INTERNATIONAL

Costco Gets Into Crowd Control

9:00am CST: Costco opens its first China store in Shanghai. 

1:00pm CST: Costco closes its first China store in Shanghai. 

What happened? Consumers were too excited about bulk Craisins coming to China. The ~150,000 sq. ft. warehouse closed eight hours early after it was flooded with shoppers yesterday. 

^@hancocktom

Local police were deployed to block customers from entering the store by mid-afternoon. Bumper-to-bumper traffic reportedly kept customers from entering or exiting the parking lot as well. On Wednesday, Costco said it would only allow 2,000 customers in the store at a time.

The hype bodes well. Costco conducted five years of online-only sales in China before opening a store to target the country’s ever-growing middle class. It expects at least 100,000 new members to pay 299 yuan (about $41.75) per year for Gold Star membership. 

Similar wallet-friendly bulk retailers have tried to woo China’s vast consumer market with free samples and fro-yo—but predecessors haven’t had much luck against domestic retailers. 

• French supermarket chain Carrefour decided to sell 80% of its China business to a domestic brand, Suning, in June.
• German wholesale retailer Metro is selling its China operations.
• Tesco, a British grocer, exited China in 2014.

Currently, two powerhouses remain: Hema, Alibaba’s offline retail chain, and Walmart-owned Sam’s Club, which plans to have 40 stores by the end of 2020. But Costco hopes its take on affordable membership and bulk deals will lure shoppers away from its competitors.

Zoom out: Costco’s looking to sail around the $75 billion in retaliatory tariffs on U.S. imports Beijing announced last week. The retailer plans to substitute some Australian produce for similar products from the U.S. About 50% of its merchandise for the China store will need to be sourced from outside of the country.

COLLABS

Disney’s Trading Retail Partners

On Sunday, Disney and Target announced that Disney will open small concept stores inside 25 Target locations in October.

No Spider-Man, no problem. Those shops will include more than 450 Disney-branded products, 100+ of which were previously sold exclusively at Disney retail locations. Target will also open a new store next to Orlando's Walt Disney World Resort, whose Magic Kingdom park receives more than 20 million visitors every year. 

It’s a symbiotic partnership. For one, execs say the companies "share a strong guest overlap," mainly among families with kids hooked on Frozen. Target's toy sales have been a bright spot, too. Ahead of Christmas 2018, Target expanded its toy selection in over 500 stores, and the segment drove a significant portion of its 5.7% holiday comparable sales growth.

Plus, Target’s on a better trajectory than Disney’s other retail partner. J.C. Penney has opened more than 600 Disney branded stores in its locations since 2013...but it’s approaching a NYSE delisting.

Bottom line: Another choice retail partner will up Disney’s retail magic. Its retail business brings in about $1.6 billion, per Retail Dive.

TRENDS

Smooth Skin Doesn’t Have a Label

Skincare companies may avoid the sales slump that’s dried up the once-silky beauty market—if they pay extra attention to a new customer. Recent stats suggest men’s personal care is a wide-open growth opportunity. 

• The men’s grooming segment is expected to reach $166 billion by 2022, per Allied Market Research. 
• NPD reports that sales of men’s skincare products grew over 7% last year.
• A report by Mintel claims that close to two-thirds of U.S. men between 16 and 24 have used or would consider using genderless beauty products.

Case study: The Ordinary markets its skincare products by ingredients instead of “for him” and “for her” labels. Its genderless approach has set its owner Deciem up for $300 million in sales this year.

The opposite approach has landed men’s grooming companies in hot water. See: the backlash to War Paint, which was accused of promoting “toxic masculinity” to appeal to male customers.

Zoom out: Coty and Estée Lauder are among the beauty companies taking men’s personal care one step further. In recent years, they’ve hired male brand partners for traditionally female-fronted cosmetics collections.

MUSIC

You Can’t Spell "Strategy" Without "Tay"

In the age of Spotify, artists need retail reinforcements to push album sales. Case in point: Taylor Swift’s tag-team with select retailers to bundle exclusive merch with copies of her seventh album, Lover.

• Target sold four deluxe editions of the album that included copies of Swift’s diary entries and a journal for fans.
• Stella McCartney partnered with the singer on apparel and accessories that were sold on Swift’s and McCartney's websites.

In a move straight from Supreme’s playbook, Swift’s team opened a three-days-only pop-up shop in NYC the weekend Lover dropped. Capital One, which sponsored the store, didn’t share how many shoppers visited—but those fans could fill a stadium. 

^@amNewYork

Currently, Lover is the No. 1 album in the U.S. A Target spokesperson confirmed that Lover was the most pre-ordered album in the retailer’s history, surpassing Swift’s 2017 album reputation. 

The takeaway: Exclusive offers can’t replace the ease of streaming, but they do push product. Also, you shouldn’t underestimate a woman whose lyrics map out a weeklong London itinerary.