In retail it is always more or less raining data. With hundreds of millions of consumers, millions of stores, hundreds of thousands of miles of infrastructure and an ever-accelerating proliferation of products to make $4 trillion worth of buying and selling that happens each year in in the United States possible, there’s an awful lot to keep track of.
One could spend hours combing the Web and searching social media to try to continually separate out the signal from the noise, but that runs the risk of cutting into one’s online shopping time and those fancy napkins on Amazon are not going to buy themselves. So, we humbly submit our trending topics to keep you on the cutting edge in the most convenient way imaginable.
Retail Payments — Apple Continues To Struggle With Sluggish Adoption
The tough part about evaluating Apple Pay is that, ultimately, no one can really quite be sure, since Apple has all the definitive use data on the subject. Since proudly trumpeting how many cards were activated in the payments app in its first 72 hours on the market (1 million), the home team in Cupertino has been pretty quiet on the specific Apple Pay numbers — though they’ve remained optimistic ( lately more quietly so) throughout the year.
As a result, exact numbers on Apple users and transactions remain a bit mysterious.
However, a lack of specific numbers have never stopped analysts and investors from sharing their opinions, and this week Bloomberg joined the party and declared what Tim Cook once described as the “Year of Apple Pay” underwhelming.
Citing research from a variety of sources — including PYMNTS and InfoScout’s report about Apple Pay adoption — Bloomberg suggested that Apple Pay is used for about 1 percent of retail transactions.
Which is probably wildly overstating it.
“People don’t know why it is they’d use Apple Pay,” Jared Schrieber, CEO of InfoScout, told Bloomberg. “They are satisfied with the current methods, and they don’t know how Apple Pay works.”
Apple Pay data is, of course, tricky because it is largely based on anecdotal evidence and statistical sampling.
PYMNTS/InfoScout’s most recent round of Apple Pay research released in early August — the only regular consumer panel out there of iPhone 6 users who shop in stores that accept it — indicated that just 13 percent had tried Apple Pay, and that this represented a falloff from March data, which indicated that 15.1 percent of eligible Apple Pay users had at least tried the service.
Apple Pay also seems to have seen a dip in its committed users. In March, 48 percent of iPhone 6 consumers in a store where they could use Apple Pay did. In June, that number had dropped to 33 percent.
Apple, unsurprisingly, remains optimistic.
“We’re off to a great start, and we are seeing continued, double-digit monthly growth in Apple Pay transactions since launch,” Apple said in an emailed statement to Bloomberg. “And our customers love Apple Pay — a recent survey found satisfaction rates of 98 percent. Merchants love it, too, and tell us that the added security and convenience Apple Pay brings their customers is a huge benefit.”
Customers who use Apple Pay may really really like it, but so far no one’s data shows that Apple has nearly enough customers who would really really like to try it, which will slow its ignition. Whether Apple Pay will hockey stick, as some analysts are predicting, or just slow burn right out, as others forecast, will depend very much on merchants’ next move, as a payment method that can’t be widely used has a limited shot of gaining wider traction.
ECommerce Wars — Walmart Readies For The Coming Digital Commerce Rush
Can you hear those sleigh bells jingling yet?
Walmart sure can.
America’s biggest (or second biggest, depending on how you count it) retailer is gearing up for the holiday rush early this year and focusing its attention on building out distribution plans and expanding its logistical networks so that its eCommerce effort doesn’t lag behind.
Walmart wants that number one spot back, which means it has to be able to compete with the twenty-year-old upstart Amazon on its own ground, and has attempted to regain it by investing $1.5 billion in eCommerce in 2015 alone.
Amazon has distribution centers (in the same sense that the Great Plains have grass), and Walmart is racing alongside it to upgrade its warehouses, including those solely dedicated to eCommerce. Today, there are five such centers, with Walmart saying it can ship to any place in the U.S. within two days.
Walmart Chief Operating Officer of Global eCommerce Michael Bender told Reuters that large facilities allow the company to ship out products more efficiently.
“Christmas for us will be very different than Christmases of the past where we have had to work out of facilities that are not like this,” Bender said.
And it’s about more than physical space. Walmart also wants to race on technology aimed at shipping faster and cheaper. That includes its own algorithms for how products can best be routed, stored, scanned and picked up. Walmart is also focused on combining orders into the minimal number of shipments as a further cost-saving measure.
And with Prime being such a runaway success for Amazon across a variety of measures, Walmart is following suit with its own membership program — for half the cost of Amazon’s. According to Bender, Walmart is still testing a $50 membership fee with three-day free shipping, with the possibility of next-day or same-day delivery in the future.
A future, notably, that is already the present over at Amazon.
Brands — American Apparel’s Final Fireworks Display
Generally speaking, for a fast fashion retailer, being a trending topic for a few days in a row on Twitter, Google and Facebook is good news. A truism that was particularly true in the specific case of American Apparel, a brand known as well (if not better) for its controversial advertising and social media campaigns as it was for the fast fashion clothing it sold.
When edgy is at least half the brand, being the subject of buzz in the Twitterverse is basically the goal, even if that buzz sometimes reflects the opinion that your firm’s marketing department consists of depraved child pornographers.
However, even the semi-professional provocateurs at American Apparel probably aren’t ecstatic about how they managed to own social media this week, with its declaration of bankruptcy in Delaware.
The ever-optimistic folks at AA put the best spin they could on the situation.
“This process will ultimately benefit our employees, suppliers, customers and valued partners,” American Apparel CEO Paula Schneider said in a press release. “American Apparel is not only an iconic clothing brand but also the largest apparel manufacturer in North America, and we are taking this step to keep jobs in the U.S.A. and preserve the ideals for which the company stands.”
Americans love their fashion — to the tune of about $331 billion a year. And an increasing amount of that is being grabbed up by “fast fashion” — low-cost and inexpensively produced clothing that encourages customers to cycle through clothing more quickly, from store shelves that are always updating. Mid-price “apparel” merchants, like American Apparel, have not converted to this new shopping environment as well.
It is not the only brand struggling — Gap, Abercrombie & Fitch and J.Crew have all faced similar issues this year — though American Apparel’s problems were certainly exacerbated by a long, protracted and costly legal battle with Founder and former CEO Dov Charney.
Some brands — notably JCPenney — are trying to update with new offerings targeted specifically to fast-fashion customers.
“We are piloting a private brand called BELLE + SKY, which is our version of fast fashion that is a private brand,” JCP CEO Marvin Ellison explained at a recent conference. “I have had two trips to Asia since March, and it was very informative because we spent a lot of time with suppliers talking about fast-fashion retailers, not trying to replicate fast fashion as a strategy but to learn elements of the strategy.”
Whether JCPenney will be able to attract the H&M customer or the other younger consumers that tend to be associated with successful fast-fashion operations remains to be seen.
But American Apparel — now in bankruptcy — is attempting to restructure. Likely to go in that restructuring: the made-in-the-U.S. model that has been a main selling point of the company since its launch. All its garments are made in L.A.
That, many analysts believe, will simply not be viable if the firm has any chance of bouncing back from bankruptcy.
So, what did we learn in retail this week? To know Apple Pay may be to love it, but very few people know it. Walmart’s elves are likely ahead of Santa’s in eCommerce organizing this year and American Apparel might just be disappearing from the stage in a puff of smoke.