Retail slumps as spending chills

Will retail's deep freeze thaw? With most of the country experiencing extreme winter weather, there have also been economic headwinds to make us shiver. From rising inflation and falling consumer confidence to musical high notes and mind tricks, here’s everything you need to know this week. Plus, a sit-down interview with the owners of modest clothing company Inherit. 

Modest fashion brand fills a gap and finds success

Inherit Clothing Company began with a simple yet powerful mission: to provide stylish, modest clothing while fostering a community centered on faith, family and integrity. For co-owner Amy Ekren, dressing modestly was a personal commitment, but finding a single store that met her needs proved challenging. Rather than compromising, she and her husband, Anthony, launched Inherit in 2018 to create a brand that offered timeless, feminine styles aligned with their values.

What started as an online Shopify store has since expanded to include a thriving brick-and-mortar business, serving thousands of customers each month. As demand for modest fashion continues to grow—projected to reach $65.8 billion in the U.S. in  2025—the Ekrens have navigated the challenges of niche retail, balancing authenticity with growth while finding meaningful ways to connect with their customers.

We sat down with them to learn more. – Bianca Prieto

What has been the biggest factor in your success as a niche retailer? 

There have been so many different factors that have played a part in our success at Inherit. One thing that comes to mind is being true to ourselves and not being afraid to say this is who we are and we would love you (the customer) to join us on our journey. Staying true to ourselves and our mission has meant that sometimes we don't jump on a trend because it doesn't fit our modesty mission. Being able to serve thousands of customers a month is something we are truly grateful to be able to do.

  What’s a lesson you’ve learned about scaling or growing your business that could help other retailers?

The lesson we have learned is that growth and scaling are not linear. It is definitely a squiggly line of ups and downs. Use those down times to take a step back and ask yourself how you got here and what can be done to improve upon it. A lot of times, this has put a spotlight on something that can be improved that we didn't see during periods of growth.

What’s one thing you’re currently experimenting with or excited to try in your business?

Live sales! We have been on this trend for a couple of years now, but it is still so exciting for us with a lot of growth potential.  Connecting with a customer base is a big challenge for online retailers, live selling has been a way for us to connect and interact with our customers in real-time.  It helps us to be very transparent and build meaningful connections.  

Answers have been edited for brevity and clarity.

Retail sales, outdoor temps nosedive in January

Retail sales dropped nearly 1% in January, surprising economists and notching the biggest drop in a year. Perhaps not a coincidence, the average temperature in January was the lowest since 1988, and the Los Angeles wildfires impacted spending in the country’s most populous state. Meanwhile, inflation has risen to 3%, and consumer confidence has dipped. Import taxes are affecting already rising prices. So, is there any good news? Hiring and wage growth have been steady, and unemployment fell to 4%.

Why this matters: As we head toward March and look back on January, things appear grim, but with every valley, there’s a hilltop. It will only get warmer, but retailers should be cautiously optimistic and more proactive in safeguarding their businesses against the many still-unknown factors affecting the economy. While the knee-jerk reaction may be to stick with what you know, it may also be time to explore some new tactics. (AP)

Joann bankruptcy signals niche retail distress

By now, we are conditioned to expect headlines when so-and-so retailer declares bankruptcy. Often, another announcement will follow when they emerge from Chapter 11. Fewer retailers have done it twice, but beloved craft supply chain Joann Fabrics is on that list. Joann will close 500 of its 800 stores nationwide and seek sale of its assets. Business had a bump during pandemic stay-at-home days, then dropped once the pendulum swung to revenge travel. Competition from big box stores and inflation have hurt the bottom line. This mirrors what several niche retail chains and mom-and-pop shops are experiencing, and the trend is set to continue.

Why this matters: The economy will forever fluctuate, but what enables retailers to survive is the ability to pivot. It can be hard if you’re suddenly mired in inventory that’s no longer selling, but solid inventory planning and management can help mitigate pitfalls. There’s nothing wrong with being niche, but it requires extreme attention to all the fundamentals and details.  (The Street)

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Consider your store’s soundtrack a brand ambassador

Ola Sars, a music tech entrepreneur and co-founder of Beats Music, where he served as COO, is now the founder and CEO of Soundtrack Technologies, a streaming music service for businesses. The platform serves more than 80,000 businesses across 74 countries and boasts a catalog of more than 100 million tracks. In a Q&A with Retail Customer Experience, Sars discusses why retail leaders view music as a crucial element of the customer experience and how it influences shopper behavior—84% of shoppers, for example, notice the music playing in-store. His advice? Automate playlists, update them regularly, and stay mindful of copyright laws.

“The music you play should always match your brand: Anyone who comes into the store has an expectation of the atmosphere they're entering and whatever in-store music is played should mirror the qualities customers are subconsciously absorbing. Is the vibe comfortable or is it glamorous? Is what they are hearing consistent with your brand advertising, merchandise and the customers' perception of the business?" - Ola Sars, Founder & CEO, Soundtrack Technologies

Why this matters: Much goes into creating a music-forward strategy, like making sure tracks are cleared for commercial use (hint: don’t let employees play their tunes over the system or you could face an infringement letter). There’s also psychology behind sounds: Playing an unfamiliar song can minimize distractions for shoppers. If you’re not up to the task, consider outsourcing to a pro because more than half of shoppers respond positively when a store plays music they like.  (Retail Customer Experience)

Digital fatigue: 5 red flags & how to fix them

Do you know what digital echo response is? What about digital hoarding, anticipatory digital stress and digital social withdrawal? These are all neurological red flags that signal your brain is going into digital overload. A study in the Journal of Business Research found that too much screen time can reshape your brain’s architecture. Most people know that other red flag; attention fragmentation. This story breaks down the signs of each one and how you can reset your brain for better health and productivity.

Why this matters: It’s far too easy to get wrapped up in your screen, which leads not only to eye strain but also to drained energy and valuable work time lost. Understanding the science behind your brain’s responses and knowing practical ways to counteract the negative effects is priceless. (Forbes)

What we are streaming: The White Lotus, Season 3 has arrived on Max and with it comes a raft of brand activations to watch for off-screen. Call it the Barbie and Wicked effect.

What we are listening to: A recent WWD Voices podcast features Caroline Weaver, small business expert and founder of The Locavore Guide, discussing the trend of guides that help consumers shop small.

What we are following: OG beauty YouTuber Tati Westbrook’s two-hour declutter video could inspire a No Buy 2025, except she also shares what’s new in her makeup, skincare and jewelry collections... and it’s hard to resist her recs. 

Thanks for reading this week's edition!

You can reach the newsletter team at theskupe@mynewsletter.co. We enjoy hearing from you. 

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The SKUpe is curated and written  by Marcy Medina and edited by Bianca Prieto