Good afternoon,
Here鈥檚 the headlines for this week: 13 December 2024
ECOMMERCE
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- Cyber Monday online sales hit a record $13.3 billion, growing 7.3% YoY, with 57% of sales ($7.6 billion) driven by mobile, marking a 13.3% YoY increase.
- Retail site traffic from AI-powered chat bots surged 1,950% YoY, while social media influencers drove 20.3% of Cyber Monday revenue, up 6.8% YoY.
- Cyber Week spending reached $41.1 billion (+8.2% YoY), with steep discounts boosting high-ticket purchases and top categories like electronics, apparel, and toys driving season-to-date growth (+9.0% YoY).
馃弹锔
- Since 2020, over 5.1 million square feet of warehouse space has been built, with an additional 2.1 million under construction and 5.3 million proposed. However, experts suggest the development boom may soon slow as the region nears capacity.
- The warehousing sector is experiencing excess capacity, rising vacancies, and falling rents. Major players like Amazon have scaled back operations, while data from Prologis indicates new construction is at its lowest since 2017.
- Long-term demand for warehouses remains tied to the evolution of e-commerce logistics. While investments in automation and technology could shape the next phase, there are concerns Salem County may face a glut of unused facilities, similar to past trends in suburban office parks
CONSUMERS
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- Gen Z shoppers visit malls as frequently as baby boomers, driven by preferences for instant gratification, social interaction and trying items in person, avoiding the hassle of online returns.
- Malls and retailers are adapting to Gen Z's desire for social media-worthy moments with features like selfie mirrors, pop-up events, and interactive installations to enhance the shopping experience.
- Retailers like Abercrombie & Princess Polly are investing in physical stores to meet Gen Z's expectations of a seamless blend between online and offline shopping, while also tapping into their nostalgic and social habits.
TECH
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- TikTok Shop achieved over $100 million in Black Friday sales, tripling year-over-year performance, with a 165% increase in shoppers compared to 2023. Small and medium-sized businesses accounted for a third of purchases during the three-week holiday campaign.
- Popular categories included makeup, skincare, apparel, fragrances, and kitchen appliances, with brands like Crocs, Fenty Beauty, and Estee Lauder leading sales. Live shopping drew significant attention, with standout events like Nicki Minaj's record-breaking livestream garnering 172 million viewers.
- TikTok's holiday campaign reflects growing interest in live shopping among Western consumers, signalling a potential shift toward adopting ecommerce formats popular in Asia.
RETAILERS
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- Amazon has donated $1 million to Donald Trump鈥檚 inauguration fund, following similar contributions by other Big Tech firms like Meta, as these companies seek to improve relations with the president-elect.
- Jeff Bezos, Sundar Pichai, and Mark Zuckerberg are engaging with Trump directly, with Bezos reportedly planning a visit to Mar-a-Lago, highlighting efforts to navigate policy pressures on antitrust, AI and trade.
- Alongside the donation, Amazon will stream Trump鈥檚 inauguration on Prime Video, a symbolic move amid its historical tensions with Trump over taxes and USPS pricing, and its current regulatory challenges under the Biden administration.
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- Jeff Bezos has re-committed to Amazon, dedicating 95% of his time to advancing AI, as the company develops over 1,000 internal AI applications.
- Amazon is building a supercomputer in partnership with Anthropic to power a multimodal AI model, positioning itself to compete with Google, Microsoft, and OpenAI.
- Bezos鈥檚 increased involvement comes as Amazon invests heavily in AI infrastructure, aiming to integrate AI across its operations and remain competitive in the evolving tech landscape.
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- A Forsta study found that 48% of negative reviews stemmed from issues like long queues and unhelpful service, contributing to annual losses of $262 billion in revenue.
- 74% of US adults reported leaving stores without making purchases after a bad experience, highlighting the urgency for retailers to address in-store shortcomings.
- While online sales surged, in-store sales saw minimal growth. Forsta鈥檚 CEO emphasizes the need to improve in-store environments, citing Walmart鈥檚 adoption of AI tools to enhance service as an example.
馃敀
- Joel Bines argues that locked display cases deter customers, with most opting not to buy the product or shop elsewhere. This strategy is customer-unfriendly and risks driving business away.
- Bines suggests alternatives like app-controlled cases, limited stock on shelves, or more frequent restocking to minimize losses without creating friction for shoppers.
- Hiring more visible associates to enhance customer service and deter theft passively is Bines' preferred solution, as it elevates the shopping experience and fosters loyalty.
馃弥锔
- Walmart CEO Doug McMillon expressed confidence in the company鈥檚 ability to quickly adapt to potential policy changes under the new Trump administration, emphasising its flexibility and depth of experience during a fireside chat at the 2024 Morgan Stanley Global Consumer and Retail Conference.
- While McMillon refrained from speculating on specific policies, he highlighted Walmart鈥檚 focus on staying empathetic to customers and associates amid a volatile environment, as industry concerns grow over the potential economic impact of proposed tariffs.
ADVERTISING
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- The advertising industry is set to surpass $1 trillion in revenue in 2024, driven by digital platforms like Google, Meta, and ByteDance, which will account for over 81% of revenue by 2025.
- Retail media ad revenue is projected to outpace TV for the first time, growing 13.8% to $176.9 billion in 2025, with the Asia-Pacific region leading the charge, particularly China.
- AI tools are reshaping ad strategies, with major platforms investing heavily in proprietary AI. Meanwhile, streaming TV ad revenue is set to grow rapidly, projected to overtake linear TV in the U.S. by 2029.
See you next week,
The 2080体育 Team
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