1) ThredUp launched a platform to help department stores enter the resale market, which could help it stay ahead of the competition.

WHAT HAPPENED: The clothing resale company announced a new service that will allow retailers to offer an in-store consignment program built upon its infrastructure. JCPenney, Macy’s and Stage stores will participate.

 

WHY IT MATTERS

  • ThredUp’s new offline offering is more beneficial for ThredUp than the department stores it’s partnering with. The new service will be expensive to build and challenging to integrate at first, but partnering with legacy department stores positions ThredUp as a forward-thinking retail technology. The partnership will spread brand awareness far and wide, attracting a new audience in geographies that have little to no access to the resale economy. It is unlikely that ThredUp will be a major traffic driver for department stores—after all, their customers might not be familiar with the practice.
  • The department stores it partners with won’t be investing in the infrastructure that resale requires, a benefit in the short-term but a limiter in the long-term. Resale and rental are growing sectors that will continue to reshape the retail landscape. While partnering with ThredUp is a great start for weakening department stores, it is not a long-term solution. Their learnings might be limited because ThreadUp will provide the inventory, technology and logistics, which means department stores will merely provide physical space for ThreadUp to utilize. Down the road department stores should invest in the resale infrastructure themselves rather than just leasing their space to a third-party.

2) Nordstrom’s introduced a new Sustainable Style category, but fails to address big picture issues that have contributed to the department store’s struggle.

WHAT HAPPENED: Nordstrom introduced a curated selection of over 2,000 sustainably- and ethically-sourced products from 90 different brands that are only available online. The launch coincides with the department store’s commitment to the G7 Fashion Pact—a coalition of 32 global luxury retailers who agreed to to more environmentally sustainable business practices.

 

WHY IT MATTERS

  • As department stores search for ways to drive shoppers to stores, launching an online-only offering is limiting. While sourcing environmentally-friendly products and brands is rightfully a priority for Nordstrom, the introduction of a sustainable product category needs to work for the retailer’s entire business long-term, versus just a response to a current trend. The topic of sustainability will remain important amongst consumers and retailers alike, which is why retailers need to implement strategies that foster environmental sustainability both in-store and online.
  • Nordstrom aligns Sustainable Style with decreasing its environmental impact, but focusing on only one collection is a drop in the bucket. One of the major sustainability obstacles for department stores is the constant influx of new products required to fill their abundant square footage. Rather than designating a specific area in its stores for sustainable brands, Nordstrom should introduce interactive areas that feature recycling programs—featuring Rent the Runway in four stores is a positive step—and educational resources that inspire engagement and contribute to a more sustainable ecosystem. Not everything needs to be built around buying more products, even if the company needs to continue driving sales.

3) Boxed partnered with Century 21 to bring beauty and apparel products to its platform, which could jeopardize its novelty.

WHAT HAPPENED: The online wholesaler announced a partnership with the off-price department store to carry clothing and cosmetics brands including Bare Minerals, Calvin Klein, Adidas and Ray-Ban.

 

WHY IT MATTERS

  • Expanding the product assortment to include apparel and cosmetics promises increased AOV but isn’t guaranteed. While Boxed competitors Amazon, Target and Costco sell household items alongside beauty and apparel products, Boxed doesn’t need to follow suit. Selling these products requires a different skill set compared to household and grocery items, which takes time to learn. Continuing to master selling household items and distinguishing itself through website services and special offers could be enough to stand out.
  • If Boxed saw long-term potential in apparel and cosmetics, it could source the product and brand relationships itself, without Century 21’s help. Despite Century 21’s status as an “upscale off-price retailer,” consumers can already access these brands on various platforms—including Amazon. While there might be marketing value to the partnership, Century 21 is an East Coast retailer rather than a household name across the U.S, which Boxed aims to become.

4) Walmart and Buzzfeed launched over 4,000 shoppable recipes in the Tasty app alongside cooking demonstrations, playing a game Amazon isn’t set up to win.

WHAT HAPPENED: Walmart’s Tasty app integration, which is powered by Northfork technology, allows viewers to purchase ingredients directly from the recipes featured in videos on the app. It links users to Walmart’s grocery webpage and connects them with their closest Walmart store. Walmart and Buzzfeed initiated their relationship last year with Tasty-branded licensed products, which included party supplies and grocery items.

 

WHY IT MATTERS

  • The Walmart-BuzzFeed partnership signals how content can fuel commerce— where Amazon is far behind. In 2018, Tasty accounted for one-quarter of BuzzFeed Commerce’s revenue and was the largest source of non-advertising revenue for the company. The Tasty brand had developed a following through BuzzFeed’s platform, making a product partnership between Walmart and Tasty a quick success. Although Amazon is top of mind for brands and retailers within every sector, this intersection is one it has yet to conquer. Amazon’s success with highly transactional shopping is the reason it’s so bad at emotional selling, but it will need to figure this out soon to continue growing. With near-infinite access to data and technology, Amazon should be able to craft narratives that resonate.
  • The success of beauty platforms-turned-lifestyle-brands like Glossier and Goop have prompted consumer brands to move further into editorial. Brands such as Outdoor Voices and Staples along with retailers like Barney’s have introduced editorial outlets that include quarterly publications and podcasts, as they aim to develop authentic long-term connections with their audiences. Editorial platforms need to find alternative ways to fund their business, while pure-play commerce brands need new ways to reach customers, which should lead to more partnerships down the road.