Are retailers automating themselves out of business?

Is the retail industry signing its own death warrant with automation?

June 14, 2024

Hello, Retailist enthusiasts! 🎉 As we approach another exciting weekend, the buzz is palpable across the realms of e-commerce, retail, and Direct-to-Consumer (DTC) industries. This week has been brimming with significant updates, emerging trends, and pioneering breakthroughs that are shaping our market. Are you eager to delve into the top stories that have emerged? Join us as we navigate these updates and discover their implications for our vibrant community!

New from Retailist

Are Retailers Automating Themselves out of Business?

Amid the COVID-19 pandemic, it became essential for retailers to offer safer, more convenient options like online shopping, order pick-up, and self-checkout. However, while these options were designed to improve customer convenience and help keep retailers alive, they may have been the retail industry signing its own death warrant...

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In the news: Top headlines this week

Do retailers need active assailant insurance? Retailers and malls in the U.S. are increasingly recognizing their vulnerability as "soft targets" for mass shootings, a situation highlighted by the FBI and Department of Homeland Security. This growing threat not only results in death and devastation in communities but also impacts the businesses financially. Companies like Walmart and Simon Property Group have begun to include the risks of mass shootings in their annual reports, citing them as potential factors that could significantly harm their financial performance and deter in-store shopping. [Retail Dive]

Apple Briefly Became World’s Most Valuable Company. Apple briefly reclaimed the title of the world’s most valuable company on June 12, surpassing Microsoft with a market valuation of $3.29 trillion, driven by a nearly 4% surge in its shares to a record $215.04. This achievement was spurred by Apple's recent advancements in artificial intelligence (AI) technology, which was highlighted at the Worldwide Developers Conference (WWDC). Despite this peak, Apple's market cap fell back below Microsoft's $3.24 trillion by the end of the trading day. In comparison to other tech giants, Apple's stock has risen about 12% in 2024, a solid performance albeit slower than Microsoft's 16% and Alphabet's 28%, while Nvidia saw a dramatic 154% increase. Conversely, Tesla faced a decline of about 30% this year. [Retail Wire]

Fast fashion retailer Shein hikes prices ahead of IPO. Fast fashion giant Shein has increased the prices of some of its core products by more than a third, ahead of its planned IPO. This price hike is higher than those seen at competitors such as H&M and Zara, according to data from the research firm EDITED. Shein, which primarily operates an online marketplace focusing on women's clothing produced by its network of about 5,400 suppliers in Guangzhou, China, utilizes a production strategy that scales orders based on demand. The company did not comment on the price increases. [Reuters]

Gen Zers are obsessed with Aritzia's $148 Effortless Pant. Aritzia's $148 Effortless Pant has gained significant popularity among Gen Zers in North America as a trendy workplace essential, praised on platforms like TikTok for its style and variety. However, in Asia, Uniqlo offers a budget-friendly alternative to this trend with its own collection of workwear. For example, Uniqlo's $36 pleated pants paired with a $30 linen button-down provide a complete and stylish work outfit at a fraction of the cost of one Aritzia pant, making it an attractive option for office-goers looking for affordable yet fashionable choices. [Business Insider]

Influencer Jake Paul launching men’s skin, personal care line at Walmart. Jake Paul, known for his YouTube and boxing career, is venturing into the skin care industry with the launch of his men's personal care line, "W," at Walmart. The line, named as a nod to "winning," initially includes three products: a body wash, body spray, and antiperspirant deodorant, all priced under $10. Paul criticized the current market as outdated and sees his entry as a disruptive move. He plans to expand the product range to include shampoo, conditioner, face wash, and hair gel, with availability on Amazon later in the summer. [CNBC]

World’s Largest Buc-ee’s Opens in Texas. The world's largest Buc-ee’s travel center opened in Luling, Texas, offering a sprawling 75,000 square feet of space with 120 fueling positions. This new facility replaces the town’s previous Buc-ee’s location and aims to enhance the experience for both travelers and locals. The grand opening attracted a large crowd, including Patrick O’Donnell from Pennsylvania, who made the first purchase. Employees like Jessie Groff and Daron Richards were actively involved in preparing the store, contributing to a lively and community-focused opening day. [Retail Wire]

How big retailers are battling the last-mile delivery squeeze. Big retailers like Walmart, Target, and Kroger are addressing the challenges of last-mile delivery costs by employing a mix of strategies including price adjustments and technological enhancements. At a recent industry conference, executives discussed how rising logistics costs and consumer expectations for rapid delivery are being managed through increased product prices, enhancements in customer experience, and the use of artificial intelligence and predictive technologies. Additionally, they are adopting subscription models similar to Amazon Prime, where customers pay a regular membership fee in exchange for benefits like free shipping, helping to offset delivery costs and increase revenue. [Retail Dive]

Starbucks Ventures Into the Film Industry With Launch of Its Own Movie Studio. Starbucks has announced its foray into the entertainment industry with the establishment of Starbucks Studios, a movie studio that marks the company's entry into Hollywood. This strategic move aligns Starbucks with other brands like LVMH and Mailchimp, which have also ventured into media production. According to Christy Cain, Starbucks' Vice President of Brand and Partnerships Marketing, the creation of Starbucks Studios is an extension of the company’s commitment to storytelling, aiming to enhance human connections and joy. The studio intends to highlight inspiring stories from a variety of individuals, including emerging artists and changemakers, who have a positive impact on society. [Retail Wire]

Beauty brand Pretty Smart launches exclusively at Walmart. The new beauty brand Pretty Smart, developed in collaboration with Walmart's merchandising team, has launched exclusively at Walmart, aiming to deliver luxury beauty products at affordable prices. Unlike many beauty brands that start independently before seeking broader distribution, Pretty Smart was designed from inception with Walmart’s involvement to ensure the products meet specific customer needs in terms of formulas, shades, and identities. The brand maintains a low price point of $10 and under, made feasible through a vertically integrated model that controls every step of the manufacturing process, from concept to delivery at Walmart, allowing significant cost savings without compromising on ingredient quality. [Retail Dive]

Should Consumers Be Worried About All These Product Recalls? The year 2024 has seen numerous product recalls, particularly in the grocery sector, raising concerns for consumers. Trader Joe's has issued recalls for cashews and basil due to salmonella contamination fears, emphasizing their commitment to product safety. Similarly, Walmart recalled over 16,000 pounds of ground beef produced by Cargill Meat Solutions due to E. coli concerns, though no health effects from the contamination have been reported so far. These recalls highlight the vigilance of retailers in addressing potential health risks, though they also underscore the ongoing need for careful monitoring and regulation in the food industry. [Retail Wire]

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