Many retail jobs that disappeared during the pandemic might not return, says commerce secretary

Vice President Kamala arris and Commerce Secretary Gina Raimondo browsing in a Providence bookstore wearing masks
VP Kamala Harris and Commerce Secretary Gina Raimondo browse in Books on the Square in Rhode Island.

Many US retail and service-industry jobs that went away during the pandemic weren’t expected to return, Commerce Secretary Gina Raimondo said.

“The real issue, I think, is that a lot of the jobs that folks lost are the kinds of jobs – let’s say, for example, in retail or services industries – that might not be coming back, or coming back in the same numbers,” Raimondo told CNBC on Thursday.

Earlier, the Labor Department reported 364,000 jobless claims for the previous week, marking a pandemic-era low. Raimondo’s comments came ahead of Friday’s jobs report from the Bureau of Labor Statistics, which showed the US adding 850,000 payrolls in June, beating expectations.

But the future of work for retail employees and others remained more complex, as the world slowly returned to normal following the COVID-19, Raimondo said.

“To be very honest, it’s so hard to tell in the data” why people weren’t returning to work, Raimondo said.

Teenagers, for example, were taking fewer jobs in June than they had been in the spring, perhaps because the labor shortage allowed them to choose the highest-paying jobs.

There’s also been an uptick in “rage-quitting” among workers, including frontline retail employees. Others were using labor shortages to secure higher pay.

Raimondo on Thursday said the US had to “lean into” job training and apprenticeships, in part because of the shrinking amount of retail jobs available.

“Because the jobs that are being created in cybersecurity or in the digital economy and in the tech economy are there, and are good paying,” she said on CNBC. “We need to make sure that the folks who are unemployed have the skills that they need to get those jobs.”

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Bed Bath & Beyond tumbles 15% as store closures weigh on quarterly sales

Mark Tritton Bed Bath & Beyond store CEO
Bed Bath & Beyond CEO Mark Tritton.

  • Bed Bath & Beyond shares lost as much as 15% on Wednesday following mixed first-quarter results from the house goods seller.
  • First-quarter sales of $2.62 billion slightly missed Wall Street’s consensus estimate of $2.63 billion.
  • The retailer reaffirmed its sales outlook for fiscal 2021.
  • See more stories on Insider’s business page.

Bed Bath & Beyond shares were knocked sharply lower Wednesday after first-quarter sales results from the housewares retailer fell short of Wall Street’s target.

The company on Wednesday posted quarterly adjusted earnings of $0.40 per share, higher than the analyst consensus estimate of $0.41 per share from Refinitiv and up from $0.38 per share a year earlier.

Sales for the quarter ended Feb. 29 fell by 16% to $2.62 billion from $3.11 billion a year ago, slightly missing the $2.63 billion that Wall Street had anticipated.

Shares fell as much as 15% to $23.68 in heavy volume before the losses were pared to 10% during the session. The company’s stock has soared over the past year from about $4 each.

Bed Bath & Beyond, which is executing a turnaround plan, said quarterly sales were hurt in part by divestitures and permanent store closures. Bed Bath & Beyond in January sold Cost Plus World Market to private equity firm Kingswood Capital Management and in November completed the sale of Christmas Tree Shops and its institutional Linen Holdings business.

First-quarter comparable store sales decreased 20%, the company said. Total enterprise same-store sales rose by 4% while online sales surged by 86%. The company said its strongest categories during the period included bedding, bath and kitchen food preparation.

The company reaffirmed its fiscal 2021 outlook for net sales of $8 billion to $8.2 billion and its adjusted EBITDA guidance of $500 billion to $525 million.

“As our transformation continues to take hold, we will show up differently for our customers with enhanced omnichannel experiences and modern stores,” among other actions, said Mark Tritton, Bed Bath & Beyond’s president and CEO, in the earnings statement.

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Walmart has reportedly lured away two Goldman Sachs bankers to help lead its new fintech venture

walmart store shoppers
  • Walmart has reportedly poached two Goldman Sachs bankers to help it run its new fintech venture.
  • The retailer announced a partnership with Ribbit Capital to offer financial products in January.
  • Walmart’s latest move represents a commitment to forging a path in the financial world.
  • Visit the Business section of Insider for more stories.

As Walmart looks to launch a fintech startup, the retailer is turning to Wall Street veterans to help it move into the banking world.

Walmart Inc. has picked up two senior bankers from Goldman Sachs to help lead the retailer’s new fintech startup arm, Bloomberg reported on Sunday. Omer Ismail, the head of Goldman’s consumer bank, and David Stark, one of his top lieutenants, will leave the bank to help bolster Walmart’s venture into financial services with investment firm Ribbit Capital, people familiar with the matter told Bloomberg. The departure of Ismail, who runs Marcus, was a “surprise,” the sources told Bloomberg. 

Walmart announced earlier this year that it was partnering with Ribbit Capital, the firm backing fintech startups such as Robinhood, Affirm, and Credit Karma, to offer financial products for customers and employees. The startup, which has yet to be publicly named, will be mostly owned by Walmart and will include several Walmart executives on its board.

Customers have “made it clear they want more from us in the financial services arena,” president and CEO of Walmart US John Furner said previously in a statement. Walmart’s current financial service offerings include the Walmart CapitalOne credit card, the prepaid Walmart MoneyCard, and the ability for people to cash checks in stores.

“Walmart’s newly-announced fintech joint venture with Ribbit Capital will provide myriad growth opportunities, with the leveraging of its massive customer base at the center of the initiative,” Moody’s Vice-President and Senior Credit Officer Charlie O’Shea, said in a note to investors, Insider reported previously. “Walmart has been slowly and tactically expanding its financial service offerings to its customers, and measured expansion of these capabilities makes sense as it will deepen these all-important customer relationships.”

Walmart’s latest move represents a commitment to forging a path in the financial world. The retailer could also possibly have an advantage by eventually using its thousands of stores to market its new product and display advertisements to a large array of customers. 

In February, Walmart reported $152.1 billion in total sales, up over 7.3% year over year.

Walmart and Goldman Sachs did not immediately respond to Insider’s request for comment.

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Home Depot will surge 35% for 5 key reasons, according to Bank of America

home depot
  • Bank of America raised its price target for Home Depot’s shares to $360, which would mark 35% upside from Tuesday’s closing price. 
  • Home Depot’s capacity to spend $6 billion to $10 billion in share buybacks is a potential driver for earnings per share, the bank said. 
  • The investment bank said the retailer has been consistent in posting double-digit monthly same-store sales growth.  
  • Visit the Business section of Insider for more stories.

Home Depot’s  sales growth and the potential for up to $10 billion in share buybacks are among five reasons to buy into the home-improvement retailer, Bank of America said Wednesday, raising its price target on the stock to $360 from $355.

In a note on Wednesday, the investment bank reiterated its buy rating on the company. The higher call would represent upside of 35% from Tuesday’s closing price of $267.24.

Shares of Home Depot were under pressure Wednesday following a 3% decline the day before, after the company did not provide fiscal 2021 profit guidance as it monitors how consumer spending will evolve.

Home Depot’s fourth-quarter revenue of $32.26 billion was higher than a year ago and beat Wall Street’s expectations of $30.7 billion.

Bank of America said Home Depot’s fourth-quarter results marked the third consecutive quarter of same-store, or comparable, sales growth of more than 20%. It said monthly comparable sales figures have run consistently above 20% since May 2020 and that Home Depot has indicated it was seeing that pace in February.

“This illustrates HD’s consistent and strong execution within a strong category of retail,” wrote BofA research analysts led by Elizabeth Suzuki.

Alongside sales growth, BofA outlined four other reasons it said investors should consider Home Depot shares worth buying:

Capacity for share buybacks

Home Depot had $7.9 billion in cash on its balance sheet as of January 31, which the investment bank said is more than 3 times the average year-end cash balance of the previous five years. The retailer plans to keep a cash cushion of at least $4 billion throughout 2021 but BofA expects the company to spend at least $6 billion on share repurchases throughout the course of the year.

Home Depot, however, “could buy back as much as $10 billion in shares without cutting into its cash threshold, by our estimates,” the analysts said. “We view this as a significantly underappreciated upside risk” to per-share earnings.

Above-average wallet share

There should be a shift in consumer spending to “away-from-home” categories in the second half of 2021, but “home is still the place to be (and spend) for now,” said the bank as it referenced year-to-date spending data and its proprietary indicator of consumer spending at home improvement stores.

Taking market share

Home Depot estimates it has captured 275 basis points of market share growth between 2018 and 2020 as a result of its One Home Depot initiative, according to the note.

The “company’s performance during the pandemic underscores the benefit of these initiatives, and illustrates the advantage of being the #1 retailer in the category with a very healthy balance sheet, i.e. the ability to out-invest competitors,” wrote BofA.

The right investments

In terms of investments, the acquisition of industrial products company HD Supply late last year could add another “4-5% in top-line growth in 2021 above comp” and provide exposure to post-pandemic “reopening” opportunities through the maintenance, repair & operations, or MRO, market. 

“Additionally, HD’s investments in hourly wages and benefits for associates should attract talent, engender loyalty, and limit attrition as other retailers follow suit,” said BofA.

Shares of Home Depot traded at $254.84 at 11:57AM E.T. on Wednesday. 

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Shopify exec: Omnichannel commerce is the new norm for the retail sector

GettyImages 495681126
A wall at the entrance display vendor merchandise. Shopify has become Canada’s tech darling by defying conventional norms and reinventing ways of doing business. This is a profile of the company built on entrepreneurship. November 4, 2015.

The COVID-19 pandemic is the biggest threat to modern commerce that retailers have seen, and likely will see, in their lifetime. It’s meant that the future of commerce has been pulled forward, and we’ve seen 10 years of innovation happen in the last 10 months alone. Retailers have had to sharply pivot their strategies in order to meet consumers’ changing behaviors, and it’s become clear there’s no value in an “offline versus online” mentality: omnichannel commerce is the new norm. But what does that mean for historically brick and mortar retailers, and what will retail look like beyond COVID-19? The inaugural Future of Commerce report from Shopify highlights data-driven predictions that showcase the opportunity ahead for physical retailers.

Proximity will be a powerful and profitable selling feature for retailers

As consumer desire grows for alternative pickup and delivery options, proximity has the potential to become a retailer’s most powerful selling feature. By the end of April, 26% of Shopify’s brick-and-mortar merchants in English-speaking geographies were using some form of local pick-up or delivery solution, compared to 2% at the end of February. And there’s a clear business impact: On average, from May to August 2020, online shoppers spent 23% more when choosing local pickup or delivery, and had a 25% bigger cart size. With a 13% and 19% higher conversion rate for shoppers who choose local pick-up or delivery, respectively, as opposed to traditional shipping, merchants should continue to tap into their local communities online.

Conversational commerce will drive sales and genuine connection with customers

In a time when in-person conversations are no longer the norm, chat has increasingly become a retailer’s most successful method of replicating the offline experience online. Traditionally used for customer support, the pandemic has heightened the importance of chat as a marketing and sales channel, and we believe this will continue in 2021 as new consumer behavior solidifies. That outlook is confirmed by Shopify’s own data: from March 16 to July 1, at the height of the COVID-19 lockdown, there was an 72% increase in conversations happening on Shopify Ping, our business conversation hub, between merchants and customers. And those one-to-one conversations were proving effective in increasing sales: shoppers who chatted with a merchant online were 70% more likely to convert and sales attributed to chat interactions increasing by 185%.

The in-store experience will continue to evolve

Consumer behavior has, and will continue to, change as we head into 2021 and new norms around shopping in-store are developed. Resilient retailers are looking to technology to meet customer needs. We know that 62% of consumers are more comfortable making in-store purchases with digital or contactless payments, and compared to the same period in 2019, the number of shops offering contactless payments on Shopify increased by 122% during the pandemic. Given that 50% of consumers would prefer to schedule appointments for in-store shopping, retailers will need to continue considering the creative ways to tailor the in-store experience.

Social commerce will become a more expected and necessary tool for retailers to thrive

Building a brand requires a presence in multiple channels. Social commerce-marketing and selling products on social platforms using content that feels authentic to the user experience-has become a must for retailers. It allows brands to engage with their customers while enabling authentic connection. Based on Shopify’s recent research, we know that three quarters of our merchants plan to sell through some type of social media for the 2020 holiday season, and that younger shoppers are significantly more likely to say that they’re going to shop via mobile phone (54% among 18 to 34-year-olds, 39% among 35 to 54-year-olds, and just 9% among 55+). TikTok, Facebook, Instagram and Pinterest are just some of the channels that enable merchants to reach new audiences.

It’s clear that it’s no longer feasible to consider commerce as operating in one arena or the other. For retailers to endure and meet shifting consumer behavior, they must engage with their customers wherever they are. Consumers want to shop independent, and businesses must adapt to make that easier. It’s undeniable that retailers have shown great resilience during a difficult time for the industry-adopting an omnichannel strategy will allow them to continue to future-proof their businesses, and their livelihoods.

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The sneaker resale market exploded in 2020. These were the most expensive sneakers that sold on The RealReal this year, where some pairs went for up to $20,000.

Most expensive sneakers of 2020
The sneaker resale industry has continued to thrive amid a pandemic.

  • The sneaker industry thrived in 2020.
  • Hyped collaborations and a surge in demand for the Air Jordan brand helped keep the sneaker resale market hot.
  • Luxury consignment platform The RealReal shared a roundup of the most expensive sneakers to sell on the platform in 2020.
  • Visit Business Insider’s homepage for more stories.

2020 was a fantastic year for sneakers, pandemic notwithstanding. 

While lockdowns and store closures initially hurt production, the industry quickly bounced back, thanks to a variety of factors that helped ignite demand for certain pairs.

Across all sneakers available on resale platforms, Air Jordan soared above the rest in 2020, in part, thanks to the launch of ESPN’s Michael Jordan docuseries “The Last Dance.” 

Read more: In the ‘year of Jordan,’ GOAT CEO says demand for the retro sneakers has skyrocketed for reasons other than the ‘Last Dance’ documentary

Beyond Air Jordan, a slew of interesting new releases this year also fueled the hype.

The controversial Ben & Jerry’s-themed “Chunky Dunkys” and the Grateful Dead SBs are still fetching more than $1,100 and $700 on StockX, respectively.

Thus far, the $2 billion sneaker resale market has proven to be somewhat pandemic-proof. GOAT, a leading sneaker resale platform, saw a surge of new sellers joining the app at the start of pandemic. StockX, another leading sneaker resale platform, announced in a July report that it had surpassed 10 million lifetime sales and had its two biggest sales months ever during the months of May and June.

As 2020 draws to a close, Luxury consignment retailer The RealReal shared a roundup of the most expensive sneakers to sell on its platform in 2020. From the always popular “Back to the Future” themed Nikes to the Tom Sachs Mars Yard, here were the top sellers:

10. Nike Air Force 1 Low Scarr’s Pizza

Nike Air Force 1 Low Scarr’s Pizza

Sold for: $5,000

These sneakers were a result of a collaboration between Nike and Scarr’s Pizza, a New York City restaurant. The shoes were released for friends and family in August of 2019 and were inspired by the restaurant’s retro look. 

9. Nike SB Dunk Low “Reese Forbes Denim”

Nike SB Dunk Low 'Reese Forbes Denim' Sneakers

Sold for: $5,250

Released in 2002, this sneaker marked skateboarding legend Reese Forbes’ second Dunk collaboration. The denim-on-denim silhouette has made this pair iconic.

8. Nike x Tom Sachs Mars Yard Shoe 1.0

Nike x Tom Sachs Mars Yard Shoe 1.0 Sneakers

Sold for: $5,300

Designer Tom Sachs collaborated with Nike to launch this sneaker that was inspired by his experiences with NASA scientists. The sneaker initially launched in May of 2012 and was re-released in 2017.

7. Jordan 1 Retro Legends of Summer Red Glitter

Jordan 1 Retro Legends of Summer Red Glitter Sample Sneakers

Sold for: $6,500

These glittered sneakers launched during Justin Timberlake’s and Jay-Z’s fall 2013 “Legends of Summer” tour. At the time of the release, only a few pairs were given to fans.

6. Nike Air Force 1 Low G Dragon Peaceminusone Para Noise

Nike Air Force 1 Low G Dragon Peaceminusone Para Noise Sneakers

Sold for: $8,000

This low-top sneaker features a yellow leather Nike swoosh and daisy embroidery on the tongue.

5. Jordan 1 Retro Legends Of Summer

Jordan 1 Retro Legends Of Summer Sneakers

Sold for: $8,000

These limited edition Jordan 1s are were also from Justin Timberlake’s and Jay-Z’s fall 2013 “Legends of Summer” tour. This pair only surfaced on the resale market about a year after it dropped at the concert. 

4. Nike MAG “Back To The Future”

Nike MAG ‘Back To The Future’ Sneakers

Sold for: $9,995

The shoes inspired by the ones Michael J. Fox’s character Marty McFly wears in”Back to the Future Part II” was released in 2011. A product description on the Stadium Goods website describes the shoe as “perhaps the most sought-after sneaker of all time.”

3. Jordan 3/8 Retro ‘Kobe Bryant’ PE Pack

Jordan 3:8 Retro ‘Kobe Bryant’ PE Pack Sneakers

 Sold for: $11,875

The Jordan brand released these special-edition Jordans on February 14, 2016, to celebrate basketball legend Kobe Bryant. These sneakers are a tribute to Bryant’s 20 years in the NBA and feature the colors of the Los Angeles Lakers.

According to Amir Azarcon, The RealReal’s sneaker and streetwear expert, this limited edition pack became even more popular after the sudden death of Kobe Bryant in January.

2. Air Jordan 1 High OG Dior

Air Jordan 1 High OG Dior

Sold for: $16,500

Designer Kim Jones collaborated with the Jordan brand for this iconic Dior sneaker, which Azarcon described as the sneaker of the year. Launched in April of 2020, this pair represents a successful cross between sneaker culture and the luxury fashion space.

1. 2005 Parra x Nike Air Max 1 Hyperstrike Albert Heijn Amsterdam

2005 Parra x Nike Air Max 1 Hyperstrike Albert Heijn Amsterdam Sneakers

Price sold for: $20,000

These sneakers were one of two pairs designed by Dutch artist Pieter Jansen (Parra Patta) that were inspired by his hometown of Amsterdam. The colors on this pair represent Albert Heijn, a Dutch supermarket chain.

“This is one of the most coveted Air Max’s in the world, and this pair sold in less than 24 hours on our site,” said Azarcon.

 

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