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Commerce chronicles: June 2, 2024

Jun 02, 2024 - Alyssa Wolfe
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June 2 Commerce Chronicles | Williams-Sonoma, Rothy's, Alibaba & more

Alibaba signs David Beckham as ecommerce brand ambassador and Williams-Sonoma is making improvements in delivery efficiency. Plus, consumer sentiment is up in May, the immersive Walmart Realm launches and DoorDash and Ulta Beauty expand their partnership.

In this week’s news, sustainable footwear brand Rothy’s launches Amazon Fashion Store, Walmart Realm provides an influencer-led digital shopping experience and Ulta Beauty is now available in 50 states via DoorDash. Plus, David Beckham to be the face of international ecommerce giant Alibaba and Williams-Sonoma optimizes fulfillment operations. Visit our blog every week for a roundup of the latest commerce news.

Alibaba signs David Beckham as international ecommerce brand ambassador

AliExpress, owned by Alibaba, has signed former England soccer captain David Beckham as a brand ambassador to compete with PDD Holdings' Temu in the global market for inexpensive Chinese goods.1 Historically a low-key cross-border player, Alibaba is now aggressively boosting its international sales as domestic ecommerce growth slows. Its international division, including AliExpress, is its fastest-growing unit, with a 45% revenue increase year-on-year from January to March.

AliExpress has also become a sponsor of the UEFA Euro 2024 tournament, investing millions in discounts and engagement to attract online consumers, with an ad campaign featuring Beckham to run during the tournament. This strategy mirrors Temu's successful Super Bowl ad campaign, significantly boosting app downloads. Despite past execution challenges in international markets, Alibaba is leveraging its competitive advantages, such as offering five-day delivery to 11 markets and strengthening its logistics arm, Cainiao. AliExpress operates in over 100 markets, and Alibaba's intensified efforts reflect the competitive pressure to differentiate and capture market share from Temu.

Williams-Sonoma makes improvements in delivery efficiency and aims for more

Williams-Sonoma's supply chain efficiency improvements significantly boosted its Q1 financial performance, increasing its gross margin by 240 basis points.2 The retailer minimized out-of-market shipments, multiple deliveries per order and reduced order returns and replacements. During an earnings call, President and CEO Laura Alber highlighted efforts to decrease replacement frequency due to shipping damages by addressing the root causes of incidents.

The company also aims to excel in shipping furniture, maintaining high customer satisfaction and record-high on-time delivery metrics. Despite progress, Alber emphasized that the ultimate goal is achieving "the perfect order" – damage-free and on-time delivery. Emerging from pandemic-related delays and cost increases, Williams-Sonoma improved its cost of goods sold as a percentage of net revenues from 61.5% to 51.7% year over year in Q1. Investments in logistics, including a new distribution center in Arizona and the use of AI to optimize shipping speed and cost, further enhance its supply chain capabilities.

DoorDash expands partnership with Ulta Beauty

DoorDash and Ulta Beauty have expanded their partnership to offer on-demand delivery from over 1,350 Ulta stores across all 50 states.3 This collaboration allows consumers to shop from Ulta Beauty’s extensive selection of over 25,000 products from 600+ brands, including cosmetics, fragrances, skincare, hair care and wellness, exclusively through the DoorDash app. This marks the first time DoorDash’s monthly active users can access a beauty retailer nationwide, broadening DoorDash’s retail and grocery offerings.

Customers can now order beauty essentials directly to their door in under an hour, enhancing convenience for busy lifestyles. Ulta Beauty Rewards™ members can link their accounts to earn points on purchases made via DoorDash, and DashPass members can enjoy $0 delivery fees and reduced service fees on eligible orders. Ulta Beauty continues to offer same-day delivery on its website and app, powered by DoorDash Drive, providing comprehensive delivery options for its customers.


Influencer-led “Walmart Realm” launches, providing immersive digital shopping experiences

Walmart has launched "Walmart Realm," an innovative VR-powered shopping experience developed in collaboration with Emperia and Sawhorse.4 This virtual shopping environment transports users into three unique worlds: Y'allternative, Go Chromatic and So Jelly, each featuring curated beauty, home, and fashion products. Customers can explore these immersive spaces, access detailed product information and add items to their cart for purchase on Walmart's main website.

"Walmart Realm" also incorporates gamified elements, such as seeking hidden "Sparks" and engaging in mini-games like card matching. It offers prizes and entry into a $100 digital card sweepstakes. This initiative underscores Walmart's commitment to cutting-edge shopping experiences and follows its previous metaverse ventures, including "Walmart Universe of Play," "Walmart Land" and "Supercampus."

Walmart has implemented in-game purchases and expanded its virtual fashion offerings to further enhance its metaverse presence. Collaborations with Outlier Ventures and Unity have supported decentralized retail solutions and integrated 3D shopping experiences. "Walmart Realm" exemplifies Walmart's vision of blurring the lines between physical and virtual retail, offering customers a captivating glimpse into the future of shopping.

Consumer confidence rose in May – and what that means

In May, the Conference Board Consumer Confidence Index® rose to 102.0 from April’s 97.5. The Present Situation Index, reflecting consumers' views on current business and labor conditions, increased to 143.1. Meanwhile, the Expectations Index, which gauges short-term outlooks for income, business, and labor conditions, improved to 74.6 but remained below the recession threshold of 80 for the fourth month.5

Dana M. Peterson, Chief Economist at The Conference Board, noted that while consumers were less positive about current business conditions, the strong labor market bolstered overall confidence. The expectation of future business and labor conditions improved, though inflation concerns persisted. Consumers cited food and grocery prices as significant economic factors, and 12-month inflation expectations rose slightly from 5.3% to 5.4%. The likelihood of a recession also grew, with more consumers predicting a recession in the next year, contrasting with CEO surveys. Despite recession worries, consumers remained optimistic about the stock market. Buying plans for homes stayed low, while plans for autos and big-ticket appliances saw slight increases. The survey, conducted by The Conference Board and Toluna, reflects data collected up to May 21.

Sustainable footwear brand Rothy’s launches Amazon Fashion Store to expand reach

Rothy's, Inc. has launched its products on Amazon, expanding access to its eco-friendly shoes and accessories made from single-use plastic bottles.6 Rothy's, known for its responsible fashion, has diverted over 179 million plastic bottles from landfills and operates a TRUE Zero Waste certified factory. The partnership with Amazon allows Rothy's to reach a broader audience, offering their popular styles like The Point, The Flat and The Driving Loafer with Amazon's fast delivery.

"Like Amazon, we are obsessed with our customers," said Jenny Ming, Chief Executive Officer at Rothy's. "We are constantly looking for new ways to improve our shopping experience and be where our customer wants us to be. Now they can now shop Rothy's in Amazon's store as they build their basket – delivered to their doorstep with the speed and efficiency that Amazon is known for." Founded in 2012 and launched in 2016, Rothy's has redefined the shoe category with sustainable practices, achieving LEED Gold and TRUE Zero Waste Platinum certification in 2023. Rothy's products, sold directly online and through select retailers, transform recycled materials into stylish items, maintaining environmental responsibility. Headquartered in San Francisco, Rothy's continues to be recognized for innovation and sustainability in the fashion industry.

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