TRD Issue 55 - Briefing: Red Sea Attacks Impact on Shipping, Nike's Cost Cuts, Affirm at Walmart Kiosk
Red Sea attacks disrupt global trade, Nike cuts $2B costs, Affirm expands at Walmart, Lalamove enters Japan, eBay's QMart grows.
Hello Readers,
As 2023 wraps up, we bring you the final Briefing of the year, highlighting essential updates despite a quieter holiday season.
Recent attacks on vessels in the Red Sea by Yemeni rebels are disrupting global trade, with major shipping companies rerouting and potentially impacting 25-30% of global freight. This could lead to increased shipping costs and further strain supply chains.
Nike, amidst changing consumer habits and economic conditions, is cutting $2 billion in costs over three years to fuel growth and innovation. This strategy shift reflects the evolving retail landscape, where brand loyalty and consumer preferences rapidly change.
Meanwhile, Affirm's expansion to Walmart's self-checkout kiosks with its BNPL services reflects a growing trend in flexible consumer spending amidst economic uncertainties.
In Asia, Lalamove's entry into Japan addresses the severe labor shortage in logistics, while eBay's QMart on Qoo10 focuses on bulk purchases of daily necessities, planning to expand its product range significantly by 2024.
Stay tuned for our final Insight this Thursday. Happy New Year, and see you in 2024!
The Retail Direct
About 91APP
Founded in 2013, 91APP is the premier OMO (online-merge-offline) SaaS company, providing one-stop omnichannel retail solutions in Taiwan, Hong Kong, and Malaysia. It offers advanced Commerce Solutions and Marketing Solutions that enable retail brands to penetrate the D2C (Direct-to-Consumer) e-commerce market and drive operational benefits to their full potential. In 2021, 91APP became the first SaaS company to be listed in Taiwan and has been named one of Taiwan's "NEXT BIG" companies by Startup Island TAIWAN.
For more information about 91APP (TWO: 6741), visit www.91app.com.
Logistics
Companies Rush to Avert Disruption from Red Sea Attacks as Shipping Rates Rise
Why it is important
- Global shipping rates have surged due to Red Sea attacks, impacting major trade routes like the Suez Canal.
- This affects global supply chains, potentially increasing consumer prices and inflation.
What happened
- Attacks in the Red Sea forced shipping reroutes, notably avoiding the Suez Canal.
- Companies like Electrolux and IKEA are seeking alternatives, facing increased costs and potential product shortages.
Source: Reuters
Retail
Nike Cuts Sales View on Choppy Demand, Outlines $2 Bln Savings Plan
Why it is important
- Nike's D2C focus since 2017 underestimated the importance of wholesale as shoppers sought out the best deals since the pandemic.
- In the last year, Nike has slowly added more wholesale players back into the mix and announced cost savings for the next three years last Thursday.
What happened
- Nike reduced its annual sales forecast due to cautious consumer spending and online sales challenges.
- It plans to manage costs by cutting supplies of key products, aiming for $2 billion in savings.
Source: Reuters
Payment
Affirm Expands BNPL Partnership with Walmart
Why it is important
- Affirm's expanded partnership with Walmart offering BNPL (Buy Now, Pay Later) at self-checkout kiosks.
- The expanded partnership is expected to benefit more consumers amidst inflationary pressures on household grocery spending.
What happened
- Affirm extends its BNPL services to Walmart's self-checkout kiosks, aiming to boost its adoption and offer customers flexible payment options, especially during the holiday season.
Source: Axios
Social
Report Finds Facebook and IG Reels Outperform TikTok Clips in Driving Views
Why it is important
- The report shows Facebook and Instagram Reels are more effective than TikTok in generating views and will influence marketing strategies.
What happened
- An Emplifi study revealed that Instagram Reels attract more views than TikTok clips, with longer Reels being particularly effective.
- This trend is also observed on Facebook, where Reels outperform regular videos.
Source: Social Media Today
Year in Review: Social Media eCommerce Has Not Yet Caught On
Why it is important
- According to a study by PYMNTS, Social media eCommerce faces trust and security issues despite high engagement. Addressing these barriers is crucial for future growth.
What happened
- While 43% of consumers browse social media for shopping, only 14% actually purchase there.
- Trust and security concerns hinder transactions, indicating a need for improved safety and transparency.
Source: PYMNTS
Marketing
5 Retail Media & Marketplace Predictions For 2024
Why it is important
- By 2024, retail media and marketplaces will undergo significant shifts due to the growing influence of AI, partnerships, and personalized advertising.
What happened
- Conversational AI will transform retail interactions by 2024, providing more personalized and efficient customer service.
- Retailers are predicted to in-house media, and we may see a potential Walmart-TikTok partnership and personalized Amazon TV ads.
- However, challenges in measuring retail media incrementality are expected to persist.
Source: Forbes
More Platforms are Helping Influencers Make Wish Lists for Fans
Why it is important
- Influencer wish list platforms are a new trend in digital gifting, providing brands with extra income streams and improving fan-creator interactions online.
What happened
- Influencers increasingly use platforms like Throne and YouPay to create wish lists for fans to purchase gifts.
- This trend is reshaping fan support, offering privacy and personalized gifting options.
Source: Modern Retail
AI
The State of AI: The Paradigm Shifts Toward Data for Marketers
Why it is important
- AI integration in marketing strategies is rapidly increasing, enhancing productivity and customer engagement.
What happened
- AI adoption in marketing has surged, with a focus on generative AI after the release of ChatGPT.
- Marketers increasingly use AI for tasks like chatbots, copy generation, and social media listening.
Source: Modern Retail
Asia
Uber for Logistics' Lalamove Enters Driver-Starved Japan Market
Why it is important
- Lalamove's entry into Japan, leveraging AI for logistics, addresses the country's delivery personnel shortage, potentially transforming the local logistics landscape and delivery services.
What happened
- Chinese logistics platform Lalamove expands into Japan, recruiting drivers and offering AI-powered delivery services.
Source: NIKKEI
eBay Japan Launches Consolidated Product Shipping on Qoo10
Why it is important
- eBay Japan's new service on Qoo10 for consolidated purchases and shipping enhances convenience, potentially increasing customer retention and competing more effectively in Japan’s e-commerce market.
What happened
- eBay Japan introduced a section on Qoo10 for bulk purchasing, allowing customers to buy different brands together and receive consolidated shipping.
Source: NIKKEI
