The Goods (U.S. Edition) – Ex-SKUs Me
Welcome back to The Goods! This week we’re discussing tariffs boosting the secondhand market, increased demand for multifunctional products that do it all, and how bar code scanning apps are changing the food game.
Tim Friede has an interesting side hustle: over the past 18 years, he has injected himself hundreds of times – and allowed himself to be bitten – with the venom of some of the world’s deadliest snakes. While Friede gave up immunizing himself with snake venom in 2018 after some “close calls,” his hobby has finally paid off. His immune system supported the development of a super antivenom that treats bites from 19 venomous snake species.
What’s In: This Week’s Trends
- Worn and Raised: The secondhand market could be poised to benefit in tariff times. It is projected that the pre-loved apparel industry in the U.S. will grow from $25 billion to $44 billion by 2029, fueled by a “second-hand first” mindset. As a majority of clothing and footwear is imported from overseas and subject to looming tariffs, eBay and Poshmark are seeing their share prices rise. However, not all platforms are cut from the same cloth. ThredUp and the RealReal are saddled with high operating costs due to their consignment models, and all face fierce competition from free options like Facebook Marketplace.
- Ex-SKUs Me: Retail giants like Walmart and Amazon have thrived by offering massive product variety – up to 120,000 SKUs in a physical store and tens of millions online – thanks to a humming global supply chain. Now, retailers are scaling back on SKUs, with executives warning that consumers may face fewer options with higher prices due to Trump’s trade war. While some hope this shift will push consumers toward higher quality, locally made goods, Americans will have to get used to less variety on shelves.
- Ale or Nothing: Despite craft beer’s boom over the past 50 years, consumers aren’t willing to pay the same premium for a hoppy six-pack as they would for a rare wine or whiskey. There are over 9,800 craft breweries in the U.S. vying for sales, a challenge compounded by the rise of nonalcoholic beverages, cannabis and canned cocktails, as well as climbing costs of labor, rent, and raw materials. To combat these factors, Ohio-based Nocterra Brewing is seeking to make a “cheaper-but-not-cheap-tasting IPA” by using stronger hops that deliver more “punch per pound.” Brewers are also expanding into kombucha or soda to keep their taps – and sales – flowing.
Cash or Card: Consumer Behavior
What’s going on with the consumer these days? This week we talk about Hispanic American consumers cutting back, a desire for products that do it all, and younger generations redefining what items are essential.
- Push and Pullback: Hispanic consumers – who make up 20% of the U.S. population and drove $3.6 trillion in economic activity in 2022 – are pulling back on spending amid the White House’s stricter immigration policies and broader economic concerns. With a more cautious consumer and fewer social gatherings taking place, this impact has spilled over into beer, soda, and even basics such as cooking oil and toothpaste. Companies from Keurig Dr Pepper to Colgate-Palmolive and Boston Beer Company all reported softer sales among Hispanic Americans, who have historically made up a meaningful percentage of their businesses.
- Triple Threat: Faced with rising prices and busy lives, there is a growing cohort of consumers demanding more from the products they spend their hard-earned money on. From microwave-roaster-grill air fryers to do-it-all bags, Americans are turning to multifunctional products that fill more than one role. For instance, a ceiling lamp that also acts as a projector and speaker, or the Rhode Product Blush – which works as a blush, lip color, and moisturizer all in one – makes a discretionary purchase feel more worthwhile.
- Pay Sera Sera: Despite ongoing economic uncertainty, Millennial and Gen Z consumers are now viewing once nonessential items like Netflix and skin care as personal necessities. In a survey of 2,000 people conducted by Credit Karma, 74% of Gen Z respondents report they will “strongly consider” decreasing nonessential purchases if their financial situations worsen, but many will still prioritize hobbies and self-care expenditures. Approximately 50% of respondents share they would reduce long-term savings before forgoing travels and restaurant dining, underscoring a “life goes on” mentality among the younger generations.
Making Moves: Industry Transformations & Innovation
ICYMI, even industry icons need to reinvigorate their brand presence through unique and creative ways. Here are some new brand moves that you should know about:
- The Proof is in the Points: Food-scanning apps like Yuka are reshaping shopping carts, with 68 million U.S.-based users (and growing) scanning food product bar codes to receive a 0-100 score based on organic content, additives, and nutrition. As a result, many manufacturers are reformulating products to boost their scores. For instance, Chobani removed synthetic additives and reformulated its oat milk recipe in response to thousands of consumer complaints submitted through the app. Yuka and its peers have been boosted by the same skepticism toward ingredients, food companies, and regulators that has powered the “Make America Healthy Again” movement.
- Sak a Punch: Saks Fifth Avenue has officially set up shop on Amazon, offering luxury labels like Dolce & Gabbana and Stella McCartney. The simplified Saks page doesn’t include typical Amazon features such as customer reviews and star ratings, but does provide the convenience of free one-day shipping to Amazon Prime members. The move gives Amazon a long-sought credibility boost in the luxury space, while providing Saks a chance to generate revenue and ease mounting financial pressures after its costly Neiman Marcus acquisition.
- Afternoon Delight: Many of us know the 3 PM mid-afternoon slump, when a sugar fix sounds good or a caffeine boost feels essential. To meet that craving, Starbucks announced plans to bring its aperitivo-style menu, already popular at many European locations, to the U.S., expanding its snack offerings between 2 – 5 PM. While details are still under wraps, the move is part of CEO Brian Niccol’s continued push to reposition Starbucks as a café experience rather than a fast-food stop.
Capital Markets Corner
ICYMI, even industry icons need to reinvigorate their brand presence through unique and creative ways. Our investor relations experts break down this week’s trends and headlines.
- Sole Ownership: In the footwear industry’s largest buyout to date, Sketchers has agreed to be taken private by private equity firm 3G Capital for $9.4 billion or $63 per share, reflecting a 28% premium on the price at Friday close. Needham analyst Tom Nikic said deal negotiations may have been accelerated by tariff-related concerns, weak consumer sentiment, and volatile U.S.-China relations. In its first quarter earnings report last month, Sketchers withdrew its full year 2025 guidance, citing an “uncertain” macro environment.
Tariffs, Ands or Buts
The tariff-free shopping spree for goods from China is coming to an end, as President Trump closed the de minimis loophole for shipments under $800 beginning Friday – affecting over a billion packages a year. Shoppers are already feeling the pinch: one Temu cart that once cost $275 now rings up at over $600 with import charges, and Shein loyalists are seeing price tags quietly climb ahead of the policy shift. As consumers adjust their carts and expectations, the era of ultra-cheap online hauls may be fading fast.
At FTI Consulting, we help clients think comprehensively about the problems they face, understand their exposure, assess and mitigate risks, and manage change needed. Have questions about tariffs? Learn more about how we can help here.
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