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- DTC Dispatch #038
DTC Dispatch #038
Record Sales for Prime Day
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🏖️ Have you been on vacation yet?
This week in DTC Dispatch:
🎒 Back-to-school and product refresh cycle fuel record Prime Day sales
🩳 Pacsun steps into men’s activewear category
đź’„ Ulta Beauty Raised $2.4 Million for Big Brothers Big Sisters
đź‘— Hugo Boss has lowered its guidance as the slowdown in the luxury market continues to take its toll
đź‘ź Adidas modifies controversial advertising campaign with Bella Hadid
LATEST NEWS
Back-to-school and product refresh cycle fuel record Prime Day sales
During the two-day Prime Day event, shoppers spent a record $14.2 billion online, an 11% increase from last year, according to Adobe Analytics.
Adobe Analytics identified two major trends boosting sales:
1. Back-to-School Shopping: Compared to average daily sales in June 2024, sales of backpacks, stationery, and school supplies surged 216%, and kids' apparel sales increased 165%.
2. Product Refresh Cycle: Electronics sales rose 61%, with tablets and televisions up 117% and 111%, respectively. Small kitchen appliance sales grew 76%.
Vivek Pandya, lead analyst at Adobe Digital Insights, noted that while electronics, apparel, and furniture typically see low single-digit growth, Prime Day sparked significant sales due to deep discounts.
Almost half of the online spending came from mobile devices, an 18.6% increase from last year. "Buy now, pay later" orders made up 7.6% of total orders, up 16.4% from 2023.
Our take: Prime Day's record sales reflect evolving consumer behaviors. Trends in back-to-school shopping, home and tech upgrades, and the rise of mobile shopping and flexible payments are reshaping the retail landscape. Retailers must adapt their strategies to meet these changing consumer needs and preferences.
Pacsun steps into men’s activewear category
Pacsun has launched a new men’s activewear collection called A.R.C., which debuted online and in stores on Friday. The 28-piece range features T-shirts, flight shorts, vests, crewnecks, hoodies, pants, and joggers, with prices ranging from $29.95 to $74.95. This collection marks Pacsun's expansion into the men’s activewear market, building on the success of its women’s activewear line. Additionally, the brand introduced its Pac1980 sub-brand store at the Mall of America in Minnesota last year and established 20 activewear shops within existing Pacsun locations.
Our take: With the global activewear market booming, Pacsun's entry into men’s activewear is timely. The collection, including T-shirts, shorts, vests, hoodies, and joggers, meets a wide range of customer needs at competitive prices. This makes the collection appealing to budget-conscious shoppers who value style and functionality.
Pacsun’s men’s activewear is built on the success of its women’s line. Insights gained from the women’s collection have likely guided the development of the men’s range. The brand’s strategy is further strengthened by the Pac1980 store at the Mall of America and 20 activewear shops in existing locations, boosting visibility and allowing customers to try the products in person.
There’s a clear gap in the market for stylish, affordable men’s activewear. High-end brands dominate, leaving room for Pacsun’s A.R.C. collection, which offers trendy, functional activewear at reasonable prices. This collection is set to attract a broad audience, from fitness enthusiasts to casual wearers, positioning Pacsun as a key player in the activewear market.
Ulta Beauty Raised $2.4 Million for Big Brothers Big Sisters
Ulta Beauty's month-long fundraising campaign has raised over $2.4 million for Big Brothers Big Sisters of America (BBBS), the company announced.
The funds will be used to support wellness and mental-health programs, training, and resources for 200 BBBS agencies serving 5,000 communities nationwide.
From mid-May to mid-June, Ulta Beauty customers and associates could donate at checkout in nearly 1,400 stores, online at Ulta.com, and through local community events.
Our take: Ulta Beauty’s recent month-long fundraising campaign, which raised over $2.4 million for Big Brothers Big Sisters of America (BBBS), is a great example of corporate responsibility. This effort highlights Ulta’s dedication to supporting communities and making a real difference in youth wellness and mental health.
Ulta’s choice to fund BBBS’s mental health programs is especially important given the growing need for such support among young people. The money will strengthen 200 BBBS agencies, helping them provide vital training and resources to thousands of youth.
Ulta Beauty sets a strong example for other companies by showing that businesses can have a significant positive impact on social issues. This campaign is a model for how companies can use their reach and resources to support important causes and encourage a culture of giving.
Hugo Boss has lowered its guidance as the slowdown in the luxury market continues to take its toll
Hugo Boss experienced a 42% decline in EBIT during the second quarter, falling to €70 million (£58.8 million), reflecting weaker sales and investments in business strategies.
The fashion retailer also saw a 1% decrease in group sales, totaling €1.02 billion (£856.76 million), due to “challenging macroeconomic and geopolitical conditions” affecting consumer demand.
Hugo Boss highlighted that key markets, particularly the UK and China, faced significant difficulties as the luxury sector slowdown persisted.
In contrast, the Americas saw a 5% growth, while sales in Europe, the Middle East, and Africa, as well as Asia Pacific, fell by 2% and 4%, respectively.
Revenue from physical stores dropped by 2%, with a corresponding decline in store foot traffic during the quarter.
Our take: Hugo Boss reported a 42% drop in EBIT for the second quarter and a 1% decline in group sales. These results highlight ongoing difficulties in the luxury fashion sector and the broader economic pressures affecting consumer behavior.
The sharp drop in EBIT and the small decrease in sales indicate that Hugo Boss is struggling with current market conditions. Despite investing strategically, the company has yet to see significant improvements. These challenges reflect the tough environment luxury brands face due to economic instability and changing consumer preferences.
Hugo Boss’s results vary by region. The Americas saw a 5% growth, showing some positive trends, while Europe, the Middle East, and Asia Pacific experienced sales declines. The issues in key markets like the UK and China are especially concerning for the luxury sector.
Adidas modifies controversial advertising campaign with Bella Hadid
Amid criticism from Israel, Adidas has announced plans to revise its advertising campaign for a reissued running shoe originally designed for the 1972 Munich Olympics. The controversy centers around the selection of Bella Hadid as the campaign's face. The Israeli government took issue with Hadid's involvement, due to her father’s past statements, which have been accused of anti-Semitism.
The 1972 Summer Olympics were overshadowed by a terrorist attack that killed eleven Israeli athletes and officials, carried out by Palestinian militants.
Adidas stated, "We acknowledge that the campaign unintentionally linked to tragic historical events and apologize for any distress this has caused. We are revising the campaign to address these concerns. Our commitment to using sport as a unifying force and promoting diversity and equality remains steadfast."
Our take: Adidas’s campaign revision demonstrates the complex issues brands face when dealing with sensitive historical and political topics. By addressing the controversy and reaffirming its commitment to diversity, Adidas is making an effort to navigate these challenges thoughtfully. This situation highlights the need for careful representation and sensitivity in brand messaging.
Thanks for reading this week’s edition of the DTC Dispatch!