Inside Ecommerce - October 16th, 2019

Inside Ecommerce (Oct 16th, 2019)

Trade and tariffs: LVMH, VW / Lululemon social compliance / Nick Offerman scotch

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Hi Inside Retail readers,

While the scary-for-retail China tariffs are on hold for now, plenty of other issues are stirring overseas. Outside of tariffs and military invasions, garment workers in a lululemon factory in Bangladesh have brought social compliance into issue. Lulu has had its fair share of scandal, and seemed to be riding a new wave of popularity. However this story proves how vigilant brands have to be to protect their image.

How do you ethically shop? Hit reply and let me know!


1. U.S. retail sales unexpectedly fell 0.3 percent in September for the first time in seven months, according to new data released Wednesday morning. The Commerce Department reported that the categories where spending dropped the most included cars, online spending, building materials, and hobby products. Economists were expecting retail sales to increase 0.3 percent, but the drop signals potential consumer concern about the greater state of the economy. - CNBC

2. The tariffs on Chinese goods set to go into effect October 15 were postponed, but this might mean they could all go into effect in December. Secretary of the Treasury Steven Mnuchin said, "I have every expectation if there’s not a deal those tariffs will go in place, but I expect we’ll have a deal." The tariffs were vehemently opposed by retailers that claimed the 30 percent tax increase on imported goods would be passed along to the consumer. The Oct. 15 tranch included footwear and many products traditionally bought as holiday gifts. - FINANCIAL TIMES

3. French luxury conglomerate LVMH will open a leather workshop in Texas as part of a retail alliance with President Trump to bring more jobs to America. A statement from LVMH said the Keene, Texas workshop will open to "meet the ever-growing demand for Louis Vuitton products in the American market." The workshop is called the Louis Vuitton Rochambeau Ranch and will create 1,000 jobs over the next five years. The 100,000 square foot space currently has 150 employees. Opening the workshop has already benefited the town with a $1 million road improvement. The workshop is part of the Trump Administration's "Pledge to American Workers" to create better paying jobs. Amazon, Apple, Johnson & Johnson, IBM, Microsoft, Volvo, Rolex, and Walmart are retailers that have joined the pledge. - THE CUT

4. Volkswagen is delaying its decision on whether it will open a $1.4 billion manufacturing plant in Turkey amid the country's Syrian conflict. A statement from VW said, "we are monitoring the situation carefully and are worried about the current developments." Turkey invaded a northern region of Syria occupied by the Kurds, who are a U.S. ally in fighting ISIS. Trump said, "I am fully prepared to swiftly destroy Turkey's economy if Turkish leaders continue down this dangerous and destructive path." The plant would be VW's second in Turkey and would make Passats and Skoda Superbs. - REUTERS

5. Walmart-owned Flipkart will enter the food retail business in India. Flipkart's CEO said it will be investing "in local agri-ecosystem, supply chain and working with lakhs of small farmers, Farmer Producers Organisations (FPOs), food processing industry in India, helping... bring affordable, quality food for millions of customers across the country." Rival Amazon has already launched Prime Now and Amazon Fresh, and has committed to a $500 million five-year plan to sell private label food in India. In additional Walmart food retail news, the company launched in-home delivery in three cities in the U.S. - TECHCRUNCH 

6. Target raised its hourly wage to $15/hour, but workers say their hours were cut and they now make less. One worker told CNN, "I got that dollar raise but I'm getting $200 less in my paycheck." CNN Business also reported that Target employees who work an average of less than 30 hours a week are ineligible for company-sponsored health care benefits. Target's COO said, "We needed to change the way we operate in the store to create a better, more inviting experience for our guests." - CNN

7. Skechers took out an ad in the Los Angeles Times directly discussing a lawsuit filed by Nike that claims Skechers copied Nike shoes. The LA Times ad is addressed to "Skechers retail partners," and said in part, "As you may have heard, Nike filed a lawsuit against Skechers in Los Angeles alleging that those shoes infringe certain Nike patents. Please note that the lawsuit has been filed just recently and merely contains Nike’s unproven allegations." Skechers said it will stand behind the stores who are selling the shoes in question "if Nike indeed tries to bully you too." Skechers strategy involves trash talking its competition. It made an ad trolling Nike when Zion Williamson's Nike shoe exploded during NCAA playoffs in March. As one user tweeted, "Zion would rather play barefoot than sign with [s]ketchers." Williamson signed with Nike's Jordan Brand this summer. Nike has not responded to Skechers ad. - HIGHSNOBIETY

8. Lululemon garment workers have claimed they are beaten in a factory in Bangladesh operated by the Youngone Corporation. One worker told The Guardian that her supervisor "slapped me so hard my cheeks turned red and everyone asked me what happened. I couldn’t tell them the actual story. I just told them I had allergies." The factory is operated by the South Korean Youngone, and is known for making sportwear, swim, and activewear for brands including adidas and Nike, Lululemon recently announced a partnership with the United Nations to support mental health of humanitarian workers and has a vendor Code of Ethics posted online.  Pending a deeper investigation, the Canadian brand will likey have to move manufacturing.- THE GUARDIAN 

9. Dyson will open a concept shop in Los Angeles' Westfield Century City that will allow customers to demo hairstyling and household products. Dyson's CEO said the space will "be a destination for healthy hairstyling appointments... Los Angeles is the epicenter of health, and we are excited to see the response." Dyson has demo stores in New York, San Francisco, and Virginia. The stores feature "Beauty Bars" and Dyson-device purified air to create an atmosphere of "health, styling and wellness." The new Dyson LA store will open on November 6. - WWD

10. Comedian Nick Offerman has partnered with Lagavulin on a limited edition single malt scotch whisky. Offerman said he was "gobsmacked" at the proposition to create a special edition, and that "I feel like I’m being invited to pitch a game for the Cubs or something." His character Ron Swanson on "Parks & Recreation" loves Lagavulin which formed the foundation of the partnership. Offerman said his special edition is "right in pace with my woodworking tastes." The Lagavulin Offerman Edition is $75. - DAILY BEAST

Written and curated by Cassidy Mantor, a brand storyteller with a decade of retail marketing experience including in-house at Nike and Oakley. Occasionally she writes a “think piece” about fashion law for the American Bar Association. She is happy to be based in coastal Virginia except when there’s a hurricane. She can be found on LinkedIn.

Editor: Bobby Cherry (senior editor at Inside, who’s always on social media).

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