Good afternoon,

Here’s the headlines for this week: 10 January 2025

ECOMMERCE

Holiday e-commerce hits a record as shoppers choose phones over stores

• Online holiday retail sales rose 8.7% year over year to $241.4 billion, with phones driving 54.5% of online transactions, reflecting a consumer shift to mobile shopping. Key sales days like Cyber Monday and Black Friday saw double-digit growth.
• Grocery (up 12.9%) and cosmetics (up 12.2%) led category growth, while heavy discounts boosted demand for high-priced items like electronics and appliances. Every 1% price cut drove a 1.03% rise in demand.
• AI-powered chatbots drove 1,300% more retail site traffic, and buy now, pay later (BNPL) options accounted for $18.2 billion in online spend, a 10% increase from last year.

25 years of retail trends: Amazon, customer data and personalising AI

• Over 25 years, Amazon grew from a bookseller to a retail giant, dominating 41.1% of US retail ecommerce sales in 2025 and significantly influencing brick-and-mortar through ventures like Whole Foods and its logistical prowess. However, not all experiments, such as Amazon Go and Amazon Style, found success.
• Retailers have leveraged advanced customer and logistical data to enhance decision-making and marketing. Programmatic advertising and retail media networks have enabled precise targeting, personalised marketing and real-time campaign optimisation, reshaping how brands connect with consumers.
• AI has emerged as a pivotal trend, enabling hyper-personalised shopping experiences, predictive analytics and efficiency through tools like chatbots and shopping assistants. The future envisions AI integration with augmented reality and adaptive interfaces for seamless, immersive consumer engagement.

USPS Resumes Mail to Canada

• On January 6, 2025, USPS began accepting mail and packages bound for Canada after a strike by Canada Post employees caused significant delivery disruptions since mid-November.
• The strike, which ended mid-December with a back-to-work order, led to unprecedented delays during the holiday shipping period, heavily affecting businesses and consumers.
• Canada Post has made significant progress in addressing the backlog and platforms like eBay have implemented seller protections to mitigate the impact on international shipping.

New EU regulations for the fashion industry are coming into force in 2025

• The EU's Extended Producer Responsibility (EPR) regulation, effective January 1, 2025, mandates the separate collection of textile waste across member states, aiming to reduce waste and promote recycling.
• The EU's deforestation ban, effective December 30, 2024, will require companies in the textile, apparel and footwear industries to prove their materials do not contribute to deforestation.
• The Digital Product Passport (DPP) initiative begins its test phase in 2025, allowing consumers to access detailed product information, including sustainability data and repair instructions.

CONSUMERS

Over a third of US consumers took on debt this holiday season, averaging $1,181 per person—an increase from $1,028 in 2023—primarily using credit cards, store cards and BNPL services.

• Millennials were the most likely to take on holiday debt (42%), followed by Gen X (37%) and Gen Z (34%), while baby boomers incurred the least (29%).
• Rising inflation and holiday spending pressures led to financial stress for 60% of those who took on debt, with over 20% expecting repayment to take five months or longer.

US Consumer Credit Card Defaults At Highest Level Since 2010

• Americans are defaulting on credit cards at the highest rate since 2010, with $45.7 billion written off by banks in the first three quarters of 2024, a 46% increase from the previous year.
• 36% of Americans incurred holiday debt, averaging $1,181 per person, with 42% expressing regret and many struggling to pay it off amid high interest rates.
• While inflation drives holiday spending and debt, 74.5% of consumers carry some debt and those living paycheck to paycheck face average credit card balances of $7,000.

RETAILERS

Recap: Here are the retailers that filed for bankruptcy in 2024

• In 2024, several large retailers filed for bankruptcy, including Big Lots, The Body Shop and Express, with some closing stores or seeking buyouts.
• Joann and Express managed to emerge from bankruptcy, while others like Party City and Tupperware struggled with store closures and sell-offs.
• Economic pressures, including inflation, digital shifts and weak consumer confidence, contributed to the bankruptcies, especially in ecommerce sectors.

How Walmart Is Gearing Up to Challenge Amazon in 2025

• Walmart is reinventing itself as a "people-led, tech-powered omnichannel retailer," focusing on e-commerce expansion, a global standardised approach and investments in technology, wages and pricing to position for future retail growth.
• Walmart is emphasising its third-party online marketplace, addressing seller concerns, attracting high-end brands and building better tech solutions to scale this business significantly in 2025.
• Walmart is simultaneously growing its ad business, membership programs and fulfillment services while remodeling stores and enhancing its apparel offerings, showcasing its ability to handle multiple initiatives at once.

Amazon's AWS to invest $11 bln in Georgia to boost AI infrastructure development

• Amazon Web Services (AWS) plans to invest $11 billion to expand its infrastructure in Georgia, supporting AI and cloud computing technologies and creating at least 550 high-skilled jobs.
• The investment aligns with Big Tech's increasing focus on AI, driving demand for specialised data centers to support AI models and cloud-based applications.
• The rise in AI data centers is contributing to significant increases in U.S. electricity consumption, with data centers potentially consuming up to 9% of the nation's electricity by the decade's end.

Zulily’s Antitrust Suit Against Amazon Gets Green Light from Judge

• A Washington judge has allowed Zulily’s antitrust lawsuit against Amazon to proceed, alleging Amazon has created a monopoly through price-fixing and anti-competitive practices that hinder competition.
• Zulily claims Amazon forces sellers to align their off-site prices with Amazon's, limiting other platforms' competitiveness and discouraging wholesalers from working with competitors.
• The judge ruled that Zulily's claims of anti-discounting practices could be considered anticompetitive under federal laws but dismissed certain other elements of the case, including conspiracy and deceptive practices allegations.

Shopify Faces $60M Lawsuit Over Technical Failures

• Redline Steel has filed a $60 million lawsuit against Shopify, accusing the platform of technical failures, including Meta Pixel mismanagement and DNS discrepancies, which allegedly led to the collapse of Redline’s operations.
• The lawsuit raises concerns about Shopify’s reliability, with broader implications for its merchant base. Similar technical issues have been reported by other merchants, highlighting potential systemic flaws.
• The case underscores the importance of robust technical infrastructure, clear communication and contingency planning for merchants to mitigate risks from platform failures.

UK lawmakers summon Shein and Temu for questioning over labour practices

• UK lawmakers are questioning fast-fashion giants Shein and Temu over labour practices, particularly regarding workers' rights and forced labour in their supply chains, as part of an inquiry into employment standards.
• Shein and Temu, both linked to China, face scrutiny for alleged poor working conditions and forced labour in their factories, with both companies denying these claims.
• The inquiry coincides with Shein's plans for a London IPO, while the government explores protections for British workers and safeguards against importing poor labour practices.

ADVERTISING

Have we reached peak ad network?

• While the pace of new ad network launches slowed in 2024, experts predict continued growth through specialisation and consolidation, with dominant players like Amazon and Walmart leading. Smaller or niche networks tailored to specific verticals (e.g., finance, travel) or formats (e.g., CTV ads) may emerge.
• Late entrants face increased risk and must offer unique propositions or leverage valuable data sets to stand out. Service industries like finance and hospitality are expected to explore ad networks, while retailers refine existing models.
• Ad buyers favor networks integrated with major DSPs to streamline spending and optimise data usage. Without consolidation or robust partnerships, networks may struggle to attract sufficient ad dollars.

What RFK Jr.’s Dislike for Drug TV Commercials Could Mean for the Ad Industry

• Robert F. Kennedy Jr. aims to ban pharmaceutical TV ads, a move deemed unlikely by experts due to legal challenges. However, the push could lead drugmakers to preemptively adjust their advertising practices, such as adopting stricter voluntary guidelines or emphasising digital and professional marketing channels.
• Increased scrutiny might encourage greater transparency in drug advertisements, such as clearer pricing or comparisons to generic alternatives. Without a ban, pharmaceutical companies may explore creative alternatives like influencer marketing, unbranded campaigns and direct outreach to healthcare providers.
• Efforts to restrict or regulate drug advertising face significant logistical and legal obstacles, including First Amendment concerns and past judicial pushback on similar proposals. Regulatory changes, if pursued, would likely be slow to materialise.

MARKETING

Influencers are suing PayPal over its browser extension Honey

• Two lawsuits against PayPal claim Honey's browser extension improperly takes credit for driving sales, even when it doesn't find coupons, potentially harming influencers' affiliate earnings.
• Honey defends its use of last-click attribution, a standard affiliate marketing practice and argues it helps shoppers save and reduces cart abandonment for merchants.
• Legal experts suggest proving unlawful behaviour under current attribution rules may be difficult, but backlash from influencers could pressure Honey to adjust its practices to maintain support from its creator marketing network.

See you next week,

The ChannelSight Team

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