SUSTAINABILITY

Go Green or Get Out

Brands are joining forces and cutting ties in the name of sustainable production, and it’s messier than a Shondaland love quadrangle. Let’s dive in.  

On the rocks: Zalando, Europe’s largest e-comm fashion retailer, and its ~2,500 merchants. Zalando said yesterday it will require brands to complete a 250-question supply chain assessment by 2023. If they don’t comply or aren’t willing to improve poor scores, they’ll be kicked off Zalando’s platform. 

Zalando says it’s the first retailer to require that brands use a sustainability measurement tool to remain partners. "We see a crucial link between sustainability and the continued commercial success of our business,” Kate Heiny, Zalando’s sustainability director, told WWD. Merchants can’t afford the boot: Zalando sells to 32+ million active users in 17 countries. 

Pairing off: Adidas and Allbirds. The brands paused the Stan Smiths vs. Wool Runners battle to announce they’re co-developing a sneaker with the world’s lowest carbon footprint. 

• There’s no release date for the sneaker—it hasn’t even been prototyped yet.
• The reason? The brands will have to reconfigure every step of the supply chain to achieve their Guinness goal, from manufacturing to transportation.

Alter your expectations

The pandemic has exposed some hard truths: Too many brands think they’re interesting enough for daily IG Lives, and not enough have baked sustainability into their business models. Fashion brands averaged a 23% transparency score on the 2020 Fashion Revolution Transparency Index, which measures emissions, supply chain waste, and worker safety, among other metrics.

But shoppers want to see brands up their sustainability game, cringey reveals and all. 

• In an ING survey of 15,000 shoppers, 61% said they’re less willing to purchase from a brand with poor environmental policies. 
• Nielsen expects U.S. sales of sustainable products will approach $150 billion by 2021. 

My takeaway: Brands have a compelling case for making bold sustainability declarations. We may not see another sneaker outdo the Allbirds x Adidas collab, or Amazon issue a transparency ultimatum, but more retailers could commit to reducing emissions or upcycling materials in the near future. 

FOOD & BEV

Restaurants Don't Want to Go Halfsies

Restaurants in at least 15 states have been asked to reduce capacity to 25% or 50% in order to reopen, the WSJ reports. That could mean more pool noodle distancing hats for diners and mounting costs for restaurant owners. 

Explain it like I need a kids’ menu

A 50% occupancy cap on a 75-seat restaurant would mean only 20 diners can enter, after employees. In a recent study of NYC restaurants, 61% would permanently close with capacity limits below 70%.

• Materials that promote distancing, like plexiglass barriers between tables, also come with party of 15 price tags.

National chains are hurting too. Applebee’s, Denny’s, and IHOP franchisees have closed locations or requested rent relief after losing millions. TGI Fridays could permanently close 20% of its restaurants. 

Looking ahead...more restaurants could join Le Pain Quotidien and file for Chapter 11 bankruptcy. Subsisting on takeout orders already put them on the edge, so reopening at less than full capacity may do them in.

SPONSORED BY SAILTHRU

Don’t Go Into Uncharted Retail Territory Alone

Right now, the world of retail feels like an expedition with no guidebook, a game with no playbook, a disassembled couch with no manual—you get the idea. 

That’s why Sailthru created this guide to help retailers navigate the new retail landscape that has resulted from COVID-19.

Retailers know that the spread of the coronavirus is having an unprecedented and unpredictable impact on the retail industry. What they don’t know is how—or when—it will end. To ease the uncertainty retailers face, Sailthru compiled 14 tactics to test right now.

Their guide will teach you about: 

• adapting to changes in consumer behavior
• offerings such as BOPIS (buy online, pick up in store)
• creating community with employee-generated content

The future of retail might seem like a new continent, but you don’t have to explore without a map. 

Download Saillthru’s guide today. 

RESALE

Those Who Can't Do, Resell

Walmart has tried on racks of acquisitions to become a fashion destination, but nothing fit. It resold ModCloth two years after buying it, layoffs and cost-cutting riddled Bonobos last year, and I forgot about Scoop’s relaunch until I did research for this story. 

So Walmart’s shifting gears. On Wednesday, Walmart revealed it’s pivoting to resale through a partnership with thredUP, the leading clothing resale service. Walmart will relist more than 750,000 used items on its website from 2,000 brands sold on thredUP.

The motive: By partnering with thredUP, Walmart doesn’t have to create or store extra apparel inventory. Yet it’ll have newfound proximity to capital-F fashion brands like Coach, Michael Kors, and even Chanel. 

The challenge: sneaking gently used lambskin purses into carts otherwise packed with frozen pizzas. Groceries made up more than half of Walmart’s e-comm biz in Q1. 

Budget conscious shoppers will ignore faded pit stains if it means they get a deal—especially during an economic downturn. If Walmart can direct enough customers toward its online thrift store, it could secure a 2-for-1 deal to finally score fashion cred while unlocking higher margin sales.

WHAT ELSE IS BREWING

• Dollar General and Dollar Tree beat Q1 expectations with strong sales gains. 
• Nordstrom’s sales declined 40% in Q1 due to store closures.
• Amazon will offer permanent roles to 70% of the hires it made during the pandemic.
• Boohoo acquired the remaining minority shares in PrettyLittleThing for around $331 million.
• Glossier plans to furlough most of its store employees starting June 1.
• Caraway, a DTC cookware brand, raised a $5.3 million seed round to enter more product categories. Last fall, we spoke with its founder.

SPONSORED BY JRNI

Retail is changing; time for a new playbook. This ebook provides tips and tricks to restart your retail business. It’s based on hundreds of conversations with retailers over the past eight weeks, the expertise of JRNI, and guidance from respective government agencies. Learn how to go contactless, stay healthy, and manage footfall here.

SWAPPING SKUS

Raise a glass of whipped coffee to the items we weren’t thinking about until the pandemic came to town.

• Jiggy founder Kaylin Marcotte wanted to sell puzzles that could double as wall decor. Now, stay-at-home hobbyists are pushing her fledgling jigsaw puzzle brand to the big time (Elle).
• Haters said hole-ridden, technicolor plastic clogs were heinous and ugly. Yet the humble Croc was the only shoe to record sales growth in March and reach a 15-year Google interest peak in April. Can the comeback last? (WSJ).

FRIEND OR FAUX?

Three retail news stories that happened, one that came to me in a clickbait fever dream. Which one is fake? 

1. Burger King releases beef-scented hand sani for National Burger Day.
2. Streetwear brand Anti Social Social Club’s latest collab partner? The USPS.
3. Uniqlo repurposes underwear fabric for face masks.
4. Sellers on Poshmark and eBay are reselling Starbucks cups for 5x their value.

FRIEND OR FAUX? ANSWER

1. Nope, Burger King isn’t bottling the sweet scent of burgers yet.