Apple Cup Kiss On Three & It is almost 'Black Friday', how do we think holiday sales will shape up?
Issue №18 - Time to get our heads wrapped around some turkey, stuffing, and rivalry college football games as we mix an Apple Cup Kiss - while we consider how retailers and brands will do this season.
It is almost Thanksgiving and ‘Black Friday’ - the traditional kick-off of the holiday shopping season. Let’s look at what we can expect for retailers and brands as we get our heads wrapped around some turkey, stuffing, and rivalry football games - and mix an amazing spicy, sweet cocktail to celebrate.
And in the spirit of giving thanks… let me just say how thankful I am for this newsletter and you, the readers. When I started writing this past February I was not sure what to expect, but it has been a joy to see the newsletter grow and to get all the positive feedback. Thank you for all the encouragement, comments, likes, and shares. I really appreciate it - and of course, just like grandma’s sweet potatoes with marshmallows, I would love to have more!
I look forward to your comments and thoughts. Thanks again for reading and I hope you enjoy it! Happy Thanksgiving to you all! Cheers!
Cocktail: The Apple Cup Kiss - fireball for ‘the Farmers’ & sweet, strong victory for ‘the Sundodgers’
It is that time of year in the Pacific Northwest when both the cocktails and days turn dark. When it seems you need to rake your lawn everyday, and look for breaks in the rain to run outside - slipping back inside to warm yourself from the brisk air by the fire. Conversation turns to Thanksgiving - whose coming, will there be turkey, and are we for sure having Grandma’s sweet potatoes with the browned marshmallows on top? (Don’t knock the sweet potatoes with marshmallows-on-top until you have tried them!)
In much of America it is also that time of year for the big rivalry college football game. Today’s cocktail was one I created to imbibe along with one of the greatest rivalries in American college football - and one most outside the state of Washington have never heard of - the Apple Cup. I hope you can all forgive me for a more personal cocktail article today than most, but U-Dub is 11-0 and it is the holidays!
Let’s get ready for some (tackle) football!
Originally called the ‘Governor’s Trophy’, the University of Washington Huskies (aka ‘U-Dub’) and Washington State University Cougars (aka ‘Wazzu’) began play against each other 123 years ago - in 1900 - back when Washington’s moniker was ‘the Sundodgers’ and Washington State’s was ‘the Farmers’. The game has traditionally been the final game of the regular season for both teams, and played around the Thanksgiving holiday. For time it was almost always played on ‘Black Friday’, until the retailers in the state lobbied to move it so the game would not cut into their doorbuster specials and the hoards of shoppers they aimed to attract. (Fortunately mobile commerce came to the rescue and now we can order Mrs. Claus her new holiday pjs during a timeout!)
The annual game was renamed the Apple Cup in 1934 to celebrate and help market Washington state’s thriving apple industry - and to this day Washington state is the leading apple producer in the United States and arguably the world. The rivalry literally divides many families in the state of Washington each year, and that is certainly true for mine.
I am a U-Dub Husky and always have been, indoctrinated early-on by my maternal grandfather. He was a ball-player himself, recruited as a walk-on running back to the U-Dub before he was drafted into the U.S. Army, serving in Europe during WWII. ‘Polish Lightning’ - as he was called - never saw the field after a tank accident during the Battle of the Bulge gave him a lifelong bad-back, but he became a lifelong Husky all the same. I learned to drive in Grandpa’s purple and gold pickup truck and he and my grandmother attended every Husky home game for nearly sixty years. Now 101, my grandfather and 98 year-old grandmother watch from the comfort of their home - walkers and canes near-at-hand - but still cheering and jeering at the TV. Needless to say, they have seen a lot of Apple Cups and have typically been happy with the results - though it seems to be the defeats you remember most in any rivalry. (See Note #1 for how things are going thus far in the rivalry. Go Dawgs!)
But my roots with Wazzu also run deep. My father is a Cougar and his father - my paternal grandfather - was even on the research team that created arguably WSU’s most famous and delicious product - ‘Cougar Gold’ cheese - when he was a graduate student in the 1940’s in the WSU dairy program - the U.S. government having funded research there into canning cheese to keep in nuclear bomb shelters. The cheese is still made on WSU’s campus to this day, and is - as most Wazzu alumni would say - ‘good shit’. Among its many awards, it received the gold medal at the 2006 World Cheese Awards. But while a good story, it is not nearly as good as both my father's and uncles at Wazzu each are. (Editor’s note: We are trying to set a good example with this newsletter, so these stories have been cut. See Note #2 below.)
Most Huskies - like myself - look at the Cougs as family, like a younger brother or a cousin. You love beating them, but not as much as you love them. And besides our mutual love for our beautiful state, and love of competing against each other, there is at least one thing all U-Dub and Wazzu fans can agree on - and I am sure the OSU Beav’s would agree too - we all hate the Oregon Ducks! (Editor’s note: See Note #3 below.)
The annual Apple Cup tradition was at risk, with the Pac-12 Conference splitting up and U-Dub headed to the Big… um…let’s count… 10(?), but fortunately the U-Dub and Wazzu will continue the Apple Cup at least for another five years such that we can celebrate the rivalry and get stirred up with some Apple Cup Kisses along the way!
I thought this was a newsletter about cocktails, not tackle football… time for The Apple Cup Kiss!
A few years ago I hosted an Apple Cup watch party, and wanted to make a cocktail for the family and friends who were coming over to watch the big game outside on the TV on my office patio. I told everyone to bundle up - it was going to be cold - and I wanted a cocktail that would warm us up from the inside as well. I also wanted a cocktail I could batch so I did not have to take my attention off the game. And needless to say, I wanted to use apple brandy because… well… apples! For inspiration, I turned to a very old, pre-prohibition, classic apple brandy cocktail for inspiration - The Widow’s Kiss.
Like many old classic cocktails from the late nineteenth century - such as the Corpse Reviver we wrote about recently - many bartenders back then had their own variation on The Widow’s Kiss. Back in those days, when someone would say someone was ‘the widow's kiss’, they were essentially saying they were ‘hot stuff’. So many bartenders would name their most evocative and sexy cocktail The Widow’s Kiss. It represented nearly anything that was strong, boozy, and sweet - and meant for, um, well…shall we say… “after dinner”?
The first recorded mention of The Widow’s Kiss cocktail was in 1891, and it is best known from George J. Kappeler’s well regarded cocktail book, Modern American Drinks, published in 1895. Ted Haigh - aka ‘Dr. Cocktail’ - wrote a beautiful piece about the drink in his book Vintage Spirits and Forgotten Cocktails, in which he gushes, “[The Widow’s Kiss] is a cocktail of fall turning toward winter, and it wins Doc’s award as the most evocative drink ever.” (That’s quite a compliment, especially coming from a dude who published a version of his book as a three-ring binder for the mixology nerds out there - like us here at C&C.)
To create The Apple Cup Kiss I took the basic spec from The Widow’s Kiss - apple brandy, yellow Chartreuse and Bénédictine - and gave it a bit of a college football twist. I added spicy hot cocktail bitters to mimic the cinnamon fire of the otherwise disgusting Fireball whiskey - many shots of which will of course feature prominently at all the frat boys’ tailgates on both sides of the Apple Cup rivalry on November 26. My goto for hot spicy bitters these days are Infuse Bitters Tres Amigos - which I also love here in that it honors all those of Mexican and Latino heritage who are such a big part of our state’s culture and agriculture - including apples.
Meanwhile, I subbed in Génépy for the yellow Chartreuse out of pragmatic decision making and in the interest of conservation. Chartreuse is both expensive and in reasonably short supply, while Génépy is a very reasonable substitute as the herb génépy - aka wormwood - is the most dominant in the Chartreuse flavor profile. Génépy also happens to be a lot less expensive and is easy to find. (We are adding spicy bitters here and drinking for five hours watching football, let's save the good shit. See C&C Issue No.6 for more on Chartreuse and the shortage.)
I also played with the proportions of The Widow’s Kiss. If there is one fairly consistent critique of that classic cocktail it is that it can be a bit sweet. I vary the classic 2:1:1 of the original Widow’s Kiss to reduce the sweetness some in The Apple Cup Kiss.
With that, let’s all drink to a Husky victory as we give the Cougs a kiss!
Cheers! And Happy Thanksgiving everyone!
Notes:
For the record, U-Dub holds a 75–33–6 series lead over Wazzu across the 114 games played. Go Dawgs! Let’s get win 76!
My dad’s and uncle’s adventures in and out of Wazzu are hilarious stories, and who knows, maybe something you can get me telling late into “Office Hours” on December 8th. (See below.)
The Apple Cup Kiss Cocktail Spec, serves one:
1 ½ oz (~45 ml) - Apple Brandy (Laird's 100 Proof Apple Brandy preferred)
½ oz (~15 ml) - Bénédictine
½ oz (~15 ml) - Génépy (see note)
Dash or two - Angostura or ‘house’ cocktail bitters
Dash or two - Infuse Bitters ‘Tres Amigos’ cocktail bitters (See note)
Garnish - slice of apple with a cocktail cherry
The process:
Combine all ingredients in a cocktail mixing glass, add ice. Stir until well chilled. Strain into a cocktail coupe or martini glass. Garnish.
Preparation time: 5 min.
Notes:
I have used Génépy here and explained why in the article above, but certainly yellow Chartreuse can be a great inclusion here. Another nice American alternative is Fast Penny Spirits’ Bianco amaro.
L.A. based Infuse Bitters does not have super wide distribution yet. It is excellent and HOT! Use any spicy bitters as a substitute, or a small pinch of cayenne pepper if you don’t have any of those around.
Mix & Learn with Cocktails & Commerce! Composable Commerce, Content & Cocktails, oh my!
Bill and I had a blast joining ITG on the recent webinar to talk about composable cocktails and composable commerce. We mixed negronis and boulevardiers and apparently had a great time and said a few insightful things along the way about both cocktails and commerce. (Our memory is a little fuzzy, we were drinking after all.)
So join us for the next one on November 30 as we share our knowledge and perspective on composability - both in cocktails and commerce - and do a deeper dive into headless content with special guest, Dina Apostolou from Contentful. I am still considering what I am going to mix, but rumor has it Bill plans to one up me and double-split a Boulevardier! (And teach you all about it along the way!)
If you hurry, you may even get a great cocktail kit to mix along with us! It is going to be a blast. (Register here, and do it quickly!).
Note: If you are a commerce technology or services business interested in working with Cocktails & Commerce for virtual or in person events, contact us here.
Analysis: Holiday 2023 - How are things shaping up for retails and brands this holiday season?
Let’s face it, a majority of the commerce tech market serves the B2C commerce clients, though in today’s market the action has largely shifted from retailers to brands and manufacturers - and their direct-to-consumer businesses. As such, the health of the overall retail and e-commerce economy and the quality of clients results is of vital importance to the outlook for the commerce tech and services market the coming year - as their customers set priorities, establish budgets, and kick-off vendor selection processes early in 2024. Many clients will make those decisions while reflecting back on the results of 2023 as they set those plans.
Strong results will feed a client's investment thesis and make justifying spending on tech, services, and talent much easier to sell and stomach (speaking of Thanksgiving). Poor results can lead to not only conservative planning, but may lead to cost cutting and even some strange, but pragmatic decision making.
And there is no more critical set of weeks in the calendar for most DTC businesses than the next few - unless they sell flowers (Mother’s Day) or Jewelry (Valentines Day) or suits (May… weddings!). While in today’s day and age, 50% of consumers begin shopping in October or earlier, closing out the holiday shopping season with strong sales, healthy margins, and balanced inventory is the peppermint dream for every retailer as they head toward flipping the calendar over on New Years.
So how are things shaping up a few short days ahead of ‘Black Friday?’
Retail overall is essentially flat, while e-commerce continues to take share
Retail as a whole is not in great shape. Insider Intelligence and NRF both are projecting total retail sales in the U.S. will grow a modest 3% YoY. And while inflation has been largely brought under control in the U.S. as 2023 has gone on, it is important to note that these figures are not inflation adjusted - which means retail as a whole is nearly flat in terms of real sales growth.
And while e-commerce growth has moderated post-pandemic, it is starting to grow more aggressively again on an annualized basis. The net-net here is to realize that e-commerce is still taking market-share from brick-and-mortar retail, outgrowing it by 7% - though on a much smaller base. E-commerce is in modestly better shape, though for omnichannel retailers and brands the overall picture may still appear to be a challenging one. And yes, while I agree with many of you who are right now saying, “Can’t we stop looking at these as competing channels?,” I think it is fair to say that the investment thesis and business model decisions need to continue to tilt toward digital in a more and more meaningful way. (So I guess it does still matter.)
E-commerce remains the bright spot, even post-pandemic
And while that may surprise some - as the media continues to want to trumpet a narrative that e-commerce has taken a step back since the massive growth rates during the pandemic - friend-of-the-newsletter Jason ‘Retail Geek’ Goldberg did us all a favor and crunched some numbers that tell the real story. The real story is that e-commerce continues to grow at a strong pace, and now on a much larger base than before the pandemic. So the media narrative that e-commerce has slowed somehow is just plain wrong - and I suspect may be twinged with generational bias and yearning for a return to “offline ad revenues” that kept media afloat and profitable until digital came in and stole the turkey… and the cranberry sauce.
Deflation & discounting will have a big role to play this holiday season
Another factor that will have a big impact on how retailers and DTC brands feel exiting 2023 are margins. Many products are being marketed for less now than they were a year ago, when inflation was still near its forty-year peak. Prices for everything from consumer electronics, toys, housewares and apparel that often get put under the tree have all dropped in price since last year’s holiday season. Smartphone prices were down 12% in October from a year earlier while TV prices were down 9.4% in the same period. Audio equipment - like speakers, earbuds, and headphones - also were cheaper from a year earlier and computers make the list, as well. This will cut into margins in a meaningful way.
There are several reasons. Consumers are spending more on experiences such as travel and concerts, reducing the demand for goods just as store shelves are better stocked - in part to the recovery of supply chains. Overall inflation has declined significantly as the economy shows signs of cooling off - from slower job growth to sluggish retail spending in October. Retailers such as Walmart say an era of price hikes is fading, but they are not likely to share that a big reason why is that the cost of goods has also fallen - as China and much of Asia enters a deflationary phase. And while that may be great for the U.S. consumer in the short term, it may strain and challenge the global economy just as two wars impact and add volatility.
But just because prices are lower to begin with, does not mean we are likely to see any less discounting. Consumers are for the most part prioritizing promotion and discounts higher than ever.
And retailers are likely to oblige. Adobe predicts discounting this holiday season will hit record highs as retailers struggle with the uncertain outlook for consumer spending. It forecasts that toys, electronics, TVs and furniture will see the most aggressive price cuts.
And despite an overall healthy U.S. economy, consumers are not in the mood to splurge this year. Can the lower prices and steep discounts entice consumers? We will have to see.
2024 is shaping up to remain a conservative commerce tech and services market
Net-net, commerce tech and services businesses need to realize that the retailers and brands they serve may remain in a relatively conservative mood after the holidays. While sales may be decent, margins will likely not. Those running retail and DTC businesses may be inclined to continue to optimize around the edges. Areas like personalization, martech, and other optimizations will continue to see effective pipelines - but it may be a bit tougher sledding in Q1 and into next year for commerce platforms and larger investment areas like OMS and building out bespoke approaches to generative AI.
Join us for the first-ever Cocktails & Commerce Office Hours! (AKA: The Virtual Hotel Bar)
We love cocktails and we love this community. Many a night over the years has been closed out with a cocktail at the hotel bar with others from our commerce community - others from our companies, our partners, our clients, and colorful stragglers-on (you know who you are!). Often ending up at the hotel bar was evidence of poor decision making, but it also led to lifelong friendships, great stories, and often great insights. So bring something to mix and add to the conversation! Join us online for:
Cocktails & Commerce “Office Hours”
Friday - December 8, 2023
4-6PM ET / 1-3 PT / 10PM-midnight CET
To register send an email to: events@strategyem.com - we will shoot you a meeting invite with an online meeting link. (Don’t worry, there is no marketing and no list sharing. While we don’t want to do that for policy reasons, the real truth is also… we don’t know how! Ha!)
If you are looking for Brian online, you can find him here, here, and here. Bill may be busy sorting all the new amari he just received from Italy, but you can find him here.
Be well, be safe, and here is to good business! Cheers! - Brian
Cocktails & Commerce™ is a wholly owned subsidiary of StrategyēM, LLC.
Great piece.
One trend I noticed intensifying in the pandemic and since - which may mean it’s a permanent shift- is the lengthening of the peak period.
I think a number of factors including popularity of Prime Day but also all the random stuff like the deliver driver labor crunch, the run on cardboard, and other shortage issues got smart retailers to peanut butter their promotional calendar back into October.
As the pandemic fades in the rear view mirror maybe we will see a return to the intense cyber 5 spike of the 2010s but I doubt it.
One thing that means imo is that you really have to have your act together when it comes to devops/cicd and so forth. You can’t really run a business where everything technical pauses for months.
Looking forward to your next piece on architecture!