Today in retail, Wish.com sees the macroeconomic environment as a tailwind for its bargain-centric marketplace, while debit cards are the preferred payment method as the economy languishes. Plus, Office Depot parent will keep its retail and B2B operations together, eCommerce firms are looking to help shoppers shave time off their checkouts and Global-e expands cross-border payments base with Borderfree acquisition.
Debit Holds Edge Over Credit as Economy Sours
In times of turmoil, when the economy wreaks havoc with household budgets, visibility into cash flow becomes king. It should come as no surprise, then, that debit, as a payments choice, should be top of mind and top of the proverbial wallet.
That sentiment is borne out by the recent findings of PYMNTS’ deep dive into the spending habits and preferences of more than 2,700 consumers in the United States last month. In the PYMNTS report, “Digital Economy Payments U.S. Edition: Payment Method Diversification,” we found that debit edges credit, in some cases, significantly.
That preference cuts across all permutations of what we might call payments demographics — those consumers who show a broad or high range of payment diversification. These are the consumers who utilize at least three payment methods, with at least two of them classified as nontraditional methods.
Kellogg Split Sees CPG Brands Turn Their Focus to High-Growth Snacking Category
Kellogg, noting the strength of its snacks business relative to its other categories, is splitting its portfolio into three independent public companies. The company announced Tuesday (June 21) its separation into Global Snacking Co., which includes snacks, noodles and more; North America Cereal Co., selling cereals in the United States, Canada and the Caribbean; and Plant Co., selling plant-based foods.
The company stated in the release that the goal is for each company to be better able to focus on its priorities and to operate with greater flexibility. The names for each are temporary.
Similarly, Mondelēz International announced Monday (June 20) the acquisition of energy bar maker Clif Bar & Company for $2.9 billion, also in a move to focus on driving growth in the snacking category. In addition to selling in convenience and grocery stores, Clif also runs a direct-to-consumer (D2C) eCommerce shop.
Office Depot Parent Rejects Bids, Says Retail and B2B Office Supply Biz Is ‘Better Together’
A multi-year process that would have put Staples, Office Depot, OfficeMax under one roof was officially rejected Tuesday (June 21), as the board of ODP Corp. announced the sale or spinoff of its consumer businesses would not proceed.
Citing the benefits derived from scaling and operating under the holding company structure, CEO Gerry Smith said “Office Depot, ODP Business Solutions, Veyer and Varis are better together as a value-creating enterprise at this time.” The announcement follows a review of both “public and private non-binding proposals” that ODP received for its pair of consumer brands, which include about 1,000 retail locations.
Although not named in the release, New York-based private equity firm Sycamore Partners, which specializes in retail turnarounds and acquired office supply rival Staples for $6.9 billion in 2017, had been looking to buy certain ODP assets since January of 2021, a deal ODP’s board had initially rejected in favor of a plan that would have combined the three retail brands.
Gucci Continues Courting Younger Consumers With Harry Styles-Designed Line
In a bid to broaden its appeal to young consumers, Gucci has teamed up with pop music superstar Harry Styles to produce a line of vintage, rock-inspired apparel.
Styles became the latest musician to try his hand at fashion design when Gucci launched the HA HA HA clothing line Monday (June 20). The line includes 25 looks co-designed by the former One Direction vocalist and Gucci creative director Alessandro Michele.
The collection, which will be in Gucci stores in October, includes “sport coats with meaty lapels, neckerchiefs and glen-plaid topcoats,” according to The Wall Street Journal (WSJ), which noted “the clothes have a palpable ’70s look to them.”
Global-e Acquires Borderfree, Expanding Cross-Border Operations
Cross-border end-to-end platform Global-e agreed to acquire Borderfree, a cross-border eCommerce solutions business, from Pitney Bowes, according to a Tuesday (June 21) joint press release, giving Global-e access to a service that helps retailers reach more than 200 countries with local websites.
The companies are also launching a strategic partnership: Pitney Bowes will provide cross-border eCommerce logistics services to Global-e and its clients, and Pitney Bowes’ clients will be able to utilize the Global-e platform for their cross-border needs. Global-e will acquire Borderfree for approximately $100 million in a cash deal. Borderfree is expected to generate more than $40 million in revenue this year. The deal is expected to close during the third quarter of the year, subject to customary conditions.
Through the collaboration, Global-e will be able to offer its merchants with increased global demand generation, and Borderfree clients will have access to Global-e’s platform localization capabilities, data models and artificial intelligence (AI) algorithms for conversion optimization.
Wish.com CEO: Our Customers ‘Forget What They Bought,’ Enjoy the Surprise
At a time when consumers are tightening their belts, trading down and shifting their spending habits toward essential items, Wish.com’s new CEO Vijay Talwar says the macroeconomic environment will be a tailwind for the 12-year-old eCommerce marketplace for low-priced goods.
In fact, at a time when the challenge and cost of meeting the same-day and next-day free delivery expectations of retail customers are getting increasingly difficult, he said Wish’s online dollar store business model is a completely different value proposition.
While there are an estimated 50,000 dollar stores across the country that continue to be the fastest growing segment of retail in terms of adding new physical locations, there’s clearly demand for this “thrill of the hunt” or bargain hunting type of shopping.
eCommerce Firms Fine-Tune Tech to Shave Seconds off Checkout
For consumers, a good checkout experience is one they can complete quickly so they can move on to the next thing they want to do.
For eCommerce retailers looking to serve those customers, the top measure of success is whether a customer who starts checkout completes the sale — and a big part of doing that is speed. Offering a choice of payment methods is a key part of this. Consumers want to be offered payment methods that are relevant to where they’re located and the kind of buyers they are.
Increasingly, industries are also working to engage customers at the moment that they want to make a decision. In some cases, that means letting them buy things through ads on Instagram and other social channels. Whether the customer is engaged in-store, online or on social channels, they expect the checkout to be as frictionless as possible.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More