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Big game energy. Happy Monday, Future Party people. How’s everyone feeling this morning after yesterday’s Super Bowl? Like a billionaire, we hope? IYKYK. While the game and commercials were fantastic (congrats, Chiefs!), what we really wanna talk about is Rihanna's triumphant return. Yeah, it was well worth the wait.
Hey RiRi, when can we expect that album and tour to drop? We know you have other things happening, so keep us posted.
In other news… BNPL takes to the skies, big brands keep raising prices, and fashion experiences a secondhand renaissance.
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TRAVEL
BNPL takes debt to the skies // Illustration by Kate Walker
"Fly Now, Pay Later" puts travelers in debt
The Future. Inflation has created a global cost-of-living crisis, and many are canceling their travel plans to cope with the price increases of essential goods. But those who do travel are increasingly resorting to Buy Now, Pay Later (BNPL) methods to afford trips — and might get trapped in a dangerous cycle of debt if the jet-setting continues.
Get away… then payFewer and fewer people can afford to travel, but BNPL is putting them on planes.
According to a recent survey, money troubles have prompted over a quarter of UK citizens to cancel travel plans and cut back on dining out in the past year, and led 20% to turn off their heat. Even more are cutting down on travel.
In response, some travel firms are partnering with BNPL platforms — like Kayak’s new deal with Affirm.
The downside: a survey conducted by Accrue Savings found that 1 in 5 US consumers who use BNPL platforms have gone into debt due to travel.
Buy now, cry laterBNPL programs are notorious for encouraging irresponsible spending and having high delinquency rates, and regulators are beginning to target them for it.
In other words, it’s probably best to avoid traveling by BNPL… at least for now.
BUSINESS
Big brands get away with bigger prices // Illustration by Kate Walker
Big brands pass price hikes off to consumers
The Future. Inflation is still high, and major brands are coping with higher production costs by pinning them on consumers through price hikes. Generally, consumers aren’t defecting to it, which suggests that major name brands might weather the looming recession better than smaller companies or the average consumer.
More bucks for your bangQuarterly earnings reports suggest that big brands haven’t suffered from raising prices on their customers.
Though PepsiCo raised prices 16% YoY in Q4 2022, the firm’s sales volumes only fell 2%, enabling revenue growth.
Likewise, Unilever raised their prices by over 13% in the same time frame and only saw a slight decline in sales volumes, beating revenue expectations.
Chipotle and McDonald’s both also grew profits significantly despite significant price hikes, with McDonald’s reporting increased foot traffic and Chipotle attracting more high-income customers.
Blame it on the gainsA few major companies are getting punished for raising prices — Procter & Gamble recorded their first sales drop in years, following 10% price increases in Q4.
That suggests that each of these firms has a breaking point. And since many major brands have indicated that price hikes are likely to continue throughout the first half of 2023, we may find out exactly how much is too much for companies like PepsiCo and Unilever to charge.
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FASHION
We're gonna pop some tags at the thrift shop // Unsplash
Buying used > new
The Future. Not too long ago, brands refused to engage in resale because they feared it would hurt the sale of their new products, but now they’re warming up to the idea as demand shifts. For the resale market to grow and for the clothing industry to reduce its carbon footprint, brands may need to overhaul their business practices to entice customers to sell their used goods and buy secondhand instead of new.
Old is better than that new newBy 2026, the resale market is projected to hit $218 billion, per Fast Company.
ThredUp is the biggest player in the resale game, with 1.7 million active users.
Between 2017 and 2022, the number of customers who had shopped, or were willing to shop secondhand, reportedly increased from 52% to 93%.
While resale heats up, worldwide clothing production is also skyrocketing.
The $2.5 trillion new clothing sector produces about 150 billion garments annually, supposedly discharging more carbon emissions than international flights and shipping combined.
Everyone has to get paidMost brands don’t have a strategy for reducing clothing production while continuing to grow financially — except for Patagonia.
Its platform, Worn Wear (in which Patagonia buys back old products, refurbishes them, and sells them), has allowed the company to remain a thriving business while using fewer resources.
Still, Patagonia hasn’t reached a point where the revenue from resale can dethrone the sale of new clothing, partially because there isn’t enough secondhand product on the market.
The transition from overproduction to sustainability may ultimately come down to the brand and customer working together to de-stigmatize shopping secondhand once and for all.
Highlights
The best curated daily stories from around the web
Online shopping is becoming cheaper
The Adobe Digital Price Index shows overall e-commerce prices were down by 1% in January 2023 compared to the previous year. Even in high inflationary categories like food, price increases have decelerated since September. As the rising cost of living makes people more cautious about discretionary spending, brands may have to fight to retain customers this year.
Read More → forbes
Pickleball attire gets a glow up
Apparel brands are cashing in on the pickleball economy. OG labels like Fila and Nike have marketed clothing and accessories for the sport, while newer brands like Recess and JOOLA have primarily built their businesses around it. The pickleball wardrobe follows only one rule: clothes can’t be the same bright yellow shade as the ball. That’ll keep it from becoming too buttoned-up…
Read More → nyt
There’s no one to put out Twitter fires anymore
Twitter went down last week because an employee accidentally deleted important data from an internal service. But the team that worked on the service had already exited the company in November. The outage left users unable to tweet or retweet. Many were faced with the error message: “You are over the daily limit for sending tweets” (2,400 tweets per day), even if they hadn’t tweeted at all. Oops.
Read More → insider
Adidas isn’t “performing the way it should”
The sportswear brand could lose $1.3 billion in 2023 if it doesn’t sell its existing Yeezy inventory. Shares dropped by 11% last week as traders reacted to the announcement. Good luck finding a home for those kicks…
Read More → cnbc
Spirits out earn beer for the first time ever
Despite the tough economy, cocktail culture is booming in the US and supporting jobs in the distilling, hospitality, and agriculture industries. More than 60% of the spirits sector’s total revenue in 2022 was from sales of high-end and super-premium spirits, led by tequila, bourbon, and rye. Even with less disposable income these days, consumers are still willing to purchase that special bottle of spirits and “drink better, not more.”
Read More → forbes
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Today's email was brought to you by Luke Perrotta and Kait Cunniff.Editing by Nick Comney. Publishing by Sara Kitnick.