Hope you aren’t expecting a typical blog post. If you are, disclaimer: This won’t be it.
Introducing our brand spanking new Monthly Retail Recaps. AKA, a one-stop shop for all the emerging retail trends that have happened in (roughly) the last 30 days.
Let’s start unpacking.
A potential TikTok ban threatens how brands reach GenZ
GenZ represents ~60% of all TikTok users. And the vast majority of them (97%) use the app to inspire their future purchases. This has made the social app known for viral dances the obvious choice for brands targeting Zoomers.
But if the US government bans TikTok (which is looking more and more likely), that comes screeching to a halt. So, marketers are scrambling to determine what they’ll do if TikTok becomes unavailable.
And YouTube might be the answer. Sure, YouTube Shorts and Instagram Reels already compete (used generously) with TikTok. But YouTube would be the obvious replacement – especially for brands targeting today’s youths.
Over 86% of GenZ already feel favorable about YouTube, with the average Zoomer spending ~6 hours a week on the platform.
Not to mention that the latest updates to YouTube’s ad offerings allow brands to target consumers by what they’re listening to. Meaning, if you know what music’s hip with the kids these days, you can probably market to them more directly than you ever did on TikTok.
🤿 Dive deeper: A data-backed cheat sheet for marketing to GenZ.
Even more layoffs, incoming
In January, retail layoffs spiked 3,225% YoY, and the trend is still ongoing.
We won’t ruin your day with a seemingly never-ending list of brands telling folks’ to “pack up.” But we will quickly run through some of the big ones:
- Amazon is laying off another 9,000 workers in the coming weeks. (This number is on top of the 18,000 employees the company has laid off since November 2022.) This round will hit Amazon’s cloud computing, advertising, human resources, and Twitch teams.
- Walmart let go over 600 fulfillment center employees (200+ worked at the Pedricktown facility in New Jersey and 400 at the Davenport facility in Florida). This is the latest indicator that the multinational retailer is scaling back its US fulfillment footprint after rapid expansion throughout the pandemic. (Last year, Walmart laid off 1,500 workers at an Altanta-area fulfillment center.)
- Apple is finally joining its fellow Big Tech companies and laying off some of its corporate employees. Most of these cuts will be to the company’s development and preservation teams. But it is unclear exactly how many roles will be cut.
Cost cutting leads to higher profits
Q1 numbers are rolling out. And the retailers reporting the best quarterly earnings are almost exclusively brands that made noise around improving their bottom line or lowering prices.
We know… who would have thought? (*Rolls eyes dramatically*)
- H&M reported higher than expected operating profiting margins in Q1 (1.3%, up from .9% a year earlier). These increased operating profits are primarily due to the brand’s cost-cutting measures.
- Tesla used lower prices to increase demand for its eclectic vehicles. And it delivered a record 422,875 cars in Q1, as a result (up ~4% QoQ). Tesla will publish its full Q1 results on April 19th, but it’s unlikely demand will stay this high as excitement over the new prices wanes.
🤫 Psst – looking to improve your Q2 numbers? Here are 4 ways to increase your profit margins.
Walmart wants to be (excuse us, beat) Amazon
Walmart’s new ecommerce site is basically a carbon copy of Amazon’s marketplace. And it aims to challenge the competitor’s market dominance head-on.
(Since the site’s launch, people have taken bets on whether Walmart CEO Doug McMillon will shave his head to get Bezo’s signature look next.)
Legacy brands are rethinking how to stay relevant
“Relevancy” seems to be top of mind for Boomers’ (and even Millenials’) favorite brands as GenZ comes of age and gains spending power. Some of the moves being made?
- Pepsi debuted its first new look in 14 years. The new, maximalist branding (complete with a new logo) focuses on boldness. And it features a “pulse” motif that attempts to encapsulate the energy and movement of the brand’s most iconic (often music-motivated) moments.
- Home Depot entered the metaverse. But unlike most brands, it didn’t just recreate its offline experience on Roblox. Instead, the home improvements company built a kid’s workshop where gamers can collect materials and complete virtual DIY projects.
- Diageo (AKA, one of Britain’s biggest companies and the maker of Guinness) appointed its first-ever woman CEO, Debra Crew. She will take command on July 1st.
- Foot Locker is having a bit of an identity crisis at the moment. The sneaker company has recently announced that it will close 400 stores by 2026. And in the process, it will also look to expand beyond sneaker culture. (Good luck, I guess.)
Google’s opening up about the biggest ads platform out there
Google launched its Ad Transparency Center, a library of all the ads recently run on Google Search, YouTube, and Display.
This library aims to inform people about which advertisers are reaching them. But you can use the library to sleuth what your competitors are up to, too!
(For instance, you might use it to see that Lush is wildly cutting back on its Google Ad spend.)
And finally, a few more stories worth your attention
- Mid-pandemic, the Jonas Brothers took center stage with a hot, new pop star: Rob’s Backstage Popcorn. And it’s a viral hit. The DTC rift on the trio’s “staple backstage” snack just raised $7m from fellow A-listers, so it can secure more “key retail chains nationwide.”
- Magnolia Bakery, the iconic NYC-based sweets shop beloved by Carrie Bradshaw, will officially start selling its treats at grocery stores and on Amazon.
- Speaking of Amazon, the ecommerce giant faces an antitrust lawsuit, alleging that its pricing policy artificially inflates prices. (Basically, the policy prohibits sellers from offering a lower price outside the marketplace). The prospective class action suit claims estimated damages of up to $172B.
- The very public collapses of several “next big thing” companies (think: SVB and FTX) are driving high demand for limited-edition corporate merch. (For instance, there’s a Borders bookmark unironically listed for $35 on eBay.)
Think we missed something major? Have the tea on an upcoming story? Drop me a line at email@example.com – and I’ll see about working it into April’s Monthly Retail Recap.