Black Friday weekend and holiday marketing trends

0:05Hello, everyone, and welcome to the Modern Retail Podcast.

0:30podcast. I'm joined this week with Glossy reporters Lexi Lebsack and Sarah Spruck-Finer, and we're going to talk about some of the major trends we're seeing with holiday marketing and shopping this year. Thanks for listening and enjoy.

0:50I feel like all we've been talking about in beauty and in retail over the last month is Black Friday and Cyber Monday. I'm kind of happy to see it coming up very quickly and then soon passing. I will say that one of the biggest things that I've seen is a lot of big influential brands that are really taking on new brick and mortar strategies this upcoming season. Big names in beauty betting big on brick and mortar shopping this season. So the first one that I'll mention is Chanel, which opened its first house of beauty retail and spa experience this month in Paris. And it's a three-story, 2 ,000-square-foot store located in, I think, the 6th Arasonment in Paris, but they offer face and body treatments, the full Chanel beauty range, and that includes 88 fragrances, which is crazy, makeup, skincare, books, gifts.

1:44It really is going to become this hub for shopping in Paris for gifts. And we already have Chanel beauty stores here in the U.S. in top retail destinations, but I think this is going to kind of take it to the next level and be a really good example of how to create an experience and a destination for shopping. And then another one is Dior as well just opened its very first beauty exclusive retail store in the U.S. earlier this month. This one is located in New York's Soho neighborhood. I don't know if you guys have seen it. They offer color cosmetics, fragrance, skincare, and it's a very, it's a similar sort of operation there.

2:21It's all beauty, all cosmetics. So I have a bunch of questions about this, which is one, like, so Lexi, you're the person who will know about this, but like, usually, especially when we cover things at modern retail, especially holiday related, it's very pop-up. It's very short. It's like, we're just going to do this for a couple of months. Why do you think these prestigious brands like Violet Gray, like Dior, because these sound like more permanent. Am I incorrect? Yeah, a lot of these are permanent. I do have one that's sort of temporary that I'll mention, which is Laneige, which, of course, is this huge K-beauty brand that is, I mean, I could just talk about them forever.

2:59They're absolutely killing it. But they are doing a temporary space. So they took over one at the Grove. And it's not like the glass box, which is sort of like this installation feeling like pop-up. This is an actual in a store that happened to be vacant, but they are only going to be having the space until mid-January. And I think they're doing a very cool thing where they have holiday sets, bestsellers. They have branded merch. They're also bringing in exclusive K-Beauty SKUs. They're owned by Amore Pacific, so they have access to all these great K-Beauty brands, some of which we don't even really necessarily have all the products here.

3:33And they're going to market through gift with purchases, discounts, photo booths, like all of these different activations. And then the last one is, Kale, you sort of alluded to this, the Violet Gray Partnership. So fresh off of their acquisition from Farfetch, they are doing a shop in shop. It's unclear if it's going to be permanent. I think that it is, but it's in a luxury department store. I don't know. I'm curious if you guys have ever been there, but it's in Manhasset and it's called Hersh Lifers. And it's basically this luxury department store. And as luxury prices continue to go up and up and up, we're seeing these entry-level products, the beauty products just become more and more popular.

4:11I think that's, I mean, it's kind of like an old answer that we've heard before, but I think it's just like the demand. I think that people want to go and they want to shop for Chanel. They want to shop for Dior. And then the Chanel thing, I think is also they're, they're doing like a spa basically. So you can do all kinds of treatments. And so it creates a little bit more of a destination, but yeah, I think it's very interesting that we see all of these brands like really getting ready to sell in person. I'm sorry. I'm, I'm so ignorant when it comes to a lot of the luxury houses. But like Chanel doing a spa, I know the Chanel store is like no holes barred.

4:43They will do whatever. Like I've seen a lot of TikToks, but is a spa experience new? Like that sounds new to me. It is new. Yeah. So like Chanel has beauty stores already. They have one here in LA in the Palisades Village, which is like very, very bougie, very 1 % and Westfield Century City as well. And it's basically you just get all the makeup and the perfume and stuff like that. But the idea of them doing treatments, I think is definitely very new. You can go in and there's all kinds of different protocols. They call them body protocols and face protocols. And they're also, I think, going to be focused on like books and gifts and other sort of like small items that are like very gifty.

5:18I think previously it's been more at like luxury hotels. I believe they have a spa at the Ritz in Paris. So like it's not I assume that you can't go if you're not staying there. But potentially a store makes it more accessible to someone who comes in not, I mean, off the street sounds a little dramatic, but comes in and realizes that's potentially available to them if they're in a certain, you know, tax bracket and can book a treatment that way. I think that it really just goes to show that like retail is so prolific and there's so many places to buy the same things. Retailers sort of have to stand out with these like cool experiences.

6:00Absolutely. And there's one other thing which I can sort of go into this next topic, which is another big trend I'm seeing just for the holidays, which is the exact flip of what we're talking about. So, you know, Lexi, you're talking about Chanel, Dior, these 1 % brands doing these insane things. But one thing that we've been covering a lot at Modern Retail has been how value has been such a big focus, both in the economy and what's going on. And I wanted to talk about and get your guys' thoughts, but just a few weeks ago, Amazon launched its whole value-based platform to go against Timu. It's a really interesting thing.

6:33There actually are a lot of beauty products on it. I've been going through it, but it seems like it's specifically in time for the holidays. And it, at least to me, appears like sort of a bellwether of what this holiday is going to be about for a lot of people, which is like value-based trying to get as cheap a deals because nobody knows where the economy is going to be going. And so it's kind of interesting. The timing makes sense, but it literally launched like two weeks before Black Friday. And now Amazon has an app that looks exactly like Timu and Shein, which I think is just so fascinating.

7:03It's actually an app? Yeah. It is in the Amazon app. It is only available in the app. It's not available on the website. But it's not its own standalone app yet. You have to like search it when you're on your Amazon app. I want to do it. I want to check it out. You should. It's wild. It's a really, really weird spot. And is it just sort of, I mean, like, why would someone need to go to a different sort of site or a different app? Like, is it sort of like more editorialized and they're kind of like hitting you with like bargains and stuff or like? Exactly. So it looks like nearly identical to T-Move where it's like.

7:37It looks like TikTok. Yeah, exactly. And it's like you see like slashes in there like this was$1.99. Now it's 50 cents, like like stuff like that. And it's very gamified. it's it's really i'm kind of shocked and i've talked with a lot of people about this they're shocked it looks so much like timu they're like why if you're amazon why would you do this you know what i mean but like it's clearly trying to get like discount shoppers people who will spend 50 cents on 10 things and then we'll have them shipped in five days they're being shipped directly from china which is another pretty wild part about this like it's really it's a really interesting thing that Amazon is going into.

8:15And like, it's an interesting juxtaposition to have it next to our conversation about how these luxury houses are opening up these prestige stores. But I think that there are like two polar opposites that are happening, especially this year, at the end of this year going to next year. And these are great examples where you have, you know, especially high end luxury prices getting higher, you have these experiential spa like things from Chanel, and then Then you have Amazon saying, well, we're going to sell you truly the cheapest thing possible. And it's going to be just consumption, consumption, consumption and fun for you, but also won't hurt your wallet.

8:48I think the interesting thing is, though, like it's one like I almost feel like you would call it like the era of like chaos shopping. Yes. Oh, my gosh. Like there's been a lot of discussion that I've had with certain guests on the podcast. Like we had Matt Newman, also known as Matt Loves Hair on the podcast. I can't remember if this made it in the episode, but he was telling me, I was like, do you buy stuff on TikTok shop? And he was like, oh my God, all the time, like to the point that I can't even keep up with the packages coming to my house. And we all know that creators make a very good living.

9:23And I think like, yeah, the prices are really low, but the people that can actually afford this level of chaos impulse shopping may not actually be like I'm sure there are plenty of like low-income middle-income people spending in a way that is potentially like irresponsible which is another story on apps like this but I also think what's really interesting is like I think there's a lot of high income people spending in a very chaotic way on TikTok shop. And potentially that might be what Amazon is going for because like you see these low prices and I think it feels like monopoly money, right?

10:09Like anytime that TikTok shop has gotten me, it's been because it was a low enough price that, and like, I'm not a high income shopper that it felt like oh okay like whatever might as well just go for it well and i think you're totally right where it's like i think that there probably could talk about like there have been cheap things like wish and other other places where you could buy cheap cheap products specifically for lower income people but i think actually if you want to like tiktok shop is a great example but i think shein really specifically trained gen z to shop in this chaotic way where it's like i see a five dollar shirt that that is nothing to me.

10:50I'm going to buy that. And that's what you're seeing TikTok shop do as well. You're seeing Timu, you're seeing Amazon do that. And it's this new type of shopping. I think you're right for this, not necessarily the low income, but for people who just aren't thinking about the amount they're spending if it's under a certain threshold. Yeah. Like if it's under, let's say$15 or$20, it feels like, okay, whatever. And I would love to see like studies. it's probably like still too soon, but on like what certain demographics have spent, again, it's too soon for Amazon's platform, but like on TikTok shop in the past two years that it's been out, because I bet some of the numbers are kind of frightening.

11:30I've seen that happening. I think with people who don't necessarily need to shop on some of these sites, but there's a curiosity to it. It's like, what am I gonna get for like$3? Like, what is this even gonna look like? There's like so much curiosity around it. And I do think that what we're talking about here, we kind of do see the data reflected. So in one of the reports that I covered this fall was from Surkana, and they predicted that people were going to be spending more than last year with one caveat, and that was a softening of beauty holiday sales for households making between 100 and 150.

12:03So I think we do see this, and it's hard to say like, oh, 100, 150 is middle class, but money doesn't really go as far as it used to. So I will say that like we do see this softening of the middle class, which I mean, not to get political, but I mean, this has been happening for a while now. So it's like, I think people are maybe curious, maybe also enjoying the cheap prices on these websites. I wonder if a lot of it is like gifts that people are buying though, or if it's like decorations and stuff. Okay. I'm not convinced. And I have an example. I'm not convinced that it's gifts. This is like kind of a funny thing to give you guys.

12:40but the thing that they've been targeting me so hard on TikTok, okay, it's a bra. Why don't you just roll with me here? And it actually, I think this bra speaks to so much of what marketers and CEOs and CMOs have been telling me in interviews for the past three and a half years that I've been working on pop for why beauty resonates on TikTok, which is that this bra has a before and after effect, okay? It's a minimizing - No, you're so right. it's a minimizing bra and so people will show their chest in a shirt and then they're like okay now watch what I put on this bra and like it looks like they got like a breast reduction or something and like people are making so much money off commission on selling this bra and so I think like they get people I mean listen am I saying of course someone could buy a bra as a gift but I I think there's a lot of that of like, let me try that for myself and see if it's really as compelling as this video made it look.

13:38I didn't even think of this, but we've done a little bit of writing about it on Modern Retail. And it's something that, honestly, we probably write about every year in some capacity. And I've always been, it's more of a marketing thing than it is like actual phenomenon, which is like the rise of self-gifting. Like brands are saying, you know, treat yourself, that type of thing. But I actually do think this year might be a little different because just to go back to chaos shopping, to go back to this bra, like it's kind of self-soothing in a certain way where you're like, I don't know what's going on.

14:07Things are really like frenetic. I don't know where, you know, politically what's going to happen or where my paycheck's going to go. But I will buy this specific thing for me. And there's a slight discount specifically because it's the holiday. So I do think that that is like we there are a lot of brands that are doing specific marketing for self-gifting. And I do think that it is fitting with where we are culturally right now in the United States. So I think that that's it's right into it with that bra, Sarah. Yeah, 100 % agree. Who knew that bra anecdote would make it in here? But I've been targeted this bra, then you wouldn't you it would be inevitable that it made it in here.

14:46And I mean, like, I absolutely agree with what you're saying of like the comfort of not knowing what's going on. And I also think almost there's a social element because when you guys, we started off talking about Black Friday, you know, I'm a New York City based millennial who never learned how to drive. So, like, I don't know many people who are like going to stores and the mall on Black Friday. But I will say that like every year, I want to say at least the past five years, one of the group chats that I'm in is like, so what did you guys get on Black Friday? Same for Prime Day, by the way. there's like a social element of like did you get sucked in by any of these deals and like you know you have the people that are like didn't buy anything this year and then you have the people that are like oh I got you know like it's like you have the different like personality types almost and it's definitely for me and my friends many of whom maybe work in and around the beauty and fashion industries that we're discussing it there is an absolute social element which I guess could play into, like you said, like the gamification of this stuff, like of talking about it and talking about like, oh, I bought XYZ at XYZ.

15:53Yeah. And there's actually, this is a perfect segue because this is something I wanted to talk with you guys about a little bit more, which is, and I think Lexi has come prepared with some stats that I want you to talk about, but like, what is this Black Friday going to look like? Because I think it could go in any which way. And like, Sarah, you brought up, you know, people talking about what they bought on Amazon Prime Day, like Amazon had its second Prime Day at the beginning of October. That was a way for pretty much Amazon and every retailer to kick off holiday shopping earlier than ever, because the time between Black Friday and Christmas is shorter than it usually ever is.

16:27And so I'm just like, really interested to see if that like the fact that it's shorter, or the fact that holiday shopping technically kicked off earlier, because Amazon had the sales so early, is that going to have a dent in what we're seeing this coming weekend with Black Friday sales, where that's supposed to be like the biggest day for every brand, for every retailer? I think that Black Friday will be really big this year, as well as the other holidays through the weekend, Cyber Monday, Small Business Saturday, all of those things. I think those will be big. But it's crazy because every analyst I spoke to and every organization that I included in any of our wellness and beauty briefings basically said that people will be spending more.

17:06It was sort of this unified front that people will be spending a little bit more than last year. Some people, of course, won't be, but for the most part, we're on set to spend almost a trillion dollars in the last two months of the year, according to the National Retail Federation. People are going to be buying seven, eight, nine gifts this year, which is one above what they purchased last year. But I will also say that most people said that it's actually a good thing that Black Friday is coming so late because it's almost like a palate cleanser from the election. It'll give people like a moment to kind of like sit back, recalibrate.

17:45The dust will hopefully a lot of the dust of like the news cycle will have settled a little bit. People will feel a little bit more confident whether they're happy about it or not happy about it. We know that when people are confident in what will happen, they'll be able to make better choices for them. So people are aware of who's going to be the president. They know sort of like what the next four years are going to look like, at least in their mind they do. So it'll help people to be more confident in their buying. However, I will say that one thing I don't think anyone's really talking about yet right now is the impasse that we are headed to in December with shipping times, because that is when things are really going to go off the rocker.

18:23And I don't think that people are really prepared because people still want things in like a day. They have this expectation, which, Kale, when you were talking about the new Amazon selling platform, I was like, who is going to order this stuff? Because if it takes so long to ship, nobody wants to wait weeks. But I don't know. This is an interesting anecdote. I was getting a pedicure like four weeks ago in L.A. And I'm Jewish. So to be honest, there's like almost no, like my family does not exchange gifts in the way that many of my Christian friends do. But the woman doing my pedicure did not know this.

18:57And she was asking me if I had started shopping for the holidays. And this was November. So I want to say this was mid-October. And I said, oh, you know, no, not really. And she told me that she had been saving for months already. So I guess that like what you're saying is there's like a difference there where like people, this is something they save for throughout the year. And I should not take that for granted. So I guess thank you for reminding me of that. I also think that there is, and this is more of my personal interest, but I think people on a certain income bracket are doing fine or doing better and people at a lower are doing worse.

19:32And so I think that the divergence is bigger than ever, which informed a lot of the election. But I imagine, especially for nicer brands or top brands, they aren't feeling that impact as much because people on the other side are still able to buy and they're not as impacted by people on the lower end of the spectrum would be would would be my hypothesis, though I can't back that up with data. I think that most people tend to save for the holidays. And if they don't save, then I think they spend on credit cards. So I just saw a stat recently that said 28 % of credit card users are still paying off last year's holiday purchases.

20:08And the analyst I spoke to, I also sort of asked them this question, Sarah. And I think that the feedback is basically like these are cultural norms that people value so much in their lives and in the life of, you know, I don't know, the Western world, I guess. But yeah, people will put presents under the tree or they'll, you know, they'll gift in the way that they can. And even if that means going into debt, which I think is, you know, something. And I'll also add, I totally forgot about this, but Lexi, thanks for bringing this up. Like debt's going to be a big thing. I think debt is only getting more now.

20:42But like even like new types of debt, buy now, pay later, is going to be skyrocketing right now. And that's specifically targeting like millennials, Gen Z, even a little bit of like younger than Gen Z, like being like, pay this in installments. It's OK. And so I think that goes to answer kind of people are going to be spending more probably beyond their means, but there are always going to be mechanisms by which even if they don't have that much in their checking account or their savings account, that they'll still be able to buy that. And there's competition growing in that arena as well. I know that Chase has just banned third-party payments from companies like Affirm.

21:17And I realized this only because I have a Chase card and I recently made a purchase and a little pop-up was like, do you want to pay this over time? And I'm like, oh my gosh. So they're basically allowing you to pick a purchase and then pay it over time without interest, but with a monthly fee or whatever. I get that all the time, Lexi. If I buy anything, if I had a vet charge that with like 400, like right away. Like, yeah, it's like the, what's it called? Like a firm of your credit card. Yeah, so I don't know. It's like, we'll see what ends up happening with like the ways that people are carrying debt and sort of what that looks like.

21:55Cause I feel like there will probably be shifts there. Yeah, it's crazy. And I also going into shipping times as well and all these lead times, like businesses, this will be the headline in December if I have to predict it. Businesses are just gonna get smacked in the face with these shipping time requirements. And it's gonna be a whole mess. And anyway, it's gonna end up becoming this whole thing, but also returns. I'm also terrified for returns. I know we saw that Ulta Beauty, for example, just sort of quietly walked back their return policy a few weeks ago, which it's still very liberal, but basically now it's 30 days for a actual like money back return and it's 60 days for store credit.

22:38you have to have the receipt, of course. But it used to be 60 days for money back. So I think that some of these retailers are trying to kind of cut the returns off of the past. But I am terrified for January's return rates because it's going to be absolutely outrageous, I'm sure. But anyway, Chris, have you guys heard anything about returns for the new year? There are a couple of things. One, and we didn't even talk about this when we were prepping, but it just dawned on me right now, which is that speaking of the Ulta thing, it seems like a lot of the major fashion players have been trying to prepare for this because of like serial return people.

23:10So was it I think it was a couple of months ago, probably you guys know this better than I, but it was ASOS added a new return fee specifically because they had so many people who would just return things in bulk. And they did that in September, which I think was sort of a run up to like train people to be able to shell out for returning come the holidays. I think there were a few others that are trying to make similar similar moves to like stop people from returning in mass. But there was this other thing that happened, which I think is kind of funny, which we had a story on Modern Retail a couple of weeks ago where one of our reporters talked with a few people who are in the Amazon space when they talked about how pretty much there's been an influx of people who bought Halloween costumes on Amazon, like maybe a few, maybe one, bore them on Halloween, allegedly, and then returned them the next day and they get a free return.

23:59And so they essentially treated it like a rental platform, pretty much. And I feel like Like that, you know, with the right, you know, e-commerce is always rising. It's very predominant right now. But I think that that has trained a new type of shopping pattern that we're seeing where people are thinking about these free returns, these really long windows as a way for them to I'm going to wear this and I'm just going to give it back and get my money back at the end of the day. And so I think that that's we might be seeing that in the coming months and weeks. This is where the spirit Halloweens of the world and the Halloween shops of the world had it right.

24:32No returns. Yeah. Yeah. Oh, man. All right. I want to switch gears a little bit and I want to ask, well, I'll ask both of you, but this is something that I think Sarah will know a lot about just because of the bra story earlier. But one thing that we've written about a little bit is how TikTok is really trying to make TikTok shop very predominant. There's been a lot of coverage about TikTok focusing on live stream specifically for the holiday sales. Do you think TikTok shop is going to be a predominant channel? And like, do you think that's going to be a way for Gen Z people to buy things for the holidays this year?