The Current, delivered daily.
Happy Friday, especially to those in Philadelphia for Natural Products Expo East. We’re adding a countdown for Prime Early Access Sale alongside our Black Friday ticker, and keeping everyone in Hurricane Ian’s path in our thoughts. Here’s a quick rundown of this week’s ecommerce news:
Prime Day, again
(Photo via Amazon)
Amazon got the week off to a roaring start by making long-rumored news official: A second deals event for Prime is coming October 11-12. This one is called Prime Early Access Sale, and it’s being positioned as a kickoff to the holiday season. While reports indicate Amazon has already been in touch with many merchants about sending in deals and inventory, brands will still have to decide whether and how they want to participate.
The takeaway: Embedded in this new shopping holiday is a bid to shift holiday shopping earlier. Amazon isn’t alone in this, as Walmart will kick off discounts on Oct. 1, and Target is holding its own Deal Days event Oct. 6-8. But only Prime Day has shown the power to bend the calendar to Amazon’s will, while delivering for consumers who have been so far unable to resist a deal. With a second edition, the closest competition isn’t other retailers. It’s Black Friday.
Crossover appealShopify POS Go in action. (Screenshots via Shopify)
In-store shopping is on the rise this year, and it’s expected to be a bigger part of the holidays, NPD reported. But there will still be plenty of tech involved. Shopify released an updated point-of-sale for brick-and-mortar retailers as it saw offline GMV rise in the second quarter. This comes just after Instacart released a host of new tools for in-store grocery shopping, such as smart carts and out-of-stock trackers. We also spoke with Kadro CEO Rick Johnson about his learnings from years of helping retailers implement buy online pickup in store, or BOPIS.
The takeaway: The return to traditional in-store shopping underscores the importance of aligning brick-and-mortar and ecommerce operations. Inventory is going to become a big talking point.
Talking shopScreenshot from Search On. (Photo via Google)
New shopping features for users were among the highlights at Google’s Search On conference, which rolled out a host of updates to the world's largest search engine. Overall, the features are designed to provide a more visual experience, and bring the trends and research that Google already has onhand into the shopping experience.
The takeaway: We’ve been watching Google talk more about prioritizing shopping over the last year as it made updates to give brands more tools and revamp ad upgrades with Performance Max. The user-facing updates appear to aim to embed shopping within the search experience, rather than relying on a specific tab. These features arrive in the same week that Instagram is beginning to test a previously-reported change that would remove the Shop tab from the home feed. It seems that platforms are looking to make shopping a built-in part of the user experience.
Not now for Apple Pay LaterBNPL update: Apple Pay Later delayed, Canadian expansion
Apple made a big splash back in June when it announced it would roll out a Buy Now Pay Later service with iOS 16. But, as Bloomberg’s Mark Gurman noted, iOS 16 arrived, and there was no Apple Pay Later to be found. Engineering issues were cited as the reason, but Apple gave no official word.
The takeaway: This comes at an unsettled moment for BNPL as a whole. Inflation could be a boost to these services as consumers look to stretch dollars, but falling interest rates will likely cut into profit margins. Klarna recently made a second round of layoffs. Affirm and Afterpay are looking for expansion in Canada. Meanwhile, regulation looms and Apple’s entrance looms. Is consolidation in the market next?
Ciara with the items she curates for Instacart. (Courtesy photo)
For the first time in 50 years, the White House held a conference focusing on nutrition, hunger and health this week. Given the food focus, it’s no surprise that CPG and grocery were well-represented, and took this moment to make a splash. Instacart rolled out a sweeping health initiative that included product updates, partnerships, policy planks and new research. Shipt and Albertsons each made pledges to fight food insecurity. Meanwhile, the White House rolled out a new proposal to add front-of-package food labels and change how items are classified as healthy.
The takeaway: While that proposal will likely see plenty of debate and we’ll have to see how companies follow up on their pledges, it’s striking how the act of holding a conference can bring this much policy engagement from the industry. When you’re the White House, just inviting people over is a meaningful act, in and of itself.
Quick hits: J&J’s consumer health company has a name. Mondelez seeks “disruptively delicious” startups. Walmart builds in Roblox. Macy’s launches a third-party marketplace. Sephora adds same-day delivery subscription. H&M could start charging for returns. Peloton will grind into Dick’s. Lululemon looks in the Mirror. Retextion and RetentionEngine merge.
Thread of the week: Walmart+ is the biggest consumer product no is talking about.
Weekend reading:User reviews are much less important for DTC sites.
Trending in Economy
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.