As the e-commerce space heats up, there’s more pressure on brands to diversify and add value through additional services or tools. The bigger the player, the more ambitious they need to be to compete with their rivals.
It’s this state of affairs that’s seeing the likes of TikTok and Abercrombie & Fitch go boldly forth with new offerings that separate them from the competition – while efforts by Amazon to do more of the same are seeing diminishing returns. Let’s dive into these developments in the weekly dispatch:
The announcement of Amazon’s Amazon Prime Early Access came as a surprise to many, but it could provide an early insight into what customers are prioritizing this holiday season.
According to a study by Numerator, 40% of surveyed shoppers say they took advantage of the sale to purchase large ticket items they would only buy on discount.1 Yet 59% of items sold were under $20 – a clear indication that inflation is pushing consumers to spend less on gifts this holiday season.
Inflation is also impacting how and when shoppers are choosing to buy. 30% of consumers who participated in the sale said that they waited for the sale in order to purchase a specific item at a discount, while 24% actually passed on a promotion because it wasn’t an essential item.
Coming fast on the feet of Amazon’s Prime Day in July, the Prime Early Access sale hasn’t exactly bolstered confidence for a thriving holiday shopping season. Yet other retailers including Walmart moved fast to capitalize on interest in the sale by offering their own discounts, which saw online sales grow by 10% YOY.2
Despite being known more for viral dances than logistics, TikTok is reportedly preparing to scale up its in-house fulfillment capabilities to service the growing TikTok Shop feature.3
Recent job listings posted by the social media giant on LinkedIn for its global e-commerce team refer to responsibilities in warehousing, returns, inventory management, and CX.
This marks an interesting development for the short-term video platform, which has been experiencing growing success in social commerce off the back of its irreverent, authentic approach to content. By serving users with fulfillment and delivery programs, TikTok can add a fresh revenue stream and better position itself to compete with the likes of Meta and YouTube, which are currently losing ground with younger consumers.
However, offering e-commerce fulfillment services is a very expensive undertaking. With a massive global user base, TikTok will face the added challenge of scalability and meeting demand for its services, which could affect its reputation as a reliable fulfillment partner.
Needless to say, commentators will be watching this space closely to see how TikTok’s latest venture unfolds.
Hollister Co. has released a new mobile payment functionality to customers in the United States and United Kingdom. The system, dubbed Share2Pay, enables shoppers to share their online shopping bag with another person via text message, who then completes the purchase by clicking the link and progressing through the checkout.4
Share2Pay is based on proprietary research by Hollister Co.’s parent company, Abercrombie & Fitch, which found that shopper journeys are frequently interrupted because teens have to wait until an adult is available to make the purchase. This unique method of third-party purchasing is a great fit for retailers who cater primarily for a teenage audience with more limited disposable income. With many customers still dependent on their parents to meet their apparel needs, creating a process for sharing shopping carts with the purchaser eliminates a key point of friction for their target customer.
Beta testing of the new payment tool found that Hollister customers who shared their shopping cart using Share2Pay converted at almost x2 the rate of other customers.5 This is a clear sign that streamlining the payment process is central to increasing conversions.
Global fashion retailer Shein has announced a new set of targets to lower emissions across its supply chain by 25% by 2030.6 This includes emissions by its suppliers and its owned operation. Shein also plans on incorporating a greater percentage of recycled materials into its products, with a transition from virgin to recycled polyester of up to 31% also earmarked for 2030.
Shein has been the subject of a lot of controversy over the years, thanks to its aggressive fast-fashion model. Accusations of massive textile waste, child labor, and copyright infringement of apparel designs have led many commentators to encourage consumers to boycott the brand.7 In this context, Shein’s efforts to lower emissions can be read as a PR exercise to placate increasingly eco-conscious consumers.
Shein is far from the only fast fashion retailer to embark on sustainability initiatives. Zara, H&M, Uniqlo, and Asos have also unveiled a raft of reforms to combat climate change and textile waste.8 However, the question remains whether these brands, which are all built on a trend-based model, can ever be environmentally and socially sustainable.