Amazon is increasing the minimum wage $15 an hour for all full-time, part-time, and temporary employees across the U.S, effective November 1. They are also lobbying in DC to increase the minimum wage to this rate at the federal level. This will directly benefit over 250 thousand employees at Amazon but will also help the company. They were probably going to have to do this anyway, as the job market is more competitive, and hourly rates are going up. With increased automation these lower paid workers are lessening over time and this will allay some pressure that Amazon may have faced from their perceived workplace practices. Because they have so many sources of revenue, they can easily afford this pay hike but their retail only competitors will have trouble which will only help Amazon even more. Target announced that they were increasing their minimum wage to $12 an hour in September which barely got media notice. They were going to wait until 2020 to go up to 15. Even though some jobs will be lost, a minimum wage raise makes sense.
Walmart made another bold branding move and acquired plus size clothing brand, Eloquii. Eloquii is known for high quality clothing for women size 14 and up. More than half of all women in the US wear size 14 or greater. This is a segment of the market that has been historically underserved and neglected. The clothing Walmart has made for that demographic was not as nice and certainly no brands anyone would brag about. With the release of the EV1 brand by Ellen Degeneres which comes in plus sizes and the acquisition of Eloquii, Walmart is strongly supporting all of their customers, something other retailers still do not do well. There are still many opportunities in this market for private labelers and arbitrageurs.
Kroger and Walgreens today announced that they are collaborating on an exploratory pilot in 13 Walgreens stores. Walgreens will carry Kroger branded grocery items as well as serve as a pickup location for online orders. Kroger has done a great job of innovating in their private label brands, they are not just knock offs but really good products. With just over 2000 locations nationwide, Kroger will benefit from the added footprint that they’ll get from Walgreens 8000 plus locations. Walgreens will continue to grow as a destination for shopping. It’s a partnership that makes a lot of sense. Strategically working together is the name of the game when trying to beat big players like Amazon.
Amazon opened a new store, called the 4 Star store in New York that stocks only high rated products fro. In addition to a tremendous amount of buy data, Amazon has data on wish lists, geographic trends, and other essentials. They have funneled this into the store sections: ,“Most-Wished-For,”; “Trending Around NYC,”; “Frequently Bought Together”; and “Amazon Exclusives.” Prime members pay the Amazon.com price in store. Using sales data is a great idea for other sellers too. It’s good for creating bundles, other new products and for those with websites or stores, product rank can help determine what to stock.
Could Toys R Us come back? Their most valuable asset in the end was their intellectual property. The financial groups that took control of the retailer during its liquidation, canceled a plan to auction off the company’s intellectual property. They plan to sell the brands in a new store. This will be challenging as many major suppliers including Mattel and Hasbro have found new distribution channels, and customers have largely moved on but without the burden of crushing debt, a leaner and more modern Toys R Us could do well. This also shows the tremendous power of licensing.
Harley Davidson has been a brand that was traditionally only available on their own website and in showrooms. They reached an agreement with Amazon to introduce select Harley-Davidson apparel and riding gear in their own branded storefront. The future of branding is really about exposure and strategic partnerships. This could mean a bump in sales as marketing efforts will increase searches for Harley but it could also mean a bigger crack down on this brand with restrictions for resellers.
NAFTA has been renegotiated and now called the USMCA. It could have a positive impact on US based sellers as it will be easier to ship and sell individual purchases into Canada and Mexico. Any order that is less than $40 will ship to Canada with no duties or taxes. Goods up to $150 will be duty free but not tax free. The Mexican threshold is $117. These will both be for product shipped via private shipping companies, not the national postal service. Merchant Fulfilling to Canada from the US, just got a big boost.
Oct 5th is National Manufacturing Day in the US. It is a celebration of modern manufacturing. There are over 2500 related events nationwide from trainings, to trade shows, to meetups. While importing is still the easiest route for many businesses to manufacture, there are more and more domestic opportunities. Check out your local area for events all month at MFGDay.com.
Selling one’s own brand in a retail space has been difficult as a whole store’s rent can be too much but grabbing shelf space in a popular retailer is very difficult. Entrepreneur, Selene Cruz, is hoping to change this with her startup, Re:Store. It’s a co-working style store where for a small monthly fee a brand owner can sell in the shop. Each store will have up to 60 independent brands represented. Stores are staffed by Re:store and they do their own marketing to attract local customers. The first location is in San Francisco, but Cruz hopes to have Re:Stores in cities nationwide.
Amazon has started promoting it’s own brands IN LISTING for competitors. At the bottom of the listing it says, “Similar item from Our Brands” and then shows, for example, an Amazon Mama Bear diaper in a Huggies listing. Not surprisingly, brands are not happy about this. This new feature was NOT formally announced and has not been commented on by Amazon. In Europe regulators are closely watching how Amazon uses its own sales data to potentially gain an unfair advantage over marketplace sellers but in the US there is no regulatory oversight of this practice. The new feature illustrates the growing tension between Amazon and the many big and small brands that have become reliant on the site. Is this unfair? What do you think?
We sit down with the experts in the industry
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We sit down with the experts in the industry