PAYMENTS

Presents Now, Pay Later

Most retail trends that seemed innovative during season 1 of the pandemic now hit like a C-SPAN election rerun. Not the growth of buy now, pay later (BNPL) options at retailers, however.

In stores...Point-of-sale loan providers are creeping ever closer to the point of sale. Klarna yesterday said it’s partnering with Verifone, a digital payments firm, to expand its network of in-store installment processors. 

• So far, Klarna can divide payments at 60,000 U.S. stores, including its recent investor, Macy’s.
• Competitors are making similar moves: Afterpay launched in-store payments over the summer.

Online...retailers have typically noticed higher cart values when shoppers can split the receipt with their future selves. During a holiday season when shoppers are spending less, brands have marketed their BNPL partners alongside their holiday discounts.

• Adoption’s soaring: Afterpay and Sezzle reported record sales and customer sign-ups across November. 

Room to grow

Shoppers splitting their Christmas trees into four easy payments aren’t yet the majority. 

• Despite user growth on every major provider this year, fintech firm Marqueta estimates that more than one-third of U.S. consumers use BNPL. 
• Research from Pymnts and PayPal found that 25% of U.S. shoppers who aren’t currently shopping by installments are “highly interested” in trying it.

+ A side of scrutiny. While most BNPL services are interest free, not an article about its rise goes by without pointing out the concerns about shoppers spending beyond their means. At least one financial firm is following suit: Capital One banned its customers from making BNPL payments on its credit cards earlier this month.

• Counterpoint: Afterpay CEO Nick Molnar said that 90% of the platform’s purchases are made via debit card.

My takeaway: Retailers will view BNPL as more of an opportunity than a liability in 2021. But they may want to consider educational materials for shoppers before affirming the trend.

ECONOMY

November Retail Sales, Unwrapped

In November, retailers waged a campaign to recapture the sales momentum lost earlier this year. Not only did retailers amplify their usual Black Friday and Cyber Monday deals for online shopping, but they turned the entire month into a coupon calendar. 

But shoppers held back. Retail sales declined 1.1% in November, the U.S. Commerce Department reported today. October’s modest increase was also revised to a 0.1% decrease, culminating in two consecutive months of slowing sales and the first backslide since April.

• Apparel was once again hit hardest: Clothing sales declined 6.8%.
• Sales also fell in restaurants (4%) and electronics (3.5%). 

It’s not that retailers forgot to send email alerts. Job growth slowed in November, while unemployment claims increased. Combined with the ongoing stalemate over additional Covid-19 stimulus, shoppers cut their gifting budgets.

My takeaway: We won’t have a full picture of the 2020 holiday sales season until we count December’s receipts. But November’s results indicate that even record breaking digital holidays haven’t bridged the brick and mortar gap yet.

SPONSORED BY SAILTHRU

Big Brands Don’t Have Superpowers

They’ve got Sailthru-powers. The leading companies you trust, for everything from breaking news to leggings that fit just right to organic snacks, all have one thing in common—they use Sailthru.

Sailthru is where performance meets personalization. It’s the cross-channel marketing platform purposefully built to help marketers deliver personalized experiences to each and every consumer across email, web, and mobile.

Brands like Condé Nast, Fabletics, Thrive Market, and many more rely on Sailthru’s AI and Machine Learning technology to ensure they have the data they need to deliver meaningful marketing experiences that drive conversion and secure customer loyalty.

So while today’s leading marketing gurus don’t have the ability to teleport or read minds, they have something even stronger (and way more useful): Sailthru’s industry-leading, data-rich, single-view customer profiles.

See what your business can do with the power of Sailthru today. 

EXPERIENCE

So Long, McDonald’s Salads

Sweetgreen shared with Retail Brew its biggest news since its buffalo chicken bowl became a permanent menu item. It’s opening its first drive-thru store in late winter 2021.

What’s the (floor)plan? Drive-thru lines will be divided in two: One for pre-orders made on the Sweetgreen app, and one for folks who don’t know there’s a Sweetgreen app.

• Stores will also include outdoor lounge seating, in case team lunches become a thing again. 

A rep for Sweetgreen told Retail Brew that the concept pilot is limited to one store in Highlands Ranch, Colorado. But Sweetgreen is already exploring additional expansion opportunities, with a focus on suburban areas.

Why it matters: Faster than you can say “always fresh, never frozen,” quick service restaurants emerged as the most resilient meal provider this year. To hold their lead, chains from Chipotle to KFC are testing futuristic drive-thrus to replace in-store seating. 

Those stores have also cut menu items including salads, creating a window for brands like Sweetgreen. Expansion is critical: Many urban, walk-up chains have contended with limited store renovation options and slowing foot traffic. 

• Some may not make it to consider new locations: By Chloe, a vegan, city-centric chain, filed for bankruptcy Monday. 

WHAT ELSE IS BREWING

• E-commerce could make up 25% of global retail by 2024.
• StockX is valued at $2.8 billion after raising a $275 million Series E.
• Verishop now has a group shopping feature.
• Amazon launched a measurement customization tool. So far, it’s just for t-shirts.
• H&M said Covid-19’s fall resurgence in Europe disrupted its Q4 sales.
• Same story at Inditex.

SPONSORED BY SPLITIT

Stalling on installing installment payments? Whether you’re just dippin’ your toesies in e-commerce or you’ve already built a robust online system, one question of top concern should be: “Are Installment Payments Right For My E-commerce System?” Coincidentally, Splitit just wrote a detailed post on that exact subject. For the down low on installment payments, read Splitit’s post here.

COMMUNITY

It’s time for our segment highlighting the best part of Retail Brew: you, the readers. If you’re ready for the spotlight, we encourage self-nominations for an upcoming newsletter.

Today we’re screen sharing with Azora Zoe Paknad. After a multi-role tenure at Food52, she’s now the founder at Goldune, a new marketplace for home and personal care products.

How’d you start your company? My interest, passion, and experience all sort of collided beautifully after I had a few months in quarantine to really stew on something I was looking for that I couldn't find. In June, I founded Goldune, and at the end of October, we launched. 

We're a sustainable and inclusive e-commerce retailer who works primarily with small, woman and BIPOC-owned brands. We're on a mission to make sustainability less beige, in every sense. 

Favorite project you’ve worked on: Food52's holiday pop up last year in the Oculus/World Trade Center. (100% impossible in 2020.)

A brand you’re obsessed with (that isn’t your own): Kosas. Everything they do is gold.

Favorite brands to follow: Ugh, so tough. My friends at Omsom or the jewelry wizards at éliou.

SWAPPING SKUS

I spend a lot of time talking to and about general retailers. Let’s take a closer look at the specific brands on their shelves. 

• Excluding Two Buck Chuck, private label alcohol is still in its infancy. But retailers are brewing plans to change that in 2021. (Grocery Dive)
• Function of Beauty is the latest digital native to reserve an endcap at Target. Here’s why it finally decided to go omnichannel—and what’s next. (Glossy)
• Oreo has released 65 new cookie flavors since 2012. Inquiring minds want to know: Why? (NYT)

ICYMI

Catch up on the Retail Brew stories you may have missed.

• At Retail Ecommerce Ventures, ‘Brands Don’t Die’
• Sit Down Restaurants Brace for a Tough Winter
• Retailers Are Running Short on Holiday Decorations