The expansion of Amazon's Personal Shopper service set off alarm bells for Stitch Fix — but analysts say it has some decisive advantages over the retail giant
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This week, Amazon expanded its Personal Shopper by Prime Wardrobe offerings to include men's clothing. For $4.99 a month, members receive shipments of clothing that are curated based on their style and fit preferences. Personal Shopper was first launched for women's clothing in July 2019. According to an Amazon spokesperson, "hundreds of thousands" of people have since set up profiles for Personal Shopper. The news that Amazon was expanding the service set off alarm bells for many wondering whether it would spell doom for Stitch Fix, the publicly traded personal styling tech company. Stitch Fix's primary line of business is its "Fixes," which are boxes of items selected for male and female shoppers by stylists using data on users' personal style and fit. But analysts say that Amazon's growth into this category won't hurt Stitch Fix too much — not any more than Amazon's usual innovations do, at least. "Obviously, whenever Amazon does anything in retail, we all pay really close attention, and apparel has been a strategic focus of theirs for a long time," Ed Yruma, managing director at KeyBanc Capital Markets, told Business Insider. Yruma said that Amazon has done well in basics — underwear and socks, for example — and continues to make inroads in luxury fashion. This summer, for example, Amazon teamed up with Vogue and the Council of Fashion Designers of America to launch a digital storefront for luxury goods. But Yruma added that while Amazon's platform is built to understand a customer's past purchases, it's not as well suited as a traditional apparel retailer to making predictions about what trends will be on the rise in the future. Stitch Fix, meanwhile, collects a lot of data from customers, asking them specific questions on how well each item in their Fix fits, how well it's suited to their style preferences, and whether it fits into their budget. Stitch Fix charges $20 styling fees, which are waived if customers buy an item from delivered shipments. Simeon Siegel, managing director at BMO Capital Markets, noted that selling apparel purely online comes down to an "understanding that fashion needs to be sold differently than consumer electronics." "I think fashion is one of the few businesses in the world where selling less allows you to charge more," he said to Business Insider. "The goal of fashion is to create an experience, to drive a markup and sell an experience more so than a product." That experience could be trying a new dress on in a store, or it could be the excitement of opening a Fix box without knowing what's inside. Yruma added that Stitch Fix stands to benefit from the bankruptcies that have plagued the retail industry this year. BDO analysts said in their biannual "Retail in the Red" report this week that the retail industry is on pace for a record number of bankruptcies and store closures for 2020. Since Stitch Fix is purely online, it wasn't as hurt as brick-and-mortar retailers were when in-person nonessential retail came to a halt this spring due to the coronavirus pandemic. Stitch Fix said in its earnings call in September that plus-size apparel was a particular area of growth in the most recent quarter. Ascena Retail Group, which as of July operated some 2,800 stores under various banners, said at the time of its bankruptcy filing this summer that it would close all of its plus-size Catherines stores as well as some Lane Bryant stores. And since Stitch Fix has so much data about its users on file, it's in a good position to recreate the experience of working with a salesperson in a traditional retail store. Amazon is in the process of refining that still, Yruma said. Siegel drew a line between older forms of retail, with a "select group of merchant princes telling the world what they wanted to wear," and new, data-driven retail that takes feedback from customers to determine assortment. "Perhaps Stitch Fix has been a successful blend of the two," he said. And as for how pandemic buying habits will affect the Fix side of the business, Yruma said "time will tell." Stitch Fix reported a loss of $44.5 million in the fourth quarter, though it said revenue grew 11% year-over-year and its active client base grew 9%. SEE ALSO: These 33 retailers and restaurant companies have filed for bankruptcy or liquidation in 2020 Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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E-commerce advertising is skyrocketing in the pandemic. Meet 8 execs at Walmart, Amazon, CVS and more who are trying to turn retailers into big ad businesses.
Summary List Placement The advertising industry has taken a big hit from the pandemic, but e-commerce...Summary List Placement The advertising industry has taken a big hit from the pandemic, but e-commerce companies are reaping the benefits. With people shopping more from the safety of home, advertising on e-commerce platforms has boomed during the coronavirus. E-commerce advertising is expected to rise 39% to $17.4 billion in the US this year and represent 12% of digital ad spend, according to eMarketer. Amazon has long dominated e-commerce advertising but a number of companies like Walmart, Instacart, CVS, and Boxed are getting in on the action as retail's profit margins get thinner. They're pitching advertisers on data and audiences and rolling out new advertising platforms and features. "Retail media is having a moment right now — COVID has shifted a ton of sales online, and online sales are less profitable than in-store sales," said Jason Goldberg, chief commerce strategy officer at Publicis. "Retailers have to do everything they can do to improve profitability." Business Insider identified eight executives ranging from Amazon Advertising's Colleen Aubrey to Kroger's Cara Pratt who are leading this trend. We compiled the list through our own reporting and by talking to sources in the industry. One notable company missing from the list is Target. Target's top advertising leader Kristi Argyilan is leaving the company's in-house advertising firm Roundel, and Target said it would fill the role through an external search. Below are the eight executives in alphabetical order by last name.Colleen Aubrey, global VP of performance advertising, Amazon Key stat: Amazon is on track to make $13 billion in US ad revenue this year, according to eMarketer. The executive to know: Amazon quietly elevated longtime advertising exec Colleen Aubrey to take on a larger role after ad sales veteran Seth Dallaire left to become Instacart's chief revenue officer last year. Reporting into Amazon's executive suite, she oversees Amazon's search advertising business and has worked on products to build brand loyalty and awareness on the platform. She was a major face of Amazon's ad sales org at AdCon, Amazon's annual advertising conference, this year. Amazon's pitch: Amazon is the biggest game in e-commerce advertising. The retail site is the third-biggest digital advertising seller, behind Google and Facebook, and dominates ad budgets from e-commerce sellers and brands. Amazon pioneered keyword-based search ads that pop up on its website and app when people shop for a specific product like "red dress" — an advertising tactic now used by most e-commerce companies. Most recently, Amazon has beefed up its sales teams and pitch for brands to run ads using Amazon's data beyond Amazon's properties like in its connected-TV properties and programmatic advertising. What advertisers say: While other retailers have brick-and-mortar stores, Amazon's traffic is six to seven times bigger than Walmart and includes thousands of sellers, making it the biggest platform for e-commerce advertising, said Sreenath Reddy, founder of Intentwise, an ad management service for Amazon and Walmart sellers. "The distance between Amazon and everybody else when it comes to online audience sizes and online engagement is massive," he said. "My sense is that as these [other] retailers aim to get more search traffic, they'll always be hamstrung by the limitations of a purchase happening on their site." Erin Condon, VP of front store and omnichannel marketing, CVS Health Key stat: CVS has 10,000 stores in the US with 75% of Americans living within five miles of a location. The executive to know: Condon has held the role of VP of front store and omnichannel marketing at CVS since 2018 and was previously senior director of marketing. Earlier, she had marketing analytics and management roles at UPromise, Sallie Mae, and Discover. CVS' pitch: CVS has run an advertising business that helps brands promote products in stores for years but in August, rolled out a media network to expand its ad sales to social, search, programmatic and video ads on other media properties like Facebook and Google. CVS has run more than 100 campaigns on its media network. Condon said one of the big ways CVS differentiates is with custom campaigns using CVS' data. CVS also makes assets and creative for brands including branded storefronts and landing pages on CVS' digital properties. "The supplier is able to make more efficient use of their media dollars and get more relevant [ads] in front of the consumer," she said. What advertisers say: Elizabeth Marsten, senior director of marketplace strategic services at Tinuiti, said that while CVS' audience is smaller than Walmart and Amazon, CVS produces a strong return on ad spend because there is less competition. She also said CVS has an advantage in its Extracare loyalty program data that goes back many years. Seth Dallaire, chief revenue officer, Instacart Key stat: Instacart works with more than 500 retailers, reaching 85% of Americans. The executive to know: Instacart hired former Amazon ad sales leader Seth Dallaire last year to build a business letting advertisers promote products in search results. In addition to Amazon, Dallaire has also held sales roles at Yahoo and Microsoft. Instacart's pitch: Online grocery has long sat on the backburner of retailers' e-commerce initiatives — until the coronavirus hit. Instacart's on-demand grocery shopping business skyrocketed with people shopping from home. It hired hundreds of thousands of contractors who pick up and deliver groceries from retailers like Kroger and Costco. Instacart divides advertisers into five tiers that rewards top-spending marketers with perks like access to an API program and exclusive data about the brands people buy the most. What advertisers say: Instacart's ad business is still small, which makes its advertising twice as efficient as Amazon or Walmart's, said Sam Jennings, lead client strategist at e-commerce agency Marketplace Strategy. However, Instacart doesn't neatly fit into marketers' existing spending buckets, he said. "Instacart isn't a retailer and it's not a digital marketing platform, so I think a lot of people are having a hard time figuring out where budgets come from," he said. Edward Fong, director of business intelligence, Boxed Key stat: The average Boxed shopper buys 10 items and spends $100 per order, with 70% of people buying more than once. The executive to know: Fong is one of the first employees of Boxed, a e-commerce wholesale retailer, and helped onboard brands like Kellogg's to the platform. He's also developed tools like a data portal that shows brands stats like inventory levels. More recently he's focused on Boxed's advertising business. Boxed's pitch: The online retailer sells ads to brands like PepsiCo and Kind Snacks that can be targeted by location and search terms. A search for "soda," for example, could show an ad for PepsiCo-owned Izze. Boxed's pitch is that it has data that advertisers don't typically get from Amazon and Google like where and when people shop. The data is then used to recommend products to people and target ads. "[Advertisers] know that things are being sold but they don't know at a detailed level," Fong said. "We're willing to share data back with them." What advertisers say: Jason Goldberg, chief commerce strategy officer at Publicis, said that because Boxed's sales are smaller than Amazon and Walmart's — Boxed says that it sells about 1,600 products — it can win by emphasizing data and a good user experience. "As you get smaller, you need to offer more benefits — there is valuable data that retailers have not historically wanted to share," he said. Alex Kazim, VP of global advertising, eBay Key stat: 182 million people a month shop on eBay. The executive to know: Kazim is a longtime eBay employee who rejoined the company in June to lead its advertising business. He is an entrepreneur who co-founded news subscription service Ongo and has held leadership roles at Skype, HP, and FuelX. EBay's pitch: EBay was early to the e-commerce boom in 1995 and today has 1.5 billion live listings from sellers. Sellers can promote their listings through display ads, promoted listings, and native placements like email and push notifications within eBay's app. EBay also gives advertisers data like how many items someone looks at and what devices they use that is used to target campaigns. The company recently rolled out a first-party data tool that targets ads without using third-party cookies that are being phased out due to privacy concerns. In July, eBay spun off its classified advertising business for $9.2 billion in cash and stock to online retailer Adevinta. What advertisers say: EBay's e-commerce dominance has waned in recent years and it's marketplace is a fraction of the size of Amazon. Laura Meyer, founder and CEO of the Amazon-focused ad agency Envision Horizons, said eBay's smaller size makes it a tough sell with advertisers. One of eBay's advantages over Amazon is that its design makes it easy for advertisers' ads to stand out to shoppers. "As a result, Amazon can get a little messy if there's a ton of people selling your product," Meyer said. "The advantage of eBay advertising is that if you drive someone to your page, you're going to be the one getting the sale." Erik Keptner, CMO, Rite Aid Key stat: Rite Aid has 2,500 stores in 19 states. The executive to know: Keptner joined CVS last year after working in marketing roles at Western Food Corp. and Giant Food Stores. He is responsible for pushing Rite Aid into more e-commerce and partnerships, and launched a program where Amazon shoppers can pick up packages at Rite Aid stores. Rite Aid also has a deal with Instacart to deliver products to homes. Rite Aid's pitch: A newcomer to digital advertising, Rite Aid recently rolled out a retail media network called Rite Aid Performance Media that places keyword-targeted search ads on its website and app. The pharmacy chain outsources its sales to tech firm Quotient, which sells ads on Rite Aid's website and also co-branded ads on social media, programmatic, and digital out-of-home with messaging that a supplier's product is available at CVS. What advertisers say: Tinuiti's Marsten said that Rite Aid's ad business is an easy way for retailers to test advertising. A self-serve platform lets advertisers turn off and on search ads, which are easier to manage than TV or display advertising programs. "It's a good gateway — it gives you an always-on ability that you can control," she said. Rich Lehrfeld, interim head, Walmart Media Group Key stat: People visit Walmart.com 12 million times a day. The executive to know: In October, marketing exec Lehrfeld was named interim head of Walmart Media Group, filling a role that VP and general manager Stefanie Jay held. The longtime American Express marketing executive joined Walmart last year as SVP of brand, creative, and media and filled in as Walmart's interim CMO recently. The pitch: Walmart's ad pitch centers around data that shows advertisers how people shop in-store and online after seeing an ad. Walmart has recently started handling its advertising in-house after splitting with longtime agency Triad Retail, building out a tech stack and self-serve platform that allows adtech companies to manage ad campaigns for big spenders. What advertisers say: While still smaller than Amazon, Walmart's e-commerce sales are significant enough to command advertisers' budgets. "Walmart Media Group is nicely positioned in that direction," said John Lods, CEO at ad tech and media-buying agency Arm Candy. "The challenge of WMG and the technology that they have is that it's pretty rudimentary." Cara Pratt, SVP, Kroger Precision Marketing and 84.51° Key stat: Kroger's loyalty card data includes 60 million households and tracks 96% of sales. The executive to know: Pratt has worked at Kroger for three years, where she's responsible for product development, sales and advertising operations. She previously worked for shopper marketing firm Dunnhumby, which Kroger acquired in 2015. Pratt is also a member of the leadership team at 84.51°, Kroger's in-house analytics and advertising team. Kroger's pitch: Kroger has loads of data from its big loyalty program that spans its chains including Gerbes, Harris Teeter, and King Soopers. Kroger's ad business has two parts: One arm helps suppliers run direct marketing campaigns like emails and promotions, and the other uses Kroger's shopper data from 60 million households to target ads to people visiting Kroger's website and app. Kroger has also worked to prove people bought a product after seeing an ad, through efforts with Microsoft-owned retail tech firm PromoteIQ and by measuring sales from ads served on Roku's streaming platform. Kroger also has a deal with Pinterest that uses shopping data for ad targeting on Pinterest. What advertisers say: Kroger's ad sales dig deep into its trove of first-party shopping data, said Tinuiti's Marsten.
DTC salaries revealed: What top brands like Peloton, Wayfair, and Instacart pay marketing employees, from designers to senior managers
Direct-to-consumer brands have continued to reshape the business world during the coronavirus pandemic as more consumers...Direct-to-consumer brands have continued to reshape the business world during the coronavirus pandemic as more consumers buy all sorts of products and services online. Some DTC companies have laid off staff and restructured their business models due to declining revenue over the past several months, but others, like Peloton and Instacart, have seen revenues and share prices explode. Many of these DTC companies emphasize aggressive marketing. Business Insider analyzed the US Office of Foreign Labor Certification's 2019 disclosure data for some of the biggest DTC brands to determine what they pay top marketing employees in a variety of roles. Pay ranges from just under $50,000 for a GrubHub marketing specialist to $285,000 for a head of marketing analytics at Chewy.com. Subscribe to Business Insider to read the full story. The direct-to-consumer space has been one of the hottest business categories in recent years, with US ecommerce sales expected to reach nearly $18 billion this year, according to eMarketer. Investors have pumped trillions into the sector, with brands often emphasizing rapid growth over profitability through aggressive marketing strategies. Two of the biggest DTC brands, SmileDirectClub and Casper Sleep, went public over the past year with mixed results. The space has been deeply affected by the coronavirus pandemic, and some hot brands, like Everlane and Away, have had to cut staff as their sectors have been crushed broadly. But other DTC companies have gained as consumers spend more of their money with brands directly, bypassing brick-and-mortar retailers. DTC companies remain top destinations for marketing professionals, especially as ad agencies cut thousands of jobs and traditional brands continue to lose market share to up-and-comers. These businesses hire top talent from around the world, and they are required to file paperwork, including salaries and salary ranges for all employees on visas, with the federal government — data the US Department of Labor's Office of Foreign Labor Certification releases every quarter. The salaries in this story are determined, in part, by "prevailing wages," or the minimum companies are required to pay for the jobs in question. The Department of Labor uses these totals to protect US employees' wages and prevent educated immigrant labor from being exploited. Some of the top DTC businesses are not listed in the database because they did not employ any visa-holders during the latest fiscal quarter, which ended in March. But Business Insider analyzed the latest available data on permanent green cards and temporary H-1B, H1B1, and E-3 visas to compile a portrait of what some of the space's top brands pay employees in marketing roles. These numbers don't include every type of visa or any form of compensation beyond base salary. Spokespeople for all the companies included in this story either declined to comment or did not respond to related requests. Peloton paid a digital media director up to $200,000 Peloton has seen its business explode during the pandemic as a growing number of consumers ordered its signature exercise bikes and other products while gyms around the world remained shuttered. The company's most recent earnings report in May saw revenue shoot up 66% as the company scrambled to meet demand despite reports of live classes being cancelled and warehouse workers asking to avoid home deliveries. Analysts say Peloton has long transcended an infamously viral Christmas ad and stands to emerge from the pandemic as a stronger business; its share price has increased in turn by more than 350% since US lockdowns began in March. Peloton applied for at least 47 visas last quarter, most of which were for software jobs. But the available data for marketing positions like director of digital media, which handles all original content on the company's website, makes clear that it offers very competitive salaries: Product design program manager: $130,000 Senior director of brand marketing: $151,840 to $180,000 Director of digital media: $77,750 to $200,000 Restaurant delivery startup DoorDash paid a growth marketing manager $175,00 and Postmates paid a VP of communications $250,000 Food delivery companies have been thriving since lockdown orders started and consumers shifted dramatically from dining out to delivery. DoorDash and Uber Eats have benefited the most, with the former raising an additional $400 million in equity financing pushing its valuation to $16 billion and the latter surpassing Uber's core ride-hailing division for the first time, with an adjusted net revenue of $885 million in the second quarter of 2020. Postmates, another delivery app, agreed in July to be acquired by Uber for $2.65 billion in stock, intensifying competition in a space where Grubhub is another established player. As restaurants continue to struggle, these companies are also fighting local laws that regulate the fees they collect from participating businesses. Here's a snapshot of how food delivery companies including Grubhub, DoorDash, and Postmates are paying employees to market their services during the busy time: Marketing specialist, Grubhub: $49,587 Brand designer, Postmates: $96,000 B2B marketing manager, Grubhub: $102,500 Sales optimization analyst, Postmates: $118,000 Product designer, Postmates: $120,000 Manager, strategic partnerships, DoorDash: $143,000 Manager, growth marketing, organic and conversion rate optimization, DoorDash: $175,000 Director, business operations and strategy, Postmates: $180,000 VP of communications, Postmates: $250,000 Grocery delivery services startup Boxed paid a junior designer up to $54,000 and Instacart paid a director of analytics up to $220,000 Another type of DTC delivery startup has also seen its business boom under the pandemic as more consumers turn to apps in place of visiting physical grocery stores. Surveys show that more than 50% of consumers have already bought groceries online in 2020, and around two-thirds plan to do so over the coming months. Instacart is the largest player by market share, and it has gained on rivals AmazonFresh and Walmart as others like DoorDash more recently entered the space. Instacart went on a massive hiring spree this year, and competitor Boxed also reported a 200% increase in traffic to its website as pandemic fears first hit in March. Data across Boxed and Instacart, the latter of which applied for more than 70 visas, show a range of high-paying marketing jobs: Private label designer, Boxed: $39,686 to $54,000 Paid shopper marketing analyst, Instacart: $95,000 to $125,000 Senior analyst, marketing, Instacart: $110,000 to $140,000 User researcher, Instacart: $120,000 to $140,000 Integrated marketing manager, Instacart: $120,000 to $160,000 Senior marketing manager, paid search, Instacart: $140,000 to $160,000 Product designer, Instacart: $130,000 to $175,000 Director, advertising analytics, Instacart: $165,000 to $220,000 Home goods platform Wayfair paid a senior web analytics manager $150,000 Consumers stuck at home during the pandemic have turned toward home improvement products, leading to an unprecedented growth streak for furniture and home goods-focused e-commerce company Wayfair. Sales nearly doubled in the second quarter from $2.3 billion to $4.3 billion, marking the first time in years Wayfair had turned a profit, and its share price leapt from a low of $23.52 to more than $340. Wayfair remains the largest online furniture retailer by market share, though rivals like Birch Lane and AllModern also saw significant gains in recent months. The fact that Wayfair received at least 475 visas, with a focus on software development, logistics, and engineering, demonstrates its scale. These are salaries and ranges for some marketing jobs at the company: Senior analyst, marketing: $78,100 Product and marketing analyst: $61,048 to $100,000 Associate, product and marketing: $73,778 to $100,000 Senior manager, partnerships and growth: $113,859 to $125,000 Manager, product and marketing: $113,859 to $135,000 Senior manager, web analytics: $150,000 Ecommerce fashion brand Poshmark paid an analytics manager $180,000 and Stitch Fix paid a data science manager $260,000 Fashion retail has suffered more than some other industries during the pandemic as consumers are less likely to buy or rent new clothes while stuck at home. Some previously hot DTC fashion brands, like Rent the Runway and Glossier, have cut staff and redesigned their entire business models in turn. But online platform Poshmark, where people can buy and sell used clothing, thrived in recent months by fast-tracking new features like a video component similar to Instagram. This success came after the company pulled its planned IPO in late 2019 due to a pre-pandemic slowdown in the fashion market. Stitch Fix, a subscription service that provides customized fashion packages to members, has also fared far better than department stores despite some third quarter fulfillment challenges related to the pandemic. The company's share price is up more than 100% since March. These are salaries and ranges for top marketing jobs at the two companies: Marketing associate, Stitch Fix, $126,000 UI/UX designer, Stitch Fix: $138,000 Associate manager, analytics, Poshmark: $155,000 Product manager, Poshmark: $160,000 Customer relationship management manager, Stitch Fix: $164,000 Data and analytics manager, Poshmark: $180,000 Data science manager, Stitch Fix: $260,000 Meditation app Headspace paid a marketing manager up to $150,000 and Calm paid a director of user acquisition $216,653 Like food delivery services, meditation and wellness apps have also surged in popularity amid the pandemic, with many people's stress and anxiety levels going through the roof. According to app intelligence firm Sensor Tower, the 10 largest English mental wellness apps generated more than 10 million downloads in April 2020, up 24.2% from January 2020, with Calm and Headspace leading the ranks with 3.9 million and 1.5 million installs, respectively. Headspace specifically has been attempting to capitalize on the momentum by adjusting its communications and creating new programs to cater to its growing audience. Calm and Headspace applied for at least seven visas combined in 2019. Here's a peek at the salaries they offered for marketing and adjacent positions: Manager, lifecycle marketing, Headspace: $116,418 to $150,000 Lead product designer, Headspace: $165,000 Director of user acquisition, Calm: $216,653 Pet product retailer BarkBox paid a creative lead up to $110,000 and Chewy.com paid a senior director of marketing analytics $285,000 The pandemic has fueled pet adoptions and sales across the country — so much so that brands ranging from Petco to luggage startup Away are also trying to cash in. Pet product subscription box BarkBox and retailer Chewy.com have also benefited from the trend, with sales at Chewy up 42.5% between March 12 and March 18, according to data from Earnest Research, and BarkBox also seeing a jump in its subscription business. In fact, BarkBox, which has until now mostly curated other brands as part of its subscription service, is using the time to expand into the category of pet food, and is beta testing a private label dog food service called Bark Eats, per Retail Dive. These are what the companies are paying marketing employees: Associate marketing project manager, Chewy.com: $67,000 Creative lead, BarkBox Essentials, BarkBox: $95,000 to $110,000 Director of creative operations, BarkBox: $130,000 to $155,000 Associate director, product management, Chewy.com: $170,000 Senior director, marketing analytics, Chewy.com: $285,000 SEE ALSO: The CMOs to watch in 2020 Join the conversation about this story » NOW WATCH: Why electric planes haven't taken off yet
Ascena Retail is the latest retailer to fall during the pandemic. The disappearance of 1,600 of...Ascena Retail is the latest retailer to fall during the pandemic. The disappearance of 1,600 of its 2,800 stores is a fresh blow to shopping malls.