Agenda-setting intelligence, analysis and advice for the global fashion community.
THE CHEAT SHEET
The Social Media Explosion
Instagram posts by Chanel, Gucci and Louis Vuitton | Collage by BoF
- Facebook reports quarterly results on Oct. 29, while Pinterest reports on Oct. 28
- Last week, Snapchat said revenue jumped 52 percent in its second quarter, far more than analysts expected
- Many fashion brands initially pulled back on social media advertising during the pandemic
We know social media usage has spiked during the pandemic. We'll find out how much, and whether that boom lasted beyond spring lockdowns, this week when Facebook reports its quarterly results. The top-line engagement numbers are only part of the story, however. With many consumers stuck at home and worried about their finances, those record numbers of likes, views and comments aren't always translating into a similar uptick in sales for fashion brands that rely on Instagram for customer acquisition. Many brands opted to scale back on social media advertising as a result. Snapchat's earnings surprise is a sign they may be coming back.
As for this week's results, Facebook rarely offers more than a fleeting glimpse at Instagram's performance. Pinterest could potentially offer a Snapchat-like surprise (investors certainly think so, as the company's stock is up 10 percent since its rival's surprisingly strong earnings report last week). The platform has taken steps to build its fashion cred, including courting style influencers and introducing shoppable "pins."
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The Bottom Line: The most consequential social media news may come out of Washington rather than Menlo Park. The Federal Trade Commission is reportedly close to deciding whether to pursue an antitrust case against Facebook. Coupled with the Justice Department's recent antitrust action against Google, an FTC case has the potential to reshape the entire online economy.
Should Retailers Fear More Lockdowns?
A Louis Vuitton store in Paris during lockdown earlier this year | Photo: Daniel Korkhov
- Some US states and European countries are seeing record numbers of new coronavirus cases
- Officials have floated the possibility of reimposing lockdowns on retail, though few localities have done so in the current wave of the pandemic
- Consumers typically conduct the bulk of their holiday shopping beginning in late October and early November
In Jaws, the mayor of the resort town being terrorised by a great white shark nevertheless opposes shutting down the beaches at the peak of the summer tourist season. We all know how that turned out. Politicians across the US and Europe are grappling with the same choice: Coronavirus cases are surging, but the holidays are approaching and many businesses are still reeling from the last round of lockdowns.
For now, there appears to be little appetite for closing stores again, even in Covid-19 hotspots. Officials are instead pinning their hopes on a vaccine, and arguing that the cost of another round of blanket lockdowns would be too high (and potentially ineffective, as the virus would almost certainly return as soon as stores reopen). The debate may not matter for retailers. A growing body of evidence shows that where cases are spiking people stay away from stores regardless of official orders.
The Bottom Line: Retailers are preparing for more lockdowns, and the changes they make will serve them well even if they aren't forced to close stores. Consumers were already shifting their holiday spending online before the pandemic, and brands that invest in e-commerce and clever order fulfilment methods will benefit from what is likely to be a mostly digital Black Friday this year.
SUNDAY READING
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The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
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