Today in retail, Affirm teams up with Poshmark on flexible payments program for shoppers. Plus, digital rewards increase brand loyalty, and Rent the Runway is ready to respond to an uptick in weddings, special events and the return to work.
Rite Aid Posts Strong Year Amid Shuttering Unprofitable Stores
Rite Aid reported a strong close to its fiscal 2022 fourth quarter and full year, while also eyeing an outlook in 2023 that leads to the shuttering of 145 stores that have so far proven to be unprofitable.
Amid struggles to compete with Walgreens, CVS Health and Walmart pharmacies, Rite Aid is looking to lower costs, which includes closing stores already announced as being shuttered in December. Rite Aid has reported losses that have only increased in recent months, adding up to a $7.18 loss per share for the period ending Feb. 26, 2022.
Last month, Rite Aid President and Chief Executive Officer Heyward Donigan said the company was planning to streamline its operations by eliminating the chief operating officer position and consolidating its pharmacy leadership. Pharmacy reimbursement pressures and competitive threats like online retailer Amazon’s push into pharmacy are forcing drugstore chains to look at new ways to reinvent their brick-and-mortar drugstores.
US Consumers Spend 10x More on Groceries at Walmart Than Amazon
Last year, Amazon captured almost five times Walmart’s share of U.S. household spending on electronics, appliances, sporting goods, hobbies, music and books. But Walmart still has an edge in the grocery category.
The average American household still spends roughly 10 times as much on food and beverages at Walmart than at Amazon. Walmart has always had a comfortable lead on Amazon in this category, capturing a total of $264 billion in sales in 2021, compared to Amazon’s $27 billion.
Amazon has never taken in more than 2.1% of consumers’ total spending on food and beverages and shows no sign of raising that percentage anytime soon. Since acquiring Whole Foods in 2018, the share of food and beverage spending won by Amazon has shifted between 1.7% and 2.1% — a leeway of just 0.4 percentage points.
Amazon’s Andy Jassy Hints More Prime Benefits on the Way
In his first letter to shareholders since taking the reins from Jeff Bezos in July, Amazon President and CEO Andy Jassy provided a history lesson with some vision.
The Thursday (April 14) letter provided a glimpse into how Jassy’s influence continues to shape what became the world’s largest retailer in 2021, finally bypassing archrival Walmart.
Saying Amazon’s consumer business “realized the equivalent of three years’ forecasted growth in about 15 months,” he pointed to the logistics issues that Amazon’s legendary fulfillment network dealt with as demand rose, and how success makes its own challenges.
Smartphones and Contextual Rewards Soothe Inflation’s Sticker Shock and Close the Sale
In the latest “Expanding Payments Choice Playbook,” PYMNTS, in collaboration with Onbe, found that coupons for free products make customers 98% more likely to buy, with sweepstakes increasing the likelihood by 39% and contests by 42.5%.
In a separate PYMNTS report, “The 2022 Global Digital Shopping Playbook,” PYMNTS has found that 24% more brick-and-mortar shoppers in the U.S. used their smartphones for shopping in stores in 2021 than in 2020, using them chiefly to earn rewards.
As economies reopen, and as stores go back to bringing foot traffic in the aisles, consumers are bringing technology with the devices as they return to physical points of sale. The mobile device becomes the key place to present those same consumers with the contextual reward that may lead them to transact.
Gen’l Merchandise, Appliances Offset Weak eComm as March Retail Sales Rise 0.5%
U.S. consumers continued to shop last month, pushing overall retail sales up by 0.5% in March on the back of strength at general merchandise stores, such as Walmart and Target and appliance and electronics retailers including Best Buy.
At the same time, eCommerce, or so-called non-store retailers, posted the single-largest decline of 16 major categories tracked in the government report, falling 6.4% for the month, versus strong year ago comparisons fueled by lingering COVID lockdowns and store closures.
According to the latest U.S. Department of Commerce report, the half-percent increase in March retail sales marks the smallest month-on-month increase since February 2021 and follows an upwardly revised February tally that bettered February’s sales to 0.8% from the 0.3% stall initially reported.
Affirm Teams With Poshmark to Offer Shoppers Flexible Payments
Payment network Affirm is extending its partnership with social marketplace Poshmark to offer increased payment flexibility to shoppers, according to a press release.
Poshmark was among the initial companies to use Affirm’s Adaptive Checkout. Of Poshmark’s 80 million users, eligible shoppers can now tap Affirm and choose between monthly payments or four interest-free payments every other week for merchandise exceeding $50.
This expanded partnership follows Affirm’s Consumer Spend Report which showed that more than 50% of consumers want to use an installment service to pay for purchases this year. Approved Poshmark customers selecting Affirm at checkout, can split the total cost of their purchase into biweekly or monthly payments, for as low as 0% APR.
Clothing and home décor retailer Lands’ End will showcase women’s swimwear in its on-air debut on home shopping channel QVC at 10 a.m. Eastern Friday (April 15), part of an expansion of the companies’ eCommerce relationship that started late last year, according to a Thursday (April 14) press release.
The women’s swimwear collection will feature sizes 2 to 32 and run from petite through tall. It will also be featured on QVC’s digital platforms, according to the release. The move is part of Lands’ End’s push to find new platforms and collaborations to increase its audience.
Rent the Runway Preps for Surge in Weddings, Events, Back-to-Work Blazers
After doubling revenues and subscribers last quarter, the nation’s leading designer clothing rental platform is aiming to do so again, saying the surge in inflation, combined with a spike in upcoming special events, will drive the value case for not purchasing new outfits.
Rent the Runway CEO Jennifer Hyman told investors and analysts during the 12-year-old company Q4 earnings report has long waited for an environment like this.
For the three months that ended Jan. 31, the Brooklyn-based site said its revenues rose 91% while its active subscribers rose 110% to finish the quarter and fiscal year at 115,000.
eCommerce sales in the United States rose 14% year over year to reach $871 billion in 2021. Moreover, a surge in online and mobile payments adoption throughout the Asia-Pacific region and Europe is expected to help drive 18% annual growth in cashless transactions worldwide through 2025.
Lawmakers have moved to develop regulations to keep digital payments secure from fraudsters, money launderers and other malicious actors. Businesses seeking to accept an expanding variety of digital payment methods must keep pace with these rules, including Payment Card Industry Data Security Standard (PCI DDS) and 3D Secure requirements for credit and debit data, as well as the Strong Customer Authentication (SCA) standard taking shape in the European Union and the United Kingdom.
Report: Digital Incentives Boost Customer Loyalty
Incentives are a vital part of retail advertising, consisting of rebates, loyalty programs and other rewards for making purchases that encourage shoppers to buy more. Coupons for free products make customers 98% more likely to buy, with sweepstakes increasing the likelihood by 39% and contests by 42.5%. Rebates, one of the most popular means of sales incentive, make customers more than 75% more likely to make a purchase.
Onbe’s Future of Payments Research 2022 Survey found that 74% of consumers prefer to make payments by using digital methods. Another recent study found that more than 70% of customers prefer to deal with businesses digitally rather than deal with paper, meaning that the more online a business can be, the more customers it can gather.
PYMNTS’ latest Expanding Payments Choice Playbook® examines how businesses incentivize customers through rebates and other promotions, the factors that drive customers to digital payments and how implementing digital incentives can help businesses maintain a competitive edge in a crowded environment.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More