DTC Dispatch #022

LATEST NEWS

Clinique expands reach with launch of Amazon storefront

Clinique has started selling its products on Amazon's Premium Beauty store in the U.S. They offer a range of skincare, makeup, fragrance, and men's products. This is the first of a few Estée Lauder brands to open a store on Amazon in the future. As part of their launch, Clinique has also introduced the Clinique Skin Analysis Tool, an interactive questionnaire that helps customers personalize their skincare routine and receive product suggestions.

Clinique has been making strides toward skin care customization using retail and consumer testing. The partnership with Amazon is just the latest.

“We are thrilled to be strategically expanding our consumer reach in the U.S. as a select few Estée Lauder Companies brands open dedicated storefronts in Amazon’s fast-growing Premium Beauty destination over the coming months, starting with Clinique today,” Fabrizio Freda, president and CEO of The Estée Lauder Companies, said in a statement.

Our take: Another large beauty brand, known for its high-quality products and innovative approach, has recently made a significant move by joining forces with the e-commerce giant Amazon. This strategic and mutually beneficial partnership is set to revolutionize the way Estée Lauder interacts with its customers and paves the way for unprecedented growth and expansion. By leveraging Amazon's vast platform and extensive customer base, Estée Lauder aims to reach a wider audience and establish a stronger presence in the ever-evolving beauty industry. This collaboration not only signifies the brand's commitment to adapt to the digital age but also showcases its determination to continuously innovate and provide exceptional beauty experiences to its loyal customers.

DoorDash enters home improvement category with Lowe’s partnership

DoorDash has entered the home improvement category with a new partnership with Lowe’s.

DoorDash now offers gardening tools, spring cleaning essentials, DIY supplies, and other products from over 1,700 home improvement stores across the country, according to a press release on Monday (April 1).

“Our partnership enables consumers with quick access to must-have tools and last-minute materials to complete projects of all sizes,” Fuad Hannon, vice president of new verticals at DoorDash, said in the release. “With Lowe’s on the marketplace, we add to the great selection of everyday essentials that consumers rely on for on-demand delivery on DoorDash.”

DoorDash has added a home improvement retailer to its app. This means that DoorDash now has over 150,000 stores that are not restaurants on its platform. They offer a variety of items such as groceries, retail products, flowers, and food.

You can buy Lowe's products on the DoorDash app. This means you can shop for them along with other things from local stores. If you have DashPass, you might get free delivery and a lower service fee for eligible orders.

For Lowe’s, this expansion of same-day delivery options is part of the retailer’s continuing “omnichannel journey,” Neelima Sharma, senior vice president of digital commerce and technology at Lowe’s, said in the release.

“Our collaboration with DoorDash unlocks an opportunity for us to reach new DIY customers who are shopping directly on the DoorDash app, helping them get everything they need for spring,” Sharma said.

Our take: Another highly unexpected and rather surprising collaboration has emerged between the renowned DoorDash and the well-established Lowe's, as they join forces to provide customers with an exceptional on-demand selection of top-notch home improvement products. This partnership not only showcases DoorDash's unwavering commitment to diversifying its portfolio beyond the realm of restaurants but also signifies a remarkable leap forward in their quest to cater to a wider range of clientele. By incessantly broadening their array of offerings, DoorDash is poised to unlock an unprecedented influx of fresh customers, propelling them to even greater heights of success and innovation.

Canada Goose, Levi & Nike hit snags in their quest to build bigger DTC businesses

DTC-focused apparel companies are facing obstacles and challenges as consumer spending habits undergo significant changes. The latest setback in this trend was witnessed when Canada Goose recently announced its decision to lay off 17% of its corporate workforce. The company aims to prioritize "achieving efficiency and margin expansion." This news follows closely after Nike's decision to cut over 1,500 jobs as part of a broader restructuring effort, and Levi's announcement of potential layoffs of up to 15% of its employees as part of a two-year "productivity initiative."

These developments highlight the struggles faced by these companies, all of which had previously unveiled ambitious plans to increase their direct-to-consumer (DTC) sales. Canada Goose, for instance, had set a target of having DTC account for 80% of its revenue by 2028. Similarly, Levi had expressed its hopes of tripling e-commerce sales by 2027. Nike, on the other hand, had already severed ties with 50% of its retail partners by 2021, in order to focus more on its own stores and website, thereby retaining a larger share of profits.

However, the changing landscape of consumer behavior and preferences has posed challenges to these companies' DTC strategies. As a result, they have been forced to make difficult decisions and adjustments to their operations. While these setbacks may be discouraging, it is crucial for these companies to adapt and find innovative ways to navigate the evolving market. Only by doing so can they hope to regain momentum and achieve their long-term goals in the DTC space.

Our take: Consumer spending habits have undergone significant and unprecedented changes since the onset of the pandemic. In this new era, direct-to-consumer (DTC) focused apparel companies find themselves grappling with immense challenges and obstacles, making it increasingly arduous to regain their pre-pandemic momentum. These resilient brands are confronted with the daunting task of implementing layoffs, a testament to the difficult decisions and profound adjustments they have been compelled to make in order to navigate the ever-evolving landscape of their operations.

TikTok ban could harm Amazon sellers looking for alternatives

In March, the U.S. House of Representatives overwhelmingly passed a bill that could potentially force ByteDance, the parent company of TikTok, to divest its ownership of the popular social media platform or face a ban in U.S. app stores. This development has sparked extensive discussion and debate, primarily focusing on American data security and speech rights. However, it is important to recognize that this potential move also sheds light on another significant aspect: TikTok's increasing emphasis on e-commerce. Unfortunately, the intricate interplay between tech giants and geopolitics is placing immense pressure on smaller merchants, thereby impacting their ability to thrive.

In recent months, numerous merchants, predominantly hailing from China, have sought an alternative to Amazon and have consequently turned to TikTok as a platform to promote and sell their diverse range of products, including clothing, cosmetics, electronics, and more. Through the introduction of TikTok Shop, these sellers have found a new avenue to reach American consumers. Nevertheless, in conversations with TechCrunch, sellers from Shenzhen, a bustling Chinese megacity renowned for its thriving community of Amazon merchants, expressed a collective sense of frustration and helplessness in light of the escalating geopolitical tensions and the looming possibility of a TikTok ban.

Our take: TikTok's popularity has experienced an unprecedented surge in recent years, emerging not only as a prominent social media outlet but also as a flourishing e-commerce platform. Consequently, if the U.S. House of Representatives successfully passes the bill to prohibit TikTok's presence within the United States, a pressing question arises: where will these enterprising e-commerce players redirect their efforts, having relied on this influential social media platform as a pivotal avenue to market and vend their diverse range of products and services?

FEATURED CONTENT

US commerce sales penetration marks new high

Corey Epstein, CEO/Founder, discusses how eCommerce sales growth continues to outpace total sales and hit a record share in Q4 last year

Keep in mind China is at 46% (still a lot of room to grow!)

Our take: Amid predictions that eCommerce market penetration would drop post-pandemic, those predictions are simply not coming to fruition. Online shopping as a percentage of total retail sales continues to grow consistently, recently peaking in Q4 of 2023. It’s likely we’ll see more and more consumers worldwide continue to spend more online.