The start of the school year and back from summer vacation always come in strong, with retailers still focused on back to school rush while already preparing for the holiday boom. Within the retail industry, a few policy issues have the potential to impact the broader industry. Potential tariff increases from China could have the retail industry increasing prices passed on to the consumer. According to the Bureau of Labor Statistics’ consumer price index, apparel prices haven't gone up meaningfully in at least 7 years, and for items like toys and cosmetics, prices have actually been trending lower. “We’ve trained customers to be so cheap," Sucharita Kodali, a retail analyst at Forrester Research is quoted in Axios. “Amazon is a symptom of the consumer obsession with low prices,” not the cause.
In FTC and Amazon news, the agency is looking to see if Amazon is using its size and scale to hurt competition with antitrust actions. The Wall Street Journal also reported on changes to Amazon’s search algorithm claiming that it was altered to benefit Amazon’s own branded products over best-selling or more-relevant products.
Other stories that caught our attention this month:
1. Generational differences in shopping preferences and actions. Emarketer reports on the increase in “Buy Online, Pick Up In Store” (BOPIS) among Gen Z consumers, with more than half (58%) of internet shoppers aged 18-25 saying they had never used BOPIS. Fifty-nine percent said they used BOPIS to get the item in their hands faster. However, in another survey of internet users 18 and older, 47% cited avoiding shipping charges as the main reason to use the service.
Older women who had previously shopped at stores like Dressbarn and Chico’s are feeling the effects of store closures. This CNBC article reports that women aged 50-60 are turning more to off-price retail and shifted to online. According to NPD, e-commerce for women's plus has grown 5% and online sales among Gen X have also risen double digits.
2. RetailDive reports on the increase of venture capital funding to warehouse robotic companies and the potential impact this may have on retail. For example, there is the promise that an AMR (autonomous mobile robot) could unload truck and deliver palettes without any human interaction. Warehouse operations and order fulfillment are also potential areas for growth.
3. More details on Le Tote’s acquisition of Lord & Taylor from last month were reported in Modern Retail. Rakesh Tondon, CEO of Le Tote, said that his company’s decision to acquire department store chain Lord & Taylor for $100 million was driven primarily by technology. Le Tote plans to implement its tech stack to improve both the online and offline experience for Lord & Taylor customers. Le Tote has built its own onboarding quiz that new customers have to fill out to indicate what size and style of clothing they are looking for. It’s also built a personalization and pricing engine to recommend to customers items they might want to add to their subscription or buy.