Stock futures are flat ahead of first trading day of November

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, October 27, 2021.

Brendan McDermid | Reuters

U.S. stock futures rose slightly in overnight trading on Sunday as investors readied for the first trading of November.

Market participants are gearing up for another week of corporate earnings, a key Federal Reserve meeting on Wednesday and October’s jobs report.

Dow futures rose 80 points. S&P 500 futures gained 0.25% and Nasdaq 100 futures rose 0.25%.

Stocks closed out the month of October on Friday and all three major averages closed at record highs. The S&P 500 and Nasdaq clinched their best months since November 2020.

The Dow Jones Industrial Average rose 5.8% in October. The S&P 500 rallied 6.9% last month and the technology-focused Nasdaq Composite added 7.3% in October. The month marked a rebound from September, where the major indexes declined.

Corporate earnings season dominated October amid solid earnings even with global supply chain concerns. About half of the S&P 500 companies have reported quarterly results and more than 80% of them beat earnings estimates from Wall Street analysts, according to Refinitiv.

As earnings season continues this week, investors will also be monitoring the Federal Reserve’s two-day meeting Tuesday and Wednesday. The central bank is widely expected to announce that it will begin to unwind its $120 billion in monthly bond purchases and end the program entirely by the middle of next year.

Investors will also be looking for the Fed’s comments on rising prices as inflation has been running at a 30-year high.

“The Fed is part of a global move to remove accommodation, and the market drives right past that,” Bleakley Advisory Group CIO Peter Boockvar said. “In a way, the stock market is playing a game of chicken, with this inflation move and interest rates and the response from central banks.”

The other big event for the week will be October’s October employment report Friday, which could show some improvement in hiring, as new cases of Covid-19 continued to decline.

“The change in nonfarm payrolls is expected to be a robust 450K which is likely to again lower the unemployment rate,” said Jim Paulsen, chief investment strategist for Leuthold Group. “Key to the report will be how much wage inflation rises and whether the labor force participation rate finally picks up after so many recently came of extended unemployment benefits.”

—CNBC’s Patti Domm contributed to this report.

Market is melting up to new records, but 2022 looks rough: Wells Fargo

Chris Harvey’s reign as the year’s biggest bull won’t extend into next year.

The Wells Fargo Securities head of equity strategy, whose 2021 S&P 500 target is 4,825, predicts Wall Street will stage a vibrant year-end rally and then see a losing 2022.

“You’re going to bring equities to a level that they can’t sustain. We’ll have the equity market melt-up,” he told CNBC’s “Trading Nation” on Friday. “We’ll bring stocks to a level where the fundamentals and valuations don’t support them.”

The S&P 500, Nasdaq and Dow ended the week in record territory. The S&P and Nasdaq were up 7% in October while the Dow gained 6%.

“What we’re seeing from a lot of individuals and investors is they feel like the market is unbreakable at this point in time. We’ve had several pullbacks. You’ve bent it, but you’ve never broken,” said Harvey. “That brings another level of FOMO [fear of missing out], and that brings in a level of confidence.”

Harvey lists strong economic fundamentals, better-than-expected earnings, low capital costs and massive cash on the sidelines as fuel for gains.

“It’s late in the bull market,” he said. “Now is a period where irrationality becomes much more rational. Things you don’t expect to happen can happen, and most likely will.”

Harvey contends momentum names, which include banks, will be major drivers into year-end. He calls financials a “stealth leadership play” that will get traction from the Federal Reserve’s taper plans.

Don’t go bottom fishing

October best month for box office ticket sales in 2021

Tom Hardy stars in Sony’s “Venom: Let There Be Carnage.”

Sony

Don’t count out the domestic box office just yet.

A combination of new movie releases, many of which appeared exclusively in theaters, coupled with growing consumer confidence in returning to cinemas amid the coronavirus pandemic led October to be the highest-grossing month for ticket sales so far in 2021.

It’s estimated that moviegoers spent around $637.9 million on tickets over the last 31 days, as they ventured out to theaters to see “No Time to Die,” “Venom: Let There Be Carnage,” “Halloween Kills” and “Dune.”

“Though this is likely an anomaly that will perhaps never be repeated, the 10th month of the year has now shown that it can indeed provide a great home for blockbusters of any size or genre type,” said Paul Dergarabedian, senior media analyst at Comscore.

Many of the films released during the month were slated to open earlier in the year but were postponed due to the ongoing pandemic. This led October receipts to outpace July, which previously held the record for the highest-grossing month in 2021 with $583.6 million in ticket sales, according to data from Comscore.

As of Sunday, the domestic box office has tallied $3.1 billion through the first 10 months of the year, which is 45% higher than 2020’s haul through the same period and 66% behind 2019.

“The industry circled this October on the calendar as an important marker for moviegoing’s pandemic rebound, and it delivered in a big way,” said Shawn Robbins, chief analyst at BoxOffice.com.

While the summer months are typically the highest-grossing months of the year for the domestic box office, October has made major gains in recent years thanks to blockbuster titles like “Joker” in 2019 and “Venom” in 2018.

In 2019, October secured $789.5 million in ticket sales, the second-highest haul for the month behind 2018’s $832.1 million. October 2021 had a higher haul than the same period in 2017.

Cinemark said Sunday that October was the company’s highest-grossing box office performance month in the Covid-19 era. The month’s results were more than double the receipts of May 2021.

“I am thrilled that we have reached a new milestone within the industry’s recovery, delivering our best monthly box office performance since the reopening of our theatres,” said Mark Zoradi, Cinemark’s CEO, in a statement. “Congratulations to our studio partners for creating must-see big-screen content with something for everyone.”

Heading into November and December, movie theaters will benefit from the release of a number of films that were previously postponed. “Eternals,” “Ghostbusters: Afterlife” and “Encanto” are slated for November and “West Side Story,” “Spider-Man: No Way Home” and “Matrix Resurrections” are due out in December.

“We’ve been through several of these stress-test periods throughout the year, and there will be more to come during the holidays and winter,” said BoxOffice.com’s Robbins. “Vaccines for young children remain crucial in the long term. All in all, though, theater owners and studios should be very encouraged by the string of recent box office hits and what they signal for the new year around the corner.”

Disclosure: Comcast owns NBCUniversal and CNBC. Universal released “No Time To Die” internationally and is the global distributor of “Halloween Kills.”

Biden calls on G-20 to help address global supply-chain issues

US President Joe Biden addresses the media with President of the European Commission during the G20 of World Leaders Summit on October 31, 2021 at the convention center “La Nuvola” in the EUR district of Rome.

Brendan Smialowski | AFP | Getty Images

WASHINGTON – President Joe Biden convened a summit on Sunday during the annual gathering of G-20 leaders to address supply-chain challenges and other disruptions affecting global commerce.

“Supply chains are something that most of our citizens never think twice about until something goes wrong. And during this pandemic, we’ve seen delays and backlogs of goods from automobiles to electronics, from shoes to furniture,” Biden said in his debut at the G-20 since becoming president.

“Ending the pandemic is the ultimate key to unlocking the disruptions we’re all contending with. But, we have to take action now, together with our partners in the private sector, to reduce the backlogs that we’re facing,” he said. “Now that we have seen how vulnerable these lines of global commerce can be, we cannot go back to business as usual.”

Biden, alongside leaders from 14 other countries and the European Union, agreed to “foster greater international cooperation on near-term supply-chain disruptions,” according to a White House readout of the meeting. The leaders also plan to strengthen and diversify the entire supply-chain ecosystem from reliance on certain raw materials to manufacturing to shipping and distribution.

The world’s supply chain is continuing to bear the brunt of a relentless pandemic, surging consumer demand, labor shortages and overseas manufacturing delays, which has led to higher transportation costs and inflation.

In an effort to address the U.S.’s own supply-chain issues, Biden also announced the following domestic measures:

  • An Executive Order aimed at streamlining American stockpiling efforts by delegating authority to the Department of Defense to make material releases from the National Defense Stockpile. The measure will allow for a more rapid response to material shortfalls within the defense industrial base.
  • Two initiatives to promote international supply-chain resilience among U.S. partners and allies. First, the State Department will grant additional funding to provide technical assistance to Mexico and Central America counterparts to alleviate supply-chain disruptions and bottlenecks. Second, millions of dollars in funding for new U.S.-ASEAN initiatives. Both of these initiatives will improve and simplify customs and clearance procedures, reducing delays and encouraging sustainable and efficient supply chains.
  • Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo will hold a multi-stakeholder summit next year along with their foreign counterparts. The summit will be a follow-on dialogue to establish the next steps among these parties to build greater global supply-chain resilience.

Earlier this month, the Biden administration unveiled a plan to run operations 24/7 at the California ports of Los Angeles and Long Beach, which account for 40% of sea freight entering the U.S.

Last week, the twin ports announced new fines on carriers at the nation’s busiest port complex in order to abate the intensifying logjam of cargo ships.

Once loaded off vessels, containers moved by trucks will have nine days before fines start accruing. Containers scheduled to move by rail will have three days.

In accordance with these deadlines, carriers will be charged $100 for each lingering container per day starting Nov. 1.

Groups like Buy Nothing and Freecycle bolster budgets and community

kate_sept2004 | E+ | Getty Images

When Sherose Badruddin, 38, joined her local Buy Nothing group in Chapel Hill, North Carolina, five years ago, she did it purely to save money. As a single mom, she was on a tight budget.  

“I joined my Buy Nothing group in 2016 to get free stuff; I thought that was all it was,” she said. “Very soon after that, I learned that it was so much more.”

She found new clothes and shoes for her son, who was 5 years old at the time, and connected with families in her community that she wouldn’t have otherwise met, she said.

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In addition, she realized that even though she was working to cut spending, she had a lot to give – when her son outgrew toys and clothes, she gifted them back to the community.

“I suppose I could’ve taken them to a thrift store,” said Badruddin, who works at a local library and later became an administrator of the Buy Nothing group in Chapel Hill. “But the opportunity to be able to give to a neighbor feels really good.”

A boom during the pandemic

Groups that promote gift-giving and exchanging goods and services for free have been around for some time. The Freecycle Network was founded in 2003 by Deron Beal to recycle items and Buy Nothing was started by Liesl Clark and Rebecca Rockefeller in 2013 as a social experiment on a local gift economy and to cut down on plastic use.

Both groups experienced growth during the coronavirus pandemic. Buy Nothing grew by a third in a year, according to its founders, and now has 4.27 million participants in more than 44 nations around the world using more than 6,800 Facebook groups (an app is also in the works and launching soon.)

During the pandemic, “communities came to realize that one of the biggest ingredients of resiliency is sharing, is relying on your neighbor,” said Rockefeller, adding that during lockdowns, many people comfortable or able to go to stores but felt safe doing a contactless pick-up of a sanitized item from a neighbor’s porch.

Freecycle experienced an uptick in activity during the pandemic, something Beal also noticed during the Great Recession more than a decade ago. The organization now has about 9 million members and is in more than 5,000 local communities across the globe.

“The growth of our organization is completely counter-cyclical,” Beal said.

The budget saver

For Kate Muth, 44, her local Buy Nothing group in Brooklyn, New York, has meant her family has been able to try things that wouldn’t be included in a budget or she’d never think to buy.

This includes a pullup bar, which she snagged for one of her daughters — she has two, ages 4 and 9 — during the pandemic.

“That’s a fun thing that I never would have spent the money on,” said Muth, a customer experience strategist.

On occasion, the group has also shielded her from a repeat purchase, as was the case with her blender. She’d given one away a few years ago but recently thought it might be nice to have again. Instead of going to the store, she was able to get one from the community.

These gift-giving groups can be a help to people who are working on spending less or trying to be more mindful with their wallet, said Tania Brown, a certified financial planner and coach at SaverLife, a nonprofit focused on helping low-income Americans save money.

Brown herself felt compelled to consume less during the coronavirus pandemic and imposed a no-spend challenge on her family for one week as an experiment. It ended up going so well that she now recommends similar challenges to interested clients.

“The core of it is mindful intentionality about your spending,” she said, adding that being part of a gifting group can help you slow down knee-jerk, emotional spending by looking for something within one’s community.

For those who are interested in spending less or being a more mindful consumer, Brown recommends starting small.

“It could be as simple as no spend in one item that you typically buy impulsively, or a week without credit cards,” she said. “It doesn’t have to start with this massive change.

Environmental impact

To be sure, such groups were first and foremost started with environmental goals — to help people recycle better and consume less. While there are financial benefits, both founders and members say that they’re often driven to join groups to be more sustainable and connect with their community.

“I feel that it has more of an environmental impact because we throw fewer, things away,” said Ramona Monteros, an administrator for Buy Nothing Noho Arts (North) in Los Angeles. While she has gotten things from her group, she has been more active on the giving side – donating clothes and toys that her two young boys have outgrown, for example.

“I have so much stuff that I need to get rid of, and someone else can use it,” said Alison Kamat, 69, a retired librarian who lives in a suburb of Washington, D.C., and volunteers with Freecycle.

There’s also the thrill of finding something that you’re excited to use, or that can have a new life with a little elbow grease.

Recently, Kamat found one such item — someone in her local Freecycle group posted a fajita pan that had been left outside all winter.

“I spent a whole morning sanding it down and making it really nice, seasoned it and it’s a great pan now,” Kamat said. “It was really worth the effort; I was really proud of myself.”

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Moderna says FDA needs more time to review its vaccine for teens

Moderna said the Food and Drug Administration will need more time to complete its assessment of the biotech company’s Covid-19 vaccine for children ages 12 to 17.

The agency is looking specifically at the risk of myocarditis in kids, Moderna said in a statement Sunday, and the review may not be completed before January 2022. Myocarditis is the inflammation of the heart muscle.

“The company is fully committed to working closely with the FDA to support their review and is grateful to the FDA for their diligence,” Moderna said.

Moderna also said it will delay filing a request for emergency use authorization for a smaller dose of the vaccine for younger kids ages 6 to 11 while the FDA completes its review.

Moderna said on May 25 its Covid vaccine was 100% effective in a study of 12-to-17-year-olds. The company then applied to expand the emergency use of its vaccine for adolescents in June.

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Jenn Lim, CEO of Delivering Happiness, book recommendation

When Jenn Lim pitched her new book “Beyond Happiness” in early 2020, she thought she’d discuss her decade of work as CEO of Delivering Happiness, the business consulting firm she cofounded to help companies build happier, more sustainable workforces using science-backed research on happiness.

No one, let alone she, could predict the way the coronavirus pandemic would change everything about daily life and work in the months to come. As she provided updates on how companies from Starbucks to Airbnb were responding to the global crisis, she experienced her own life-changing loss when her cofounder and close personal friend Tony Hsieh, the larger-than-life business leader known for his work as CEO of Zappos, died suddenly in November 2020.

As she worked through her grief, Lim says one book stands out for helping her through her personal as well as professional challenges.

Lim tells CNBC Make It that she recommends everyone, especially those early in their career, read “Inward,” a collection of poetry, quotes, and prose written by a meditator, writer and speaker Diego Perez who goes by the name yung pueblo, which means “young people.”

Published in 2017, the collection explores “the movement from self love to unconditional love, the power of letting go and the wisdom that comes when we truly try to know ourselves. It serves as a reminder to the reader that healing, transformation and freedom are possible.”

Lim describes the text as concise and straightforward and “timely for whether you’re young, as in literally young in age, or you want to keep being young at heart, in your mind and in your spirit.”

In the last year, Lim says she’s seen the power of connecting through grief and healing both in her personal life and through her work as a happiness expert. “Since the reset on humanity hit the whole world, people wanted to understand what it meant to be scientifically happy, but through the lens of grief and loss,” she says. “It was a reminder that it’s not just our highs in life that we learn from, it’s also our lows.”

Lim also connected with yung pueblo’s themes of discovering the self and authenticity, she says, as it relates to how she aims to help individuals build a sense of happiness within themselves and, by extension, through their work.

“Where we are now, there’s no longer work-life separation or even balance — it’s work-life integration,” Lim says. “It’s great seeing how this next generation is looking at things in simple yet very grounded, spiritual ways,” she says, referring to millennials and gen Z.

“Ultimately at the end of the day,” she adds, “what else are we here for if not to be authentic to who that spirit is within us? And to transcend that, not just figure out our self-actualization, but also to help others?”

Check out:

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The book that helped Simone Biles deal with criticism after the Olympics

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The risks in buy now, pay later holiday purchases: Credit experts

Shoppers fill a Target Store on a Black Friday in Chicago.

John Gress | Corbis Historical | Getty Images

“Buy now, pay later” has become a popular payment tool among young consumers, replacing standard bank credit cards. And this year, the largest retailers are adapting to the trendy payment option for the holiday shopping season. But it comes with a warning: defaults on “BNPL” payments have been rising and experts worry BNPL can be a recipe for overspending.   

More than half of all consumers plan to use BNPL in the next year, and that’s good news for merchants. Shoppers tend to spend more per purchase when they use BNPL, according to McKinsey.  

The spending option is being offered for purchases large and small.

In September, Amazon struck a deal with Affirm that would allow consumers to split purchases of $50 or more into smaller monthly payments, a trend that Dan Dolev, Mizuho analyst, told CNBC’s “TechCheck” is growing. “The big trends we are looking at is the move toward lower ticket items,” Dolev said. “And we are seeing that in the Amazon deal with Affirm.”  

Everyday spending items, like a pair of shoes, is a BNPL space retailers want to accommodate, according to Dolev, because of the frequency and low risk of the purchases. “You aren’t going to go bankrupt on a pair of shoes.” 

Fintechs Square and Paypal bought into the BNPL space recently too.

Macy’s, Amazon and Walmart are among the biggest retailers that have begun offering “buy now, pay later” payment options. In October, Target announced it would adapt to BNPL ahead of the holiday shopping season to make shopping “more flexible and personalized to guests’ needs, right in time for the holiday season,” the company said in a statement. 

Target said its partnership with BNPL firms Sezzle and Affirm will let consumers pay at a pace that best suits them. “It’s a handy option during the busy holiday season and all year long,” the company said.  

Sezzle will break each small purchase, like festive party supplies or holiday PJs, into four interest-free payments over six weeks. The retailer also suggests consumers pay off big ticket items like electronics or new furniture sets with Affirm because of its longer payment period options. 

Holiday retail sales have inclined steadily over the last decade. In 2000, holiday retail spending totaled to $400 billion. Comparably, and despite being in the peak of a global pandemic, 2020 holiday sales reached near-$800 billion, according to the National Retail Federation, which is predicting the sales will set a new record again this year.

In 2021, consumer spending is up, the economy is reopening, and consumers are ready to shop for the holidays.  

1 in 3 Americans expect to take on debt this holiday shopping season, according to an October Credit Karma survey. But no matter how people plan to purchase their holiday items, consumers should be mindful of their spending, and any interest or late fees that may be part of credit card or BNPL models. 

The booming financial tool offers consumers installment options on instant purchases.

Whether the purchase is through a BNPL service or a credit card, “consumers should fully understand the transaction,” said a spokesperson for Affirm. 

“People tend to lose their minds financially speaking, right around Black Friday,” said John Ulzheimer, a credit expert. “So, when you combine a higher delinquency rate with more debt, which is what happens at the end of the year, because of holiday shopping activities, you are combining two things that are pretty dangerous.” 

BNPL draws consumers in with its zero-interest financing, but to guarantee no interest and no fees, consumers must meet certain terms, such as making payments on time and in full. 

Klarna, a fintech company based out of Sweden, makes money by charging retailers to offer BNPL to clients. But if a scheduled payment is past-due, a late fee of up to $7 — capped at a maximum of 25% of the past-due amount — is issued to the consumer.  

Affirm has no late fees, but charges interest to consumers, though it only approves customers for the amount they’re looking to purchase on their terms, which they can choose to pay off over three, six, or 12 months, and they are only charged interest on the principle amount (no compounding of interest over time as is common with credit cards when not paid off in full.) Affirm does note that making late payments can affect a consumer’s ability to get future loans.  

In a Credit Karma survey released in September, 44% of respondents said they had used BNPL services, and 34% had fallen behind on one or more of those payments. Further, more than half of the young consumers included in the survey said they have missed at least one BNPL payment: “25% of millennials have missed one payment, while 30% of Gen Z respondents have missed two,” according to the survey. 

Klarna says less than 1% of its users never pay off what they owe. Similarly, Affirm’s delinquencies of 30+ days were about 1% for the year, according to the Affirm spokesperson. A Klarna spokesperson said that if shoppers miss a payment, the company restricts the use of its services so they can’t accumulate debt.

Regulation of BNPL is increasing in countries including the U.K. and that has led firms like Klarna to become more strict with lending requirements.

Historically, young consumers begin building credit in their early twenties by paying off credit cards and bills in their name. Credit cards report to credit agencies and paying those down in time translates to good credit for the consumer. That credit becomes important for consumers when applying for loans or mortgages. But not all BNPL transactions are reported to credit agencies, a factor which Ulzheimer said can seriously dent the value of the financial approach. Affirm, for example, does not report shorter-term, interest-free loans. Its interest rates range from 0% to 30%.

Ted Rossman, senior industry analyst at Bankrate.com says if the consumer is responsible and if BNPL works in their budget it could be a useful tool, but in the end just like credit cards it can also be a slippery slope. “If you overspend, pay late and rely too much on it, [buy now pay later] could be bad.” 

He says consumers should think of it as “more of a steppingstone.”

“This could be used kind of selectively, but I wouldn’t put all my eggs in this basket long term because then you’re missing out on other benefits.” 

Future of Ralph Lauren, and retail, may be coloring clothes in store

Ralph Lauren Polo shirts are on display in a store window in New York.

Daniel Acker | Bloomberg | Getty Images

If the colors that apparel retailers choose for their latest lines often aren’t to your liking, or by the time they hit the store shelves seem behind the latest trends on the sidewalks or on social media, a solution may be coming sooner than you imagined.

By next year, Ralph Lauren flagship stores may have the textile coloring technology to let shoppers have the blank slate of cotton polo shirt dyed in-store.

Chemicals giant Dow, a major player in textile dyes, has been working with Ralph Lauren on new processes for cotton dyeing that reduce use of chemicals, water and energy intensity.

“Ralph Lauren obviously is a big user of cotton and to dye textiles, it takes a lot of chemicals and a lot of water and you generate a lot of waste and mainly you do that because you’re trying to use heat and pressure to put that dye into the fabric,” Dow CEO Jim Fitterling said last Thursday at the CNBC ESG Impact summit.

Trillions of liters of water, for example, are used for fabric dyeing, which is equal to 20% of the world’s wastewater.

That is one of the reasons Dow developed what it calls ECOFAST Pure, announced earlier this year, which to dye cotton needs up to 90% less chemicals, 50% less energy and 50% less water.

But the sustainability project could also have major implications for what is called experiential retail — the effort by retailers to give consumers new reasons to come into stores as e-commerce’s footprint, already large, only grows as a result of the pandemic.

Ralph Lauren’s Color on Demand project uses the Dow technology to color cotton at any point in manufacturing, and result in shorter lead times for making color decisions. Halide Alagöz, chief product and sustainability officer at Ralph Lauren, said in an announcement about the effort earlier this year that the retailer will be able to “meet personalized consumer demands faster than ever before.”

And while he didn’t say it, that means potentially coloring a shirt in the store.

“Ralph Lauren will be able to do something like put Color on Demand in one of their flagship stores in New York next year so that you can go in and get your Ralph Lauren polo dyed in the store,” Fitterling said at the CNBC ESG Impact event. “That would have never been possible without this technology.”

A Ralph Lauren spokeswoman said, “We look forward to sharing more about this in due course.”

The post-pandemic era of experiential retail

Coming up with new strategies to more deeply involve the consumer in the apparel production experience is not new for Ralph Lauren. It has allowed shoppers to customize colors for its iconic horse logo sewn into shirts for apparel ordered online. Other retailers, such as North Face, have been letting consumers pick and choose the components of jackets and have their preferences manufactured into the whole.

Customization and faster fashion that embeds the individual consumer in the shopping narrative is going to play out in many ways in the retail sector. Levi Strauss & Co. CEO Chip Bergh has said the traditional sizes will be a thing of the past in fashion as 3-D body scanners and camera technology, combined with much faster manufacturing, will allow retailers to make clothes a unique fit for each person. Nike and Amazon both have made body-scanning technology acquisitions in recent years.

Pre-pandemic every conversation in retail was about selling experiences over things, and while the lockdowns may have put much that had been in the works on pause as digital became the only way to do business, those strategies will now come back into focus.

“E-commerce has gained points of penetration and mindshare and will not give it back,” said Simeon Siegel, retail analyst at BMO Capital Markets. “But strong stores that made it through the pandemic are even stronger and are not likely to go away.”

That means an increasing blend of e-commerce and experiential stores, especially for high-profile locations. “The store will become more experiential each and every day,” Siegel said. “The trick is how to capitalize on it to sell more things.”

Allowing a consumer to choose a color and have a piece of apparel dyed in a store could help to create the type of emotional attachment tied to a purchase that is key to retail’s future.

Making the consumer “the creator,” according to Siegel, “has always been a powerful thing. Bringing the consumer into the story has always been a winning proposition.”

“People want to get back out after the pandemic,” said Ivan Feinseth, chief investment officer and director of research at Tigress Financial Partners. “Lots of ideas got shelved because of the pandemic but will come back. A good portion of retail still takes place in a store” he said.  

Customization and rapid production of apparel that allows consumers to choose color is an interesting development because the process of fabric preparation has historically been toxic and only able to be done by workers wearing protection in plant settings.

“The chemicals to dye stuff, the whole handling of how companies get rid of stuff … you don’t take excess dye and dump it in a sink,” he said, though he added that removal of chemicals from many products, such as cleaning products, is becoming much more common.

Dow declined to elaborate on its CEO’s comments.

Ralph Lauren said in its official announcement that the goal is the world’s first “scalable zero wastewater cotton dyeing system,” and the first phase which will be in use with traditional dyeing equipment will use up to 85% less chemicals. By 2025, it aims to use the Color on Demand platform in more than 80% of solid cotton products. 

The companies also announced earlier this month that they are open-sourcing the dyeing process for the textile industry.

Breakthroughs in color technology

Multiple breakthroughs in fabric coloring are underway. Digital textile printing is already changing the way consumers control color and pattern.

“The sky is the limit to what consumers can order and receive,” said Ken Butts, global key account manager at Datacolor, which works with retailers on the implementation of digital color solutions for their supply chains. That has been mostly limited to online companies doing it for DIY crafters, and for patterns rather than solid colors on fabrics including upholstery or curtains, though it is moving into apparel, too. “We’re seeing companies investing in their own digital printers or print samples and the next step is printing directly for consumers,” he said.

Digital printing is able to respond to consumer interest and demand quickly, but it will not replace traditional dyeing any time soon because, among other factors, there are many fabrics which it still cannot handle.

“It doesn’t mean that won’t be overcome some day,” Butts said, “but your typical polo shirt, it is manufactured first to look like a shirt and then dyed in the form of a shirt. You can’t print it, you can’t twist it around in there [the printer].” 

The traditional approach to dyeing a piece of clothing like a polo shirt requires an intensive process with hundreds of gallons of pigment and a significant amount of large-scale machinery which would never be feasible for a store setting, but even in industrial textile facilities, there are smaller machines used to test color samples.  

“Anywhere in the world you find a factory dyeing fabrics on large-scale equipment, thousands of pounds at a time, they will have a similar piece in the lab on a small scale and that’s where the manufacturer is testing their ability to make a specific color,” Butts said. “The first step for a supplier when a retailer asks for a new color is to test it on smaller equipment.”

The smaller equipment still requires chemicals and water and the end of the process will include waste disposal issues, but as technology improves it is not unreasonable to foresee a future in which retailers can dye fabric in-store, especially larger, flagship-style stores where space is not constrained.

Customers may be able to come into a store and pick a color from a palette, or maybe even bring in a color with them, and software will be able to translate that into the dyes required. But timing will be an issue for an in-store revolution in color-dyeing. Chemical dyeing, even at its most efficient, can still take as long as an hour to produce the final garment. But for both consumer and retailer that might still be better than the current process.

“Now designers are choosing a palette that will appear in a store six to nine months from now, summer 2022, and trying to predict consumer trends,” Butts said. If retailers get the trend wrong, that may result in a rush process of new manufacturing and transport which has high costs and by the time they get the new units they may still miss trend. “With this, you can respond to current hot trends,” he said.

A consumer could come into a store with a color in mind, maybe they saw someone else wearing it, and within a day or two the apparel can be produced and the retailer didn’t need to order 10,000 shirts in advance. “Dying fabrics to customer preferences is really exciting,” Butts said.

Sustainability and the apparel consumer

Datacolor focuses on translating colors into numerical codes that can be communicated between designers and textile manufacturers in the supply chain, cutting down on the need to ship physical samples back and forth during the design process, and aiding quality control efforts related to making sure the color is correct when it comes time to manufacture thousands of pieces. That is a more efficient approach to apparel production than a designer in one location sending color palettes to dye mills around the world, which then have to send back fabric samples for visual review — “back and forth until the designed finds something they like,” Butts said.

But whether it is digital innovation or dyeing innovation, the retail industry has a sustainability issue that will remain challenging to address. Faster communication in the design and manufacturing process, and faster fashion is enticing for shoppers, but a consumer turning over a wardrobe more frequently is not necessarily being more sustainable even if the underlying processes used to produce the piece require less resources and energy. And giving consumers more reason to come into stores — and potentially spend a longer time while waiting for a custom item to be finished, leading to possibly even more purchases — means more consumption.

“You can eliminate all the big pigments in the machines but at the end of all of that you are still left with a garment or fabric,” Butts said. “That question still has to be addressed. I like seeing improvements in the coloration process, but we still need to address sustainability from an end-to-end view.”

“Let’s face it,” Siegel said. “In retail, the most sustainable option is to not sell the item in the first place.”

Manufacturing that is less harmful and less energy intensive with a lower carbon footprint is a good thing for retailers and brands, but it does not address consumer waste and landfills, which is why retail models are evolving in multiple ways, including the focus on resale and reuse businesses, such as Rent the Runway, which went public last week.

The Ralph Lauren-Dow partnership may be novel in how its sustainability in manufacturing story can lead to a new narrative in experiential retail for the consumer, but no brand has the answer to the bigger question.

“The retailers are in the business of selling more units, but also in the business of improving their sustainability. The question is how to marry those two,” Siegel said. “They need to balance a high-wire act of being better without alienating consumers, convincing consumers the best thing is to walk away. And that story is yet to be written.”

Supreme Court to hear arguments in major cases on abortion, guns. Here’s what to know

A demonstrator holds up an abortion flag outside of the U.S. Supreme Court as justices hear a major abortion case on the legality of a Republican-backed Louisiana law that imposes restrictions on abortion doctors, on Capitol Hill in Washington, U.S., March 4, 2020.

Tom Brenner | Reuters

Abortion and guns are front and center as the Supreme Court heads back to the bench in November to hear oral arguments in some of the highest-profile cases of the term.

On Monday, the justices will hear back-to-back arguments in two cases, Whole Woman’s Health v. Jackson and United States v. Texas, challenging a restrictive Texas law that bans most abortions after about six weeks of pregnancy.

Two days later, the court will hear arguments in New York State Rifle & Pistol Association v. Bruen, a case that centers on the Second Amendment’s protections of the right to carry guns in public.

The cases, which deal with two of the most fraught and polarizing topics in American politics, will be handled by a court that had already stoked furious backlash and accusations of politicization even before its latest term began. Experts say the court’s conservative shift during the Trump administration may be part of the reason some of these cases are being heard in the first place.

Here’s what to know:

Abortion

United States Capitol Police in riot gear stand between Women rights activists and anti-abortion activist, as they gather in front of the supreme court after a rally at freedom plaza for the annual Women’s March October 2, 2021 in Washington, DC.

Tasos Katopodis | Getty Images

S.B. 8 was signed by Republican Gov. Greg Abbott in May, and it went into effect in September. It bans nearly all abortions in Texas by outlawing the procedure after the detection of a fetal heartbeat, which occurs as early as the sixth week of pregnancy.

Rather than task state officials with enforcing the six-week ban, S.B. 8 delegates that power to private citizens, who are empowered to sue, for at least $10,000, anyone who “aids or abets” an abortion.

Critics call that enforcement mechanism a loophole, intended to avoid responsibility and judicial review. The Supreme Court is hearing oral arguments against the law from the Department of Justice and from a group of abortion providers, both of whom filed legal challenges against Texas officials.

Texas argued that since the abortion law is not enforced by the state, they are not the ones who should defend it in court. “No state executive official actually enforces [the law],” Texas wrote Wednesday in a 93-page brief to the high court, “making the injunction an improper attempt to enjoin a law rather than a person.”

The Justice Department wrote in its own court brief that “other states are already regarding S.B. 8 as a model” and that “if Texas is right, no decision of this Court is safe.”

The justices on Dec. 1 are set to hear arguments in another case, Dobbs v. Jackson Women’s Health Organization, taking direct aim at the rulings that have upheld abortion rights for decades.

Court watchers following along on Monday via livestream audio — a novelty of the coronavirus pandemic — will be listening closely for hints about how certain justices, including Chief Justice John Roberts, will approach Roe and Casey in that case and others in the near future.

“I think everyone will be watching the chief justice very closely,” said Jaime Santos, a partner in the Supreme Court and appellate litigation practice at law firm Goodwin.

“Of the conservative justices, he is most inclined to protect the principles of stare decisis” — the adherence to precedent in similar cases — “and most concerned about public perceptions of the Court as a fair and independent body,” Santos said.

The oral arguments over Texas’ law come less than two weeks after the court approved the two cases on a highly accelerated schedule. The rocket-docket proceedings could also lead the justices to issue rulings much more quickly than if the cases were moving at normal speed, Georgetown University business law professor Thomas Cooke told CNBC.

Pro-choice activists march past the U.S. Supreme Court in Washington, D.C., U.S., on Monday, Oct. 4, 2021.

Stefani Reynolds | Bloomberg | Getty Images

Abortion-rights advocates and providers in Texas asked the Supreme Court in late August to temporarily block S.B. 8 before it went into effect Sept. 1 at midnight. But the court did not respond until hours after the law took hold.

In a late-night ruling, a bare majority of five justices — including all three who were appointed by former President Donald Trump — voted to deny the advocates’ emergency request, largely on procedural grounds. Roberts sided with the court’s three liberals, writing in a dissent that “the statutory scheme before the court is not only unusual, but unprecedented.”

As a result of the 5-4 ruling, abortion providers say, hundreds of patients in Texas have been denied care, while clinics in neighboring states have been overwhelmed.

Critics, including President Joe Biden, fumed. The Supreme Court’s approval rating sank to a new low, and calls to reform the high court — already a topic of study in the Biden administration — grew even louder.

In quick succession, multiple justices, including Samuel Alito, Clarence Thomas and Amy Coney Barrett, spoke out in defense of the court. “This court is not comprised of a bunch of partisan hacks,” Barrett reportedly said in September.

That same month, the abortion providers whose request had been denied filed another petition to the high court. This time, they asked the justices to quickly take up their case challenging the law, even though litigation in the 5th Circuit Court of Appeals was still pending.

Separately, the DOJ sued Texas in federal court, winning an injunction that was then suspended by an appeals court. The agency then approached the Supreme Court, asking it to block the Texas law by vacating the lower court’s decision to reinstate the abortion ban.

The Supreme Court in late October agreed to hear both cases on the expedited schedule.

Two other cases originally set for argument on Nov. 1, Ramirez v. Collier and Shinn v. Ramirez, were rescheduled for later in the term.

Guns

Wednesday’s arguments center on a century-old New York law, which requires some applicants to demonstrate “proper cause” to receive licenses to carry a concealed handgun in public.

Tom King, head of the New York State Rifle and Pistol Association (NYSRPA), and a challenger in a case being heard by the U.S. Supreme Court with regards to the right to carry handguns in public, poses at the NYSRPA office in East Greenbush, New York, U.S. October 20, 2021.

Cindy Schultz | Reuters

The case before the Supreme Court stems from a lawsuit brought in 2018 by the New York State Rifle & Pistol Association and Robert Nash and Brandon Koch.

Nash and Koch are New York residents whose applications to carry guns in public for self-defense reasons had been denied. The licensing officer who denied their requests said they “did not demonstrate a special need for self-defense that distinguished [them] from the general public.”

The petition for the Supreme Court to review the case argues that a lower court’s ruling upholding the New York law was “untenable.”

In a brief in July, petitioners argued that the language of the Second Amendment — securing “the right of the people to keep and bear Arms” — refers to two separate rights. To “keep” arms is to be able to own them, while to “bear” arms is to be able to carry them, they argued.

New York Attorney General Letitia James had argued in February that the Supreme Court should not take up the case.

“The law is consistent with the historical scope of the Second Amendment and directly advances New York’s compelling interests in public safety and crime prevention,” James wrote.

The most recent major Supreme Court decisions on guns came more than a decade earlier in District of Columbia v. Heller, when the court held that the Second Amendment protects the individual right to carry a gun for self-defense inside the home. 

Last year, the court declined to issue a substantial ruling in another case about gun regulations in New York, which has some of the strictest such rules in the country. Justice Brett Kavanaugh, Trump’s second appointee, urged his colleagues to hear another Second Amendment case “soon.”