2020 Killed the “Gadget Apocalypse”

Pre-2020, “gadgets” were essentially over. Smartphones, tablets, and smartwatches took the place of cameras, music players, navigation systems, fitness trackers, gaming devices, etc. But now, this “spontaneous mass hobbyism” is really bringing gadgets back.

It appears (for now) this “gadget apocalypse” has been averted. Months of lockdown and new normals have changed consumers back into gadget freaks: pulse oximeters, the iPhone 12, air filters, infrared thermometers, tablets, laptops, the PlayStation 5, ring lights, miniature freezers, home networking equipment, and noise-canceling headphones. We can all agree that the breakout device of the summer was the (three-year-old) Nintendo Switch.

The ways in which people buy gadgets have also become more practical. The way we search for items is also changing – from searching “The Best Laptops” to “How to Shop for a Used Laptop or Desktop PC.” Companies like Amazon who may have had “rip off” gadgets are now popular and preferred. Another example, Anker, which made its name selling portable batteries on Amazon, now sell projectors, so that you can open a small movie theater in your home since the movie theaters are shut down.

The pandemic gadget boom is a story of new needs — for example,  the number of backorders and top listings on Amazon of S.A.D. lamp and outdoor radiators.

What’s interesting is that these pandemic gadgets don’t claim to be the next big thing. Companies know these products are obsolete but this isn’t something they necessarily want to hide, because when we don’t need them, it won’t be a disappointment but more of a relief. Food for thought: where does conscious consumerism come in? Will these products be thrown out post-pandemic?

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PayPal to allow customers to buy and sell cryptocurrencies

On Wednesday, PayPal announced it would start offering users the ability to buy, sell, and hold cryptocurrencies through their online wallets. The company also said it would allow its 26 million merchants use cryptocurrency for payments.

At first, users will be able to buy four cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. This functionality will go live for U.S. users “in the coming weeks.” PayPal says it will expand these features to its social payments service Venmo, as well as internationally, in the first half of 2021.

In a press release, PayPal noted accelerated adoption of digital payments, driven by increased interest in digital currencies and the COVID-19 pandemic. PayPal also stated that mainstream adoption of cryptocurrencies has “traditionally been hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact,” but quoted a survey by the Bank for International Settlements as saying that one in 10 central banks expect to issue their own digital currencies within the next three years.

Why it’s hot:

This new PayPal feature, coupled with the digital shift that has already accelerated due to COVID-19, could represent a huge shift in the world of cryptocurrency and digital payment. The general population has been slow to adopt cryptocurrency, but could this mainstream visibility be the turning point?

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There’s now a chain store dedicated to Covid-19 essentials

Covid-19 Essentials with eight locations around the country may be the country’s first retail chain dedicated solely to products required because of an infectious disease.

Covid-19 Essentials, which specializes in pandemic masks, has eight stores nationally, including this one in the Park Meadows mall near Denver.

With many U.S. stores closing during the coronavirus pandemic, especially inside malls, the chain has seized on the empty space, as well as the world’s growing acceptance that wearing masks is a reality that may last well into 2021, if not longer. Masks have evolved from a utilitarian, anything-you-can-find-that-works product into another way to express one’s personality, political leanings or sports fandom.

And the owners of Covid-19 Essentials are betting that Americans are willing to put their money toward covering where their mouth is. Prices range from $19.99 for a simple children’s mask to $130 for the top-of-the-line face covering, with an N95 filter and a battery-powered fan.

Covid-19 Essentials also carries other accessories for the pandemic, in a space that has a more established feel than a holiday pop-up store; permanent signage above its glass doors includes a stylized image of a coronavirus particle. Not that the owners want their products to be in demand forever.

The chain has locations in New York City, New Jersey, Philadelphia and Las Vegas, and is looking to open stores in California, where the wildfires have only added to the demand for masks.

Why it’s hot: As the pandemic sticks around, certain products have become essential while some have seen demand skyrocket. With many traditional retailers manufacturing and selling masks, it’s no surprise that there is now a dedicated retailer selling products associated with this ongoing pandemic that isn’t going to disappear anytime soon, unfortunately.

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Hormel finds a way to bait anti-maskers into covering up

Hormel, producer of Black Label Bacon, wants you to “not just eat bacon, inhale it” with their new bacon breathable masks. “From now through October 28, meat lovers can sign up at BreathableBacon.com for a chance to win, and the winners will be announced on November 4,” according to Newsweek. Seems like a way to get a certain segment of the population (*cough, ahem*) to at least consider wearing masks.

 

For every face mask request, Hormel will donate a meal to Feeding America, up to 10,000 meals.

https://www.breathablebacon.com/

Story on Newsweek

Why it’s Hot

It’s not just hot, it’s sizzling. Obviously, this is just a way to promote the product in a fun way.

Singapore Airlines is turning its planes into pop-up restaurants

Singapore Airlines, which experienced a 99.5% drop in passengers during its first quarter, is turning two aircrafts into pop-up restaurants for two weekends in October and November. Tickets sold out in 30 minutes.

Singapore Airlines’ in-flight experience is legendary. Travel + Leisure has voted it the best international airline for 25 years in a row, and meals across all classes are designed by world-class chefs. So it makes sense that fans of the airline would be willing to pay for a gourmet meal, especially if they were already nostalgic for air travel.

Customers had the option of buying tickets in different classes, with a meal in a first class suite priced at $474 compared to an $39 economy class meal. Both meals will take place on planes at Singapore’s Changi Airport, which is the company’s hub. The airline says it will enforce social distancing, using only half of the 471 seats on the plane.

Why its hot

Brands in many industries are being forced to quickly find some way, any way, of generating profit and interest from consumers during COVID. This is an interesting way of staying relevant at a time when air travel is almost nonexistent. Not sure I could think of a less comfortable place to enjoy an expensive meal right now, but it’s an interesting idea nonetheless.

Beiber x Crocs Collab = Normcore apotheosis?

“As an artist, it’s important that my creations stay true to myself and my style.”

Justin Bieber is embarking on a new fashion partnership — just in time for Croctober.

The singer, and founder of clothing brand Drew House, is teaming with Crocs for a limited-edition Classic Clog inspired by elements of his fashion brand. The shoes are designed in Drew House’s classic yellow hue and include eight custom Crocs’ charms, called Jibbitz, including the Drew House smiley face logo, rainbows, daisies and pizza slices, among others.

“As an artist, it’s important that my creations stay true to myself and my style,” Bieber said in a statement. “I wear Crocs all the time, so designing my own pair came naturally. With these Crocs, I just focused on making something cool that I want to wear.” —WWD

Of course, the collection sold out in a couple days and the Bieber Crocs have arrived on eBay listed for 4X the original price.

Why it’s hot:

  • It’s interesting to consider the ebb and flow of trendiness, and what ingredients seem effective in bringing a brand back from the brink. Like fine art, it doesn’t really matter what it is, when it comes to a trendy product. What matters is that the right people say it’s desirable, and thus it is.

 

  • Can art and advertising co-exist? Pop music seems to say a resounding “Yes!” Mainstream recording artists have become the new powerhouse endorsers, which speaks to pop music becoming ever more an advertising channel, rather than an art form.

Source:WWD

Big Auto Doubling Down on Big Data

Source: ZDNet.com

Ford’s new CEO eyes software, tech stack as differentiator vs. rivals

New Ford CEO Jim Farley’s plan for the automaker includes a heavy dose of software and services for its commercial vehicle business as well as new consumer experiences to drive loyalty.

Why It’s Hot // The convergence always-on connection and data commercialization brings a world of new opportunities to marketers and brands seeking to redefine their businesses – while also adding fuel the the fiery debate about the trade-offs between privacy and personalized experiences.

Tech and the future of transportation: From here to there

Ford, which is in the middle of a turnaround of its core business, is trying to navigate a shift to electric vehicles, autonomous vehicles as well as an industry that is increasingly more about software. Farley takes over for Jim Hackett, who streamlined the automaker over the last three years.

Farley outlined a series of leadership changes and a plan that includes “expanding its commercial vehicle business with a suite of software services that drive loyalty and recurring revenue streams” and “unleashing technology and software in ways that set Ford apart from competitors.”

In addition, Ford is looking to develop connected vehicles and create new businesses from the Argo AI self-driving system.

Ford is also looking for a new CIO as Jeff Lemmer is retiring Jan. 1. His successor will lead Ford’s technology and software platform.

The tech strategy from Farley lands after a Sept. 16 investor presentation by Kenneth Washington CTO. Washington outlined the connectivity required from smart vehicles in the future that will include 5G, satellites and edge, cloud, and fog computing.

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Washington added that Ford has hired more than 3,000 advanced computing experts to work on the tech stack and surrounding technologies including things like smart cities, mobility services, edge computing, and analytics.

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He said:

If you were to tear down a future Ford, say, 10 years from now, the biggest difference you’d see is that the software, compute and sensing services are being serviced by a central compute module. And that’s really important because that’s more like we’re accustomed to seeing with the smartphones and the smart devices that we surround ourselves in our homes with every day. So this design that you would see would enable us to really leverage the power of high bandwidth connectivity that happens around the vehicle.

In the future, vehicle changes will be handled with updates via software and algorithms instead of hardware, said Washington. These updates would start with software, but design of electrical architecture as well as shared memory and power systems for various zones of the vehicle would be critical.

Other key points about Ford’s tech stack include:

  • Ford uses QNX, Autosar and Linux to develop is operating system and tech stack.
  • The automaker builds on top of that OS with middleware from its internal software team.
  • In 2020, Ford began equipping most of its redesigned vehicles with the ability for advanced over-the-air updates.
  • The data from those updates on vehicles like the F-150 and Bronco will help Ford iterate.
  • There are 5 million Ford connected vehicles in the field today.
  • Ford sees opportunities in services to optimizes Ford fleets for small business owners.

Nike Drops First eSports Spot

Nike’s first esports advertisement features gamers arrive at Camp Next Level — an esports training facility built by League of Legends player UZI. The retired League of Legends star was one of the first esports signings made by Nike.

The ad itself shows gamers being trained and worked in an (esports) training camp. Nike has come out saying that the ad is meant to try and remind esports athletes, who often practice extremely long days, that a healthy lifestyle and eating right is just as important as putting in long hours of practice.

Why it’s hot:
Nike didn’t hold back in it’s first eSports spot and launched in a Chinese market that is already booming. China’s e-sports revenue grew 54.69% YoY to $10.6 billion in the first six months of 2020. The spot will definitely spark discussion over Nike’s place in the esports world.

Coors Seltzer Launches with a Sustainability Mission

Molson Coors is entering the hard seltzer world with an unusual campaign centered around “the easiest volunteer program on the planet.” Based on an insight from a Nielsen study that Americans drank 87 million gallons of hard seltzer in just this past summer, the new Coors Seltzer will help save America’s rivers, with every 12-pack sold restoring 500 gallons of water. The company has committed to restoring at least one billion gallons during the first year.

(PRNewsfoto/Molson Coors)

In order to accomplish this goal, the brand is partnering with Change the Course, a program of the national nonprofit the Bonneville Environmental Foundation that specializes in helping its partners implement water restoration and is the leading national source for corporate water restoration. The partnership will identify and oversee projects around enhancing stream flows, modernizing irrigation, and restoring fish and wildlife habitat in 14 states.

To kick off the program and engage customers in helping turn the large amount of hard seltzer consumed to be “water neutral,” the first 175,000 12-packs will be paid for by Coors. Customers simply need to send in a rebate to get their first 12-pack for free. This “volunteer program” therefore just involves purchasing and drinking Coors Seltzer, while the Change the Course partnership really engages in the hard work to save the rivers.

(PRNewsfoto/Molson Coors)

The launch will also be supported by a contest across social platforms, where customers can upload photos of themselves engaging in a volunteering activity using the hashtag #CoorsSeltzerSweeps for the chance to win a year’s worth of hard seltzer.

Why It’s Hot

As a later entrant into hard seltzer, Coors needed a unique reason to convince people to try out their new beverage. The light tone of the campaign coupled with the push toward sustainability that resonates with their audience’s values, on top of a rebate that let’s people try the seltzer for free, should give the brand a strong start.

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Levi’s launches used-jeans shopping ecosystem

From Green Matters:

Levi’s Secondhand is one of the first buyback initiatives of its kind.

Levi’s latest sustainability efforts have lead the brand to launch a buyback program called Levi’s Secondhand, which incentivizes customers to buy and sell secondhand. Customers can trade in old pieces for a gift card, according to HypeBeast, and their used clothes then go up for sale on the company’s Levi’s Secondhand website. Levi’s also will handpick some vintage items, and feature them on the website, selling them from $30 to $150 USD.

According to Vogue, Levi’s is the first major denim brand to start a buyback initiative.

This could really make a difference, regarding the company’s annual carbon footprint.

For Levi’s Secondhand, the company has partnered with an e-commerce start-up called Trove, who will handle logistics, cleaning, inventory processing, and delivery, and it seems as though their joined efforts will make a major impact on the company’s carbon emissions. According to MR Mag, each pair of used jeans sold will save approximately 80 percent of CO2 emissions, as well as 700 grams of waste, compared to buying new jeans.

Levi’s joins the continuously growing resale market, which is predicted to skyrocket from $32 billion in 2020, to $51 billion by 2023, as emphasis on environmental consciousness continues to rise among brands and buyers, according to Fast Company. Because the fashion industry contributes about 10 percent of global carbon emissions, as well as 20 percent of global water waste, this initiative is incredibly important.

Not the first buy-back or second hand initiative from a brand. Patagonia has been doing their Worn Wear resell program for some time.

A unique challenge: Shopping second hand, online, across the decades. Since sizing has changed over time, how do you know your size is your size on a pair of vintage Levi’s?

Why it’s hot:

1. There’s a tacit implication of quality and longevity in a program that buys back clothes and resells them, which aligns perfectly with Levi’s value proposition as a brand.

2. One of the challenges of sustainability is how brands can spin the idea into something beneficial to the consumer, without losing money. Levi’s has leaned into the “shop used” to save the earth meme as the value proposition without giving consumers much in return, and while at the same time, capturing the value of the returned jeans for the brand, in the form of a gift card for future purchase.

 

Source: Green Matters

 

Sales of home-related merchandise have seen strong growth this year

  • Bed Bath & Beyond reported that in-store sales in Q2 2020 were up 6% and digital sales were up 80% (after nearly four consecutive years of same-store sales declines).
  • Wayfair reported a quarterly profit in August for the first time since going public, with sales being up 84% year-over-year.
  • Target reported during its second quarter earnings in August that sales of home goods were up more than 30% year-over-year, which helped contribute to comparable sales being up 24.3% year-over-year.
  • Williams-Sonoma reported during its second quarter earnings that e-commerce sales were up 46%

Home improvement chains Lowe’s and Home Depot, as well as big-box and department stores with home goods sections like Walmart, Target, Kohl’s and Macy’s, also recorded similar gains.

Tribeca Citizen | Seen & Heard: Bed Bath & Beyond gets a renovation after all

Why it’s hot: Americans are spending more time at home since the start of the pandemic and more people are moving (to the suburbs) leading to increased spending on furniture, bedding, kitchenware, and all sorts of home goods and home improvement products/services.

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Slack and Cole Haan Team Up

Slack has partnered with footwear brand Cole Haan to launch a unisex sneaker in the four colors of the Slack logo. This is the first time Slack—or really any major tech company, to our knowledge—has collaborated with a fashion brand.

Will people want to drop $120 on Slack-branded sneakers?

The partnership first came about in the lead-up to Slack’s IPO last summer. Cole Haan decided to create custom shoes for Stewart Butterfield and Cal Henderson, the company’s cofounders, as a surprise. That day at the Stock Exchange, Slack had little booths featuring products that companies had created entirely through the platform, including ice cream flavors and these sneakers. (Slack and Cole Haan created a Slack channel together to discuss all the details of the shoe and provide updates.) As Slack fans gathered to show their support, many wanted to know where they could buy the sneakers. In the months that followed, Cole Haan decided that a full-on collaboration made sense.

Over the past few years, Cole Haan has tried to stand out in the footwear market by investing in technology. Associating itself with Slack allows it to deepen its identity as a tech-forward brand.

Why it’s hot: This is an unexpected partnership that is mutually beneficial to both brand’s missions — a fun way to display the capabilities of Slack, and differentiating Cole Haan in the fashion landscape. Although it does seem like a miss that the shoes don’t have any unique capabilities beyond just slack-themed colorways.

Source: FastCo 

 

Hinge and Headspace launch pre-date meditations to beat dating nerves

Dating app Hinge has teamed up with Headspace to bring you pre-date meditations. From Oct. 6, daters can access Hinge and Headspace’s pre-date guided mediations on hinge.co/headspace at no cost. The meditations last around five to six minutes and they tackle a number of emotions you might be feeling before a date, from self-doubt to negative self-talk.

According to Hinge data, more than three in four Hinge users around the world have felt nervous or anxious prior to a date. And because of the pandemic, one in four users feel even more anxious now.

The meditations are narrated by Eve Lewis, Headspace’s director of meditation. And the first one begins by underlining how natural it is to feel nervous or stressed about going on a date. “We tend to rush ahead into the future, sometimes creating a full-blown story of what could or might happen,” says Lewis in the meditation.

Why it’s Hot:

This is a really interesting partnership for both Headspace and Hinge – both digital-first services geared at Millennials. Given the growing concern around mental health during COVID, this meditation service could help the app differentiate itself from other dating apps.

Source: Mashable

Wyndham Updates App for Easier Pandemic Travel

Wyndham Hotels & Resorts updated its mobile app to provide features meant to make guests more at-ease during the pandemic. This includes offering mobile check-in and checkout to 6,000 hotels, up from 300 hotels previously.

The app will allow for keyless room entry at select locations, and a gamified “passport” that tracks in-app actions around their loyalty program, like booking a stay or redeeming points. There will also be a “Lightning Book” feature to reserve a room quickly, designed for people on-the-go who want to find the nearest hotel and complete a booking in as few as three taps.

While upscale hotel chains have led the way in investing in mobile capabilities, this move by Wyndham, the parent of brands like La Quinta, Days Inn and Super 8, suggests such features are a must-have for a broader group of economy and midscale hotels. As these brands are largely servicing guests who are traveling by road rather than air, they’ve been holding up better than other chains. While the revenue per available room, a key metric for the hotel industry, fell 81% at luxury hotels in the U.S. in the second quarter, budget hotels experienced only a 44% decline over the period, according to data from analytics firm STR cited by The Wall Street Journal.

Why It’s Hot

The new contactless features along with stronger personalization and gamification of the loyalty program can be a differentiator that helps people return to traveling.

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Hard-hitting New Zealand campaign shows how seat-belts save lives

Transport agency in NZ transforms car crash survivors into advocates for seat-belts.

Body image for Graphic New Zealand campaign shows how seatbelts save lives

Body image for Graphic New Zealand campaign shows how seatbelts save lives

The campaign saw a 74% perception shift for its target audience (young men). The campaign had a recall almost three times higher among young males than the general population, and nearly four times higher than previous seat-belt campaign recall.

Recognizing that the seat-belt was regarded by young males as a symbol of weakness, NZ Transport Agency carefully selected survivors with heavy seat-belt marks to show that a seat-belt will save you, but it will also leave its mark on you. The dark bruising in each of the survivors’ portraits conveys just how hard a seat-belt works to save a life, re-framing it as a symbol of strength, rather than weakness.

A cast of young, macho, tattooed men, proves that even the most physically fit and imposing people are saved by seat-belts, and that wearing one is not just for kids or the elderly.

Why it’s hot: It’s easy to become desensitized to even graphic PSA campaigns, but NZ Transport Agency chose to feature real people who survived car crashes because of seat-belts, thus having a greater impact on their target demographic.

SOURCE

Working Den Helps Prevent Burnout

One-third of workers globally are experiencing increased burnout during the pandemic. Although burnout has been a topic for decades, with livingrooms becoming conference rooms, the lack of separation between work and life has become the #1 workplace stressor.

Yet even though burnout is pervasive and can result in everything from insomnia to high blood pressure, it’s one of those issues employees often feel they can’t talk to their employers about.

Source: Trendwatching

Filled with tools to help remote workers maintain healthy routines, Working Den has launched as a free service. Designed to be used throughout the workday, at launch, the service includes:

  • Exercise and stretching guides
  • Calming nature videos
  • Playlists of background noise
  • Mental health assessment quizzes
  • Pomodoro productivity timer
  • Eye-strain reduction notification system

New features like the ability to pair users up with one another to answer questions and as a way to combat loneliness are on the way.

Additional source: Fast Company

Why it’s hot: Although the site still has some rough edges, the site offers great value to those thrust into the deep end of working from home.

 

Good American changes the sizing conversation, again

Imagine a pair of jeans that magically adjusted to your body as you wore them day after day, year after year, even as your body changed. After an indulgent holiday meal, they’re not too snug; nor are they too loose on days when you feel your best. It seems like the stuff of a teen movie, but denim startup Good American may have found a way to turn this dream into a reality.

Today, the company, cofounded by Khloe Kardashian and Emma Grede in 2016, launched Always Fit, which does away with traditional denim sizing. Instead, it has five categories—A, B, C, D, and E—each of which covers four sizes. (The sizing goes from 00 to 32.) If you traditionally wear a size 8, for instance, you’d be in the B category, which encompasses sizes 6 to 12. This means that if you go up a size or two over the next few years, the jeans should still fit comfortably. The jeans start at $139 and come in six washes.

[Photo: Good American]

Grede, Good American’s CEO, says this new collection came out of conversations she and her team had in the office. “Many of us have jeans for good days, and jeans for days when we feel bloated,” says Grede. “And then there’s the fact that our jean size seems to change over the course of the month, and over the span of years. This creates such a pain point for women.” Indeed, Grede’s research found that the average woman’s jean size fluctuates 31 times over the course of her adult life. (With men, it’s only 24 times.) The solution, she believed, was to create a jean that was stretchy enough to expand across several sizes.Of course, the market is flooded with stretchy pants, particularly with the rise of athleisure. But Good American wasn’t interested in making another pair of jeggings. Grede says it was important to design jeans that felt like real denim, which meant giving the fabric the heft and weight of cotton, along with all the traditional fixtures, such as the zipper, buttons, and pockets. “These are not jeggings,” says Grede. “If I could, I would banish that word.”

To create the Always Fit jeans, the Good American team explored a wide range of fabrics and did extensive wear tests. While leggings tend to be made largely of synthetic materials, these jeans are made from 90% cotton and 10% lycra and polyester. But thanks to the way the fabric is woven, these jeans have a lot of give. While most stretch denim on the market can expand by 50%, this can stretch by 100%, which means it can effectively double in size when stretched.

The Always Fit jeans align with Good American’s broader efforts to become more eco-friendly. Denim is a notoriously unsustainable product, because it requires a lot of water and dye to create. With this line, the company is increasing its use of more sustainable materials, including 5% recycled cotton. But more broadly, Grede believes that producing fewer sizes has the potential to reduce waste, since women won’t need to buy as many pairs of jeans. And from the company’s perspective, there’s likely to be less unsold stock at the end of the season, since each size will target more customers.

Ultimately, though, it seems like comfort will be the jeans’ main attraction. And the timing couldn’t be better. Over the last six months, consumers have gravitated toward sweats and loungewear, and as we reemerge into society, Grede believes we’ll have no tolerance for clothes that don’t feel good. “I believe that fashion will make a comeback,” says Grede. “We’ll want to get dressed and get together with other people again when we can. But we’ll just expect a higher level of comfort than ever.”

Why it’s Hot:

  • Good American continues to innovate to solve problems and pain points for women, especially when it comes to buying jeans.
  • They are an example of a brand committed to their brand values of helping women feel better and sustainable fashion.
  • As people continue to stay at home and the athleisure market continues to grow, they are finding their place in the market that will be relevant even after people go back to work.

Source: Fast Company

Why American Eagle is the last mall brand standing

When COVID-19 arrived in the United States, the fashion industry took a major hit. In April, clothing sales fell by 79%, the largest drop on record. By the end of the year, revenues are expected to drop by a third, equal to $640 billion in losses.

At a time when many retailers are hemorrhaging money and closing stores, Aerie saw a 32% rise in revenue and is on track to open 70 new stores this year. The company also launched two new brands during the pandemic, Offline and Unsubscribed.

How did AEO become one of the last successful mall brands in America? The answer seems to be the company’s single-minded commitment to its target customer: Gen Z, the oldest of whom are now in their midtwenties. AEO has invested heavily in focus groups, consumer research, and even an in-house council made up of teens and twentysomethings who help with the corporate decision-making. All of this has given the company a clear sense of this generation’s values, aesthetics, and shopping preferences. “We’re gathering feedback from customers at every step,” Schottenstein says. “We’re reading comments on social, we’re getting feedback in stores.”

A GENERATION OBSESSED WITH COMFORT

So what does Gen Z want from a fashion brand? The answer is important, not just for AEO, but for the rest of the industry, as its spending power is set to increase by 70% by 2025, making its members key to the global economic recovery. Jennifer Foyle, AEO’s chief creative officer and Aerie’s global brand president, says: Today’s young people want comfort, and she means that in every sense of the word. “They want their clothes to be soft and comfortable, but they also want marketing campaigns to make them feel comfortable in their own skin,” she says. “This is now at the forefront of everything we do.”

This clothing assortment turned out to be ideal for the pandemic, when people around the world began sheltering in place and their wardrobes shifted. In April, the sale of sweatpants in the U.S. went up by 80%, and AEO was ready to meet this demand. AEO was already selling a lot of sweats, hoodies, and leggings, but in February, as COVID-19 loomed, Foyle says the company began ordering more of these items. “We got early reads on the crisis because we have factory partners in Asia,” she says. “We moved fast. We did not wait.”

And in July, the company released Offline, a new brand focused on activewear that had been in the works for nine months.

Foyle says AEO also works hard to create branding and marketing that makes customers feel comfortable in an emotional sense. She believes that for Gen Z, physical comfort is connected to a deeper sense of well-being and ease. “Our customer wants to feel like herself when she’s wearing our clothes,” Foyle says. This aligns with research from McKinsey showing that Gen Z tends to see consumption as a manifestation of individual identity and is drawn to brands that celebrate diversity and authenticity. To that end, back in 2014 Foyle spearheaded a campaign called Aerie Real, which focused on body positivity and inclusivity. The brand began using a wide array of real women as models, going beyond race and body size to include trans women and differently abled women. And it banned photoshopping.

THE “COME TO YOU” STRATEGY

While AEO’s products were a good fit for pandemic life, the company still had to think creatively about how to reach customers. For one thing, it has 1,095 stores across the country, all of which had to shut down early in the pandemic. Foyle says that AEO had been investing more in e-commerce and social media, but when the crisis hit, these channels became crucial.

The company poured marketing dollars into online spaces like TikTok, in what Foyle calls a “come to you” strategy. For instance, Aerie partnered with Charli D’Amelio, TikTok’s most popular user with more than 80 million followers, to launch a “positivity challenge” in which she invited users to share things they were grateful for in quarantine. “We knew our customers were on their phone more and engaging in social more,” Foyle says. “We decided that we’re going to be where our customer is at, serving them with products they want to wear.”

All of these efforts drove customers to shop online. In the second quarter, AEO saw a 74% increase in revenue through digital channels across all brands. Foyle knows some segment of customers may increasingly shop online even after the pandemic, which might mean closing less-profitable stores. American Eagle already has plans to close 45 stores.

But at the same time, she believes strongly that brick-and-mortar retail isn’t dead, it’s just evolving. While many suburban malls have been dying for some time, she sees opportunities to expand into shopping streets in smaller towns and into outdoor lifestyle centers, which are increasingly popular. “We just need to be very smart about our real estate strategy,” she says. “It’s about being in the best locations and the best new markets. It’s about innovating the in-store experience.”

THE FUTURE OF AEO

Unsubscribed, AEO’s newest brand, is an experiment that will allow the company to explore creative in-store experiences. It launched with a single boutique in East Hampton, New York, and doesn’t even have an e-commerce presence for the time being. Its clothes are more expensive than AEO’s other brands, with outfits ranging from $40 to $550. And while American Eagle and Aerie focus on delivering affordable, trendy styles to customers quickly, Unsubscribed is focused on creating smaller collections of classic, durable garments, designed to be worn season after season. The brand is designed to appeal to an older, slightly wealthier clientele. “It’s an entirely different business model,” Foyle says. “It’s teaching us a lot.”

In many ways, Unsubscribed is a way of thinking about what Gen Z consumers may want in the next decade, when they have more disposable income. AEO is betting that big-box mall stores won’t be as compelling as intimate neighborhood boutiques and that they’ll care about sustainability and buying fewer, better clothes. “It’s a conceptual project,” Foyle says. “We’re asking ourselves: What is our customer going to be thinking about down the road?”

Source: FastCo