Retail Diary: Week of January 1, 2024
This Week's Topics:
Shopping in 2024 - Cooler, Smaller and Weirder
Luxury Retail Updates
Initial Holiday Sales #s
New Launches, Collabs, Corporate Moves & News
What else I ❤️️
Shopping in 2024 - Cooler, Smaller and Weirder
I kicked off Substack Chats with a link from this article from Rachel Tashjian in the Washington Post (gift link) titled “How we’ll shop in 2024: Cooler, smaller and weirder”
Highlights from the article:
Luxury Business Shift: how the consumers are shifting behaviors due to increased pricing from inflation and changing consumer behavior to more affordable categories - especially beauty.
Bifurcation of shoppers: True luxe shoppers not balking at the price points vs consumers shopping for entertainment and joy and affording the entry price points of brands (beauty and small leather goods, for example.)
Rise of Independent Boutiques: Independent retailers, offering unique and reasonably priced items, saw success as consumers sought alternatives to big luxury brands.
Shopping inspiration: Love love love that Tashjian called out some fabulous writers Leandra Medine Cohen, Becky Malinsky and laura reilly for where we are getting inspiration as the “new guard of shopping newsletters” vs traditional fashion market pages (although I’m still reading magazines too.)
I’m excited about these shifts as it opens lots of new opportunities for retail disruption. Retail entertainment is bringing immersive and engaging experiences into shopping - this can drive loyalty and create memorable moments for a shopper that they want to talk about with others.
This WWD article further discusses the luxury shopping experience and how when stores deliver the customers will visit - shown by an uptick in foot traffic in London’s West End shopping district at its highest since 2019.
Join the chat - I’d love to hear what boutiques, brands and retailers you think are providing exceptional service to all customers and who is nailing the experience and entertainment to shopping? Tiffanie Darke shared Agora, her boutique in Ibizia “We treat it like a live magazine, telling the stories of fashion and sustainability and it's as much an event space and a hangout as it is a shop.” and Liz McKay (author of a newsletter I love Bad Influence) mentioned A Current Affair vintage show that pops up a few times a year in LA and NYC.
Luxury Retail Updates
Farfetch and Matchesfashion luxury retail was in the news so much during December 2023 it was hard to keep my head from spinning. Here are a few updates on where they currently stand:
Frasers Group, a British retailer, has purchased Matchesfashion/Matches for $63 million, which was a significant loss for Private Equity group Apax Partners.
In 2017 the PE group bought Matchesfashion but it is disappointing to see the retailer struggle. Prior to 2017 it was a destination to discover trends, new labels and showcase the owners curation (Tom and Ruth Chapman.)
In late December, Coupang acquired Farfetch, infusing the luxury retailer with a crucial $500 million capital boost. Farfetch has significantly evolved from a tech-centric service for boutiques providing back-end support into a luxury e-tailer that has been struggling. With competitors like Net-a-Porter, Mytheresa, Matches, SSENSE, and LuisaViaRoma, differentiation and a unique perspective are vital for navigating the bustling luxury market landscape for today’s consumers.
The fate of Farfetch owned Browns Fashion is still up in the air. Browns Fashion is another legacy and iconic boutique known for discovering new brand and curation (see a trend here…) that was purchased by Farfetch in 2015. This Glossy article also points out a lot of challenges - brands that sell to multiple luxury retailers could see their Purchase Orders go down with consolidation. Additionally, it makes me wonder about the state of consumer businesses with volume around $10-$50 million. How do they stay independent, successful and profitable?
Still waiting to see what happens with Saks interested in buying Neiman Marcus.
This WWD article has great insights on luxury online retail with executives from some of the major players. And I liked reading about Toshi which could be an answer to many online retailers creating luxury omnichannel customer centered solutions.
In case you missed it, this late December post from Business of Fashion dives into the state of luxury ecommerce.
Initial Holiday Sales #s
From Retail Dive and Adobe Analytics, “online consumer spending between Nov. 1 and Dec. 31 rose 4.9% year over year to $222.1 billion” which was a new record for e-commerce.
BNPL (buy now pay later) saw a 14% jump from LY and hit an all-time high.
According to Mastercard there was 3.1% growth Year over Year but I suspect we are still waiting for a fuller picture of retail performance including discounting impact which seems to have been heavy for Holiday 2023.
Also too early to speculate on January returns (Return-u-ary) but I’m keeping my eyes peeled for that data to get a better picture of how Holiday 2023 performed.
New Launches, Collabs, Corporate Moves & News
Launched
Thingtesting launched a new sampling program where users can get reimbursed for purchases or get exclusive promotions. This is a smart way to drive trial and solicit reviews from an engaged community.
To celebrate 10 years of the Max Mara Teddy Coat, Max Mara launched the Teddy Ten project has special editions (sparkling with sequins!) and the Mini Teddy Coat for the younger set and accessories too. I loved reading that stylist, editor and entrepreneur Carine Roitfeld was the first person to publicly wear the coat which helped drive the initial virality of it.
Collabed
MCM x BAPE - Love how they pitch this as a collab of two brands - one luxury and one hype.
Marimekko x Uniqlo on a new collaboration
Lyst named the hot bag silhouette, similar to The Row banana sling bag, is available in a Marimekko print in multiple color ways.
This heattech turtleneck is pretty great too.
Corporate Moves & News
CEO Bracken Darrell discusses VF Corp's turnaround efforts, focusing on Vans - where I think there is so much opportunity still. Darrell's background and the team's strategic steps indicate a promising path to success.
All images from the sites linked in Retail Diary newsletter.
What else I ❤️️
Brilliant of Proenza Schouler to put a minimal make-up Pamela Anderson as the centerpiece of their campaign.
Toteme T-lock is now in a beautiful suede on NAP.
I loved reading about these limited edition, cult status, Chore Jackets by Paynter Jacket Co.
Have you seen Tanner Leatherstein on tiktok? Part of me shudders every time I see him take apart a luxury bag, but I find it so interesting. Volkan Yilmaz is the leather expert behind the account and he takes apart luxury handbags and gives an assessment of what he thinks it costs to make and which ones he thinks are good quality for the price. In this NYTimes article he shares more about his background, how he came to be on social media tearing apart luxury handbags and the brands he thinks are worth their retails (Strathberry - seen carried by Meghan Markle, Polene and Coach.
Tiktok worked hard in 2023 to build up their commerce platform. One of the ways they enticed merchants was with their low fees. 0-2% in some cases to pull away business from other social selling channels. Now in 2024 they will be increasing their fee to 8%.
There is no denying that Stanley Water Bottles are everywhere, so it is no surprise to hear that their revenue went from $73 million in 2019 to an estimated $750 million in 2023! What helped drive that? A Utah Blog, The Buy Side, who early on loved the product so much she started to wholesale it when Stanley threatened to discontinue the Quencher. And the President Terence Reilly who arrived from Crocs which was the right fit for the brand in driving collectibility and driving the merchandising strategy.
I’m interested to see the changes that are necessary in the consignment/resale models going forward. Managing the inventory, authenticity and matching the right customer with the right product at the right time with the right price is all a challenge. Here are some predictions from Retail Brew on what could happen in 2024.
Seriously, has Chip Wilson (Founder and largest shareholder of Lululemon) not learned anything?
Thanks for reading Sarah's Retail Diary - Feel free to share and help our retail community grow!
What's Next?
I’d love to keep the conversation going - so come join the chat. Here is a link and I’ll see you there. Substack chats are such a happy place on the internet.
I’m ready for 2024 to be a disruptive, innovative, exciting and successful year in Retail - follow along and let’s uncover the news together. I’ll curate the best content for you.
After Amy Odell‘s interview with Dana Thomas I purchased Deluxe: How Luxury Lost Its Luster and plan to read for a Retail Diary Book Club newsletter. (I saw @ideservecouture on Instagram also posted and since it is sold out on Bookshop.orgwe are likely part of a large group that decided to read this book. Tip: I ordered mineused via eBay.)
Thanks for reading Edition 147
Sarah Shapiro