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Under a recently-hired CEO, Lands’ End is set to rally around initiatives that optimize digital sales, and use data to reach customers across categories.
“It's worth noting that while we seek to meet customers where they are, over 90% of our revenue comes from a click,” CEO Andrew McLean, a former American Eagle executive who joined the brand in September, told analysts on the company’s recent earnings call. “So, we will continue to emphasize digital channels for serving existing and new customers. At Lands' End, we're customer-obsessed. The key to executing this product strategy is making sure we reach our customers in the right cadence with the right products at the right time, helping them to build their basket across categories.”
With an assortment that stretches across apparel, outerwear, swimwear and home goods, Lands’ End has a history of mail-order shopping and direct engagement with its customers through its famed catalogs. In an era of digitally-enabled commerce, this strategy is evolving with the goal of reaching customers who are shopping in multiple channels, and introducing new ways of harnessing proprietary data to understand how to reach them.
“Our focus will be on deepening relationships with existing customers while simultaneously bringing in new customers to the brand,” McLean said. “This will involve qualitative and quantitative assessments that are just kicking off, which will provide us with an even better understanding of our customers, including how they view our brands, what other products and product adjacencies they may be looking for, and how we can best engage with them.”
When it comes to channel expansion, one area of particular interest is third-party marketplaces. As Retail Dive pointed out, sales through online channels at other retailers are a bright spot for the brand.
In the fourth quarter of 2022, third-party revenue increased 8%, far outpacing an overall decline in ecommerce revenue of 6%. The growth on marketplaces was driven in particular by fleece and outerwear sales at Kohl’s. The company also sells through Walmart, Target and Amazon. In the second quarter of this year, it plans to add a presence on Macy’s recently-launched third-party marketplace.
McLean said these marketplaces represent an opportunity to pick up new customers, which it has been acquiring at rates in the “low-teens.”
“I think there's opportunity to continue to grow that and refine that with the data we're bringing to bear,” McLean said.
With that data, Lands End is seeing opportunities to market additional products to a customer who enters the business through a discrete category. For instance, a customer may seek out the brand for swimwear, but can be engaged with additional products like hats, slides and swim dresses. Using data, Lands’ end can understand patterns, and apply tools to put these products in front of the right customer through marketing.
“We moved in the fourth quarter to an AI-integrated system for email, and within that system, we're able to look at these customer cohorts and look at the behaviors that they exhibit...more specifically,” McLean said. “So, we're guessing less and being more specific and accurate and thoughtful going forward.”
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Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”