ClickZ Retail Fashion Newsletter - 11.07.2024

PLUS: Off-White's new chapter & footwear's Q3 slowdown

Author

Sophie Bruxner-Randall
November 07, 2024 • Estimated Reading Time: 7 minutes

Insight of the Week 📖

YouTube surpasses forecasts in Alphabet's Q3 earnings call

Google parent Alphabet's Q3 earnings call revealed YouTube's impressive performance, bringing in nearly $9b in ad revenue—a 12.2% increase year-over-year. This substantial growth, typically undisclosed by Alphabet, signals the platform's rising dominance in digital advertising.

👉 Fospha highlighted this upward trend in their their latest report, identifying YouTube as the second-fastest-growing ad channel for eCom brands by ad spend.

While YouTube currently reports the highest CPA among Google channels as brands adapt and optimize their campaigns, its increasing popularity reflects a broader shift toward brand-building channels for long-term growth. The platform's potential for driving brand growth makes it one to watch in coming quarters.

Niche Nuggets 🔎

An AI-generated image depicting Mango’s Sunset Dream collection of its youth line (Mango)

Mango, a Spanish fast-fashion retailer, is using AI-generated avatars in advertising to speed up content creation and reduce costs. This shift reflects a broader industry trend, with AI also aiding in design.

The use of AI extends beyond advertising, influencing design processes by inspiring fabric choices and creating clothing that fits Mango's aesthetic. While AI offers financial benefits, Mango continues to grow its human workforce, especially in the US, aiming to double its employees by 2025. This trend reflects a broader industry shift, with brands like Levi Strauss & Co., Louis Vuitton, and Nike also exploring AI modeling. Despite AI's rise, Mango plans to expand its US workforce and store presence by 2025.

LVMH sold Off-White to Bluestar Alliance, marking a new chapter for the brand. This acquisition honors Virgil Abloh's legacy, blending street culture with high fashion. Bluestar aims to continue Off-White's innovative spirit, aligning with their vision of fostering creativity and diversity in the fashion industry.

Eight retailers are making strides to revitalize their brands. Gap is enhancing cultural relevance through influencer collaborations, while Amazon Fresh is testing new store formats to capture a broader grocery market.

Victoria's Secret is focusing on inclusivity with its fashion show relaunch, though its strategy remains unclear.

Abercrombie & Fitch is shifting from a teen to a millennial focus, and Adidas is strengthening its wholesale business. CVS is innovating with a new private label and ad partnerships. Lidl is reintroducing itself to U.S. customers, and Kohl's is experimenting with new offerings but needs a more cohesive strategy.

The third quarter of 2024 saw a slight decline in the U.S. footwear market, with sales dropping by 1% to $10.5 billion, according to Circana. Despite this, the outlook for the holiday season is optimistic, as consumer sentiment has improved. Performance footwear remained stable, with running shoes experiencing a 4% increase. The athleisure segment, particularly running, soccer, and training-inspired sneakers, showed growth, contributing to a 3% rise in leisure footwear sales. However, fashion styles faced a 6% decline, though certain silhouettes like flats and slippers performed well.

Beth Goldstein from Circana noted that consumer purchasing behavior is driven by immediate needs rather than the retail calendar, with versatile fashion styles gaining traction. The holiday season is expected to see a 2% increase in consumer spending, with Black Friday anticipated to reach a four-year high. This optimism is fueled by more consumers planning to purchase footwear and travel during the holidays, presenting opportunities for the industry.

As the holiday season approaches, the footwear market is poised for a rebound, driven by consumer optimism and strategic purchasing. The industry must leverage these insights to capitalize on the anticipated increase in demand, particularly in performance and versatile fashion segments, to navigate the evolving retail landscape successfully.

As we approach holiday season, what’s your primary approach to engaging customers?

Login or Subscribe to participate in polls.

Leading Voice📣

Jamie Bolton reveals how top eCommerce brands drive resilient growth:

🌐 Diversification is Key: A diverse channel mix acts as an “insurance policy” for brands amid rising CPAs and a challenging market.

🔄 Stay Agile: What worked last year may not work today. Top brands adjust their strategy over time, adapting to new growth levers as they mature.

📊 Measurement Matters: With channel diversity comes more complex measurement needs. Only with full-funnel attribution can brands assess their channel mix and remain agile.

For a full rundown, check out the full post!

Performance Pulse 📈

LinkedIn's new research highlights the effectiveness of connected TV (CTV) campaigns for reaching decision-makers. With LinkedIn's CTV ad options, you can extend your marketing to platforms like Paramount and Roku. This approach could enhance your campaign's reach, especially among influential LinkedIn users who regularly consume CTV content.

Ad prices fell in Q3 2024, impacting ad spend growth in search and social. Retail media saw a click surge, while new formats outpaced traditional channels. Amazon DSP and Google Performance Max showed significant growth. Lower prices increased ad volume, especially in retail media's purchase funnel.

To navigate rising holiday advertising costs, diversify your strategy by incorporating platforms like TikTok, YouTube, and Connected TV. These channels offer competitive pricing and reach new audiences. Focus on user-generated content and platform-specific strategies to optimize engagement and conversions, ensuring a successful holiday marketing campaign.

ClickZ is a Contentive publication in the DTC Ecommerce division