Brands Are Flying Solo
Amid a decline in wholesale, Levi’s recently announced a jump in overall sales thanks to direct-to-consumer channels online and in brand stores. The same report noted a reduction of wholesales sales from 50% to 30% of overall revenue in the last eight years, alongside a plan to expand 100 stores. The major takeaway - brands are looking to get directly to their customers. One of the key ways that they have been looking to do so is through owned stores that focus on brand products - something Nike, Puma and many others are focused on expanding.
And the results are promising. Looking at weekly visits over the two year period from October 2017 through September 2019 shows a clear upward trend. The peak week in August 2019 saw 64.7% more visits nationwide than the peak week in August 2018. August 2019 was so strong, that its best week was 14.0% higher than the best overall week in 2018 - the week before Christmas.
These numbers are seen even more clearly when analyzing monthly visits compared to the baseline for the same period. The July and August peak in 2019 brought in visits that were 54.4% and 47.7% above the baseline respectively. While September sees an annual dip following the summer and Back-to-School period, the next major milestone will come during the holidays.
Should Levi’s be able to maintain growth into this period, expectations for the proposed store expansion will only generate more enthusiasm.
Bed, Bath & Beyond’s Glimmer of Hope
Excitement abounded for Bed, Bath & Beyond after announcing that former Target EVP Mark Tritton would be taking over as CEO. And with good reason. Target isn’t just an amazing retailer, they have a unique knack for innovation and new concepts that truly resonates with customers. But, there may be even more to be optimistic about than improved leadership.
In a year, where seemingly every month saw a drop in Year-over-Year visits, August actually saw an increase. August 2019 visits were 22.9% above the baseline for the period between September 2017 and September 2019, while August 2018 visits 17.7% above. Admittedly, July and September visits were lower in 2019 than in 2018, but the bump does reinforce a critical idea - Bed, Bath & Beyond still resonates with customers.
With large scale closures already announced, much of the future success will likely be predicated on a combination of an improved in-store experience and closing the right stores. The latter concept is critical because it can greatly diminish the overall impact of closures. If Bed, Bath & Beyond can effectively identify the stores that will have the lowest impact on overall sales - low performers and those that already cannibalize from other locations - the turnaround could be fairly quick.
In fact, a more optimized fleet may not see such a huge decrease if a focus on location optimization is pushed to the forefront.
Which stores may be the ideal closures? Visit Placer.ai to find out.
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