BEAUTY

"@AvonLady Requested to Follow You"

Brazilian beauty conglomerate Natura became the fourth largest pure-play beauty company in the world when it completed its $2 billion acquisition of Avon Products last week. Now comes the hard part: introducing Avon’s nearly 5 million sales representatives to TikTok.  

Teaching a 134-year-old new tricks

Natura’s confident Avon can regain cosmetics market share with a social-first recovery strategy that casts its salespeople as influencers, the WSJ reports.

• Natura Executive Chairman Roberto Marques told the WSJ he expects representatives to soon conduct business entirely through their smartphones.
• By becoming social media influencers, representatives can extend sales networks beyond their friends and families—the traditional sales targets—to wider swaths of customers. 

The timing couldn’t be better. Natura’s attempt to crack social selling 2.0 for Avon arrives just as Instagram enhances shopping functionalities and TikTok begins experimenting with its own social commerce tools.

And Avon needs a viral hit. Through Avon’s decades-old multilevel marketing platform, representatives sold its makeup and jewelry by going door-to-door. (Gen Z readers, here’s what that looked like.) But Avon’s model suffered as we learned to ignore the doorbell when anyone flapping a brochure rang. Yearly Avon sales were on track to fall below $5 billion in 2019—half of its 2009 total.

My takeaway: After taking its sweet time joining competitors online, Natura’s Avon will have to sprint to catch up to digitally savvy rivals like e.l.f. As Vogue Business notes, brands with the best chance of capturing Gen Z should already move on from Big Social to private channels and esports. 

Zoom out: The beauty industry is in flux. As customers flock to quote-unquote clean skincare products, traditional cosmetics sales have contracted in key markets including North America.

DEPARTMENT STORES

There's Nothing Merry About 2019's Holiday Sales Figures

Sales figures from the holiday season are trickling in—and none of my hints to throw Kohl’s or J.C. Penney a bag on Super Saturday seemed to have resonated.

• Kohl’s comparable sales slipped 0.2% during November and December.
• J.C. Penney comparable sales fell 7.5% over the nine-week period ending on January 4. 
• Macy’s comparable sales fell 0.6% during the holiday season. 

Where’d the money go? Look at your own receipts. When kids convinced their parents they needed just one more gift, parents ordered online from goliaths like Amazon, Target, or Walmart. E-comm sales over the holidays grew 18.8% compared to 2018, per MasterCard SpendingPulse data.

Zoom out: Holiday sales figures were the wrinkled bow on top of a lackluster year for department stores. Their share of total retail sales was just 1.2% in 2019, down from 5% in 2005, according to Customer Growth Partners data cited by the WSJ.

SPONSORED BY JRNI

Get Them in the Door–And Wow Them

What’s the one thing online stores can’t do as well as brick-and-mortars? Two words: in-store events.

In the power struggle between online and IRL, retailers are realizing the power of entertaining, helpful, and informative events when it comes to attracting customers. 

And this helpful ebook from JRNI has the data to prove it. They found that 64% of consumers expressed interest in attending product demos, while half would attend educational events. The numbers don’t lie: Consumers want a hands-on experience. 

But data without insight is only half the picture. That’s why this ebook will help you see what’s next for physical stores, while also providing 5 reasons for moving toward an event-based culture. 

So if you’re ready to harness the full power of in-store retail, you need access to this ebook.

E-COMM

Amazon Won’t Give Up on Luxury Fashion

Amazon is launching a luxury fashion platform in the first half of 2020, WWD reports. Here’s the retailer’s latest attempt to look like a Carrie: 

• Participating brands will likely pay a percentage of their sales to Amazon for complete control over an online store on the platform. Amazon will provide logistics (including shipping) and customer service.
• Amazon is reportedly building a new logistics center in Arizona for the platform and spending $100 million on a marketing campaign.

There’s a target customer in mind. Many of Amazon’s 100+ million Prime members have cushiony incomes to order fur clogs with one-day shipping. Those Prime members are also known to spend more on Amazon than the average nonmember.

But image is everything...and few fashion houses would want to sell their blouses one click away from bulk spatulas. Another concern is the rampant counterfeiting by third-party sellers on Amazon, which contributed to Nike’s departure from the site in November.

Bottom line: Amazon was the largest apparel retailer in the U.S. in 2018, per Wells Fargo—but it got there with 30-pack plain t-shirts. To play with premium SKUs, Amazon will have to convince the luxury world its vast logistics resources balance out its bargain reputation.

M&A

One More Brand for P&G, One “Stronger Brand for Womankind”

That’s almost a direct quote from P&G’s announcement Wednesday that it acquired Billie, a D2C women’s grooming company, for an undisclosed amount.

Some background: Since 2017, Billie has sold razors and body care products through a subscription service—but it has a rebellious streak like its Billboard 100 twin. Billie is as known for its campaigns to normalize body hair as its pastel razors. 

Why P&G’s interested: As some women have embraced their stubble, sales have dipped for traditional razor brands like P&G’s Venus. Billie attracted fans—and investors—by taking a “do it when you want to” approach. Bringing on the only women’s shaving brand that’s underwriting No Shave November may help P&G make up for lost ground and appeal to younger customers. 

Zoom out: Old school grooming companies have been courting younger customers by snapping up D2Cs. In 2016, Unilever acquired Dollar Shave Club for $1 billion. Last May, Edgewell Personal Care bought Harry’s for $1.4 billion.

WHAT ELSE IS BREWING

• U.K. retail sales hit a record low in 2019.
• H-E-B has surpassed Trader Joe’s as the top U.S. grocery retailer by customer preference. 
• Allbirds is raising a Series D to fund green updates to its supply chain, including the removal of unrecycled plastics.
• Lululemon has chosen its first chief brand officer: Nikki Neuburger, formerly of Nike and Uber Eats.
• Target is launching a new private label activewear brand.
• Bed Bath & Beyond has delayed 20 store closures scheduled for this fiscal year until fiscal 2020.

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DON'T BREAK THE CHAIN

In the three-block radius around the Brew office, you can find pretty much every major U.S. restaurant chain. But that’s no longer the case around the city. According to the Center for an Urban Future’s annual “State of the Chains” report, the number of chain stores in NYC actually dipped 3.7% last year. See who’s staying and who closed their doors here.

FRIEND OR FAUX?

The first headlines quiz of the year has arrived. Can you spot the fake? 

1. Pennsylvania police are investigating after someone released bedbugs in a Walmart.
2. Universal Studios said it’s producing a biopic about the founders of Away. 
3. Charmin unveiled a toilet paper delivery robot.
4. A Harry Potter store was blocked from mounting a dragon on its facade. 

Congratulations! You survived the first full work week of 2020. Can’t wait to do it all again with you next week—Halie.

FRIEND OR FAUX? ANSWER

2. Away’s story isn’t hitting theaters anytime soon.