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🤖Why AI is driving the retail evolution and how to use it to get ahead

In 2024, retail innovation is driven by AI.

Greetings from the Retailist team! As we look ahead to 2024 the e-commerce, retail, and Direct-to-Consumer (DTC) world shows no signs of slowing down. We've seen a range of key news, developing trends, and unique stories from the world of retail over the last week. Dive in to explore the top stories:

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In the news: Top headlines this week

Costco veteran CFO to exit, Kroger's Millerchip to take over. Costco Wholesale announced that its longtime finance chief, Richard Galanti, will step down on March 15th, to be succeeded by Gary Millerchip from Kroger's. Galanti, who served as CFO for over three decades, will remain in an advisory capacity until January 2025. This transition comes amidst strong sales growth, including during the pandemic, and follows the appointment of Ron Vachris as CEO earlier in the year, succeeding Craig Jelinek. Additionally, analysts noted the timing of Millerchip's departure from Kroger's, particularly given the grocer's pending deal with Albertsons. [Reuters]

Garnet Hill opens first full-price location. Garnet Hill's new store in Dedham, situated strategically in the heart of the Boston metropolitan area, aims to cater to both existing and potential customers. Collaborating with architecture and design firms, the space reflects Garnet Hill's ethos with natural elements showcasing its signature products. Connie Hallquist, president of Garnet Hill, expressed excitement about the opportunity for customers to engage with the brand's quality and sustainability commitment in the beautifully designed store. Garnet Hill operates under Qurate Retail, which recently sold Zulily and announced its closure after layoffs. [Retail Dive] 

McDonald's seeks to open 1,000 new stores in China by the end of the year as demand for fast food surges in the country amid economic troubles. McDonald's is capitalizing on economic challenges in China by expanding its presence in the country, with plans to open approximately 1,000 new outlets by the end of 2024. This aggressive expansion strategy aims to reach a total of 10,000 outlets in China by 2028, with a particular focus on lower-tier cities which are expected to account for the majority of new openings. [Business Insider]

Spirits sales beat out beer and wine for second straight year, despite little growth. In 2023, the spirits industry maintained its market share lead over beer and wine for the second consecutive year, despite experiencing minimal growth. According to the annual economic report from the Distilled Spirits Council of the U.S., U.S. spirits revenue saw a modest increase of 0.2% to reach $37.7 billion, outpacing the growth rates of beer and wine sales by 0.4% and 26.1%, respectively. [CNBC]

Valentine Retail Trends: 6 Keys To The Heart That Could Last Forever. Valentine's Day is projected to drive a staggering $25.8 billion in spending on gifts like candy, roses, and jewelry, according to the National Retail Federation, yet a significant portion of shoppers may leave feeling disappointed with their retail experiences. Despite the romantic sentiments associated with the holiday, the pressure to "get it right" with gift choices can sometimes lead to frustration due to subpar shopping experiences, potentially impacting customer loyalty and future purchases. [Forbes]

Neiman Marcus Parts Ways With Luxury Online Retailer Farfetch. Neiman Marcus Group has decided to end its commercial partnership with online luxury retailer Farfetch, altering the landscape between the two major players in the luxury retail industry. The collaboration, initiated around two years ago with Farfetch investing $200 million in Neiman Marcus, included Farfetch taking over Bergdorf Goodman's digital presence. However, with this termination, the dynamic between the primarily physical retail-focused Neiman Marcus and the digital-first platform Farfetch undergoes a significant shift. [Retail Wire]

Hershey looks to cut jobs as it projects a dour 2024. Hershey announced job cuts and anticipated costs of up to $60 million after projecting lower-than-expected full-year sales and profit. Although specific details on the number of job cuts were not provided, the company disclosed a new multi-year productivity initiative aimed at improving supply chain efficiency and reducing expenses, with estimated pre-tax costs ranging from $200 million to $250 million through 2026. Despite implementing price increases to offset rising input costs, Hershey expects a demand slowdown for its products due to cost-conscious consumer behavior amid inflation concerns. [Reuters]

How Axe Body Spray is trying to move beyond teenage boys’ lockers. In the early 2000s, Unilever's Axe Body Spray gained widespread popularity among teenage boys, often associated with the notion of attracting romantic interest. John Hegarty, founder of Bartle Bogle Hegarty, acknowledged the irony of this marketing strategy, suggesting that it played into a known cultural stereotype. Despite this, Axe Body Spray achieved significant success in the U.S. market, generating nearly half a billion dollars in domestic sales within a decade of its introduction. [CNBC]

Why AI is driving the retail evolution and how to use it to get ahead. In 2024, retail innovation is driven by AI, with a focus on increasing operational efficiency and improving customer and employee experiences. Dell Technologies and its partner ecosystem are aiding retailers in leveraging AI to streamline operations, enhance experiences, and drive growth, emphasizing the importance of AI adoption for organizations to stay competitive. Michael Dell highlights the transformative potential of AI, emphasizing its role in reinventing organizations and driving deeper insights, particularly in retail where AI applications like Generative AI promise to enhance various aspects from customer experience to internal operations and marketing initiatives, necessitating a robust data management strategy for accessing disparate data sources. [Retail Dive]

Under Armour lifts annual profit forecast on easing input costs. Under Armour raised its annual profit and margin forecasts, expecting reduced input and freight costs to offset slowing demand in North America. Despite offering discounts to incentivize purchases, sales in its largest market declined by 12%, primarily due to reduced consumer spending on higher-priced items amidst inflation. The company also experienced a hit from wholesalers like Dick's Sporting Goods and Foot Locker reducing orders in the United States, contributing to its revised annual revenue expectations of a 3% to 4% decline. [Reuters]

E.l.f. Beauty blows past Wall Street’s estimates, raises guidance for a third quarter in a row. E.l.f. Beauty, a popular cosmetics brand among young consumers, raised its guidance for the third consecutive time following an impressive 85% sales growth during the holiday quarter, despite challenging comparisons from the previous year. The company's performance exceeded Wall Street's expectations, demonstrating strong momentum in its third fiscal quarter.[CNBC]

New Spiced Coca-Cola Flavor Is Here To Stay. Coca-Cola is introducing its "Spiced" flavor as a permanent addition to its range after successful testing of quirky limited editions in recent years. The new drink combines the classic Coke taste with refreshing notes of raspberry and spiced flavors, and will be available in both sugar and zero-sugar options across stores in the U.S. and Canada. With its selective approach to adding new flavors to its permanent lineup, Coca-Cola has chosen to include Spiced alongside existing favorites like cherry and vanilla. [Retail Wire]

Zac Posen Takes the Creative Helm at Gap Inc. and Old Navy. Fashion designer Zac Posen has been appointed as the executive vice president and creative director of Gap Inc., along with the role of chief creative officer at Old Navy. Posen, known for his technical expertise and body-positive approach, brings over 25 years of experience in the fashion industry to his new positions, which will be based in San Francisco. Gap Inc. is hopeful that Posen's renowned creativity will inject new energy into the brands and contribute to their revitalization. [Retail Wire]

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Retailist Magazine is an outlet focused on modern commerce as it relates to digital innovation. The publication examines our culture’s ever-evolving relationship with marketing, commerce and traditional retail. Our goal is to connect our audience to quality content and award programs for retail brands to tell their story of innovation.

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