Economy
19 June 2022
The Week Ahead: DTCx4, CommerceNext, Countdown to Prime Day
Ecommerce events, indicators and stories we're tracking for June 20-24.
Will high gas prices bring more ecommerce orders? (www.flickr.com)
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Welcome to a new week. Juneteenth celebrations are being held around the country. The holiday commemorates the emancipation of enslaved people following the Civil War. Declared a federal holiday in June 2021, Juneteenth is being observed on Monday, June 20. Learn more about the history from The New York Times, or reflect with a poem by Amanda Gorman.
Here’s a look at news and events in ecommerce that The Current is tracking this week:
Events
There are plenty of opportunities to gain insights and network this week at in-person and virtual events. Here’s where the ecommerce community is gathering:
- DTCx4: Leaders in the direct-to-consumer space gather virtually on Wednesday, June 22, for a day of presentations in areas such as customer experience, acquisition and retention. Featured speakers include Shopify President Harley Finkelstein, Sharma Brands Founder Nik Sharma and BigCommerce VP of Revenue Growth Sharon Gee. See the full lineup here.
- CommcerceNext: Held at the New York Hilton Midtown on June 21-22, the conference features more than 50 sessions with speakers from brands and retailers including Glossier, Purple, FTD, Walmart, UNTUCKit, Rent the Runway and more. Find more info here.
- Analytics Unite: Held June 21-23 in Chicago, retail and consumer brands gather at this summit for workshops, keynotes and panel discussions that focus on unlocking success through data and analytics. Speakers hail from AWS, Mars Wrigley, Kimberley Clark, Kellogg and more at this conference produced by EnsembleIQ. Get details here.
- Cannes Lions: With the creative marketing community gathering in France from June 20-24 for a mix of awards and learning, expect announcements from agencies, brands, retailers and more.
- Call for speakers: Resale marketplace Poshmark announced that it is seeking speakers for its PoshFest event, which celebrates fashion and entrepreneurship in Houston on Sept. 29-30.
Economic indicators
The University of Michigan is set to release its final index data on consumer sentiment for the month on Friday, June 24. As inflation remains at 40-year highs and the Fed takes steps to cool off the economy, this is a closely-watched barometer of how shoppers are responding to the macroeconomic swings. Preliminary results released earlier this month showed a 14% decline from May, with sentiment plunging to an all-time low.
Stories we’re following
Here's a look at top recent developments we're following in ecommerce and consumer goods:
- Prime Season is here: Amazon set July 12-13 as the dates for its annual sales holiday last week. The early deals are set to begin this week, with a host of Prime benefits being offered on a host of media and commerce platforms in Amazon’s orbit. Prime Day’s famed “halo effect” is also set to start taking shape. Look for other retailers to announce their own deals, as Target did with its own plans for a Deal Days event on Friday.
- Ecommerce opportunity in a downturn? A recent story from PYMNTS looked at the potential for ecommerce to rise as fuel prices continue to go up. With gas prices topping $5 a gallon in many areas, Americans will want to drive less. That means they’re more likely to opt to have items delivered, the piece posits. With talk of tough economic times ahead, we’ll be on the lookout for more ways in which ecommerce can be a potential source of relief.
- More product shortages: The era of product shortages continues during the pandemic, as tampons and sriracha are the latest to hit snarls in the supply chain. This comes alongside a baby formula shortage that continues after a key Michigan factory was shut down following a storm late last week. How long will these shortages last, and where will solutions ultimately come from? Is there an opportunity for DTC brands that make these products to step in?
- Grocers add to plus:Instacart and Kroger both announced plans to expand membership programs last week. This followed a series of recent moves by Walmart to boost its own subscription offering through an expanded fuel discount and a members-only event. A report earlier this year from eMarketer showed these programs were in-demand from shoppers. Now that retailers have responded, we’ll be watching to see whether these moves had tangible results in upping subscriber numbers.
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Marketing
09 June 2023
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
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.
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