailored to where the brand’s been before. Some need complete website overhauls; all need new executive leadership.

Taken together, Lopez said REV’s digital house of brands is yet another interpretation of a “virtual mall.” But this one’s built by a cross-promoted navigation bar on each REV website and a hands-off merchandising strategy.

Each brand only owns a portion of its inventory. The rest is listed directly by vendors through a dropship model.
REV brands also sell their items on Amazon. “We don’t see Amazon as a competitor, we see it as another channel,” Lopez said.

Depending on clicks instead of foot traffic has paid off so far: Dressbarn and Pier 1 Imports both notched higher than expected Black Friday and Cyber Monday sales. Lopez said REV is operating at a “nine figure run rate.”

Looking ahead…REV’s portfolio could expand into anything from cosmetics to fintech—so long as the price and IP are right. “We think [...] there’s about ten to twelve trillion dollar industries in the world,” Lopez said. “We’re trying to slowly work our way into all of them.”

+ Speaking of acquisitions...Authentic Brands Group is reportedly in talks to take over Arcadia Group, home of Topshop.

STORES

It's Finally Happening

An illustration of shots with red liquid lined up against a pink background

Getty Images

The first shipments of the Covid-19 vaccine are currently making their way across the U.S. Now comes a logistics tango with partner retailers.

The first phase: Distribution. So far, it’s divided into two retail tracks:

In-store: Pharmacies and grocers were approved to distribute free vaccines last month. Superstores recently got on board: Target and Walmart are also prepping their in-store pharmacies for staff and shopper vaccinations.
On-site: Walgreens and CVS are lending their pharmacy staff to nursing homes. In an announcement Friday, Walgreens said it could vaccinate its first patients before Christmas.

The next challenge: Making sure all those syringes are administered, especially on retail employees. Store and fulfillment center staff have been susceptible to Covid-19 while working in close quarters.

Administering the vaccine may eventually allow retailers to roll back capacity caps in stores and behind the scenes.
But requiring a vaccine to return to work could open up legal and cultural hurdles from any wary employees.

A past solution? Inoculation incentives. Publix, for example, hands out $10 gift cards to anyone who gets a flu shot at its in-store pharmacies.

These Emails are E-mazing

Obviously we know a thing or two about e-mazing emails, but so do our pals at Sailthru.

To help those of us who are inbox-challenged, their Strategy & Analytics team has created an email benchmarking tool that qualifies the millions of emails sent every minute.

They then found the top 12 performers from the first half of 2020 and put together a guide that you can have in your inbox ASAP.

The guide features an email Who’s Who, like Thrive Market, Buzzfeed, NASCAR, and some scrappy little media startup called Morning Brew.

With topics like email personalization, rewarding loyalty, predictive analytics, and more, you’ll be on your way to incredible inbox infiltration.

Get Sailthru’s Top Performing Email guide here.

TRENDS

Deck the Halls, and Windows, and Driveways

Most shoppers are home for the holidays because it’s where they’ve been all year. So they’re buying festive decorations for a change of ’tis the scenery—catching retailers by surprise.

Costco CFO Richard Galanti said on an earnings call last week that many of its stores are already sold out of wrapping paper and holiday decor.
Walmart is about a week ahead of its usual holiday shopping sales, despite buying more inventory than usual.
Christmas Central nearly doubled its typical sales in November, and is turning away requests from other retailers for spare inventory.

Why no stockingpiles? Retailers set their holiday buys at least a year in advance, since most string lights and fake firs come from overseas factories. So there isn’t wiggle room to call in extra inventory at the buzzer.

At Home Group even trimmed its holiday inventory orders when Covid-19 shutdowns began. CEO Lee Bird told the WSJ it would’ve bought more with a 2020 do-over.

My takeaway: Surprise demand for inflatable snowmen won’t stretch into 2021 like general WFH equipment. But the situation proves yet again the importance of supply chain flexibility in every facet of retail, even seasonal categories.

WHAT ELSE IS BREWING

Adidas confirmed it's considering selling Reebok.
Savage x Fenty wants to raise $100 million for expansion efforts, DealBook reports.
Starbucks plans to operate 55,000 stores globally by 2030.
Affirm delayed its IPO until 2021.
Lush employees said the chain has blocked them from unionizing.

HOT TOPIC

Billie

At the mall, it’s where I was forbidden to spend my allowance. In Retail Brew, it’s where I invite readers to weigh in on a trending retail topic.

Last week, the FTC sued to block P&G’s acquisition of women’s DTC shaving and body care brand Billie. The federal agency has a patchy strategy: It blocked the sale of Harry’s to Edgewell in February, but not Unilever’s billion dollar acquisition of Dollar Shave Club in 2016.

Notable response: “If the FTC’s goal is to not kill competition then I’d advise them not to diminish exit prospects for investors and founders,” Re:store founder Selene Cruz told TechCrunch. “This would hurt investment in the space and that’s the real fear for innovators.”

Weigh in: What are your thoughts on the failed Billie x P&G deal? Hit reply to share your take, and I may include it in an upcoming newsletter.

Extra read: Dig into the FTC’s explanation for why a Billie takeover could be considered anticompetitive and what it means for future DTC exits. (The Fashion Law)

SWAPPING SKUS

Consider the below links your syllabus on the state of size inclusive retail.

This is the best explanation I’ve found on how the pandemic interrupted sizing progress in the apparel industry. (Vogue Business)
When retailers take on a size expansion, it’s usually in the women’s department. What about menswear? (South China Morning Post)
After years of controversy and customer demands, Lululemon finally agreed to expand sizing in some items this fall. It’s already capturing new shoppers. (Bloomberg)

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