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Web Based Stores Move to Suburban Malls
Brands that came to prominence as online only such as Warby Parker, Bonobos, and Casper are moving into brick and mortar locations in suburban malls left empty from the recession. In a trend known as ‘‘clicks to bricks’” big named online retailers like Amazon as well as more niche startups like Madison reed are opening over 600 physical stores across the US. At the beginning of this movement online stores were opening brick and mortar locations as a way to improve their brand awareness and receive some publicity. Though not much was initially expected for the physical locations, but a traditional store front is becoming increasingly prominent in stores long-term growth plans. Furthermore, the stores are increasingly being located in areas throughout the south and Midwest. These retailers are finding online advertising more expensive, they are also experiencing an increasingly crowded marketplace where it is difficult to grab the attention of customers scrolling through their Instagram feeds. Simultaneously the cost of opening a physical location is cheaper than ever before. As department and chains stores close, there is a mall vacancy rate of 9.1% in the last quarter. Meaning that online stores can snatch up prime mall locations at the lowest rates since the heights of the great recessions. Mall owners are also adapting to the needs of online retailers. Appreciating that online retailers do not carry stock and require less space, mall owners are also offering shorter leases accommodating the popular trend of pop up locations. As a way of reducing risks for online retailers some mall owners are evening accepting a small percentage of the store sales eschewing the traditional monthly rent. Other malls owners are seeing online startups as investment opportunities. Online retailers are cautious about investing too much into physical locations, but have the benefit of observing the lessons that retailers have learned over the last century. Armed with the hard learned lessons of other retailers  and an unparalleled levels of data, online retailers think they know how to be successful in the virtual world and the real world.   Source: By Matthew Townsend Bloomberg Businessweek https://www.bloomberg.com/news/articles/2018-10-22/warby-parker-and-casper-are-coming-to-a-strip-mall-near-you?srnd=checkout
General
Canada Goose Innovates Cold Dressing Rooms
Luxury outerwear company Canada Goose is introducing frigid dressing rooms where shoppers in their stores can test parkas in temperatures as low as -25 degrees Celsius. Five Canada Goose stores currently feature these cold dressing rooms, with another dressing room planned to be introduced in Beijing as Canada Goose expands in China. Cold dressing rooms where designed to illustrate to customers that the company’s coats are able to keep them warm in severely cold conditions in ways customers have not yet experienced. The ability to do this is especially important for Canada Goose stores in subtropical locations such as Hong Kong, where cold rooms can prove the brand is authentic artic gear rather than a mere luxury status symbol. In the past the company utilized cold chambers for trade shows, it only introduced the concept as a dressing room in Tokyo in 2017. Canada Goose’s small retail network (only 11 stores) and the high prices of its products makes such a high concept dressing room financially feasible in ways that would not be possible for other brands. The cold room also allows the brand to offer a unique and memorable experience to customers in an age wear brands struggle to attract customers to brick and mortar locations. Finally it allows Canada Goose to build relationships with customer’s vital to the long term success of luxury brands.   Source : https://www.bloomberg.com/news/articles/2018-11-17/canada-goose-is-turning-the-dressing-room-into-a-freezer?srnd=checkout
General
Apple Products Will Become Available On Amazon
In November 2018, Amazon and Apple created a deal which allowed for a wide selection of Apple products to be available on Amazon. The deal makes Apple available to Amazon customers in the US, UK, Spain, India, and other companies around the world. In the past the companies have viewed themselves as rivals for dominance in the tech arena. Although Apple products would appear on Amazon, this was exclusively through third  party resellers, not approved by Apple and whose merchandise offered inconsistent quality and price. After January 4, these unofficial resellers will not be able to sell Apple products on Amazon unless they apply to Apple for authorization. With the new deal Amazon Customers are able to provide new Apple products directly from the manufacturer or from resellers who are authorized by Apple. Refurbished Apple products available on Amazon will now be available for purchase through Amazon’s Renewed program.   However, there are still some limits on what Apple products will be available through Amazon. Apple products that are seen as direct competition for Amazon’s products, such as the HomePod a direct competitor to Amazon’s Echo, will not be available on Amazon. This is not unprecedented, in 2015 Apple TV was pulled from Amazon’s catalogue when Apple blocked the release of the Prime Video app for Apple TV. The companies reached a compromise in 2017. This new agreement appears to be the next step in warming relations between the two tech giants.   Source:https://slate.com/
General
US Consumers Have Fewer Brand Choices
Open Markets Institute has issued a new report that says corporate America is becoming increasingly concentrated. This monopolization is becoming prevalent in a wide range of industries such as cat foods, jellys, airlines, and cell phone providers; all of which have become dominated by a handful of companies in recent years.  As an example of this just four companies control 97% of dry cat food, with one, Nestle, company holding 57% of the cat food industry. Nestle controls this much of the industry because it has 4 different cat food brands, which means that customers going to a store feel like they are seeing a lot of different choices. However, sense these brands have a single parent company creating a false impression of choice for customers. Experts call this a scam economy in which competition and choice is an illusion. In many industries the market share is held by just two companies an increase that has taken place since the turn of the century. Corporate concentration is an issue as it can lead to increased prices for consumers, as there are fewer options for consumers there is less pressure for competitors to keep their prices down. If corporate concentration and monopolies goes unchecked it can lead to a serious issue known as Monopsony. Monopsony is when a single large buyer controls a huge portion of the market. This is the opposite of a Monopoly where the power is primarily held by the seller. Monopsony’s are problematic as means that a single company has an outsized control over suppliers and workers. Amazon is an example of a company that has the potential to become so large that it control what shipping companies charge it and becomes the main employer in specific areas meaning it has the ability to push employee wages down. If this happens it could lead to an overall drag on the economy as a whole. Though consumers may not be fully aware of their choice restrictions at this time, it is already an issue. Currently there are 4 cellphone network providers controlling 98% of the market, 2 of those companies (T-Mobile and Sprint) are proposing a merger. If this goes through the market of cellphone providers in the US will drop to 3.   Source:VOX https://www.vox.com/2018/11/26/18112651/monopoly-open-markets-institute-report-concentration  
General
Millennial Consumers Are Challenging Traditional Wedding Retailers
Well known US bridal gown retailer, David’s Bridal, has recent filing for Chapter 11 bankruptcy which is a symptom of changes in the wedding market as a whole. Millennials are delaying or foregoing marriage altogether in numbers higher than previous generations. In 2017 the median age of people entering their first marriage was 29.5 for men and 27.4 for women, in 1970 the median ages for a first marriage was 23 for men and 20.8 for women. These demographic shifts have a very real impact on the wedding industry which is finding a smaller number of customers for wedding gowns and other wedding products. Another industry shift affecting retailers is a move towards customization for customers who are holding weddings. As customers are getting married later in life, they have developed stronger individual identities and they want these identities expressed through their weddings in ways not previously the norm in the industry. This move towards customization has increased business for nontraditional or “indie” wedding designers, but have left traditional retailers like David’s Bridal behind. Customers are not just moving away from traditional retailers to express their personalities; they are also unable to justify the large price tags. The modern bridal customer is more inclined to spend their money on unique venues and experiences for their guests, instead of paying large sums for a wedding gown. In this light, brides are turning towards nontraditional gowns or renting their gown through services like Rent the Runway who recently launched a wedding concierge program to meet this demand. This shows that companies are changing their models to meet the demands of millennial customers.   Source: Vox Media https://www.vox.com/2018/11/20/18105000/davids-bridal-bankrupt-wedding-industrial-complex

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