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Commerce chronicles: June 24, 2024

Jun 24, 2024 - Alyssa Wolfe
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June 24 Commerce Chronicles | Instacart, H&M, Pendleton, Kohl's & more

Instacart’s retail media network heads to YouTube, H&M works to create a more sustainable supply chain and Pendleton celebrates 100 years of shirt marking. Plus, Kohl’s launches Return Drop and how AI is transforming ecommerce.

In this week’s news, find out what Supply Chain Dive is saying about outsourced vs. self-fulfillment. Plus, learn about H&M and Rondo Energy’s partnership, Instacart’s retail media network going offsite and how Kohl’s is making returns easier. Visit our blog every week for a roundup of the latest commerce news.

Instacart expands shoppable ads to YouTube

Instacart, a leading online grocery platform in North America, has announced an extension of its retail media data to YouTube, enabling select brand partners to convert viewers into purchasers with same-day delivery options.1 This new initiative builds on Instacart’s successful collaboration with Google Shopping Ads introduced earlier this year.

Instacart's shoppable YouTube ads will allow brands such as Clorox and Publicis Media to pilot campaigns using Instacart’s first-party data to target high-intent consumers, providing a seamless path from ad viewing to purchase. Viewers can directly click from YouTube ads to an Instacart product page to buy the featured items for same-day delivery. CEO Fidji Simo, CEO and Chair of Instacart, said, “We’re merging the power of video creative with our valuable first-party data and seamless shopping experience.”

Tiffany Tan, Clorox’s Senior Director highlighted the value of reaching consumers through retail media. “Clorox has been a longstanding Instacart Ads partner. We’ve been quick to test new pilot offerings, including Instacart’s shoppable video ads on their platform, because we see the value of retail media to reach our target consumers,” said Tan. “We are excited to pilot these new Instacart-powered shoppable YouTube ads off of Instacart to test and learn alongside the Instacart team. Instacart’s first-party retail media data layered on top of our video creative will help us create engaging, shoppable ads to better reach, inspire and drive purchases from YouTube.”

This initiative extends Instacart’s retail media partnership with Google Shopping, leveraging AI-powered merchandising to engage consumers. With YouTube being a leading platform for product research and purchasing decisions, this partnership aims to enhance connected commerce experiences and drive business growth for CPG clients.

H&M Group invests in Rondo Energy to decarbonize textile supply chain

Global fashion retailer H&M Group has announced an investment in Rondo Energy, a leader in zero-carbon industrial heat and power, to explore heat storage technologies aimed at decarbonizing its supply chain.2 This partnership includes H&M Group joining Rondo’s Strategic Investor Advisory Board (SIAB) to help deliver clean, affordable heat to textile factories globally. Rondo’s Heat Batteries, which convert renewable electricity into high-temperature heat, will be tested in H&M's supply chain to replace fossil fuels with sustainable energy sources.

H&M Group Ventures’ investment will support Rondo in expanding its international operations and developing heat storage projects. The collaboration marks a significant step in H&M’s ongoing efforts to decarbonize its operations, aligning with other global leaders like Rio Tinto and Aramco Ventures in seeking large-scale, zero-carbon energy solutions. "Producing and finishing fabrics requires substantial energy, traditionally sourced from coal," said John O'Donnell, Rondo’s Founder and Chief Innovation Officer. "Our brick batteries offer a practical alternative by harnessing cheaper renewable energy sources."

This initiative’s goal is to significantly reduce the fashion industry’s carbon footprint, which currently accounts for 5% of global greenhouse gas emissions. Laura Coppen, Sustainability Investments at H&M Group Ventures, highlighted the potential of Rondo’s technology to help the company meet its climate targets, particularly in Southeast Asia, a key region for textile production. “We look forward to working closely with Rondo and the broader ecosystem in scaling decarb tech," said Coppen.

Pendleton marks 100 years of shirtmaking

Pendleton Woolen Mills marks a century of shirtmaking, celebrating its deep community connections, partnerships with wool growers and lasting contributions to fashion.3 The iconic Pacific Northwest brand is launching a limited-edition collection inspired by its original 1924 wool shirts. "A 'Century of Shirtmaking' represents a celebration of enduring craftsmanship, and iconic patterns, that have defined Pendleton for over a hundred years," said John Bishop, CEO and president at Pendleton. "We are especially proud of this milestone as it is rare in American manufacturing to have a century of non-stop production in two factories. The expertise of our designers and mill specialists, combined with the enthusiasm for wool shirts among Pendleton fans, has made this achievement possible. We are thrilled to share this moment with our customers."

Founded in 1909, Pendleton expanded to shirtmaking in 1924, leveraging its expertise and relationships with wool growers. Pendleton shirts have become integral to various cultures, from California surf and lowrider communities to outdoor enthusiasts and American workers. To commemorate this milestone, Pendleton will release the "Century of Shirtmaking" capsule collection, featuring plaids from its 1924 designs and 100% virgin wool shirts made in the USA. The collection launches in June and September 2024. Additionally, a documentary series, "Shirt Tales," will debut later this year, showcasing personal stories from communities that have supported Pendleton over the decades. Pendleton Woolen Mills, headquartered in Portland, continues its legacy of quality and craftsmanship with two operational mills in Oregon and Washington, maintaining its status as a leader in woolen products.

text reading the ecommerce platform for selling b2b, image of person shopping ecommerce clothing store on laptop

Supply Chain Dive talks in-house vs outsourced fulfillment

Fulfillment is an enormous part of today’s retail operations. With the surge in ecommerce and omnichannel shopping, creating a strong order fulfillment strategy is critical. Supply Chain Dive, a popular online news resource for logistics, supply chain and fulfillment, recently talked about how companies must weigh cost vs. control when choosing whether to use outsourced or self-fulfillment.4 The article talked about companies weighing whether to insource or outsource their fulfillment operations and how they face a complex decision influenced by size, growth trajectory, distribution costs and customer service needs, experts told Supply Chain Dive. Factors such as shipping disruptions, demand fluctuations and inflation have significantly impacted these decisions recently.

In speaking with industry experts, Supply Chain Dive learned about an increasing trend of companies shifting to third-party logistics (3PL) models due to the challenges of insourcing, particularly for fast-growing firms facing capacity management issues. Another company transitioned to an outsourced model to save on real estate, labor and supply chain costs.

While 3PLs offer numerous benefits, it’s essential each brand carefully considers what works best for its operations – which may be self-fulfillment, outsourced fulfillment or a more unique approach such as a dedicated fulfillment site takeover.

Kohl’s introduces in-store Return Drop for select retailers

Kohl’s has launched The Return Drop @ Kohl’s, a new service allowing customers to make in-store returns from select retailers without needing packages or labels.5 This expansion, facilitated by partnerships with Inmar Post-Purchase Solutions and Narvar, is available at over 1,100 Kohl’s locations nationwide. The service includes major brands like Carhartt, Hanes and Levi’s.

Customers can initiate returns through the original retailer and choose "Kohl’s Drop Off" to receive a QR code from Narvar. The QR code, along with the merchandise, can be brought to any Kohl’s store, where returns are consolidated and sent to Inmar for processing. This initiative not only simplifies returns for customers but also enhances operational efficiency for participating retailers.

“Convenience is crucial to enhancing the customer experience,” said Gregg Barta, EVP of Supply Chain and Logistics at Kohl’s. Amit Sharma, Founder and CEO of Narvar, said, “Shoppers have shown how much they value easy returns, and brands win when they offer multiple returns options to meet their customers’ need for convenience. By partnering with Kohl’s, we’re bringing the power and breadth of its nationwide store network to our merchants, giving them an additional way to deepen their relationships with customers and drive long-term loyalty.” The collaboration aims to meet customer needs for easy returns while fostering brand loyalty and streamlining return processes.

How AI is transforming product discovery and ecommerce

Artificial Intelligence (AI) is changing product discovery and ecommerce by enhancing personalization and efficiency. AI can analyze consumer behavior through advanced algorithms and machine learning to deliver highly tailored shopping experiences, recommending products that align with individual preferences. This transformation not only improves customer satisfaction but also drives sales and optimizes inventory management for retailers.

AI transforms product discovery by analyzing consumer behavior to provide highly personalized recommendations, enhancing the shopping experience. It uses advanced algorithms and machine learning to predict preferences and suggest products that match individual tastes. Additionally, AI-driven content creation enables rich, engaging digital experiences that can captivate and convert shoppers more effectively than traditional methods.

Investors see potential in AI-powered product discovery. San Francisco-based Constructor, an AI-powered product discovery and search platform, has secured $25 million in a Series B round led by Sapphire Ventures, bringing its valuation to $550 million and total funding to $85 million.6 The funds will enhance product development, innovation and international expansion, leveraging their clickstream-based AI to improve ecommerce product discovery.

Constructor is a unique product discovery and search platform designed specifically for enterprise ecommerce, focusing on conversions. Its cloud-based solutions leverage natural language processing, machine learning-enhanced ranking and collaborative personalization to create powerful user experiences. By continuously innovating, Constructor helps customers utilize advanced AI technologies, including algorithms, machine learning and generative AI, to enhance product discovery and optimize key ecommerce metrics.

Constructor has well-known clientele that sing its praises. “The thing we liked about Constructor was that not only was it real AI, specifically made for our industry, but that their AI is incredibly transparent,” said Tony Gabriele, Vice President of Digital Strategy, Petco. “None of it is black box – so we don’t have to guess what it’s doing or why – and when we have questions, the Constructor team is always happy to talk us through it. We evaluated every vendor on the market, and Constructor was just different. The system is easy to use, the team is motivated and delightful to work with, and most importantly, it paid for itself plus the cost of switching in less than a year after we implemented it.” logo, Sell Everywhere title, woman smiling, global icon