The state of small business

The White House is making moves to limit China-founded e-commerce platforms Shein and Temu’s use of the de minimis exemption, but industry observers aren't sure how much the plan will affect its intended targets.

The Biden-Harris administration's proposal looks to cut off the use of de minimis, which exempts shipments of less than $800 from import duties and taxes, for a range of products covered by Section 201, 232 and 301 tariffs.

This would raise duties for many companies reliant on parcel shipping between the U.S. and China, such as Shein and Temu, which experts say would likely trickle down to price hikes for consumers who flock to the companies for a variety of fast fashion goods.

Beyond the need to pay import duties, scrapping the exemption would also call for standard reporting, bond and document requirements for these shipments, just like other freight entries, Flexport wrote last week.

The proposal also aims to push businesses to provide more detail about goods’ destinations and shipments’ contents, such as describing cargo as a "100% cotton men's T-shirt" rather than just a T-shirt, Flexport added. The White House says this will promote greater visibility into de minimis shipments.

"Some companies exploit the de minimis to conceal shipments of illegal and dangerous products and avoid compliance with U.S. health and safety and consumer protection laws," according to a White House fact sheet. "Other foreign entities use it to circumvent U.S. trade enforcement actions intended to level the playing field for American workers, retailers, and manufacturers."

The White House's efforts appear to be targeting Shein and Temu, but industry observers say that the two e-commerce giants known for leveraging the de minimis exemption can navigate these changes without much trouble. Smaller businesses, on the other hand, could be strained by the added costs and administrative requirements.

Shein and Temu could skirt the impact

Even with import taxes factored in, Shein and Temu are likely to maintain competitive pricing versus U.S. retailers, Anthony Pizza, VP of marketing at freight forwarder Accelerated Global Solutions, said in a statement shared with sister publication Supply Chain Dive. Amid long-standing de minimis scrutiny, both companies have expanded and diversified their supply chains to limit their exposure to regulatory shifts, including by expanding their U.S. operations.

"Shein, for example, has expanded its manufacturing operations to countries such as Turkey, Mexico and Brazil," Pizza said. "The company has even begun producing some items in the U.S. through a print-on demand model. Meanwhile, Temu is adopting a semi-managed logistics approach to mitigate risks associated with these types of policy changes."

The changes could encourage further supply chain shifts by Shein and Temu, said Cindy Allen, CEO and managing director of the consultancy Trade Force Multiplier. One possibility is that Temu will ship more containers to U.S.-based warehouses for storage, so that the actual sale occurs after it arrives in the country. While Temu would pay duty on those containers imported into the U.S., it would streamline the entry process for the company if the de minimis exemption changes are realized.

"[They’ve] gone from 5,000 individual packages in that box to one entry for U.S. Customs," Allen said in an interview. "It's still going to have the same 5,000 individual items in that box, and they're probably going to be individually packaged."

While Temu is monitoring de minimis developments, its growth doesn't depend on policy related to the exemption, a spokesperson said in an email to Supply Chain Dive.

Shein wants reform on the exemption "to create a level, transparent playing field," and import compliance remains a top priority, a Shein spokesperson said in an email.

Hurdles for smaller businesses

Smaller businesses that lean on direct-to-consumer shipping from China or the resale of China-based goods in the U.S. may face a more sizable challenge in navigating de minimis changes, experts told Supply Chain Dive. Many of these companies lack the resources to quickly adjust their supply chains like Shein and Temu can.

One hurdle for these businesses is to classify their 10-digit Harmonized Tariff Schedule codes, which the proposal aims to mandate, according to Flexport. The codes, which categorize imported goods and determine duty rates, aren't always needed for de minimis entries today. If that changes, importers would face more customs requirements and related costs, since classifying products at the 10-digit level is defined as "customs business."

"This would mean hiring licensed customs brokers, executing customs power of attorney and establishing responsible supervision control procedures," Flexport said.

Temu and Shein can secure low customs brokerage fees due to the high volumes they ship, but many other e-commerce enterprises don't have that luxury, Allen said.

"They're going to be impacted by having to pay more duty, having to navigate a customs broker relationship that they don't have today," Allen said. "They're going to have to pay higher costs."

Still, there are some ways businesses can adjust their strategies to mitigate the impact of the White House's push, such as manufacturing in countries outside of China. Companies could make products in Vietnam to skirt Section 301 tariffs, said Izzy Rosenzweig, founder of e-commerce fulfillment company Portless, which helps shippers utilize a Shein or Temu-like supply chain model.

As importers respond to the White House's proposal, they should also consider that changes to the exemption can happen as it advances through the implementation process, Craig Radford, co-CEO at Wizmo Solutions, noted in a LinkedIn post.

Trade-focused proposals also can take several months to finalize, he added.

"Rules that face legal challenges, significant lobbying, or political controversy can experience longer than normal delays," Radford said. "This one checks all boxes and has logistical and technical hurdles that other [government] agencies will present."

Tupperware is shutting down its only U.S. facility, laying off 148 employees in Hemingway, South Carolina, according to a June 11 Worker Adjustment and Retraining Notification Act filing. 

The job cuts are scheduled to take place from Sept. 28 through Jan. 14, 2025.

The food storage company sold its Hemingway facility last October and will transition manufacturing operations by year’s end to its Lerma, Mexico, plant, which already manufactures most of the products for its U.S. and Canada markets, a company spokesperson told Manufacturing Dive.

Tupperware will offer eligible employees early retirement and severance packages and provide outplacement services.

The nearly 80-year-old company cited the closure as part of a multi-year strategy to simplify its supply chain and operations and create efficiencies, according to the spokesperson. 

Tupperware is also navigating major concerns about its overall financial state, saying in a March 29 quarterly securities filing that there is “substantial doubt about its ability to continue as a going concern for at least one year.”

The closure of the South Carolina facility follows a rocky past two years for the company. With a slew of operational and financial woes, Tupperware has been trying to restructure its debt and make changes to its executive board, electing former Spanx CEO Laurie Ann Goldman as Tupperware's new CEO in October 2023.

In April, Tupperware disclosed that it hadn’t filed its mandatory annual 10-K report to the Securities and Exchange Commission, prompting the New York Stock Exchange to give the company a warning it’s at risk to be delisted if one isn’t turned in the next six months. Tupperware has yet to file the annual report. 

The company also filed its Q1 2024 report late, saying the delays in filing were due to “material weaknesses in the Company's internal control over financial reporting.”

Despite its financial struggles, Tupperware is still planning to invest in a new third-party logistics facility in the Midwest, according to the company spokesperson. The new facility will aim to offer additional capabilities to serve its customers, reduce shipping times and implement new warehouse technologies to better serve direct sales, retail and e-commerce customers.

The transition of the Hemingway facility’s production and establishment of the new distribution center will happen in phases throughout the remainder of the year, the spokesperson stated.

Tupperware has other manufacturing locations in Belgium, Brazil, South Korea, Mexico, Portugal, China, India and South Africa, according to the spokesperson.

Sponsored content

By Xero

Holiday retail shopping is showing no signs of slowing down this year, with eMarketer projecting that total retail sales for the 2024 season will reach $1.372 trillion - an almost 5% increase from last year. With this continued growth comes the need for greater investment from small business owners in their operational support systems, so that when the inevitable seasonal rush of demand comes, they are well equipped to harness it for a boost in revenue. Whether through an app ecosystem (like Xero’s) or elsewhere, small businesses are increasingly well-equipped to manage their finances year-round, but one of the lingering challenges on this front? Managing inventory. 

For small businesses in the retail environment, customer demand can ebb and flow naturally over the course of the year. But it’s not quite as simple as “buy more for the holidays and buy less in the offseason.” Every business’s customer base has unique needs and timeframes around those needs, with any given product moving at a different pace across different sales channels. Without the ability to properly organize this information, businesses can fall into cycles of accidental over- or under-stocking, ultimately hurting their profit margins and stifling growth. Knowing when to spend more or less on stocking product can be key to a well-regulated cash flow, but small business owners are far too often overburdened with running the day-to-day aspects of their business to organize, recognize and analyze these patterns – as evidenced by Zippia finding that 43% of small business owners don’t track their inventory. 

Understanding why inventory management is so important, and the tools available to make it doable on a busy schedule, can be a gamechanger for any small business owner.  

On the frontlines of business ownership, there are often things you know that you don’t know, but what about the things you don’t know that you don’t know (read that three times fast)? Many of the available solutions for inventory management can be entirely unfamiliar, such as the extent of reporting capabilities available for product data like top performing products by customer demographic and category, performance across separate sales channels, shipping costs by region, inventory forecasts over time and more. 

This data can then feed the automation of tedious processes, like monitoring for low stock on specific items and reordering said items. Equipped with these tools, any business can optimize their inventory game (or build it from the ground up). Many platforms today, like Xero Inventory Plus, unify these functions under one roof and allow for these new capabilities to be seamlessly integrated into a business’s day-to-day operations and decision-making. Not only does this lessen the load for business owners, but it provides a new window of opportunity for them and their advisors, accountants, and bookkeepers to sit down and devise an in-depth approach to their product strategy. 

For businesses that develop an airtight grip on their inventory, what does this mean in the long run?  

Not only does it result in a massive reduction in headaches around busy or slow seasons, it can lead to direct improvements in a business’s profitability through better customer targeting that increases sales, less waste, and more comprehensive documentation for tax season. In fact, investing in inventory is as beneficial for a business’s accountants and bookkeepers as it is for the business owner themselves. With access to unified and automated reporting from all channels at once, more of their time can be dedicated to strategic financial guidance that helps to grow the business, rather than tactical number-crunching. 

The days of disconnects between product stock and sales are coming to an end, and just in time for retail’s busiest season of all time. Will your inventory be ready for the rush? 

Over the past decade, DTC brands have evolved, causing executives to rethink their strategies.

While many digitally native darlings originally vowed to avoid wholesale in order to pass savings on to consumers, many of those brands are now inking deals with retailers to expand their distribution network. On the other hand, more established brands that previously leaned heavily on the wholesale channel are now exploring the benefits of selling directly to consumers.

The changing industry has also led to a change of hands at several brands in recent years, with founders stepping down in order to usher in more seasoned retail leadership.

Executives with some of the biggest brands last month appeared at both the ICR conference and the National Retail Federation’s Big Show, offering insights into what DTC brands are thinking about in 2024.

Here are eight takeaways from DTC leaders heard during two of the industry’s biggest events.

APL

“While we are a direct-to-consumer at our core, we always characterized wholesale as profitable marketing,” APL co-founder and co-CEO Ryan Goldston said at the ICR Conference. “We launched at Barney's, Saks, Bergdorf, Net-a-Porter, Mr. Porter, Harvey Nichols, Selfridges, Le Bon Marché, Level Shoes, Lane Crawford — you name it, we were there.”

Co-founder and co-CEO Adam Goldston added that the brand spent nothing on customer acquisition for the first decade of APL’s existence, leaving it to grow organically. A partnership with Lululemon in 2017 also gave APL insight into what kind of demand there was for its product and how the brand was received in different markets. 

“When we launched with Lululemon, we became the only third-party brand and the only footwear brand sold within their stores,” Ryan Goldston said, noting the brand was sold in 23 stores in North America. “We could see how we worked in all of these different markets, whether it was Fifth Avenue, New York; Third Street in Los Angeles; Toronto; Calgary; Edmonton; Nashville; Denver; Dallas — all these different places. In every market we went to, it worked.”

Casper

“We were very loud in the beginning about like, ‘Mattress stores are terrible,’ and ‘It's a crappy experience,’ and ‘We're going to only sell online.’ Well, that's where 80% of the mattresses in the U.S. are sold. So we can either get on board, or we can be small forever. Those are the choices,” Emilie Arel, Casper’s former CEO, said during a panel discussion at the National Retail Federation’s Big Show in New York in January.

Casper — one of the original disruptors in the mattress industry, promising to pass savings on to consumers by eliminating the middleman and shipping products directly to customers — backtracked on its DTC-only ambitions as it chased growth. The mattress company now sells products through a number of retailers, including Mattress Warehouse, Sam’s Club, Ashley HomeStore and Denver Mattress.

“We chose not to be small forever and so we expanded into wholesale. It's a consumer decision coupled with an economic decision. The economics are different in wholesale — sometimes better, sometimes worse. It depends on who you're working with and what the product looks like,” Arel added. “To me, it's: Where is the consumer? And what do the economics look like? And then go from there.”

Crocs

“We think both channels are super important, right? We're not planning to be a DTC company, we're not planning to be a wholesale company, we are planning to leverage both channels of distribution to effectively reach a very large consumer audience,” CEO Andrew Rees said, noting Crocs is 50% wholesale and 50% DTC. “From a geographical perspective, we're also diversified, with about close to 40% of our business from an international market.” 

International is expected to grow faster than the domestic portion of the Crocs business, Rees said, “which gives us access to some fast growing, extremely attractive, international scale.” CFO Anne Mehlman added that the retailer reported record revenue in China in Q4, growing around 80% in that region.

“But yet China is still underpenetrated compared to the rest of the world,” Mehlman said. “So still a big, long-term opportunity. We also had triple-digit growth in Australia, and strong double-digit growth in a lot of our other international markets.”

At Heydude, the company exited more than half of its “nonstrategic distribution” and has pulled back on digital rights, Mehlman said. “We are very excited for better product and channel segmentation in 2024.”

Purple

“It’s a mixed bag. We’ve got a third of those that are problematic for one reason or another and we’re trying to put our finger on it because it’s the same co-tenancy, it’s the same quality of location and yet two-thirds of them are working and a third of them aren’t,” CEO Rob DeMartini said at the ICR conference of the retailer’s store fleet. “They’re great brand beacons, but they’ve got to make some money.”

Purple’s strategy has had some other rough patches as well, with DeMartini noting that shoppers have shown “a real resistance” to buying expensive mattresses online versus the more affordable options it became known for. Profitability, however, could be reached this year, the executive noted.

“I mean, in all fairness, this company was on the brink for the last couple of years,” DeMartini said, noting that Purple “misread COVID” and didn’t have a good structure for wholesale set up. “I think we’ve turned the corner, we’re going to get healthy and there are places this brand can go, but I don’t want to get ahead of myself here. We’ve got to start consistently taking share in the core business, in the core country, and then figure out how to grow from there.”

Glossier

“We are on year 10 of building a 100-year-old brand,” Kyle Leahy, CEO of Glossier, said during NRF’s Big Show.

The executive, who in 2022 took over as CEO from founder Emily Weiss, said when Glossier launched in 2014, its mission was to change the way the world viewed beauty. That mission remains largely unchanged because, Leahy added, the brands that succeed for decades are the ones consumers can connect with on an emotional level. Reaching those customers across various channels has also been pivotal to its success.

“Ten years ago, this brand was incredibly disruptive in so many ways,” Leahy said. “The integration of content and commerce: We were born out of a blog, Into the Gloss, that Emily created. How do we think about community and commerce and content all together?”

Lovesac

“A sactional setup is typically $5,000, $10,000, $15,000 — $20,000 is not uncommon because people are getting giant basement configurations with stealth tech surround sound embedded,” CEO Shawn Nelson said at the ICR conference. “And as we continue to invent those things year after year after year, they can add it to what they already have. So this designed-for-life benefit to the customer is unlike I think any other brand in product. Forget furniture — in product.” 

Nelson said the company is “one of the most successful direct-to-consumer brands, if you want to call it that” and that its return on ad spend is “the best there is.” The brand’s goal is to build products that last and a model that allows shoppers to add to them over time, whether through more couch seats or embedding storage or surround sound systems into them.

“It resonates with humans that have babies, kids, pets, dogs, friends, pizza, wine,” Nelson said. “The product can roll with you as life changes and that design philosophy, obviously, will inform all of our future designs and so we're working on more additions to this platform and the Sac platform.”

On

“Performance, design and sustainability: This is the DNA of the brand and performance is at the core,” Martin Hoffmann, CFO and co-CEO, said at the ICR Conference. As a result, the number of athletes wearing its products is important, but so is the everyday shopper. “Because the product feels good, it looks good and it's sustainable, it also addresses the huge lifestyle customer community, which is of course something that is very much intended. At the same time, we need to balance both customer groups. And I think this is what we are seeing.” 

On is increasing share with both runners and everyday shoppers, Hoffmann said, opening up opportunities to expand into new sports and categories. Training is one such opportunity, which is the first expansion where On will launch apparel before footwear, co-CEO Marc Maurer said. The company has five co-founders, three of whom are now “very much involved” on the product side, according to Maurer.

“The five of us basically can control the direction of the company through our B shares, which is super important because you know, we're building this for the long run — and we don't really care about the next one or two weeks, but we care about what's going to be the legacy in 20, 30 years from now,” Maurer said. The leadership team has grown much bigger since its founding and is much more diverse now, he added. “I think this is a journey that we will continue in order to make sure that in the long run, innovation and also the operational capability lies in the company and not with just one or two people.”

Brooklinen

“How do you maintain the things that make the company special? But how do you drive more accelerated change?” Brooklinen CEO Billy May said during NRF’s Big Show last month.

May, like Casper’s Arel and Glossier’s Leahy, succeeded the brand’s founder as its CEO. In July, Brooklinen co-founder Rich Fulop announced he would step down as chief executive and in October, May was appointed CEO. During the panel discussion, May noted that in a lot of founder-led businesses, like DTCs, nearly every decision comes back to the founder. And as those brands scale, May added, it becomes increasingly difficult for founders to continue to make every decision, “but a lot of founders fail to recognize that.”

“When you move from a single failure point, to trying to drive more accountability and decision making down into the organization, that requires a change in the way you look at the business, how you manage the business and how you affect the day-to-day operations of the business,” May said.

As small businesses pursue international expansion, their evolution might involve adopting new payment tools, a recent survey from card network company Visa revealed. 

Small and micro-businesses envision a cashless future, and they’re investing in payment technology as part of their growth strategies, Visa’s survey results showed. In the card network’s global survey of 2,250 small and micro-businesses and 1,500 consumers, more than a third (35%) of business owners surveyed said they are considering accepting new forms of payment as a critical way they can improve their businesses.

About 95% of small business owners planned to become cashless “someday,” and more than half (51%) anticipate going cashless in the next two years.

“Our previous data has shown that small businesses that embraced digital payment technologies over the last few years were more resilient and better able to compete than those who did not,” Jeni Mundy, global head of merchant sales and acquiring at Visa, said in an emailed statement.

To be sure, Visa has an interest in businesses being more digital in their payments schemes because credit and debit cards are often used in those channels. In any case, the COVID-19 pandemic super-charged a worldwide trend toward increased digital payments.

Nearly eight in 10 business owners said they are expanding to new markets to drive growth, Visa said. Among other measures small business owners expect to fuel growth are: bolstering their social media presence (44%), offering new products or services (41%) and increasing marketing investments (40%). 

“It used to be that only big businesses could scale to access customers across the country or around the world, but today’s small business owner can be virtually borderless,” Mundy said in the release. “At Visa, we’re seeing the small business mindset shift from survival mode to growth mode, as SMBs harness the power of digital payments to improve efficiencies, reach new audiences and simply thrive in today’s increasingly digital world.”

The shift toward accepting new payment technology is partly driven by changing consumer behavior, Visa’s survey suggests. More than half (55%) of consumers surveyed said they expect to use digital payments more in the coming year.

Among the factors driving consumers to adopt cashless technology are the convenience and speed they offer as well as the ability to track expenses, Mundy said in the statement. While small and micro-businesses want to integrate new payment forms into their operations, they may face hurdles such as cost, lack of training and security concerns, Mundy added. 

Although nearly half (49%) of consumers told Visa they planned to shop more locally, 72% of shoppers are comfortable shopping with international merchants, the card network reported.

Visa’s latest survey builds upon previous research indicating that small businesses are counting on digital payment acceptance to further growth. The card giant released a survey last year showing that 82% of small and micro-businesses planned to accept digital payment options that year.

Other research has illustrated the decline of cash and the ancillary impact of dwindling cash use. 

A Gallup survey released last year found that 13% of respondents use cash for all or most of their purchases, down from 28% five years earlier. Plus, June data from Euromonitor International indicated ATMs declined to 451,500 last year from 470,000 in 2019.

Though business owners want to transition to cashless, legislators are weighing whether to prevent them from doing so. In June, Congress members introduced bills in the House and Senate to prohibit businesses from refusing to accept cash for in-person transactions.

The legislation is meant to prevent discrimination against unbanked and underbanked Americans who rely on cash to pay for their essentials, according to bill authors Representatives Donald Payne Jr. (D-N.J.) and John Rose (R-Tenn.) and Senators Bob Menendez (D-N.J.) and Kevin Cramer (R-N.D.). 

Meanwhile, local government officials are having a similar debate. In Atlanta, for example, Atlanta City Council members met Wednesday to discuss a proposal that would require retail businesses to accept cash payments, The Atlanta Journal-Constitution reported.

Amazon is pulling back the curtain on how it’s teeing up more packages to arrive on doorsteps without Amazon logos. Last week, the Ships in Product Packaging program expanded by opening participation to hundreds of thousands of sellers in the U.S. and Canada that use Fulfillment by Amazon. 

Amazon itself had already been increasing the amount of items it ships without additional Amazon packaging, and the e-commerce giant announced last year that sellers would be able to join its SIPP program in 2024.

It ran a pilot program with a small group of selling partners in 2023 to learn what information sellers needed to fully understand SIPP and enroll a product. The pilot “helped us develop what is a really scalable way to provide information to sellers,” said Kayla Fenton, senior manager of packaging innovation at Amazon.

Sellers are a diverse group, Fenton said: “They have a range of interests in what’s important to them — whether that be fee incentives or customer experience or sustainability — but they also have a range of experience, especially as it relates to packaging.”

Less packaging, more savings

The SIPP push is one of Amazon’s recent packaging changes to improve company sustainability. Amazon announced last year that it would phase out plastic mailers, and it upgraded the technology at a fulfillment center in Ohio to make it the company’s first to handle fiber packaging alone — no plastic. Amazon is working to lightweight its packaging and ultimately “eliminate packaging altogether.”

Sellers who enroll in the SIPP program will receive discounts. Savings will be based on the existing FBA fee tiers — which primarily consider package size and weight — but generally they will range from 4 cents to $1.32 per unit. Even if a consumer specifically opts in during checkout to add Amazon packaging for shipment, a seller participating in SIPP will still receive their discount, Fenton said.

The level of incentives vary because “if you're avoiding adding a very large overbox to a product like a ... kitchen appliance, that's different both for the seller and for Amazon than if you're avoiding an additional package for a T-shirt that might be pretty small and also be shipping in a pretty compact package today,” she said.

Amazon previously reported that it shipped 11% of products in their own packaging in 2022. The company isn’t releasing an expectation for how that figure could grow in light of the expansion, or how many sellers currently participate in SIPP. But it’s “certainly anticipating that it increases over time,” and the company is eagerly watching this year’s adoption rate, Fenton said.

Which products make the cut?

While Amazon currently has about 2 million independent sellers worldwide, for now SIPP only is being offered for those in the U.S. or Canada, and they must be part of Fulfillment by Amazon, in which Amazon takes care of packaging for a seller’s products.

Sellers also must ensure their products meet eligibility criteria to ship without additional packaging. Size is the biggest determinant: Amazon won’t ship small products in their own packaging for numerous reasons, including the inability to put labels on them.

Other determining factors for SIPP approval include product weight or sensitivity factors. Amazon says all criteria are clarified to sellers in an online hub, Seller Central.

“At the end of the day, our first goal is to make sure that the product arrives to customers undamaged,” Fenton said. “Meeting the testing requirements is the last piece of the puzzle for a product to be enrolled.”

Products can be tested in a variety of ways, and Amazon receives the final report. Following testing, Amazon can certify a product as eligible for SIPP or recommend changes to meet program criteria.

“One seller might have to make a very minor change in order to meet our eligibility criteria. Other sellers might have to sort of think about their packaging in a bigger way and maybe sort of change the format altogether to meet standards,” Fenton said.

Some of the work to certify sellers’ products for SIPP lies inside Amazon’s Packaging Innovation Lab in Sumner, Washington. That’s the primary site for packaging innovation and testing, although some work also occurs in other locations, including third-party labs.

“Every one of these interactions with the selling partner, on the other end is one of our lab technicians. So [the sellers] are talking to people that actually know about packaging and have seen, in some cases, thousands of different items get tested,” said Josh Samples, senior manager on the packaging innovation team. “We try to give specific answers that can help them get to their certifications.”

He explained that working with such a wide variety of sellers, from big companies to mom-and-pop businesses, results in Amazon gathering scores of information from which technicians can develop customized recommendations, rather than employing a one-size-fits-all approach. The team looks for ways to improve the seller experience and speed up the SIPP onboarding process, such as by recommending that fewer items are tested if they can be grouped together for certification.

“We've had instances [where] a seller submits a bunch of different tests and test reports, when we can say, ‘Hey, actually, these are all really similar. You don't need to test every different color of a T-shirt,’” Samples said. That being said, the lab does not compare one seller’s products to another seller’s. “We wouldn't want to make inferences and say, ‘You know, what we've learned from Seller B is that T-shirts do this, and so you don't want to do it.’ We kind of assume for every single seller they're unique,” he said.

SIPP spurs creative packaging formats

One example of working with a customer on a SIPP-ready product is Amazon’s partnership with Procter & Gamble on Tide detergent packaging. The partners decided to convert the liquid-holding plastic jugs to a bag-in-box design so the product could ship in its own packaging. Compared with the jugs, the revamped packaging also includes 60% less plastic and is four pounds lighter.

Despite potential efficiency benefits from grouping similar items, Amazon does more robust testing for certain products, such as fragile items. “We try to find ways to use our capacities in the lab to help get those items [certified] and make sure that we put a real scrutinous eye on them,” Samples said.

Testing at the lab typically involves “a series of drops and vibrations,” but the methods and machines used are determined by product type, he explained. 

“We might, for example, want to understand how a large palletized item would perform when a truck comes to a screeching halt. That's not something we're going to think about for a T-shirt,” Samples said.

This year and beyond, Amazon aims to continuously improve the seller enrollment process for SIPP, although sources wouldn’t provide details on specific steps. 

“We're changing our fulfillment network every day ... using science and data to try to understand — as Amazon is building out this network and it's evolving, what should that mean about our test methods?” Samples said. “If you were to come back and ask that question three years from now, we might have totally different test methods.”

Michaels launched a campaign, “Respect the Handmade,” in support of the recent debut of MakerPlace by Michaels, its new online marketplace that features handmade items, classes and how-tos, according to a press release.

Central to the effort is a 30-second spot showcasing a slew of handmade goods coming to life, set to a playful cover of the classic song “Respect.” The campaign spans social media, the MakerPlace website, Michaels-owned channels, streaming video and programmatic paid media. 

Michaels is also supporting MakerPlace, which launched in November, via an in-store pilot program, inviting makers to sell directly to their community at their local Michaels store. The retailer’s latest marketing move signals how it is attempting to stay competitive against platforms like Etsy. 

Michaels is putting marketing muscle behind its recently launched MakerPlace through the online shop’s first-ever campaign. “Respect the Handmade” could help the brand gain share against digital competitors like Etsy and loyalty from the growing number of consumers who prefer shopping from small or local businesses.

Messaging behind “Respect the Handmade” is meant to celebrate Michaels’ ongoing support of independent artists and the customers who buy their products. At the center of the campaign is a 30-second spot, which features items like a bag, earrings and flower pots coming to life to take part in a playful cover of “Respect,” the hit song originally by Otis Redding. 

Michaels additionally is using its brick-and-mortar presence to test another way for handmade artists to sell their items at their local Michaels store via an in-store pilot program. The brick-and-mortar element is part of the brand’s “test and learn” strategy, a data-driven approach to launching small-scale, in-market experiments that inform future launches, per release details. The first in-store pilot began Feb. 24 in seven stores across the U.S. and the next pilot will begin March 23. 

The Michaels MakerPlace was created to support handmade artists by offering multiple membership options, lower fees and more ways to earn, whether through selling items, hosting live classes or sharing how-tos with commission-earning supplies lists. Michaels, headquartered in Irving, Texas, currently operates around 1,300 stores in 49 states and Canada.

The first campaign for MakerPlace by Michaels follows a brand refresh by the retailer last year that introduced the tagline “Everything to Create Anything,” positioning the company as a creative partner. Michaels has made additional efforts to support sellers, including through the creation of a dedicated online marketplace for third-party sellers.

The creative push from Michaels also comes as competitor Etsy steps up its own marketing, with the e-commerce company recently making its Super Bowl debut to highlight a new gifting hub. Pinterest, also regarded as an online destination for creative inspiration, has similarly ramped up marketing recently to showcase how people use its platform to discover and experience new opportunities, places and ideas.

Google announced last week new features for merchants to help them show up more easily in search and on Google Maps this holiday season, according to a company blog post.

U.S. businesses on its Merchant Center platform can now add a small business attribute in which a small icon along with a written label describing the business is displayed on the listing. The labels will make it easier for shoppers to narrow their searches, according to the post. 

Google is also updating its knowledge panel in select countries to show additional information on businesses such as current deals, shipping and return policies, and ratings and reviews.

According to Google’s buyer’s remorse survey, 84% of people say supporting local and/or small businesses is important to them, so Google is leaning in and making it easier for small and minority-owned businesses to get noticed.

Small merchants using Merchant Center or Business Profile in the U.S., including those using the Google and YouTube apps on Shopify, can add the attribute to their account, according to the post.

Google will automatically add the small business attribute to some merchants’ listings based on the number of products offered, the number of locations or how much web traffic the business gets. Users can remove it at any time. Google is also partnering with Etsy to include eligible sellers. 

Additionally, merchants will be able to create and manage product images using its new AI-powered Product Studio. For the studio, the set of AI tools can be used to set experimental scenes for products using a text-to-image generative AI model to place products in various backdrops such as holiday-themed scenes.

Google is also adding new details to the knowledge panel, in order to help build trust with unfamiliar businesses.

“Shoppers can be hesitant to buy from businesses they haven’t heard of. But certain key information, like other shoppers’ experiences, can help them build confidence to try something new,” the company said in the blog post. “To help build trust with unfamiliar businesses, we’re expanding the type of information shoppers see when they look for businesses on Search.”

This is not Google’s first AI-powered project this year. In January, Google rolled out artificial intelligence-driven tech allowing retailers to use imagery to track items on store shelves. In June, the company used AI for its virtual try-on tool.

The percentage of consumers shopping for holiday gifts with small and local businesses as much as possible has grown from 10% a year ago to 20% this year, according to a Jungle Scout survey. 

For large online retailers, Amazon ranks first as the most popular at 67%, followed by Walmart (36%), Target (14%), eBay (13%) and Etsy (11%). Among the top in-store holiday shopping destinations are Walmart (55%); Target (22%); Kohl’s (14%); specialty, independent, boutique and local retailers (12%); and Costco (9%), per the report of 1,000 U.S. consumers ages 18 to over 75. 

Eighty-five percent of consumers report that their spending has been impacted by inflation in Q4 of this year. While 89% of Gen X shoppers said inflation has impacted their budgets, 87% of millennials, 84% of baby boomers and 74% of Gen Z consumers said the same. 

More consumers are interested in shopping with small and local businesses for gifts, surpassing interest in some major retailers, according to Jungle Scout’s report. Though specialty, local, independent and boutique retailers ranked 4th among the most popular in-store destinations, they came before Costco, Walgreens, Best Buy, Sam’s Club, Macy’s and Home Depot, which took the fifth through tenth spots. 

Other consumer research has also noted the rising popularity of local and small businesses. The total spending of U.S. consumers who shopped at independent retailers and restaurants on Small Business Saturday this year reached an estimated $17 billion. The American Express 2023 Saturday Consumer Insights survey additionally found that more than half (53%) of respondents reported shopping online at small businesses on Small Business Saturday, a greater share than the 34% who shopped online at large retailers that day.

Another recent survey from YouGov and Bankrate found that 72% of consumers said they plan to shop with small businesses online or in person over the holidays, up from 65% in 2022.

Jungle Scout’s report adds to previous research indicating that inflation is weighing on consumers’ budgets. Though only 19% of consumers said they increased spending in the fourth quarter, 45% said they spent the same amount compared to the previous quarter, and the remaining consumers said they have decreased their budget. Looking ahead to 2024, 73% of consumers said they plan to re-evaluate their spending and budget next year.

Following the Etsy strike last year, Artisans Cooperative, a collective representing crafters, has beta launched an online marketplace for handmade items owned and operated by its users, according to a Monday press release shared with Retail Dive. 

On its first day, the platform had more than 70 merchants and 1,200 items available for consumers. The site was built using Shopify, according to the announcement. 

The marketplace’s policies are written by the community and it charges a sales commission, but does not charge seller listing fees. It also provides customers and artisans the chance to become co-op owners with voting rights and financial rights.

The Artisans Cooperative emerged following the 2022 Etsy strike, in which crafters on the platform spoke out against Etsy’s business practices. Etsy raised sellers’ transaction fees, a move it said it made to “invest in more ways that benefit our sellers.” Aside from the fee increase, Etsy has also caught criticism from some sellers who say it caters more to mass merchants and resellers than it does to small crafters. 

“We are excited to provide a platform that rewards the artisans and their craft as the true value builders of a marketplace,” Erin Sapre, a potter in North Carolina and secretary of Artisans Cooperative, said in a statement. 

The launch of the Etsy alternative comes as Etsy has seen a slowdown this year. In Q1 2023, the company reported that its marketplace gross merchandise sales declined 4.7% from last year to $2.7 billion, and its net income decreased $11.6 million from last year to $74.5 million. However, its consolidated revenue rose 10.6% year over year to $640.9 million, which the company said was due to the increase of its marketplace transaction fee.

A similar pattern continued in its second quarter this year, with gross merchandise sales down 0.7% year over year and net income sliding $11.2 million from last year to $61.9 million. The company’s consolidated revenue, on the other hand, saw a 7.5% bump in Q2 2023, per its quarterly earnings report. 

Still, Etsy also noted that its active buyers grew in the first and second quarters by 1% and 3% year over year, respectively. As of the second quarter, the company had a record 96 million buyers and more than 8 million sellers on its platform.