Footwear has long had a reputation as being one of the hardest categories to purchase online. After all, great product imagery cannot guarantee a comfortable fit. It may be slightly surprising then that PowerReviews’ State of Apparel & Footwear Shopping survey found that 74% of all footwear spending occurs online.1
Thanks to stay-at-home orders, the COVID-19 pandemic forced shoppers to purchase goods online – sometimes for the very first time. We’re seeing the continuation of these habits in 2022, but consumers aren’t going in blind; the survey also revealed that 98% of footwear shoppers read reviews at least some of the time, while 69% of footwear shoppers always seek out user-generated photos and videos to assist their purchasing decisions. Quite significantly, 51% consult the brand’s exchange policy.
Apparel brands selling footwear need to think about the burden that higher online footwear sales may put on their fulfillment operation. Footwear boasts some of the highest return rates in e-commerce, with rates as high as 35%.2 Sorting, reconditioning, and repackaging can result in returned footwear piling up and affecting resale opportunities, which is why it’s important to find a 3PL that has experience in footwear fulfillment.
Kohl’s has announced that it plans on rolling out Sephora storefronts across all of its 1,100-plus stores nationwide, up from the 600 currently operating at select locations.3
Sephora locations within Kohls are designed to evoke the same experience as standalone Sephora stores, complete with trained Sephora staff, one-on-one demonstrations, and a changing roster of trending beauty products and brands.
The SWAS (Store-Within-a-Store) concept has seen many brands revive their fortunes, thanks to lower running costs and the ability to leverage the foot traffic of the host retailer. Toys R Us’ partnership with Macy’s department store has seen the iconic toy brand re-establish a foothold within the marketplace, after years of debt and declining sales as a big-box retailer.4
Now facing stiff competition from its rival Ulta Beauty and its own SWAS partnership with Target, Sephora can no longer rely on its own massive store network to keep driving sales.5
As big-box retailers use their giant store footprints to transform themselves into miniature shipping malls, foot traffic is being increasingly split between malls, high-street storefronts, and big-box stores. By expanding their portfolio, brands like Sephora are shoring themselves up for a more diverse retail landscape.
It’s not just parcel carriers that are implementing peak season surcharges this year. For the first time, Amazon has announced that a ‘holiday peak fulfillment fee’ will be put in place from October 15th to January 14th.6
Like major parcel carriers, Amazon is citing higher seasonal fulfillment costs such as labor, fuel, and inflation as making additional fees necessary to maintain service standards during peak season.
This marks a pivot in strategy for the e-commerce giant, which has traditionally absorbed these cost increases to attract more sellers to its fulfillment services. But with e-commerce growth now slowing back to pre-pandemic levels, Amazon has been forced to put its ambitious expansion plans on pause. Sales on Amazon have fallen by 4% YOY, while staffing levels have been cut to match the fall in demand for logistics services.7
With Amazon fulfillment services no longer immune from the pressures in the sector, future data will tell us whether e-commerce brands will feel encouraged to look elsewhere for capacity.
BigCommerce has announced a new partnership with Buy Now, Pay Later (BNPL) provider Affirm, offering its merchants the ability to implement Affirm’s checkout feature for monthly or bi-weekly payment installments.8 This gives Affirm access to a wider range of enterprise-level customers, enabling the provider to scale and limit its dependence on individual consumers.
Affirm isn’t the only BNPL provider that is making moves to connect with big e-commerce players. Splitit has recently partnered with Telecom company Telispire to integrate deferred payment plans into its billing system, introducing BNPL services to an entirely new audience.9
This marks a bright spot within the increasingly fraught BNPL sector. Despite a rapidly-growing user base, rising interest rates and tightening lending criteria in many countries raise questions over whether BNPL providers can continue guaranteeing access to funds to lend to consumers. And with more regulation likely on the horizon, this may put an end to the frictionless, no-questions-asked lending that consumers are accustomed to.
By aligning themselves with big e-commerce players, BNPL providers are shoring up their defenses for a more hostile economic and regulatory climate to come.