A lot can happen in a month. More Shopify layoffs (and selloffs), Walmart’s AI-powered vendor negotiations, Rent the Runway’s new subscription model, and Olipop’s eye-popping sales projections included.
So, let’s start unpacking.
👉 ICYMI, here’s what happened in March.
International Monetary Fund projects a 3% growth rate for the global economy for the next 5 years (down from the 3.8% average of the last two decades).
For reference, this is the slowest medium-term growth forecast since 1990.
If IMF’s predictions prove right, the “path back to robust growth is rough and foggy,” warns Kristalina Georgieva, Managing Director of IMF.
Shopify reported $1.51B in Q1 revenue, beating expectations.
In the same press release, Shopify announced that it was offloading its logistics operations to Flexport. Meaning, the company is no longer trying to compete with Amazon’s logistics network.
The sale includes Deliverr, which the ecommerce platform bought less than a year ago for $2.1 billion, and 50+ warehouses nationwide.
Some of Shopify’s logistics team will move to Flexport as part of the deal. But the majority will be let go (~20% of the company total.
This announcement drove Shopify shares up ~40% in the following week.
The ecommerce marketplace recently invited select Shopify brands to try Explore Brand Selection. Amazon describes this new and totally optional beta program as a “way to assist you with the product listing process.”
AKA, Explore Brand Selection automates how Shopify brands upload ASINs to the third-party marketplace – rather than manually running this process.
The fine print Amazon sent out says the feature can “pre-fill 59% of required attributes.” But many sellers anticipate that this automation will come with lots of errors they’ll need to manually fix.
But that’s not most merchants’ biggest concern. Instead, they’re asking questions about what data this program will give Amazon access to.
The program’s representatives insist that sellers will not need to connect Amazon to their Shopify back-ends and that no confidential data will be collected. But even if that’s true, sellers still worry about Amazon collecting more data from them without returning the favor.
Amazon Q1 revenue reached $127.4B (up 9% YoY) amid layoffs, beating expectations. And ads were a driving force, topping $9.5B (an increase of 21% YoY).
Speaking of ads, Amazon is working to make its full-funnel ad offerings more plug-and-play. And Pinterest announced a multiyear ad partnership with Amazon to bring more brands to the social platform.
Walmart adopts Pactum AI to negotiate better prices with some vendors. Pactum AI automates negotiations with suppliers on the retail brand’s behalf to unlock hidden value.
So far, the big box retailer has only used the tool to negotiate physical products for its stores, like shopping carts. But it’s reached deals with 68% of the suppliers it approached, saving the company 3%.
🤿 Dive deeper: How to negotiate better vendor terms without Pactum AI.
Rent the Runway’s closet is too full. So, as of March, the subscription service has been sending customers more clothes for the same money. And it’s surprisingly boosting business across the board.
Active subscribers have surpassed a record-breaking 141,000. Meanwhile, paused memberships have dropped from 26% to 22% in roughly a quarter.
But doesn’t this raise Rent the Runway’s operational costs? Surprisingly, it does the opposite.
Adding another item doesn’t drastically increase the weight of the shipment — keeping transportation costs steady. But it does leave less inventory in their warehouses, lowering holding costs.
Plus, because orders are bigger, it takes 43% fewer employees to process the same volume of inventory, the team reports. (Rent the Runway laid off 24% of its workforce in September 2022.)
“We’re actually saving here having more items at home rather than on our shelves, and that’s great for us and for the business,” CFO Scarlett Brillet O’Sullivan told Insider.
🔥 Tip: You can make a similar play by offloading deadstock as a free gift with every purchase.
Bed Bath & Beyond’s famous (infamous?) 20% off coupons have officially expired. The company will no longer honor discounts past their end date as it liquidates its inventory and prepares to shut its doors.
In its heyday, the company mailed out nearly 1 billion (yes, with a B) blue coupons annually. Many of which customers hoarded, knowing the end date in this instance didn’t mean the coupon was actually expired.
But the big blue coupons aren’t completely useless now.
Big Lots and The Container Store have taken the torch and are temporarily accepting 20%-off coupons from the dying competitor.
Olipop is on track to sell $200m of prebiotic soda as gut health trends. (For reference, this target is more than double the brand’s 2022 sales.)
The soda alternative’s rise coincides with traditional soda consumption falling.
Today, “functional sodas” (the category Olipop falls into) account for 14% of the digestive health category.
🤿 Dive deeper: Olipop’s secret ingredient for delirious revenue growth.
Think we missed something major? Have the tea on an upcoming story? Drop me a line at firstname.lastname@example.org – and I’ll see about working it into May’s Monthly Retail Recap.