IKEA ends US sales on Amazon
IKEA has become the latest company to stop selling on Amazon. The Swedish furniture company was involved in a U.S pilot programme, where they tested selling lighting products on the platform. The pilot launched in 2018, however, a spokesperson for the firm announced that the trial has ended, and the company will be exploring other options.
The news comes after Nike announced they would leave the platform in back in November. The company started selling on Amazon in 2017, however they experienced problems with counterfeit goods, which was hard for Amazon to control as sellers often created new stores with new names after being shut down. The level of control given to retailers by Amazon has also been noted as an issue for other retailers. Birkenstock experienced similar issues in 2016, and since then have not sold any of their products on Amazon.
“We are curious and keen on exploring new areas to get new insights on how to reach and serve more of the many people,” a spokesperson for IKEA told Retail Dive in an email. “The project was a trial and after it ended, it did not go live. We will continue to dialogue with different partners to test new ways to meet our customers now and in the future, whenever and wherever they want.”
According to Randy Konik, an analyst from Financial Services firm Jefferies, “The move shows us that strong brands realize that traffic driven to their own site (e.g. Nike.com) is self-sustaining, more profitable, and actually brand-enhancing, while traffic and incremental revenue from Amazon.com is less profitable but also less brand enhancing. We believe many strong apparel (and even non-apparel) brands will continue to avoid or curb their relationships with Amazon in the future.”
Holiday Shopping Results Show eCommerce Win
The results from the holiday shopping period, pre-December 25th, have shown positive growth for retail sales, with overall sales (excluding automobiles) up 3.4%.
This is according to Mastercard, announcing the news in their after-Christmas holiday report. However, the growth was not felt by brick and mortar retailers, with their sales, decreasing on last year. Online retail, was where the true growth lay.
During November, which includes Black Friday, the biggest day in the eCommerce calendar for US retailers, there were declines of nearly 4% in electronic goods, as well as 0.6% in clothing sales. This is in contrast with the eCommerce sector, with online sales growing 18.8% from last year. “E-commerce sales hit a record high this year with more people doing their holiday shopping online,” said Steve Sandove, senior advisor for Mastercard.
Department stores suffered this year, with sales down 1.8% for the season, despite
eCommerce sales up 6.9%. This shows “the importance of omnichannel offerings,” according to Mastercard.
This comes in a year where the struggles faced by brick and mortar retail were reported frequently. Coresight research reports that before December 20th, 9,300 stores had shut down across the US.
The head of retail solutions at Great American Group, Scott Carpenter, predicted that 30% of current retail stores “would cease to exist in its current form, as consumers buying trends shift increasingly online.”
According to Forbes, the rise of eCommerce in the past few years is not just simply down to the convenience offered by buying online. Pamela N. Danziger believes that today’s mature section of customers “…already have too much stuff, so their spending has shifted to replacement and necessity purchases primarily.”
Oliver Chen, Cowen retail and luxury analyst, wrote in a report on the future of retail, “‘Less is more’ applies to the closet as customers are re-thinking relationships with material possessions they already own.”
“Subscription and circular economy concepts enable customers to raise the quality of their wardrobes with fewer units and partially remove them from a cycle of purchasing more new items,” he said.
Chen continued, “There is a strong momentum toward eliminating waste among retailers,” which looks to be an awful lot of brick-and-mortar retail stores. He further advised that the role of the retail store must transition from being one focused on driving transactions to one for customer acquisition and retention.
Neutrogena App launches new AI features
Neutrogena, the skincare company owned by Johnson & Johnson, has launched a new update to their ‘Skin360’ app, which utilizes AI technology to give more accurate skincare advice.
The company has partnered with Perfect, a company that specializes in beauty-focused AI and AR software. In the past, any AI software that was offered by Neutrogena required special hardware, however the App is now able to carry out its functions using a smartphone camera. The company had previously sold a piece of hardware known as the SkinScanner for $50 US, which was likely cost-prohibitive for some consumers.
The smartphone App can now analyze a user’s wrinkles, fine lines, dark under-eye circles, spots, and smoothness. This is done by assessing over 100,000 different pixels on the user’s face, as well as 2,000 unique facial features. With that data, the app can offer 2.5 million different product recommendations based on the user’s results.
The update also collects user data, which can be used in their marketing efforts, as well as product development. The old ‘SkinScanner’ hardware honed in on specific areas of the face, whereas the new App can scan the entire face of users, which is valuable for both functionality as well as data collection. Personal behaviors can also be recorded, with the intention of calculating a ‘Skin360 score’, which is the key to customer’s understanding of what condition their skin is in, and how they should be treating it.