We ended February with more uncertainty in the retail world as inflation and supply chain issues remain a cause of concern, as well as the situation in the Ukraine escalating. The battle for retail help was still in the headlines with brands like Target now offering $24 an hour in certain tight labor markets to attract and keep employees. And Amazon and Visa agreed to end a global dispute over credit card fees that was impacting shoppers in the UK. Here are some of the other key stories we followed in February.
The New York Times reported on a surprising trend that showed physical stores beat online shopping in 2021, despite COVID closures and fears. However, the report advises that it may be more accurate to look at COVID impact on business in two year blocks to assess how the pandemic truly disrupted business.
RetailDive took a look at the cost benefits of direct-to-consumer (DTC) vs wholesale partnerships for brands. A report from BMO Capital Markets found that "selling DTC often doesn't mean fatter margins. In a set of apparel brands studied by BMO, four out of the top five merchandise margin-getters had robust wholesale revenues. American Eagle Outfitters and Gap Inc. (two retail companies with minimal to no wholesale operations) have merchandise margins below wholesale-heavy Ralph Lauren and PVH, according to BMO's report."
With an eye on climate change, Forbes reports on how Gen Z shoppers are disrupting the retail industry with a focus on choosing sustainability over brand when making purchasing decisions. As a result of Gen Z's influence over their Gen X parents on this issue, Gen X consumers' preference to shop sustainable brands increased by 24 percent and their willingness to pay more for sustainable products increased by 42 percent since 2019. The report also found that the definition of sustainability means different things to each generation. The older generations—Millennials (46%), X (48%), and Boomers (44%) - agree that sustainability means "products made from recycled, sustainable and naturally-harvested fibers and materials." But nearly half of the Gen Zers have taken that belief a step further and believe that sustainability means "sustainable manufacturing".
Tillerman In the News
Tillerman's managing partner Chris Borduas shared his thoughts on how retailers can get the most from their POS data with Total Retail, a leading publication for the retail technology industry. Chris highlighted how POS data can help inform three key areas of business related to order cancellation, future on order and improved product offerings. Check it out here.
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