Rundown: Another record Prime Day, Limited Too is back & Pacsun gets into men's athleisure

0:04Hello, welcome to the Modern Retail Rundown. I'm Gabby Barcoe. I'm here with Managing Editor Anna Hensel. Anna, welcome back to the show. Thank you, Gabby. I am excited to be here after such an important period in retail. Prime day just happened, so we'll get into all of that. Yeah, really important until the second prime day happens in two months. We'll revisit, but yeah, no, I'm excited. We're going to be trying to, I guess, synthesize it as much as we can today. But yeah, we're going to start off by talking about what else? Prime Day, of course. And then we're going to talk about Limited Toos Comeback.

0:49I feel like this one will be a fun one for us millennials to discuss. And yeah, speaking of mall stores, PacSun is also expanding into men's activewear, which just looks like it's part of a bigger strategy to go more at leisure, attract younger shoppers, something they've just constantly been doing the last couple of years. So yeah, let's start off with Prime Day. So sales are reportedly topped$14 billion. Unsurprisingly, it was another record Prime Day this week. So Amazon doesn't actually release exact revenue numbers for the two-day event, but they did say they were quote-unquote record sales and more items sold during the event than any other previous Prime Day event.

1:42What are your thoughts on some of the anecdotes we're getting from, I know we got a lot of reports following the 48 hours. Yeah, so I feel like looking at Prime Day sales, even though Amazon doesn't release exact revenue numbers, other firms put out estimates. We can also kind of look at our own anecdotes to fill in the gaps and kind of see some trends in terms of what people bought during Prime Day. I feel like this was a year very much for household staples. So personally, my big purchase I made during Prime Day was like this portable, it's like a portable carpet cleaner slash vacuum. And I feel very seen because I saw it on an influencer's account and I was like, oh, that would be useful.

2:31And then I was telling a friend about this purchase and they were like, I also saw this on influencers' accounts, so I'm very predictable. But what about you, Gabby? What did you buy during Prime Day, if anything? Yeah, I got a couple things. I think it's actually on theme for today's discussion, which were mostly just household CPG items. I also bought a hairbrush that I've been looking for, but TBD on what that's going to work. like um but yeah just kind of little things here and there um yeah cleaning supplies all that stuff but uh yeah i think a lot of people do this thing where they sort of have their cart ready and then they see what goes on sale to hit checkout but um yeah absolutely i guess we'll see what happens one thing i actually did notice as an aside is uh people complaining that uh the shipping times are prolonged for anything they've purchased during these two days, which is understandable, but obviously that's not two-day shipping as were promised.

3:36Right. If you're Amazon, this is your biggest sales event, your big promise that a lot of shoppers know you for is two-day shipping. You still have to fulfill that even during busy times. Yeah. All right. Well, let's get into some numbers. So Amazon said that it sold more than 200 million items during the two-day event. But according to Adobe Analytics, the estimate is that people spent about$14.2 billion during Prime Day, and that's up by 11 % from last year. I think last year was also a record, if I remember correctly. Yeah, it just keeps kind of, you know, getting bigger and bigger every year.

4:18So we're going to look at some products that we'll shout out that sold pretty well. So according to Numerator, the type items that sold were Amazon Fire TV sticks, surprisingly, Premier protein shakes and liquid IV pockets, which is good. I guess it's good people are hydrated this summer. But yeah, and then 27 % of people surveyed by Numerator said they bought apparel and shoes during Prime Day, while 26 % bought home goods and 25 % said they bought household essentials. So it is interesting in the sense that, yeah, for years now, we've seen that there's no longer an emphasis on just gadgets anymore during this event.

5:04But yeah, what do you feel like these numbers mean, these percentages? Right. So I feel like during Prime Day, there's always usually, because Amazon has been big into devices. Their Alexa business isn't as popular as they used to be. But of course, it still sells the Fire TV stick. So you always do usually see an Amazon device or two that's in the top products sold for Prime Day. But yeah, I think it's really interesting that a lot of the popular items were CPG products and honestly, lower cost items too. So I think the big theme in retail this year is people are still price conscious and they're waiting until sales events like Prime Day to make purchases.

5:55Another interesting statistic by Enumerator was that the majority of purchases made during Prime Day were under$20 still. And so I think that that shows that, again, people are still kind of squeezed by inflation and they're using events like Prime Day to make purchases that they already know they're going to need to buy at some point. But why not buy it during Prime Day to buy this when I can probably get 20 percent off? And so, for example, over half of people surveyed by Numerator said they compared prices to other retailers prior to placing their orders, which again, just shows that they are doing a lot of work to confirm they are getting the best deal.

6:44And I think that this is a trend you're going to continue to see throughout the year, not just during Prime Day. Yeah. And then, of course, we have to talk about the non-Amazon sales. This is a fun trend that us at Modern Retail saw sort of burgeoning in real time the last few years where it's now just like a deals week event throughout the retail world. So yeah, we saw, you know, Target, Walmart, pretty much every other retailer have their own quote unquote deal sale. But yeah, what are some of the things that we saw there? Yeah, so just to break it down, I mean, so many retailers now have sales during Prime Day or in the week leading up to Prime Day, the thinking is, is like people are in the mood to shop.

7:34They will probably be looking at other retailer sites to compare. So retailers might as well try to get some of those sales. So Target has had a competing sale for years now at this point that usually starts the week before Prime Day. Walmart also has a competing sale. And then this year, part of Nordstrom's annual anniversary sale also took place over Prime Day. And then TikTok Shop also hosted its first ever Prime Day-esque event. So according to Numerator's survey, 35 % of people said they also shop Target Circle Week and or Walmart deal sale. And if you, you know, that's pretty good. I mean, it's good to get some of those people who are already in the mood to shop.

8:26But that would mean those sales only generate a fraction of the revenue that Prime Day does. And this checks out if I look at my own behavior, too. I mean, if I look at what I spent during the week, like I probably spent a fifth of what I spent on Amazon at other retailers. So like I did check out other retailers sales and I saw one specific product in particular that I really wanted on sale at another retailer site. So I bought that, but I didn't buy anything else from them. So I think it just goes to show this is still an Amazon time and Amazon will continue to dominate this like weird mid-July sales period.

9:11Yeah. And then I think, like you said, more than ever, this is an important time to offload inventory. There's been a lot of markdowns the last couple of years at this point for retailers that are struggling. And so kind of packaging it alongside Prime Day makes sense because, yeah, everyone's in a shopping mentality or at least is going to go look at what you do have on sale. So I guess the takeaway is that people love deals. That's not going to change. I know, groundbreaking. Yeah, that's not going to change. And it just seems like more and more it is becoming about buying more essentials than it is maybe nice to haves or even just starting your shopping early or whatnot for the holidays.

9:56I know that happens for the fall. So yeah, it's probably going to keep happening every year, breaking the records. Okay, so from there, let's go back to the early aughts. This week, Kohl's announced that it is bringing back Limited 2. So why is Limited 2 being revived? Let's get into it. It's been about 15 years since Limited 2 has been on the market. And this week, Kohl's and Limited 2 announced that they are going to be relaunching the line at stores across the nation. and Kohl's.com. It will include athleisure, sportswear, plaid skirts, dresses. These are for tweens in case it wasn't clear.

10:44But yeah, other categories like swimwear are also going to be added. But yeah, it's an interesting time. I think a lot of people were maybe surprised by this because it's been, yeah, since I think 2009 was when limited to is defunct. But what do you Right. Well, this second half of the episode will be exciting if you shop during the early 2000s. So for Kohl's in particular, they seem to really be doubling down on nostalgic teen brands right now. So it's adding these products from Limited to, they also announced they are adding an assortment from Aeropostale and expanding Madden Girl items. So this launch comes just in time for back to school.

11:32And it's really targeting current moms of tweens with the moms being millennials who grew up with limited two, which is an interesting strategy. And we can get into, I think there's an interesting dynamic here of how do you try to target teens and tweens now when the people who know the brand and love the brand are older. But overall, I think on the Kohl's end of things, like it's in line with Kohl's strategy to overhaul its merchandise through brand partnerships and store-with-in-store concepts. So they have Sephora Shop and Shops, which have been a pretty big traffic driver for them. And back to school season especially is important for Kohl's.

12:23So the idea is to offer trendy apparel to draw in younger shoppers and also their parents. Yeah. So let's now talk about what this means for Limited Too. So the brand was founded in 1987 and at its peak in the mid 2000s had about 600 stores. It's a lot to think back on. And then, as I mentioned previously, it did close down in 2009 and just kind of seemed like it was defunct forever at that point. But now Limited 2 is owned by B. Reilly, which is a financial firm and alongside the brand management company, Blue Star Alliance, which also owns Justice, Hurley and BB. So, you know, sort of brands within that same realm.

13:13And now the brand wants to capitalize on Y2K trends, of course, that Gen Z and Gen Alpha have been really embracing the last few years. So according to the line's designer, the new line, they said that each piece is designed to bring back fond memories to those who grew up with the brand while introducing that same magic to a new generation. Yeah, I mean, I guess what are your thoughts on, and then we're going to talk a little bit about the targeting strategy of the brand because it's kind of, you know, I guess towing a fine line. right like we mentioned earlier the uh the trick here is that they seem to be trying to target both teens and adults which if you are a brand I think that sells I mean you've read about this Gabby like if you are a brand that sells clothes for kids or up to teens you do have to target the parent a little bit.

14:15But so one further sentence or one further quote here from their team that kind of gets at the strategy. So in a statement, Sammy Gabay, Limited Two, Senior Vice President of Licensing and Business Development said, we are thrilled to announce the return of Limited Two, a brand with a rich heritage that has long been cherished by tweens and their families. Our team is dedicated to honoring this legacy by ensuring that every product is crafted with the utmost attention to detail and designed to resonate with today's tween market. So here's where it gets interesting is Limited2 started to preview the relaunch in June by relaunching on Instagram.

14:59And so Limited2 currently has about 51 ,000 followers. And part of the taglines they used to kind of tease the launch suggested a little bit that maybe they might get into the adult market because they used phrases like rediscover an icon, which would seem to be geared toward people who bought Limited 2 back in the early 2000s. And so it's really interesting if you look at their Instagram account, when they announced the new line at Kohl's, a lot of commentators were upset that there weren't adult clothes as well. And so again, I think it speaks to this fine line, you have to toe as a teen tween brand.

15:48And I think that, you know, Gen Alpha is in a little bit to the Y2K nostalgia. But also, I think the people, it's interesting, I think the people who are going to be into it more are the adults, but there's also so much more competition in the adult space. Like, I'm sure that some of these people who commented on Instagram would want to buy adult clothes from the new limited two. But like, would they really be spending most of their money there? I don't know. There's a part of me that feels like it's all talk. But it'll be interesting to see how limited two like toes the line here. Yeah, because I think it's going to take a pretty big marketing effort on behalf of limited to by Kohl's also because they are the retailer that's helping push it out first.

16:38But yeah, like you said, I feel like there's a little bit of muddled messaging as to who this is actually for just based on some of the comments we read on the Instagram posts. But maybe that'll be ironed out and they will be able to attract new shoppers. Yeah, we'll see what happens. So moving on to another mall brand that's launching new products this week, PacSun announced that it's launching a men's activewear line called ARC, A-R-C, I believe is how you say it. But yeah, why are they launching this line now? I mean, we're going to get into their product strategy in a little bit, but this one in particular is interesting because it really does tap into this audience that they're trying to reach.

17:27Yeah. I mean, activewear and athleisure is just so competitive right now. So I find it interesting that PacSun is trying to get into this area, but it seems like what they're trying to do is target a younger demographic. So I think that's where they're trying to stand out. But to get into more what this line will entail. So it's 28 piece collection. It's broken down into the three categories that ARC stands for, which is Active, Recreation, Comfort. ARC also features tops, pants, shorts, kind of everything you would expect from an active wear line. Prices range from around$30 to$75. So I think, you know, the pricing, it's definitely geared toward a younger shopper, maybe someone who can't afford Viore at this point.

18:21So I think that's interesting. And since emerging from bankruptcy in 2016, PacSun has been trying to overall its overhaul its image as, you know, the stereotypical mall-based retailer that was really focused on skate and surfwear. I think that they are trying to expand into new categories, reach different types of athletes with this line. So some other interesting things they've done recently in they've done a decent amount of collaborations I feel like um and they've done some collections with the Met Museum and uh they've also done other stuff in athleisure and activewear so last year it launched uh PAC 1980 which was a dedicated brand for women's active wear it opened a dedicated PAC 1980 store then in the Mall of America last summer and it also launched some shop and shops within existing PacSun stores.

19:23So I think that, again, Activewear is, of course, a very popular area right now. So it makes sense that PacSun would get into it. I think it's just very competitive. So they kind of have to figure out what their differentiator is. yeah i mean uh so pax on itself says it is filling a market gap with these new items their vp of men's merchandising and design said uh the three unique style categories within the collection are designed to reflect the diverse lifestyles of our consumers our goal was to create high quality versatile pieces that resonate with their ever-evolving lives while remaining accessible to everyone.

20:10So like you said, the pricing is definitely a big part of that. And, you know, it's got a very modern look. Like you said, it's kind of in line with that Viore or Lululemon men's looks, but it is geared at a pretty youthful audience. But like you said, it is very competitive, which we'll talk about. But the plan is to promote it Two young men who are to athletics, obviously. So the campaign for the launch stars NCAA quarterbacks Shadur Sanders and Carson Beck and basketball player Sharif O 'Neal and gymnast Koi Young. So as you can probably tell, it is very sports focused, I guess, alongside lifestyle.

20:59But yeah, I mean, I guess what are your thoughts on entering athleisure now? you know, I don't know, it kind of feels a little bit late to me. But who knows? I mean, I'm sure they've done the market research. But like you said, there are so many brands already trying to tap this customer. Yeah, so I think I have a lot of thoughts on this. So they will definitely face a lot of competition. I mean, I think of Lululemon is trying to build out their men's business, Viore, you know, the price point is lower, which I think will help them reach a different type of audience. But also, I feel like I just have seen a lot of retailers try to get into athleisure.

21:46And I don't, I'd be curious to know what PacSun's goal is here. Like, do they expect it to be a big sales driver? Is this more kind of like a testing strategy to see what items their core customer is interested in. And launching a sub-brand is something that I feel like we've seen a lot of, especially kind of these mall-based retailers do. And the reality is, is that I think in most cases, it will never be as big as your parent brand. So a lot of it is around, do you have realistic expectations for this new subline? I think also part of the reason why we're seeing more retailers launch these sort of sub-brands is the success American Eagle has seen with Aerie, of course.

22:41I feel like that is one of the few exceptions where we've seen a retailer launch a sub-brand and it has almost become as recognizable as its parent company. But Activewear, again, in particular, is an area where we have seen a lot of interest from retailers who never historically played in that area. So I don't know if you remember this, Gabby, this is going back deep into my early days at Modern Retail. But Express actually launched like a D2C athleisure sub-brand called UpWest. West. And of course, Express filed for bankruptcy earlier this year. And again, I think they found some success with it.

23:27They always talk positively about it. But just the reality is that there were more problems at its parent company that were dragging it down. Paxson is privately held, so we don't know how it's doing. I do think it's doing pretty well. It seems like they are trying a lot of like collaborations and interesting marketing campaigns. But I just will be curious to see how they scale this. Like, is this more of a testing play? Do they think this could be a really big sub brand? Or do they shut it down in five years? We'll see. Yeah, I mean, you know, they do say that they are, quote unquote, building on the success of the other lines, including PAC 1980.

24:14So yeah, we'll see. I mean, like we said earlier, they have a little bit of a busy strategy of putting out new lines constantly. And some of them, I think like the Met Museum one was a little puzzling to people. They had some cute stuff, but yeah, they don't all always make sense right away, but it does seem all related to being relevant to younger customers, you know, ones that did not shop Paxun 20 years ago. Well, that is our show for this week. You can rate and review us on Apple Podcasts, Spotify, or anywhere else you're listening. And don't forget to subscribe to the Modern Retail Podcast to hear interviews with industry leaders on Thursdays.

25:01And come back on Saturdays for the Modern Retail Rundown. Follow us on socials. We're at Modern Retail. And as always, thank you for listening.