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Welcome to a new week. Retail is the focus of the economy in the coming days. As Q3 earnings seasons rolls on, Walmart, Target and Home Depot are set to report results. Plus, the US Commerce Department is set to report the latest retail and ecommerce sales.
Here’s a look at the calendar:
The countdown to Black Friday is on, but some holiday events have already arrived:
Walmart Black Friday Deals for Days: Walmart holds the second of three pre-Black Friday deals events. Walmart+ members get a head start on access to the savings on Nov. 14, followed by general availability on Nov. 16.
From YouTube to You: The video platform is ringing in holiday shopping with a series of livestreams, videos and Shorts. More than 30 of the platform’s biggest creators will feature brands such as POPFLEX, Ulta Beauty and TULA Skincare. Through Nov. 19
Retail and ecommerce sales highlight this week’s data on the state of the consumer:
Consumer Inflation Expectations: The Federal Reserve of New York provides a snapshot of the consumer outlook on spending and the labor market. This is watched by policymakers for signs that inflation is becoming entrenched. Nov. 14, 11 a.m.
Producer Price Index: The US Commerce Department releases monthly data on the price of goods in the stages before they reach retail. Also known as the wholesale price index, this is known as a forward-looking measure of inflation. Nov. 15, 8:30 a.m.
Retail Sales: The US Commerce Department releases monthly data showing total retail sales across multiple categories. This is a key indicator of consumer demand, as well as performance of the retail sector as a whole. Nov. 16, 8:30 a.m.
Q3 Ecommerce Sales: The US Commerce Department releases data showing total ecommerce sales for the third quarter. This is a frequently referenced measure to gauge the growth of ecommerce, and its share of overall retail. Nov. 18, 10 a.m.
Housing Starts + Existing Home Sales: Monthly data for the housing market offers a look at new home construction that kicked off, and sales of homes that are already built. Nov. 17 + 18
Earnings reports for the third quarter include reports from some of the largest retailers:
Monday, Nov. 14: ThredUp, Digital Brands Group, Oatly, Tuesday Morning
Tuesday, Nov. 15: Walmart, Home Depot, Lulu’s Fashion Lounge
Wednesday, Nov. 16: Target, Lowe’s
Thursday, Nov. 17: Gap, Inc., Macy's, Alibaba, Farfetch, Bath & Body Works, Kohls, Destination XL, Williams Sonoma
Friday, Nov. 18: Foot Locker
Trending in Economy
Upping marketing spend, growing loyalty members and multichannel sales are key to the beauty brand's strategy.
Digital commerce is helping e.l.f. Beauty pour fuel on the fire.
The brand continues to be one of the shining examples of the staying power of beauty products despite consumer pullback in other areas of discretionary spend. e.l.f. grew net sales 48% in the fiscal year ended March 31 as it reached $500 million in sales for the first time. For the most recent quarter, sales grew by a whopping 78%. The company is seeing profit gains as well, as adjusted EBITDA grew 56%.
With the top-line revenue flowing, the brand was opportunistic about how it invested in marketing in the most recent quarter. After upping spend to 33% of net sales in the quarter, the company ended up with marketing and digital investment at 22% of net sales for the year. That was well above the higher end of its 17% to 19% outlook. In the coming year, it expects 22% to 24%.
The fact that digital and marketing fall in the same category reflects the brand’s approach to marketing. It's a favorite among Gen Z, and has found a home on the social apps that are popular with the generation.
“Our disruptive digital-first marketing engine has built strength across multiple social platforms,” CEO Tarang Amin told analysts on the company’s earnings call. “We are a pioneer on TikTok and are now a four-time TikTok billionaire with our last hashtag challenge garnering nearly 15 billion views. We were the first major beauty company to launch a branded channel on Twitch and the first beauty brand on BeReal.”
As a sales category, digital penetration is now 17%, growing from 14% last year. The channel grew 75% in the most recent quarter.
Amin laid out three factors driving this trend:
Marketing. The marketing investment that e.l.f. made brought strong returns, and the digital-first nature of those ads are bringing people to the brand’s digital sales channels.
Loyalty. E.l.f.’s Beauty Squad loyalty program has 3.7 million members, which is a 25% year-over-year increase. Loyalty members are the biggest driver of the brand’s digital business, accounting for over 80% of sales on the brand’s DTC site.
Multichannel. e.l.f. is the only one of the top five mass cosmetics brands that has a DTC site, Amin said. It is also seeing strong growth at Amazon and other retailer ecommerce websites. The growing presence is “building upon itself,” Amin said.
With digital growth, the brand is seeking to expand capacity in the supply chain that will provide more efficiency and faster delivery, as well. It is shifting to a more distributed ecommerce fulfillment model. Previously, it had one automated warehouse in Columbus, Ohio, which meant shipping to the West Coast could take time. Now, it is moving to a multinode distribution network. With the first couple nodes up and running, there is already improvement in delivery times.
The brand is also adding distribution capacity to its main warehouse in Ontario, California.
As marketing helps more people discover and buy from the brand, the operational improvements will help create a customer experience that lives up to the hype.