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The Glossy Podcast
Insights from Glossy's holiday research report — plus, Grace Wales Bonner joins Hermés
00:45:40
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- [00:05]
A
Hello and welcome back to the Glossy Podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our international reporter, Zofia Zwiglinska. Hello, Zofia. Thank you for joining.
- [00:15]
B
Hi. Love it.
- [00:16]
A
Leon, again, it's always great to have you. This week we have a couple of big stories we're going to talk about. First, the biggest one, I think, is we're talking about Grace Wales Bonner taking over as the new designer for menswear at Hermes, which is a job she literally has said in interviews, is a dream job years ago, dream fulfilled there. And we've a lot to talk about about what that means. We're also going to talk about layoffs happening at the Italian fashion brand D Squared and their weird restructuring process that they're in the middle of. Then lastly, we're going to talk about some of the financial information from Saks Fifth Avenue's recent earnings, which were not so good, which I feel like we've talked about them a lot, being in sort of a weird place as well. But we will get into that later in the episode. We have a great discussion between Glossy's research director, Li Liu, with you, Zofia, and also our editor in chief, Jill Manoff. Three of you got together to talk about holiday sales strategies, using some data that Li Lu had gathered for us. Sounds like it was a good discussion. I'm excited to hear it. But let's start with what I think is probably the biggest news of the week, which is Grace Wells Bonner taking over at Hermes. And this is after the brand's previous head of menswear, Veronique Nichagnon, is leaving the company after 37 years. We've talked a lot about the great creative director reshuffle at a lot of luxury brands, and there are people who have been in their roles for decades and decades, and Veronique is one of them. But, yeah, now Grace Wills Bonner is going to be taking over. She is a big name in her own right. I feel like she's had a meteoric rise in the last couple of years through her own brand. And she's also is going to be the first black woman to ever lead a major European luxury house for design, which is a big accomplishment on its own. So there's a lot we could talk about there. But, Zofia, what's your initial reaction to Grace Wells Bonnet taking over at Hermes?
- [02:04]
B
Yeah, I think she's a great pick and obviously it's really exciting to have someone from South London heading up such a Major kind of fashion brand. You know, she's been known for her collabs with Adidas mainly, I think, which has been the kind of gateway for most into the Grace Wells Bonner brand. And someone who hasn't been showing at London Fashion Week for a while now, so already kind of on the international scene. And I think this is, as you said, like the job that she's been going after. Her speciality is menswear, but I kind of expect that there will be some, maybe like pieces that women can wear as well. I think a lot of people just like the tailoring, but it's really exciting and I think that for a lot of people, you know, after seeing the, the creative director reshuffles or musical chairs over the last two months, I think it's exciting for them as well to see a black woman at the head of such a well known and I guess the highest point in luxury as well. I think for them that's quite important.
- [03:10]
A
Yeah. And I think probably most people expected that she would land a big design role at one of the big luxury houses for a long time. I feel like anytime there was an opening, she was one of the names being thrown about. Um, but she, she held out. I'm sure she had offers or at least conversations with other brands. And now she's at Hermes, which is, like you said, one of the biggest brands in the world. So I, I think it's a great fit as well. Uh, I knew that she would end up at some, some brand like this, but interestingly, I don't think she's going to show anything until 2027. I saw. So it'll be a little while before we see like her official debut. I wonder if it may be a little bit like Rachel Scott at Proenza where she didn't officially design the collection, but she was kind of already in the orbit when some stuff was being made. So we'll see what Hermes looks like in the next year before her first official show, which I think will be like early 2027.
- [04:07]
B
Yeah, I think that's also really interesting considering how quickly some of these creative directors before were tasked with reinventing the house or at least like trying to come up with products. I mean, you had Demna, who's, you know, come out with pieces in like six months or something, and then you have Hermes, which is allowing her, you know, basically like a whole year to kind of define and flesh out her vision for the brand before actually showing it to the public. And again, big fan of what Hermes is doing in Terms of that slow and thoughtful approach. I think more brands should be learning from that.
- [04:42]
A
Yeah. And she tends to do these very academic collections and shows with lots of specific influences and like a reading list of, you know what, which I know a lot of designers do, but I don't know. I always feel like each of her collections is extremely well thought out, extremely cohesive. It's not just a bunch of clothes, like shown together. There's usually a strong kind of connecting thread, historical or philosophical. So I, and I, that's the kind of fashion I like more sort of artistic. So I'm excited to see where that goes. And yeah, we've mentioned, but there have been so many creative director changes in the last couple years and particularly the last year, we did a whole episode rating some of the debut, debut collections from new creative directors this past fashion month, which Grace Wells Bonner missed out on. You know, if she had been appointed last year, she would have definitely been included in that, in that episode. But yeah, I will be very much looking forward to seeing what she does at Hermes. And like you said, it's a great fit for Hermes.
- [05:45]
B
The kind of menswear side of things is starting to grow a little bit. And considering, I guess, the demand for quality menswear. And I think that a lot of people are looking for unique quality pieces. Hermes typically didn't really play around too much in that area. So I'm interested to see what kind of new customer groups as well, Grace will be able to bring in because I think that as a result, you know, her designs might be quite different from what Veronique had. And I think that would make for a better, I guess, collection and possibly better menswear range from Hermes as well.
- [06:22]
A
Yeah, I didn't really realize this, but we have a very luxury heavy episode. I next want to talk about D Squared, which is an Italian luxury fashion brand founded by Dean and Dan Caton. They had announced this week a big restructure to the business that includes letting go of 40 employees out of a total 262. So that's like 15% of their workforce, they said. And this is a quote in response to the evolving market landscape in an industry that continues to face profound and complex challenges impacting brands across the globe. Obviously, we have seen kind of a broad luxury downturn over the last year or two, mostly in comparison to the huge surge of luxury sales in the years right after the pandemic. But yeah, I think D Squared in particular has this interesting thing where they recently had kind of a legal conflict with a licensing company called Staff International. And then they brought. They fought to bring their production and marketing and distribution and everything back in house after kind of having to share it with this other company. And there was a little bit of a back and forth. So it's interesting that layoffs and restructuring are happening, like right in the midst of. Of them trying to bring some of that back in house.
- [07:34]
B
Yeah, I think it's interesting because it's not a brand that I think a lot of people have on their radar right now. And it might also point to why they're having to restructure. I think their presence maybe globally is a little bit undercovered. I know they're obviously very popular in Italy and I believe the founders are Canadian, so that probably was also a local market for them. But again, it's one of those brands that was kind of big ish in the early 2000s. Feel like it has grown that much since then. And obviously as a result, like all of the fashion brands and luxury houses have expanded their operations, collections, everything, quite significantly compared to them. And yeah, and it's one of the few brands that is still independent as well, so it's not owned by a bigger company. That could also be pointing to why there's quite a lot of problems. Because independent brands typically had a hard time with COVID if they didn't kind of bounce back properly after the pandemic. They probably also were hammering it in in sales. So, yeah, I'm not exactly surprised by this move.
- [08:43]
A
Yeah. And like you said, they've been around for a while. I think they founded in the late 90s. I definitely remember in late 2000s, early 2010s, as a teenage boy getting interested in fashion and reading gq, they would often show D Squared stuff. I feel like that's what I associate them with. But interestingly, they've had this partnership with this company, Staff International, almost since the beginning. They signed a licensing deal for production and distribution with staff International in 2000, which was only a couple years after the brand was founded. Then in 2010, it was renewed again through 2027. They've basically been working with this company for a long time, but now there's conflicts over what they say is breach of contract. There's not a ton of information or specific information about what they're alleging. So, yeah, I imagine this deal has been with part of the way the brand does things for almost the entire existence of D Squared. So I can definitely see some growing pains of switching to a new model, bringing production and distribution in house. After you have not been doing it for such a long time.
- [09:53]
B
Yeah, because that's a massive operation from what I understand is actually most of their supply chain. So essentially you'd have to create the whole kind of supply chain from the ground up as a result. And the staff International, which is the kind of production company from Renzo Rosso's OTB Group, also owns Diesel. Like those are the kind of brands that are the focus, I guess for the OTB Group right now. And maybe because D Squared wasn't performing as well, therefore they also wanted to offload that off their books.
- [10:26]
A
I don't have much more to say about D Squared, but I do think we probably like, there's been a lot of brands sort of like smaller brands adjacent to luxury that have just fully closed down. I don't know what's going to happen with D Squared. I'm not like trying to like doom, you know, foretell doom or anything, but there is a broad luxury downturn and there's like immense kind of pressure on the global economy and we've seen other brands shut down. So it's definitely worth noting when brands have to make big kind of structural changes. On that note, our last topic. I want to talk about Saks Fifth Avenue, which I feel like is a topic we've, we've touched on quite a bit. They've had a real rocky ride the last couple of years through this huge Neiman Marcus merger, through the controversy over not paying their brands, which many, many brands told me they were very angry about. This week they had, they reported some, some new financial information and it's not looking good. They cut their, their profit guidance by a full half, like down from 300 million to 150 million. And their net loss has widened by more than 6% with a 13% year over year sales drop. It is like, I don't know, that's like pretty significant. And I've seen lots of analysis out there, including from us at Glossy, but at many other fashion and business publications that like, maybe this merger wasn't such a good idea because they're immediately kind of flailing around. So I don't know. What's your take on what's happening at Saks?
- [11:56]
B
Yeah, I mean, I think that the company in general is still struggling in terms of figuring out how to I guess move forward with the business considering the debt it has. I mean, it has a 2.2 billion debt load. So that in itself I think is quite a heavy toll for Saks. And as a result it's also had to pay back creditors. And I think there's been a lot of issues and that we've reported or Danny, you've reported on this in terms of how it's been going about paying the brands from what I've kind of seen in other reporting as well is that a lot of these brands are now pulling out of Saks and deciding to switch to other retailers. You know, it's not a, it's not an easy decision, I guess, because obviously Saks still has a great kind of network and something that I think a lot of brands are looking for, especially if they're thinking about expanding to America. You know, some of the brands that I've spoken to on the UK side are definitely looking at, you know, department store distribution as a way to get into the market. But because of the fact that, you know, Saks has got such or did have such, you know, bad terms in terms of payments and also owed so much to brands, I think it's become a little bit of like a don't go there thing and I think brands are avoiding it like the plague.
- [13:22]
A
Yeah, I think you're 100% right. It seems very fundamental to me. I've never been a brand owner or a retail buyer, but the fundamental agreement is I give you the clothes and you pay me for them and then sell them and then if you just don't pay, I don't know. The thing is, as I've reported on that, I have heard from people, it's not just Saks, other retailers will be late or be annoying to work with, but it's more the degree which Saks was like kind of violating that agreement was what was notable. Like, it's not like they're the only retailer that has been late on a payment. But I think you're right that like there are brands who, who still want placement in a big fashion centric department store because that is still valuable. But I mean, in my reporting and talking to people, I've. I have seen more brands striking fewer but deeper retail partnerships where they might only sell in like they're like mostly direct and then they have like one wholesale department store that they sell to, but that one department store they have like a really tight relationship with. Nordstrom is obviously one that a lot of brands that I've talked to have said that they like working with. And a lot of times like Nordstrom has this concession model they've like. I talked with Majuri recently about how they're opening a shop in shop at the Nordstrom flagship in New York. City. And that requires a deeper collaboration with the retailer. You're sharing revenue, you're sharing space. It's not just you sell some product and it's all on them to sell it. If you're going to do a deeper partnership like that, you want to make sure that the partner you're working with is reliable. And if I was a brand and I wanted just one department store to work with and I want to go really deep with that department store, I probably would not pick the one that's infamous for not paying people what they're owed. So the more I think the brand retail relationship moves toward fewer but deeper partnerships, the less appealing Saks seems to me.
- [15:24]
B
Yeah, and that's the thing. Even though it is still such a big kind of name, especially in the US kind of luxury space, because there are new players or kind of players that are performing better, like Nordstrom, I think a lot of brands who are thinking about entering the market or else continuing thinking about what their retail partnership structure looks like, they're not going to be going for companies that are going to be seen as unreliable. I think the same thing happens when it comes to data. We've got so much going on right now in terms of how much data brands can access in terms of creator networks or retailer relationships with specialist stores. That's something that I think is another big consideration. From what I understand, Saks wasn't sharing that much with the brands. And obviously if you're thinking about sell through and that kind of longer term relationship, having an understanding of what that looks like for you as a brand is also really important. So I'm not again, not surprised that this is happening. I am surprised that it hasn't kind of had a turnaround moment because this has been going on now for the a year at least and it just seems to be steadily getting worse. And I don't know if that's because the debt level is so high and they can't get out of it or else, because no one else is stepping in to kind of save Sachs the way that I think a lot of companies would have if it was maybe a bigger or a better player.
- [16:58]
A
Yeah. And I should mention, speaking of the debt load, they have done a few things to try to ease that. One is that recently they sold their minority stake in Bergdorf Goodman, which Saks Global did have, but not anymore. So I think they are looking for ways to shed some of that debt. But like you said, it's a huge, huge amount of debt anyway. So that's all the time we have for our news segment this week. But thank you so much for being here, Zofia. And we're going to take a short break and when we're back, you and our editor in chief Joe Manoff are joined by Glossy's research director Li Lu to talk about holiday sales strategies. Any, any quick preview you can give us of what you guys talked about?
- [17:36]
B
Yeah, absolutely. So I think the main one is a kind of smaller reliance on Amazon but also it's kind of dependent on brands. So we're going to get into that and why it's happening. I think it a great discussion, something to look for even if not thinking about strategies for this year, maybe for next year.
- [17:54]
A
Thank you for being here and stick around after this short break to hear.
- [17:57]
C
That Zofia and I are here with Lilou DigidayMedia's research director and we're gonna dig into our latest research report which was unwrapping holiday marketing strategies Brands marketing strategies. Welcome Lilu, thanks for being here.
- [18:23]
D
Thank you for having me.
- [18:25]
C
So excited to dig in. Tell us about this report, who we talked to, where this data is coming from and this is not a first time report, right?
- [18:33]
D
Yes. So this is our annual report that goes out to Glossy and a member exclusive report as well. Every year for this particular report we were able to talk to executives at the Ford Group and Neom well being and both were executives that handle a lot of the holiday marketing and strategies and they're able to give a lot of information of behind the scenes and what's up to come up this year as well. And then in terms of the data we send out an annual survey that goes to brand and retailer professionals that ask about their past, current and future uses for different holiday marketing strategies, sales channels and different tactics as well as.
- [19:17]
C
Yes, this is a meaty report. For those who want to read the full report, highly recommended. We'll drop the link into into the little description here. But you can become a Glossy plus member to get full access and we've got a little promo code that's very exclusive to our listeners. It's save 40 so s a V E4 0 and that will give you 40 off a three month membership. But we can dig in here. It's yeah, again very robust. A lot of great charts here. Spell it out for us in layman's terms, based on your research, would you say that brands expectations about the holiday season, about their sales this season are up or down? Like how do they compare to last year? Considering we know that consumers are worried about Tariffs, they're dealing with inflation. Inventory is probably not what it was last year based on all of these shipping challenges. What's the vibe? What's the. Yeah, the comparison there.
- [20:17]
D
Yeah, absolutely. So for this year for holiday revenue expectations, it was pretty flat compared to 2024. I would say a lot of marketers have very conservative expectations for holiday revenue. About 56% of them said that they don't expect increases to be more than 10%. So while within that 56%, 27% of them just said flat out they don't expect any change actually. So it's very conservative this year for the most part. But that being said, only 8% said they expected decreases. So while it is conservative, most marketers are very optimistic that they will at least meet the same revenue as last year.
- [21:01]
C
I mean, Zofia, I'm a little surprised. How about you?
- [21:05]
B
Yeah, I mean, I've actually been seeing a lot of reports recently around how customers won't even be able to afford holiday gifts this year or else that they're splitting it and making it even less gifting than they previously did in other years. Obviously we did have the kind of COVID boom with everyone having a little bit more cash to spend and I think last year was the beginning of that kind of downward spiral. This year has been a little bit tougher. And also for anyone buying fashion in particular, let's say that they are a lot of that is still coming from Europe and other places, which means it is affected by tariffs. So again, people are having to consider whether they're wanting to pay for those tariff increases or else if they would just want to be focusing on stuff from the US as well, which would allow them to buy a little bit more maybe than those international gifts. Yes.
- [21:58]
C
I've been talking to some experts, shipping experts and, and other kind of brand analysts and there, there was always the talk about like we're not going to see these price increases till 2026 or spring 26 is the, the big time. However, they're telling me no, no, no, no, they're, they're happening, happening silently. It's not going to be like a shock to the system where they're all going to hit at once, but they're definitely seeing those increases happen. Now. Lilu, considering that discounting, you know, brands, I think that this is a value conscious consumer. Everybody's looking for the most bang for their buck. What did, what did the report say about that? Are brands discounting as much as ever or, I mean, is that a threat to their inventory how are they handling it?
- [22:43]
D
Yeah, that is actually a really good question. So within the survey, the majority of people said that discounts were going to look the same as last year. So about 67% said about the same as 2024 though granted, I will give the caveat for this one of when we asked the same question the last year, everyone also said the same discount. So I don't think any brand or retailer is ever saying we want to increase discounts. But the interesting strategy this time around was that it's not so much of them deepening discounts, it's more about like timing and placement of where the discounts are going there. There seem to be game changing moments this year.
- [23:23]
C
Oh, interesting. Are they more so like discounting at these hot sales periods, like, I don't know, what do they call it? Amazon Prime Big deal days when everyone is looking for the sale and they know it's there? Something like that, yeah.
- [23:38]
D
When we talked with a lot of the experts for this one, one thing that they mentioned was kind of extending the sales time period. Morse. So I know throughout the years we've heard things like, you know, they're starting holiday sales in October or things like that. But one of the items that a lot of the experts had mentioned was more so emphasizing sales a little bit earlier on, kind of then pausing them. And then once holiday comes around it becomes more of a replenishment gameplay rather than a true. We're going to find, you know, new customers and kind of have that uphill battle of getting those acquired.
- [24:12]
C
Totally.
- [24:14]
B
I went through the report as well and most brands said that their discounts will stay the same as last year. What does that say about how they're thinking about pricing and value?
- [24:24]
D
So in terms of pricing and value, I think it differs between brands. Right. Specifically when we talked with the expert at neom, they mentioned like being different in terms of the products that sell during holiday versus like a normal time. So from a gifting perspective, value changes, right? In that, in that aspect what you want to buy for yourself is probably those replenishable items, especially within like, say category like skincare. But from a gifting perspective that value shifts quite heavily. So you know, for them it can be limited edition products, packaging or gift sets that kind of change the value, especially within that type of customer mindset.
- [25:06]
B
Yeah, yeah, absolutely. And I think that Jo, you wanted to kind of jump into the digital and the social ads kind of side of things too, which has been quite a big kind of marketing tactic. Do you see any signs that these Ads are becoming less effective based on those survey results.
- [25:25]
D
Yeah, that is also a really great question because I think that's what everyone wants to know, right? For this year we did actually see digital becoming a bit more important for holiday marketing tactics. In terms of survey results they mentioned that this something they are leaning into and with the expansion of social as well, especially through TikTok, TikTok shop spaces like that, we can see why this is an ever expanding category for them.
- [25:53]
C
Definitely.
- [25:53]
B
Yeah, absolutely. I know that you had some thoughts about TikTok Shop being a big channel, Jill, Was that coming from conversations too?
- [26:03]
C
Yeah, I, I more so. I definitely saw in the report that brands are shaking up the channels they want to focus on whether that means, I don't know, Amazon, maybe they went heavy last year. I would think that would be a focus area this year as brands are looking to offer convenience and kind of that, that guaranteed two day shipping or whatever prime offers these days. I wanted to ask about Amazon and TikTok shop but yeah, what, what was the take on Amazon? Lilu.
- [26:33]
D
Yeah, so Amazon was interesting. It was very much like a mixed bag for us. So from a survey perspective and what the data said was basically marketers are moving away from Amazon both as a digital marketplace and as a like more traditional digital retailer. So on both fronts a lot of brands are saying hey, we want to look at different options. So they're looking at other digital marketplaces. So the big example that's common is like Walmart for instance and they're also looking at other retailers as well. So think something more traditional like a Macy's or a Nordstrom.
- [27:09]
C
Interesting.
- [27:10]
D
Yeah, but you know, it was a mixed bag because when we talked with a lot of the experts they actually said that they're leaning into Amazon and one of the big differences it seems is really the size of the company. So a lot more of these smaller companies seem to be leaning more into Amazon because of its ability as a search engine, a discoverability platform. Things of that nature versus my guess based on the data is that a lot of bigger brands are moving away from Amazon because they don't need a consumer to know what they are. The consumers already do. It's more so of where can the products be found and where do the consumers want to buy the products from.
- [27:49]
C
Now, yes, it ties to how we talk about TikTok. I want to ask about TikTok shop as well because we know that Amazon has become basically a gift, a search platform when somebody's looking for, I don't know, a sweater they'll go to Amazon maybe instead of Google these days. And they're also doing that on social channels, especially Gen Z. We're hearing that they're searching on Instagram or TikTok or what have you. TikTok especially. Are brands leaning into that as well? Are you? Did you see a lot of buzz surrounding TikTok shop via this report?
- [28:24]
D
Yeah. So a lot of the respondents in the survey noted that they were emphasizing social commerce. We did not break out specifically take Talk Shop from that data point though. However, when we just went on our own individual research and also talking with these experts, TikTok shop is basically the main social commerce channel. That being said, it was noted by the ford group that TikTok shop is incredibly powerful, but it's more so like, can you get on it properly and really utilize it in a more authentic way? So while you could throw products up on TikTok shop, it doesn't guarantee it as a strong sales channel. You have to actually put in a good amount of investment on the platform itself to really uplift it to the level of becoming a real sales channel.
- [29:15]
B
I actually have some great data on this because I literally did a luxury briefing recently around Amazon and kind of how it's attempting to do content. I think this is the bigger differentiator between why TikTok shop is doing so well versus Amazon, which maybe isn't doing quite as well as a content channel with a sales kind of addition, with TikTok Shop, obviously you're leading with the content and that's something that people go to the platform for. You're watching the videos and then you end up clicking it. Whereas with Amazon, it's kind of like the other way around. You end up looking for the product, but you don't really have that, I guess, like aspirational or inspiration to shop from the content itself. And while Amazon has been doing some experiments there with luxury stores in particular, so over the summer they did a couple of series getting stylists and influencers to do these kind of little shopping videos. Those haven't really shown that they've converted in a bigger way. So I'm wondering if that native kind of content structure is why brands are seeing better results from TikTok shop compared to Amazon. Do you think that's correct?
- [30:21]
D
Yeah, I would say a lot of it has to do with whether or not the content makes sense on the platform for Amazon. I'd imagine most consumers aren't going on and trying to find, you know, videos of influencers on there. If anything, I Think the content is more so in the review sections of like, you've now discovered the product, you know, people know more about it, versus TikTok is that opposite format that you mentioned. It's like you go on, you are looking for content and then that's more so like the leading factor for that one. I think especially when you take a look at the increase of which marketing channels are more popular this year, you know, particularly social and digital, it does make sense that TikTok shop does lean into, you know, that increase in that specific marketing channel as well.
- [31:08]
C
Yeah, it also makes sense considering the success of TikTok Shop, that every brand is trying to get on that bandwagon and retailer by launching these influencer storefronts. We've been writing a lot about and like you guys said, if it's not native to the platform, does it make sense? But it seems to me a lot of, a lot of brands and retailers are betting on that for holiday or trying to make a go of it. It's also interesting, like what you were saying about kind of the, we've heard from brands, especially early on in TikTok shop, the difficulty onboarding and, and kind of the challenges that they were experiencing. And when you were talking about lilu, like brands and pulling out of Amazon, we do know that Amazon's changed what like a partnership looks like. They are making, you know, brands are focused on margins right now, obviously, and, and they're having to, they're coming up with challenges. At the same time, brands want that direct connection to the, to the customer if they can get it. Digital advertising is expensive, so finding that balance is no doubt a challenge. In addition to discounting, what are brands doing to kind of boost those holiday sales? What are some other strategies that you're seeing or that, that you heard in this report for this report?
- [32:20]
D
Yeah, it was interesting in terms of strategies, more so when you connected especially with like the payoff, I would say. So one of the interesting strategies that we saw use were like, specifically within social, it's like these hauls or like unboxing videos. They're a rather popular strategy. However, when it came off for looking at the ROI essentially of them, they actually ranked a little bit lower than they placed in terms of the frequency usage of the strategy. So to kind of put it in simpler terms, the Holland unboxing videos ranked like top four in strategies that were used, but in terms of ri, they only ranked number five. So there is a bit of a discrepancy there of like, this is a hyper tactic but is it giving you payoff? Yeah. Versus we had the opposite with another one which was pop up shops. Pop up shops were pretty low in usage but when we looked at roi, like a lot of the response said like, oh, we are actually getting quite a lot of return out of this. In particular with those two examples, my guesstimate for this would likely be the cost associated with them. It's a lot easier to hire an influencer, do a quick video versus then setting up an entire in person experience.
- [33:38]
C
No doubt.
- [33:39]
B
Definitely. Yeah. We've written a lot about pop up shops on the fashion side and I'm sure that on the beauty side they're very popular as well. I think around holiday times they're also almost like an event space for people to go to. I know that in London anyway, the ones in Covent Garden are very popular. I've seen beauty brands including Tyr Tier, which is a Korean kind of foundation compact, do very big kind of events around holiday time times because they want people to come in, test the product. I think maybe that content piece, you know, if they're going to be doing it around the holiday times is more around, you know, a product awareness push. So maybe those limited edition collections that you mentioned earlier. You do?
- [34:19]
C
Yeah. And the pop up, that's interesting. I was recently talking to an executive from naadam that talked about, that spoke about how they basically do a pop up every holiday season and the importance of IRL shopping during the holidays. And like you were saying, Sophia, I think that they've done, they have done pop ups that are specific to a product like a $75 cashmere. And that was the whole pop up. Smart to get attention on what you're trying to push for the holiday.
- [34:44]
B
Did any of the smaller and bigger brands approach the holiday season differently this year? There may be some strategies that are working for smaller brands compared to bigger ones based on the report findings.
- [34:55]
D
Yeah, so we've touched on them a little bit in our conversation so far. So like the example mentioned earlier was like the different approaches to Amazon where smaller brands really want to be there for that discoverability reasons. But larger brands are moving away as Jill mentioned, kind of like what because of the changes of what is a partnership with Amazon look like. So that's one of the examples we've seen that way. Another one is typically smaller brands have to be a lot more crafty, I would say with their approach to holiday because as we know it is expensive to do any type of advertising during this time period. It's a very crowded space so one of the things that was particularly noted especially from the Ford group because they work particularly with like independent brands and smaller ones is that extension of the holiday time period coming in early and focusing more on that replenishment aspect. And my guess from that is particularly is because of the time period being so crowded when you're up against these larger players, you can't compete at the same time periods. You probably have to come in earlier to get that awareness because at the end of the day they're probably able to do those pop up shops because they have the revenue and the overhead to do so versus independent smaller brand isn't able to do that same splashy moment to compete.
- [36:17]
C
Yes.
- [36:18]
B
Yeah, that's a great point. I think in that case it's a good thing to note for smaller brands. Maybe it's better for them to do something earlier in the season. People are thinking about the holidays already in October, maybe even September. So planning for those events during those times seems like a helpful tip.
- [36:34]
C
Yes. Something else I heard which also is not expensive, but a lot of brands telling me they're betting on celebrity collaborations for holiday and I think I consider it the Hailey Bieber effect and seeing the success of her brand. But it makes sense for sure. I know the Amazon difference, the difference in brands approach to Amazon is noteworthy. Anything else? What else stood to you as LILU doing this multiple years in a row where you're like taken aback going wait, what, what was interesting this year?
- [37:06]
D
I think the particularly interesting one, you know Amazon is always a big shocker because you think of Amazon, it's like this huge juggernaut of a like brand like retailer and the fact that there's any decline is kind of shocking in general. One area that wasn't as heavily emphasized in the report, but I still think is a very good finding is this emphasis on almost returning to some of the more traditional retail spaces. I think a lot of brands are looking back towards these other retailers that are not Amazon. Right. So maybe the heading back to a department store, but maybe in a digital way, right?
- [37:42]
B
Yes.
- [37:43]
D
Another big one is the emphasis on their own distribution points. So the, the main sales channel that they emphasize during holiday is their own E commerce sites. It's consistently ranked number one throughout the years but. But it seems to always grow more and more important and especially when you see it in tandem with the way they're emphasizing physical retail. While still very important, it does seem every year that physical retail is kind of giving way to more of this digital space. So I'm particularly curious of how they're going to deal with like shipping strategies this year in particular, like how are they going to keep that sped up? What are the reminder details look like when you go on a website saying like order by this time. And you know that has to do with a lot of customer satisfaction as well.
- [38:29]
C
Yes. And how they'll fight against returns come Q1 of next year.
- [38:35]
B
Exactly. And the tariffs as well because obviously with with the tariffs last week placed on China, most brands will have had their holiday stock already in. But if they are doing replenishment that will affect something like shipping, so obviously perhaps they might have additional price increases actually during the holiday season if they run out of of stock. So obviously that that overstock issue is also going to be a potential problem afterwards if they do end up purchasing too much in advance.
- [39:05]
C
We're low on time. Last question for me. Just again, having seen what has performed best over the last couple of years, Lilu, you're a brand, what you want performance. What are you doing this year?
- [39:19]
D
Oh, I think one of the definite things is definitely that idea of, of advertising earlier. I can't remember the exact quote off the top of it, but I know one of the experts had literally said that she still sees a lot of brands only doing heavy advertising for Black Friday and Cyber Monday. And I believe the quote was something like, you're literally leaving money on the table at this point. It's become Cyber Week. That time period extends more and more. But the idea is getting in there earlier, getting in the customer's minds, and then having the strategy become less uphill in the later game, I think would be a really good point to emphasize for any marketer within this time period. Agree.
- [40:03]
B
Longer lead times. That makes sense, I think for me. Do you think that going into maybe some of the early results from this year and thinking about next year, do you think that retailers and brands will be looking to be even more efficient? Especially as we're talking about this in the age of of AI and efficiency, is that going to be a big priority for them going forward based on some of these research results?
- [40:27]
D
Yeah. I mean, AI has touched upon almost every research report that I've done. Now, whether or not it is specifically on AI, I'm curious to see how this is going to affect next year as well. At that point, a consumer is going to understand what a tariff is, how it's going to affect their purchasing behavior. So from a company point of view, how do you circumvent that? Is it through the usage of AI to streamline certain operational points that you'll have to kind of reduce this overhead once you get to the holiday time period next year because of tariffs. Are you going to use AI to help with the operational portion of shipping now, making sure that everything goes out faster than it could for those last minute decisions because pricing might fluctuate? There's just a lot of curiosity that kind of comes about when you incorporate all these different components into it for next year.
- [41:20]
B
Yeah, definitely. Yeah. I think H and M had a great strategy that they mentioned earlier this year where they had a closer relationship between their stores and their local shipping suppliers, which meant that stores basically could get the product faster. I'm sure you can read about it a little bit more on Glossy. Over to you, Joel.
- [41:38]
C
Yeah, no, I was just going to say all these standards around AI in terms of a direct sales channel, online E commerce, as everyone launches chatbots and everyone invests in AI for personalization, no doubt we're going to see them putting more emphasis on their own channels. Like you were saying this year. I bet that we'll see that number increase next year to kind of make all of this investment worth it and say we're going to get our ROI this Q4. But Lilu, this is so enjoyable. Thank you so much for being here.
- [42:10]
D
Thank you so much for having me. This has been a great discussion.
- [42:13]
C
So great. And last reminder, if you would like full access to the report, become a Glossy plus member. You can save 40% on our three month membership by using the code. Save 40. That's S A V E4 0.
- [42:27]
D
That's it.
- [42:34]
C
That's all for this episode. Our theme music is by Otis McDonald. If you liked this episode, be sure to share it with someone else you think would. Thanks for listening to the Glossy podcast.