October was another busy month in retail as the industry prepares for the holiday season and pundits make predictions of how this year will fare compared to others. At KWI, we’ve been closely following some recent trends focused on digitally native brands setting up physical stores and the rise of pop-ups, as well as how some innovative companies are using mall kiosks as extensions of their brands. The common theme here is that customers are demanding new ways to engage with brands and that shoppers are finding that nothing can replace the ability to touch and feel a product, especially for fashion brands.
See below for a look at what we’ve been reading:
According to eMarketer, Americans will likely will spend $1.002 trillion from Nov. 1 to Dec. 31. This would be a 5.8% increase from last year, and the strongest growth since 2011. Brick-and-mortar sales represent 87.7% of total holiday spending, a share that has declined. This year, e-commerce sales are estimated to increase 16.6% to $123.73 billion—12.3% of all holiday retail sales.
2. Black Friday is dead - and constant discounts could be to blame (Business Insider)
Black Friday no longer carries the same weight it once did, with at least 60 retailers planning to keep their stores closed during Thanksgiving this year, including Costco, Nordstrom and TJMaxx. In addition, consumers expect deals and discounts throughout the year, not just on this one day, as seen by Amazon Prime Day and other retailers offering significant deals outside of the season.
3. Digitally native brands set to open 850 stores in 5 years (Retail Dive)
Retail Dive delves into a recent report from commercial real estate firm JLL that examined the trend of digital startups moving to physical locations. Over the next five years, 850 physical spaces are set to open ‘clicks-to-bricks’ stores with Casper cited as opening 200 storefronts, AdoreMe with 300, and Allbirds poised to open stores in four cities. More than half of the e-tailers included in the report opened up pop-up locations first in New York City, followed by Los Angeles and Toronto. When it comes to permanent locations, NYC leads, followed by LA, San Francisco and Chicago.
4. Mall kiosks find new life as “Studio Shops” (PYMNTS)
PYMNTS explores how the mall kiosk or retail merchandising unit (RMU) is being revived by a company called Fourpost, as it aims to democratize the department store concept and meet the evolving needs of brands. Brands will be able to lease space for a relatively short period of time – six months to one year – in a variety of designs, from standard cubes to triangles and receptacles. The spaces come with the kinds of elements that a retailer would need in a mall, such as lighting, signage, point of sale (POS) hardware and Wi-Fi, as well as access to amenities like event space.
Fashion brands have long used the ‘drop’ model popularized by Supreme to generate buzz and excitement for a launch. But now brands outside of the fashion world are getting into the mix, with brands like Shake Shack, Dos Toros and Quip trying out the approach to launch specialty products or generate app downloads.
6. How 8 ecommerce companies are competing against the old guard (Adweek)
Adweek reports from Shopify Plus Commerce event how direct-to-consumer brands are making headway against incumbent brands by focusing on technology and customer experience. Brands like Knix, Parachute, Cuyana, Adore Me, Rebecca Minkoff and Brooklinen shared their experience in building brands and connecting with customers.