Posts in category: Sustainable Retail

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

According to new research, there is a complex post-pandemic retail landscape, including a shift to omnichannel shopping, which has resulted in a need to rebalance marketing strategies to ensure customer experiences are both seamless and profitable.

This means to succeed in retail and deliver both value and sustained growth brands should take “a balanced and nuanced approach.” Getting this balance right is crucial as marketers increasingly come under pressure to do more with less.

The report ‘Retail’s balancing act: A guide to sustainable performance’, released by WARC in partnership with Google, aims to provide marketers with a guide to unpacking three balancing acts to unlock sustainable growth.

---

 

---

The report not only highlights the challenges faced by the industry in achieving a balance but also provides insights from consumer perspectives that suggest potential solutions. Additionally, it includes practical advice and real-life examples on how to effectively tackle challenges as they arise.

“There have been profound changes in the way consumers research and shop, and for retailers digital is likely to be the foremost playground for consumers to interact with brands,” said Melissa Lee, Sector Director and Head of Retail, Brand, Finance and Government Sales, Google APAC.

Edward Pank, Managing Director APAC & VP Advisory, WARC, added: “As businesses respond and rapidly digitize their operations to keep up with new ways of shopping, the shift has created new opportunities for retailers to connect with their customers online and leverage data-driven insights to cater to the omnichannel consumer.

---

 

---

“But this shift also means balancing an intricate web of factors to respond to the pressures on profitability. Our white paper in partnership with Google provides valuable insights for retailers looking to navigate this new digital era and achieve sustainable performance.”

“Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.”

Three balancing acts to unlock sustainable growth

Warc and Google summarized the following insights from the report

Balancing investments over the long and short

Choosing between long and short-term strategies, namely brand and performance marketing, is a ‘false dichotomy’ that does not enable sustainable brand growth and profit.

Both tactics are complementary and needed for successful marketing and marketers should find the balance between the two in order to maintain consumer demand.

While brands may be tempted to discount to secure short-term wins, marketers should invest in brand equity to deliver value, build trust and loyalty to create future demand.

Claus Kristensen, VP, Marketing & Ecommerce, APAC, The LEGO Group, says: “It’s important to constantly optimise what and how you engage with your shopper for conversion. At the same time, you want to take away some volatility by creating loyalty and you do that through brand building. Shoppers are becoming savvier and more conscious. So, while price and convenience are crucial, them identifying with your brand and values is more important.”

Balancing the use of brand(dot)com and marketplaces

The proliferation of emerging digital channels and touchpoints, such as brand(dot)com and marketplaces, has provided brands with exciting new creative playgrounds to experiment with, but it also means more channels to trial and evaluate with limited resources.

In Southeast Asia, marketplaces account for 75% of all post-pandemic online spending and 55% of shoppers utilise brand(dot)com along their path-to-purchase journey.

Peggy Zhu, Senior Director and Head of Brand & Growth Marketing, Shopee, said: “Marketplaces have evolved beyond serving as a transactional platform for completing purchases, and now encompass the full funnel for brands from discovery to purchase. For brands without resources to enable full-funnel marketing on brand(dot)com, investing in marketplaces might be more efficient to meet online business objectives.”

To ensure ROI marketers will need to consider budget and find the right balance across platforms to leverage both marketplaces and brand(dot)com.

Balancing the intricacies of omnichannel

Omnichannel shoppers have proven to be higher value customers bringing in 1.5 – 2.1x more value than non-omnichannel customers.

To achieve omnichannel excellence, brands must break down silos and evolve legacy staffing models, both of which are barriers to getting a holistic view of the customer.

Creating a holistic measurement program is a starting point for marketers to gain insight into the multitude of touchpoints, known as the ‘Messy Middle’, that are most effective in driving consumers into a purchase decision.

One way to achieve holistic measurement is by adopting Marketing Mix Modeling (MMM) techniques, which allows marketers to measure the impact of their campaigns and determines how various channels contribute to their goals.

Yan Huang Lu, Head of Growth & Intelligence, Castlery, said: “Leverage your customer data to identify the most important drivers of omnichannel conversions, validate your assumptions, and invest resources behind these drivers. This will help you become more customer centric in your omnichannel strategy, and in turn boost profitability for your brand.”

Image by Patrick Tomasso

For a goal with universal appeal — saving the planet from pollution, waste, and global warming — the sustainability movement has been generating a surprising amount of controversy lately, the political and cultural kind that should make retailers nervous. The tip of the iceberg is the recent debate over what’s been labeled by critics as “woke capitalism,” referring in particular to disinvestment by large investment companies in the fossil fuel industry.

The issue has become politically potent in energy-rich places like Texas, which has been the lead in a national movement to blacklist from public pension assets any Wall Street firms that offer products based on ESG investing. ESG is an acronym for investment decisions that, in addition to financials, evaluate and score a company’s environmental, social, and governance records. Texas public officials claim ESG investing is a threat to the state’s economic future.

What does a dust-up over oil and gas have to do with retailing? Neither industry is sustainable. Fossil fuels are by definition unsustainable.

On the other hand, consumers are nearly unanimous in survey after survey in their expectations for retailers that they want and expect them to be sustainable and responsible. But in apparel alone, the impact on the environment is staggering and becoming more apparent all the time in documentaries and news stories depicting landfills full of used and unsaleable clothing.

That the controversy over ESG investing is finding its way into our political discourse suggests it is likely to generate more heat than solutions. The potential downside for retailers is that consumers are becoming wise to lofty-sounding mission and policy statements and initiatives that sound good but defy concrete definitions.

Any evidence of hypocrisy — there will inevitably be more scandals like the destruction of overstock luxury goods by Burberry — will be a threat to brand values at a time when consumers are choosing where they shop based on their perceptions of corporate behavior. Companies that brag about how sustainable they are would do well to avoid using language that is murky and ill-defined and call what they’re trying to accomplish what it is: less waste at every stage of the design, production, transportation, and sale of their products.

These developments in the investing world could have an outsized impact on the retail industry. For more than a decade, private equity has been playing a growing role in the acquisition, financing, and, dismembering of brands. So-called “vulture capitalists” bought out struggling chains like Toys’R’Us on the cheap, squeezed out all the cashflow, and then sold off the remaining assets.

According to a 2019 report by The Stakeholder Project, private equity-owned companies are “twice as likely to go bankrupt as public companies,” with 10 of the 14 largest retailer bankruptcies between 2012 and 2019 happening at private-equity owned companies.

With ever-more onerous ESG requirements and government regulations emerging around the globe, capital available for the retail industry may shrink and brands will be under even more pressure to do about sustainability what consumers overwhelmingly say they expect: MORE!

• Bullish sentiment has returned in a big way among retail investors as they’ve started the year piling record amounts into stocks.
• Like the meme-stock boom of 2021, investors are picking risky, speculative assets, despite those being the biggest losers during last year’s rising-rate environment.
• Strategists warn that the enthusiasm may be ill-conceived, given the Fed has insisted more rate hikes are on the way. 

Retail investors are partying like it’s 2021. 

The everyday traders that powered the meme-stock frenzy of two years ago are back, rebuffing Fed Chair Jerome Powell’s hawkishness and helping push equities higher after a dismal 2022. 

Retail investors have been spending a record $1.5 billion a day on stocks this year, according to Vanda Research, helping the S&P 500 climb nearly 5% year-to-date, and powering the Nasdaq 100 more than 11% higher.

While the bullishness matches the meme-stock frenzy of yesteryear, the macroeconomic picture couldn’t be more different.

Bullish sentiment and a bleak economic outlook

In the early days of the COVID-19 pandemic retail investors, flush with stimulus money from the government and rock-bottom interest rates, bet big on a handful of struggling companies including GameStop, AMC, and Bed Bath & Beyond. These bets ended in big losses for some hedge funds that were squeezed while attempting to short these names. 

Soon after, though, retail investors pulled out of the market at a furious pace as inflation climbed, the central bank raised interest rates, and risk appetite evaporated. Those that remained endured a brutal rout in 2022. 

But fast forward to the last several weeks month, and the retail cohort appears to be back, armed with a record $1.8 trillion in cash that’s burning a hole in their pockets. According to Fundstrat’s Tom Lee, that number balloons to nearly $5 trillion if you include the $3 trillion sitting in money market funds held by institutional investors. 

Gene Goldman, chief investment officer for Cetera Investment Management, told Insider that retail investors bid up stocks in January because optimism for an economic soft-landing ticked up — despite the Fed’s insistence that more tough monetary policy is still on the way. 

“With all of these headwinds, retail investors are jumping in on maybe some ill-conceived optimism,” Goldman said, adding that markets are pricing in an economic recovery that may not arrive until much later than expected.

DataTrek Research highlighted this month that the New York Fed’s Recession Probabilities Model puts the odds of a downturn at 57%, the highest it’s been since the early 1980s.

“No one seems to care, probably because Fed-induced recessions should have Fed-induced recoveries,” DataTrek cofounder Nicholas Colas said.

Speculative bets are back

Some of what retail investors are buying has troubled observers. The euphoria has led analysts to describe their moves as deliberately taunting the Fed, flipping the market upside down as the riskiest assets rise in the face of the central bank’s efforts to rein in market enthusiasm.

“There is an old adage ‘don’t fight the Fed,’ but this behavior is not just fighting but also taunting the Fed with crypto, meme stocks, and unprofitable companies responding best to Fed communications,” JPMorgan’s Marko Kolanovic wrote in a recent note.

Cryptocurrency, electric-vehicle companies, and speculative growth stocks — the names that took the biggest losses last year — have rallied to start 2023. Bitcoin is up roughly 48% in seven weeks, for example, while Tesla has recouped nearly all of its 2022 losses with a 70% rally in the same stretch.

Different from 2021, however, is that institutional and retail investors look like they’re on the same team, at least to a noticeable degree. 

In the last quarter of 2022, filings show Bridgewater nearly tripled its GameStop and AMC holdings, while Steven Cohen’s Point72 hedge fund also bet on GameStop and built a $108 million stake in Tesla. Billionaire George Soros, meanwhile, took sizable positions in Rivian and Peloton.

New this year, too, is the AI hype-trade, which mirrors the FOMO trade of the meme stock days. Since OpenAI’s language bot, ChatGPT, has gone viral, investors have clamored to capitalize on the buzzy tech, sending shares of everything from chip makers to obscure tech names skyward in a gold rush for anything even vaguely related to the nascent space. 

The Fed won’t rescue stocks 

Ultimately, good news is still bad news for stocks. Jobs data, consumer spending, and inflation all tell us the Fed isn’t done raising rates. To JPMorgan’s Kolanovic, retail investors’ optimism foreshadows future weakness in the stock market, as weak hands get wiped out by volatility, similar to how 2022 played out.

With the Fed still set to tighten monetary policy, retail investors’ enthusiasm for risky assets could backfire like it did last year. A recession is still a real possibility, and being overly invested in speculative bets is a sure way to feel the bite of a downturn and lead to another hibernation period. 

“The bear market rally that began in October from reasonable prices and low expectations has morphed into a speculative frenzy based on a Fed pause/pivot that isn’t coming,” said Mike Wilson, the CIO and chief US equity strategist at Morgan Stanley.

He sees US stocks falling more than 20% in the coming months, citing a torrid start-of-2023 rally that’s run too hot.

Of course, the grand irony is that the triumphant return of day traders has caused the very overextension that’s put stocks is such a precarious spot.