Today in Retail: Auto Parts Retailers Face Challenges as Market Evolves; Firework Raises $150M

Today in retail, Walmart drone delivery service expands to six states while electric vehicle companies use digital screens and apps to promote local merchants. Plus, Abercrombie & Fitch faces a year of transition and Best Buy changes its plans and projections after its quarterly earnings languish.

EV Charging Stations’ Digital Screens, Apps Promote Nearby Stores

EVgo recently announced an expansion of its program that delivers promotions to electric vehicle drivers via text, email and mobile app after their charging session has started at one of the company’s stations. Dubbed “EVgo Advantage,” the program can deliver coupons encouraging drivers to shop at nearby stores. The Save Mart Companies, a grocer operating 200 stores in California and Nevada, entered a partnership with EVgo in March, expanding the availability of EVgo Advantage.

EVgo reported that it has found that 80% of electric vehicle drivers shop while they charge their vehicles.

Another electric vehicle charging network, Volta, announced May 10 the launch of a program that enables advertisers to find 40 different categories of stores that are near Volta charging stations. Called “Store Next Door,” this place-based targeting offering identifies stores in such categories as healthcare centers, gyms, pet stores and quick service restaurants that share a parking lot with a Volta charging station.

From Aging Cars to EVs to Record Gas Prices, Auto Parts Retailers Face Big Changes

Consumers are not only keeping their cars longer with the average vehicle age rising about 12 years, but they’re also dealing with record fuel prices and rampant inflation, all as the nation and auto industry continues its steady transition to electric vehicles.

Yet in the face of these headwinds, two of the nation’s largest auto parts retailers said Tuesday (May 24) that while consumer driving and shopping behaviors were clearly changing, they weren’t drying up, a development that has put a premium on innovation and observational insight.

As far as changes in habits, such as the trade-down to store brands reported last week by retailers such as Walmart and Target, Advance Auto Parts CEO Tom Greco said those changes had yet to materialize for the Raleigh-based operator of 4,700 stores and a website.

Best Buy Revises Its FY23 Plans After Q1 Struggle

Best Buy hasn’t been able to withstand the economic triple whammy of the COVID-19 pandemic, supply chain snags and a looming recession as well as some other brands, and that struggle has the company rethinking what lies ahead for it the rest of this fiscal year.

While Best Buy stock was relatively flat in mid-afternoon trading Tuesday (May 24), the company reported an 8% year-over-year drop in comparable store sales to $10.6 billion for the 13 weeks ending April 30 that forced leadership to revise its full-year fiscal 2023 plans downward.

For full-year fiscal 2023, Best Buy is dropping its revenue guidance from a range of $49.3 billion to $50.8 billion to a range between $48.3 billion and $49.9 billion, with a comparable sales decline between 3% to 6% compared to the previous 1% to 4% expectation, according to the release.

Shoppable Video Firm Firework Raises $150M at $750M Valuation

Firework, a company that creates livestream video shopping events for retailers, has raised $150 million in a Series B funding round led by SoftBank’s Vision Fund 2 that values the company at $750 million. The company plans to use the capital to accelerate growth, improve its platform and hire staff.

Firework has 900 clients who rely on its so-called “shoppertainment” technology to provide video content in stores and on their website, according to The Wall Street Journal.

Earlier this year, Firework launched a partnership with supermarket chain The Fresh Market, which has 159 stores in 22 states.

Abercrombie & Fitch Facing Transition Period

Abercrombie & Fitch expects to close about 30 stores this year as it continues to focus on its transition to omnichannel retail sales, company officials said Tuesday (May 24) on an earnings call with investors and analysts.

About one-third of Abercrombie’s store leases are up for renewal this year, a higher percentage than its typical 25%, said Scott Lipesky, executive VP and CFO, who noted the company will focus more on improving the user experience at its stores and collecting more digital data from customers.

As for the first quarter of fiscal 2022, which ended April 30 and looking forward to Q2 and beyond, “we’re focused on controlling what we can control,” said CEO Fran Horowitz, noting inflationary pressures and supply chain issues present some variables that need to be overcome. Net sales were up 4% companywide to $812.8 million in the first three months of the fiscal year. Abercrombie & Fitch is also increasing its focus on social commerce, including an upcoming pairing with The Trevor Project and previous Hollister tie-ins with TikTok and Facebook Live.

Walmart Ups Drone Delivery Comp With Amazon, Expands Program to 6 States

Retail giant Walmart announced that it is expanding its unmanned aerial delivery service with partner DroneUp to six states, with plans to complete 1 million drone deliveries by the end of the year.

In outlining the new initiative, a company blog post said the service area will include 4 million households and tens of thousands of eligible items weighing less than 10 pounds that can be brought to consumers’ homes in under 30 minutes for a $3.99 fee.

Walmart’s drone service will be available from 8 a.m. to 8 p.m. from 34 participating stores and sites in Arizona, Arkansas, Florida, Texas, Utah and Virginia, and follows more than a year of testing and tweaks.