🎶"I love you, you love me, Barney's filing bank-rupt-cy!" PLUS: who is the vegan-curious Subway customer? Listen now!
- Vice President of Global E-Commerce and Customer Experience at e.l.f Cosmetics, Ingrid Millman, is co-hosting with Brian and Phillip this week.
- Barneys New York has filed for bankruptcy but does this spell the end for the high-end department store model?
- The perception of luxury is shifting with younger generations and brands that don't change with the times will eventually phase out.
- AriZona Iced Tea has partnered with a cannabis brand and the pairing could be a benchmark for the future of cannabis retail.
Barneys Is Bankrupt: Tough Times for High-End Department Stores:
- Barneys New York has filed for bankruptcy (no Phillip, not the dinosaur) and Ingrid captures up all of our inner feelings by saying that the Sex and the City characters within all of us are saddened by the news.
- Brian has surprisingly never seen Sex and the City, so Ingrid makes him take a Buzzfeed quiz which yields surprising results.
- There is a rapid expansion of markets that don't make sense for the Barneys brand that has succeeded at being a single store in New York.
- Ingrid states that it is a tough time for high-end department stores and brings up how other big names in high-end department stores (like Henri Bendel) have been closing.
Discovery on Instagram: Are Department Stores Dead?:
- Brian rebuttals by saying there have been many luxury stores that have been very successful in taking their business online.
- "The department store was traditionally the place where discovery happened, but now discovery happens on Instagram."
- With the advent of social media and the tailoring of advertisements that accompanies it, Instagram knows more about you than a department store ever would.
- Brian guesses that Barneys Warehouse could have been a contributing factor in Barneys' demise because a lot of what Barneys sold was sold at a discount at Barneys Warehouse.
The Cannibalization of High-End Pricing: What is the Cost of Discounting?:
- Phillip points out that the concept of doubling down on your high-end inventory before you make the addition of discount products to your brand has never been talked about on the show before.
- A recent article mentioned that the Nordstrom family wants to increase its ownership of Nordstrom beyond 50% as a result of their plummeting sales.
- There are a lot of luxury brands that cannibalize their full price sales by selling through discount outlets such as Nordstrom Rack.
- Phillip states that casualization in the workplace and a shift in the perception of luxury are contributing factors to the failing high-end department model.
The Flash Sale Model: Disillusionment Through Discount:
- Ingrid attributes the financial recession around 2008 as the advent of flash sale type brands such as Giltand these discounted luxury goods removed some of the enchantment that was associated with luxury goods.
- The older generations are typically buying the traditionally high-end brands and if those brands do not take notice of the buying habits of younger consumers, they will being to age out.
- Phillip identifies Barneys as a cultural icon that he would have previously considered too big to fail, but it will have to change dramatically to stay around.
- Brian points out the continuing trend of brands that are struggling even though they are trying to innovate such as Walgreens having to close hundreds of stores.
The Competitive Edge: Battling Against Giants:
- CVS has announced a paid offering called Carepass that promises discounts, free shipping, and prescription delivery for about half the price of Amazon Prime. (Funny how this announcement lines up with Walgreen's announcing their store closings...)
- Brian predicts that we will begin to see more offerings like this from different brands popping up to compete with Amazon.
- Disney+, ESPN+, and Hulu will be bundled for $12.99 and Phillip points out that we've come full circle and are back to where we started: with basic cable.
- Phillip is excited to try something aside from Netflix because he only watches The Office.
Mountains of Digital Waste: The Ruins of Digital Civilization:
- Ingrid is very into all of the cooking shows on Netflix such as The Great British Bakeoff, Chef's Table, and The Final Table.
- Brian states that he wishes you could just buy the equipment that was being shown on the cooking shows while watching. (Or the shoes right off of Carrie's feet. RIght, Brian?)
- Streaming Service Linear Commerce is the ability to purchase products directly from digital media as it is being displayed in various programs.
- Phillip recently heard about "the mountains of digital waste" we create that we use for a moment and then never again, but it will exist forever in data houses that require fossil fuels to be powered.
Recycle Commerce: Single-Use Plastics As Sustainable Currency?:
- Brian gets excited about being able to swap plastic bottles for a train ticket in Rome as part of a 12-month program called "Ricicli + Viaggi," or Recycle + Travel that aims to reduce the usage of single-use plastics.
- Ingrid has a conspiracy theory and is worried that this program will have an opposite effect and make people buy more plastic bottles because they will be able to use them to get train tickets.
- S'well recently announced food storage containers and Phillip thinks that they are really pretty.
- Brian loves the idea of sustainable currency and wonders why we can't factor other things in such as adding a carbon offset value to everything we purchase. (Credit to Phillip for that idea.)
Weed and Iced Tea: The Pairing You Never New You Wanted:
- Brian has been champing at the bit to talk about AriZona Iced Tea's venture into the world of weed with their partnership with Dixie Brands, Inc.
- AriZona Iced Tea and Adidas recently collaborated on a shoe that was initially sold for $0.99, caused such a crowd that the NYPD had to shut down the launch, and then later started being sold for upwards of $700.00 per pair.
- There are lots of interesting collaborations between cannabis companies and "nostalgia brands" such as the recent pairing between Green Growth Brands and Abercrombie & Fitch.
Beyond Meat: Major Food Chains Are Exploring Meatless Options:
- Subway is going to be testing out plant-based Meatball Marinara sandwiches at select locations.
- Subway is not alone in their shift towards meatless options as Del Taco, Burger King, Tim Hortons, and Little Caesar's are all going to have Beyond Meat or Impossible Burger options.
- Ingrid brings up that there are tons of people that are interested in reducing the amount of meat they consume or going meatless but they live in areas where those options are not readily available. (Brian lovingly dubs these areas "Meatless Deserts".)
- Phillip brings up a Twitter thread from Charlie Bilello that chronicles the rise of Beyond Meat and the numbers are incredibly indicative towards the success of meatless products.
- Both Brian and Ingrid share some love for Oatly and how their marketing is making oat milk look like the coolest thing ever.
Brands Mentioned in this Episode:
- Barney's New York
- Henri Bendel (R.I.P.)
- Barneys Warehouse
- AriZona Iced Tea
- Dixie Brands, Inc.
- Green Growth Brands
- Abercrombie & Fitch
As always: We want to hear what our listeners think! Where do you see the high-end department store model in five years? Is cannabis a sustainable business model when it comes to partnering with non-cannabis brands?
Have any questions or comments about the show? You can reach out to us at firstname.lastname@example.org or any of our social channels; we love hearing from our listeners!
Retail Tech is moving fast, but Future Commerce is moving faster.