Temu U.S. usership plummets, Spirit Halloween cancels season opener, brands go all-in on Dubai chocolate & Stanley 1913's next era

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0:41Hello, everyone, and welcome to the Modern Retail Podcast. It's our show that covers the ways the retail industry is changing and modernizing. I am senior reporter Gabby Barco. Later in the episode, executive editor Anna Hensel has an interview with two executives from Stanley 1913, Kate Ridley, who's the chief brand officer, and Graham Niren, who's the Chief Product and Sustainability Officer. So we'll hear from them in a little bit. But first, we're going to be talking about some of the retail news of the week, including a change in Tmoo's users' numbers and how the supply chain challenges of today are haunting Spirit Halloween.

1:26And last, we are going to be talking about the latest update on Dubai Chocolate, the viral sweet tree and how it's been impacting brands, of course. For that, I am joined by modern retail reporter, Julia Waldo. Julia, welcome back to the show. Thank you so much. I'm happy to be back. Happy to be here. Yeah, I'm so excited. So yeah, we have you on to fill in for Melissa, who's not here this week, but I think you also have covered some of these topics. So I thought you'd be a good person to talk to about, you know, for instance, coming up first, what's going on with Timu? Basically, in the last few months, I feel like things have just been really up in the air with U.S.

2:12users because of the de minimis loophole that's essentially closed now. Well, you know, for those who don't know, we'll get into what that loophole actually is. But yeah, let's talk about what happened because this is a really steep drop in numbers. Yeah, it's really interesting. So there's this new data out from Sensor Tower that says that the number of daily U.S. users on Tmoo dropped almost 50 percent. It's 48 percent from March to May. So, again, a huge drop, as you just said. And this came after Tmoo actually slashed its advertising spending in the U.S. earlier in the spring. Now, that was motivated in part by what you just mentioned, Gabby, the White House getting rid of a loophole known as De Minimis, which essentially is this kind of rule that had long allowed e -commerce giants like Timu to basically ship packages from China and Hong Kong to the U.S.

3:15duty free, like not paying tariffs if the value of those packages were under$800. But that went away in May. And so basically, Timu and, you know, Shein, another competitor in this area, they had long used that loophole to keep prices low. So this just like threw a huge spanner in their business models. Right. And of course, that's happening with the backdrop of everything else going on with tariffs right now. But yeah, the drop in users is actually just one issue that Timu is facing. It's also seeing a sharp drop in sales growth and customers growth rate, I guess, overall. There's data from Bain that says that that been trending up and then sharply fell in April.

4:04So it's sort of coinciding with all of this. Yeah. And the app usage in the U.S. is also down. So Timu averaged 58 million users in March, which dropped to 41 million users by May. So that's a loss of 17 million users in just two months. That should just give you context into how steep that was. Considering that Timu and Xi 'an were these big threats to U.S. retail not too long ago, obviously a lot of people predicted that this would happen just because they did really rely on the de minimis loophole to be able to ship directly to customers in the U.S. but I guess where does that put us now, right?

4:51Yeah, it's a good question. And I feel like Timu and Shein, now they're kind of in this weird space where, you know, they've become really reliant on the U.S. consumer, but now we're backing away a little bit from the U.S. market, you know, trying out different things, different methods. And the U.S. consumer, you know, is backing away from Timu and Shein also. And we had this data that we got in from Consumer Edge that show that a lot of US consumers are now spending more with like different other types of retailers like Macy's and Kohl's and Old Navy, which, you know, I just saw an ad for them the other day with Lindsay Lohan.

5:26So they're everywhere now. She's back. But yeah, so it's interesting, like, you know, we're seeing a lot of these customers that came to rely on Timu and Shein for these really low cost, like mass produced items, not kind of going to other places too. Yeah, I think it was really interesting because with the tariffs add-ons, or I guess some of the fees that they've tacked on and the price increases they've made recently that you've written about, I guess it did spook away a lot of customers who were like, wait, I shop at these sites for like really cheap, trendy clothes. And so if you're going to be paying all of these fees where, you know, the t-shirt costs just as much as the Old Navy one, I imagine that's probably where that has shifted.

6:13Totally. And like, if you live, I assume like in proximity to a place like Old Navy, you know, and you are looking for, you know, a quick t-shirt, it might just be easier for you to pop over there than, you know, having to go through the whole rigmarole of, you know, shipping and all of that. So you can get things quicker, faster. Let's say you have a party that's coming up or something and you need, you know, a quick$5 t-shirt or whatever. Right. So that's on the U.S. side, but, you know, we could talk about the European sales that Timu is seeing growing. So, you know, I guess they're oscillating a little bit and going over to focus on the EU.

6:49Although I believe the EU has their own sort of loopholes that they're trying to close with that, right? I think if I'm recalling correctly. Yeah, yeah. It's interesting because basically, yeah. So like Timu, you know, kind of really pulled back advertising in the US and then went on to really ramp up advertising in Europe. basically timu's ad spend rose like 40 percent in france in april on a month-over-month basis it was a 20 percent rise in the uk so you know pretty pretty big jump there and that's kind of corresponding with stronger sales in these regions also like we have this data from consumer edge that sales in the eu you know sales for timu jumped more than 60 percent in early may so that's that's pretty strong.

7:37Yeah. It's like they're investing in ads. Obviously, they're converting customers. Not sure how sustainable that is going to be month over month, especially if policies also change there. But it also there is a little bit of another way that they're trying to close this gap, which is Tmoo's had some success in shipping actually from U.S. warehouses rather than just the China factories directly. I think you probably know a little bit more about how that works, but is that a sustainable plan that they can go with? Yeah, it's an interesting question. I feel like they started doing this a bit ago.

8:12So this is something that they've had in the works, you know, longer than, you know, the past two months, per se, I think, yeah, it really comes down to, I guess, how many, how many warehouses they're able to use in the US, how many US based sellers they're able to bring on. And then yeah, just all of the tariffs and, and tariffs from other countries that we're seeing and retaliation. So yeah, as you said, I feel like this is playing out at a very moment-by-moment basis. Yeah. And not to get too in the weeds on fulfillment, but I thought the whole draw of something like Sheen or Timu is that there's just so much volume and all of these really small production runs that they're able to ship directly from China.

9:00Whereas now, if you're going to have to bring them into U.S. warehouses like any other traditional brand. I feel like that kind of throws a wrench in the model a little bit. I don't know how much you can compete there. Yeah, to me just feels like a very different departure, but I don't know, maybe that's kind of a band-aid solution. Yeah, and we could be talking, you know, in a few months and things could have totally changed by then. So it's very by the moment. Yeah, exactly. From there, we can talk about another retailer that also is really struggling right now, which is Spirit Halloween. It's scrapping its season opener event due to, quote unquote, supply chain challenges.

9:43We could read between the lines. We know that usually means tariffs. But yeah, what are your thoughts on this? A lot of people seem very upset. I've never been, but I learned that Spirit Halloween has had this event since 2021 at its New Jersey flagship store. I've never been there. Have you been there? I have driven by and it looks really crazy. So no, I have not been inside. But yeah, apparently they have this big like party there every summer where they show off like their latest batch of costumes and accessories and decor. It's open to the public very much and the whole like summer ween vibe that keeps on creeping up earlier and earlier.

10:25But yeah, basically, as you said, they said that they're pausing the event because of quote unquote, international disruptions and supply chain challenges. I posted this on Instagram in a spooky looking post. Yeah. So I guess what is, I mean, obviously this tradition has only been around a few years, but what does this entail now? Like, are they just going to roll out a normal Halloween? You know, obviously that's like their big season when they start when they open it. I believe it's in like August or something. Right. They start really early. Yeah. I mean, you know, they'll they'll still have obviously products ready for Halloween.

11:02But to me, you know, we just talked about recession indicators in a recent episode. So I'm like, this is kind of a perfect example if you think about it. Like every retailer this big that has become known for this specific blockbuster event has to cut the budget. And I guess due to some of the supply chain challenges they're already expecting in Q3. You know, as you mentioned, we can kind of read between the lines on the tariffs issue. Like the wording that Spirit Halloween used was very much like, you know, we're not going to mention tariffs specifically, but we're going to say there's disruptions and challenges.

11:41And I mean, Spirit Halloween, yeah, like every Halloween and every summer, you know, they go into so many locations. They have 1 ,500 locations that they're supposed to be going into in mid-August. A lot of them in like strip centers and malls and vacant retail spaces. But yeah, they said that they're still going full force on Halloween. They said, quote, the engines are on and we're full speed ahead. So if Halloween is your favorite holiday and you hear this and you're like, wait a second, what? it's okay according to spirit halloween things will be uh fine yeah and then uh right before christmas they turned these into spirit christmas which is a concept that they launched last year in the northeast at least i think we were talking about this when that when that was announced last year but i think it also kind of coincided with the christmas tree shop chain closing because they kind of had that market cornered so they really wanted i think it does seem like spirit halloween is trying to fill some of those gaps which makes sense but yeah i mean for now you know no big opener but what i'm curious to see what their assortment is gonna look like the same i always love looking at their costumes and how they kind of capitalize on like the latest pop culture trends or like the latest TikTok thing.

13:03And it's just funny to have it be Halloween and you see kids wearing these costumes where you're like, wait a second, is that XYZ? And it's always entertaining. I love Halloween. I don't know if you like the holiday, but. Yeah. Yeah. No, I do too. Although, I mean, I guess talking about it in June, I'm like, oh, that feels so far away. But this is when they start putting in those odors, right? It's true. It's true. Yeah. No, I just turned on my AC. So I'm like, wait, I don't want to I don't want to move into the fall yet. Yeah, exactly. All right. Well, I think from there we can wrap up the rundown portion on a little bit of a sweeter note.

13:40You know, speaking of Halloween and treats, let's talk about what's going on with Dubai chocolate right now. You know, this is a trend that's been around for about 18 months now. It first went viral in December 2023. 23. But now, of course, the brands are in on it. So I feel like it warrants coverage on the show. Okay, first up, Julia, have you had Dubai chocolate by any chance? You know what? I have not. But the bodega that I live near, they just started carrying it. And that has become a huge hubbub. Like every time I go, there's only a few sticks left in the little container. So it's selling out pretty quickly.

14:22But no, I haven't. Have you had it? Yeah, I've had a few different versions. I've also made the DIY version at home with my nieces and, you know, not didn't really crack the code there. I think, you know, sometimes following these TikTok recipes, I'm like, there's something missing. Like the chocolate was a little too hard, the shell and whatnot. But I do like it. So, you know, if you don't know by now, it's basically a chocolate bar that is filled with a mixture of pistachio cream, shredded fila dough and tahini. So, you know, of course, as the name suggests, it was invented by Fix Dessert Chocolatier founder and CEO Sarah Hamouda in Dubai.

15:10And ever since then, really, everybody, I mean, really anywhere around the world has been able to create their own version for a pretty interesting reason, actually. It's because the UAE isn't part of the International Trademark Treaty, which means that there's no, like, copyright protection around the name Dubai Chocolate, which is why, like, you have brands like Lint and Trader Joe's just releasing their own versions. And they can't be sued, I guess. Yeah, no, they're everywhere. I feel like it is a new buzzy thing. I mean, yeah, Shake Shack, they're making you come in for their limited edition Dubai chocolate pistachio shake, Crumble, you know, they have a Dubai chocolate inspired brownie.

15:57Everybody's jumping on the bandwagon, I feel like. Listen, they're capitalizing on something, right? For example, the Dubai International Airport, which sells the official bars in their duty-free shop, they reported, this is according to a CNBC segment from this past week, they sold 1.2 million bars just in April and that generated about$22 million. So that's just the real thing. So I'm pretty sure all of these other brands that are like creating their own spins or sort of dupe version. They know that it's very lucrative. Both Shake Shack and Crumble were on CNBC talking about why there is demand for it.

16:39They don't want to be left behind. They want to jump on viral food trends to, you know, to really cater to people. So yeah, it makes a lot of sense. Although it's interesting because of course, like everything else, this has created supply chain issues, right? What are your thoughts on this pistachio shortage that's been happening because of this? Yeah, it's interesting because I know you've reported on like cocoa and coffee and everything like that, but the pistachio kernels, they're also subject to a lot of price chaos. So basically, yeah, with pistachio kernels in a year, the prices of those have gone from$7.65 a pound to$10.30 a pound per nut industry trackers.

17:28So that's a pretty big jump. And I feel like, you know, this is a discretionary category, you know, to buy something like a candy bar for many people would probably come, you know, after buying milk and eggs or chicken or other things. So, I mean, if you are already trying to, you know, budget out your groceries, definitely that increase from$7 a pound to$10 a pound. That does make a difference. Yeah. I mean, of course that's on the wholesale side, but you could also, the trend trickles down so far down that now you can get it. You can get the bar for $3.99 at Trader Joe's. Is that going to taste anywhere near as indulgent or luxurious as the real thing.

18:12I don't know. I haven't tried it. But yeah, I think this sort of trend of ingredients and whole categories that just become so impacted by really viral food trends, like usually on TikTok and Instagram, have this worldwide ripple effect across these giant corporations. And that to me is always really interesting. We've seen it with some other products. I feel like the pandemic was a big example of that. There was all these little recipes that brands then were able to capitalize on and replicate. So it doesn't surprise me. I guess the big surprise is that the longevity of this, right? Like I think when I saw it, I was like, okay, this will be viral for maybe a month or two, but now it's on shelves everywhere.

19:02And I don't think it's going to go anytime soon. Yeah. I definitely think we'll be seeing more Dubai chocolate in the months to come. Okay, now I am going to be bringing in our executive editor, Ana, who's going to be giving us a preview of her interview with the execs from Stanley 1913. Ana, welcome back. Thank you. Yeah, excited to be here. So this week on the podcast, I spoke with two executives, Graham Niren and Kate Ridley. So Graham is the chief product and sustainability officer at PMI Worldwide Brands, which is the parent company of Stanley 1913. Stanley 1913 is known for its Stanley tumblers.

19:48They've been around since 1913. And Kate, meanwhile, is the chief brand officer at PMI Worldwide Brands. So they both joined the company at two interesting times. Graham has been with Stanley 1913 since 2020. Kate, meanwhile, joined the brand about five months ago. And this is a brand that really saw a ton of growth in 2020 and onward. And so Stanley is positioning Kate and Graham as two executives who are kind of leading the quote unquote next era of Stanley. So Gabby, Julia, the question I have for you is, do you remember when you first became aware of Stanley Tumblers. Is this a product that's like always been in your life or do you remember when you first saw them?

20:36Gabby, I'll start with you. I can't pinpoint an exact moment, but I kind of do remember just seeing them in stores or around growing up. Definitely the coolers. I think that was a big one. But I mean, I think as a brand, And like you said, became fully aware of them probably during the pandemic. And now I feel like anytime I'm on the subway, I see a girl with a Stanley Tumblr and I'm like, there it is. It's just become an accessory at this point. So it's hard to miss. But yeah, I guess I'm probably on the newer side of the awareness. I would say the same thing probably. Like I, I started to notice, yeah, a lot more videos in my for you feed on TikTok, specifically of, you know, teenage girls walking around with their Stanley Tumblr is as Gabby said, a, a friend of my roommate, she anytime she comes over to our apartment has a new Stanley.

21:40Wow. It's a new color. It's a new size. I asked her one time, how many do you have? she said oh I don't know at least 30. Wow um I have a lot of questions about that maybe we should bring her on to the podcast. That's fascinating. I know for storage reasons I'm like what I that my first thought is where does she store them like what kind does she live in an apartment yeah I have a lot of questions. Okay but this just shows how many super fans there are out there, right? It's been around for over 100 years. And it's really interesting because it first started off as a brand that was designed for blue-collar workers.

22:21Like, my great-grandfather had one of those classic Stanley Steel lunchboxes. Then it started to appeal more to hikers and outdoor adventurers in, like, the 60s into 2020. And then 2020, I think, is people started to spend more time outside during the pandemic. They cared more about health and wellness and hydration. So their products really started to be embraced by like mom groups and individuals who are concerned about drinking enough water during the day. But they liked the durability of the product, but they were also interested in different colorways, which I think speaks to your anecdote, Julia.

23:00So the question I asked Graham and Kate to kick off the conversation is, what is the Stanley brand? And I think, you know, the key challenge for this company is like, they got a bunch of new customers in 2020 and beyond. Now they're trying to appeal to all these different people. So Graham's answer was that Stanley, we're a brand that for the last 100 plus years has essentially done one thing and one thing really well, which is fuel the human experience, which is a very product executive answer. answer, but basically the idea, our products last a long time. These are things you want to take to work on a hike wherever you go throughout the day.

23:42Kate's answer was that over the past five years, Stanley's become more of a lifestyle brand. Lifestyle brand, it's one of those things that every brand wants to be. It's a broad term, but I think, again, at the end of the day, what they're trying to position this brand is, is that it's not just a water bottle company. these products fit into every part of your life. And so now they're trying to do that in a bunch of different ways, through new products, through marketing collaborations. And that's what we got into in the conversation. Cool. Well, we are looking forward to it. So we will get right to that after the break.

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25:35I am really excited about today's episode. we are going to be digging into a brand that has seen a lot, a lot of growth over the past few years, Stanley 1913. You might have seen one or 10 of these cups as you go about your day. And so what we're going to be digging into is kind of what does the next era of Stanley 1913 look like? What does it look like for a brand that has seen a ton of growth? So today with me, I have two executives from Stanley's parent company, PMI Worldwide Brands. So we have Graham Nairn, who is the Chief Product and Sustainability Officer, and Kate Ridley, who is the Chief Brand Officer.

26:22Kate, Graham, welcome to the podcast. Thank you. It's great to be here. Yeah, thank you for having us, Anna. So, I mean, Stanley has had a really interesting few years. It's a brand that saw sales explode, especially during the pandemic. Some data I pulled from a CNBC article before this is that in 2020, Stanley's sales were about$94 million, and then that grew to$194 million in 2021, which is crazy. Graham, I'd love to ask you. So you joined Stanley, I believe I saw in October of 2020. So what was it like when you joined the company? Kind of what inflection point was the brand at? And what was your mandate?

27:08When I joined the company, the first thing that struck me was the incredible privilege, actually, of being given the opportunity to steward the future of this unbelievable piece of Americana, this unbelievable brand that had existed for 100 plus years. So, So, you know, I felt a deep sense of privilege. And I also felt a deep sense of reverence, actually, for the legacy and heritage that the company has and the respect that consumers had for the brand, and certainly in terms of its quality and its product quality. I definitely felt a deep sense of privilege and respect, that's for sure. But we also felt a sense that we were at an inflection point around relevancy.

27:54Relevancy. Yeah. And I mean, we all know brands that existed in our childhood or that existed in our early adulthood that are no longer around. Yet they're loved. They're absolutely loved. Blockbuster is probably a good example. BlackBerry is another. So we felt a deep sense of responsibility about trying to ensure that we balance the legacy of our brand, but try to drive new relevancy. And it was the intentionality and the focus on relevancy, I think, that really drove the first two, three, four years of the reinvention or repurposing of the brand. And so you joined in a role focused on product development, I believe.

28:36So as Stanley has shifted from being a brand focused on work to outdoors to hydration to lifestyle, how has that changed how you think about product development, would you say? It's changed quite a bit. And what obviously is the author of the change is the consumer. And being much more focused and much more intentional and obsessing the consumer leads us obviously to completely different methods of make or different form and function. When it comes to where we were in Stanley in 2020, what we had was the kernel of an insight. The kernel of an insight. And that's something that's really worth exploring.

29:24The kernel of the insight was that we had a product, a particular product that had been developed to drive a hydrate solution from an everyday point of view. And what we learned was that there was a consumer base in actually Salt Lake City, Utah, that was appropriating our product to be part of their modern, creative and inventive lifestyles. And that insight, the kernel of that insight, and also we do have an amazing person in our organization called Lauren Solomon. Lauren Solomon works in our sales organization and Lauren had also really been sponsoring this insight, this new use case, this lifestyle that females were showing us that our product fitted into their lifestyle.