The last issue had a 💥 46.22% open rate with ⚡4.02% of you going to this interview with Uri Foox on his new SaaS eCommerce platform designed to further democratize eCommerce functionality across small biz.
“There’s more competition for commerce. Everyone is concerned about the reliance on CPM-based advertising,” Mason said. But, he offered, there’s hope that platforms will have a vested interest in working with publishers: “Those social platforms won’t be able to do it all themselves.”
-- On the divorce of Thrillist / Jackthreads
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MEDIA: Both Pinterest and Amazon believe they can help search advertisers reach people before they have made up their minds on products. It remains to be seen if targeting those undecided shoppers with ads will perform as well as Google’s have for so long—considering that so many people who conduct Google searches know exactly what they want.
ECOMMERCE: Amazon is already a destination point and trusted resource for consumers. Focusing on whether you see more Amazon ads is a distraction and besides the point. Focus on the fact that Amazon’s relationship with customer has given it the power and leverage to upend many current use cases for advertisers like building brand awareness and influence decision making at the moment of intent.
BRAND: Reebok is not really interested in providing designer leisurewear for couch potatoes. “We don’t want to create a generation of New England Patriots fans who aren’t active," O'Toole declares. Some analysts remain sceptical and over the past few years there have been suggestions that Adidas ought to cut its losses and ditch Reebok. But O’Toole believes that he has found the marketing sweet spot which will see the company flourish.
ECOMMERCE: Many retailers are now leveraging stores to fulfill online orders, which could mute the demand somewhat. Target this week announced it is revamping stores to the tune of $7 billion to improve its customers experience as well as to house and fulfill merchandise for online orders, including deliveries and in-store pickup services. Still, warehouse space, despite what appears to be a trend heading to some amount of over-capacity, looks to remain a premium expense line for retailers as rents remain stable.
BRAND: Abercrombie & Fitch has been making desperate attempts to improve its image since 2014. However, in February 2016, the company was ranked most hated retailer in America. Even though it is evidently still suffering from negative consumer sentiment, Abercrombie & Fitch encompasses more than just one brand and attributes the major share of sales to Hollister. In Q3 2016, 56.4% of sales was attributable to Hollister.
BRAND: There are four teams that wear Jordan Brand uniforms in college basketball, and North Carolina is one of them. Now it’ll be the Jumpman logo on the football team’s already beautiful Carolina Blue duds. There may be a subtle tweak to UNC’s look, but there probably won’t be too much altered, because before the 2015 academic year began all of North Carolina’s athletic programs got a rebrand to make a consistent look across all men’s and women’s teams. Jordan Brand is owned by Nike.
ECOMMERCE: The retail store of the future, however, is emerging--with a push from online merchants and the help of companies such as New York City tech startup Brickwork. The most public examples of the move back from the internet to the retail store include Amazon--with its checkout-less grocery store and bookstores--and eyewear vendor Warby Parker, which has opened showrooms throughout the United States and Canada. Brickwork, on the other hand, is a company that helps established retailers meld the online with the brick-and-mortar to create a new shopping experience.
DATA: Using that technology, if DSW sees a surge in sales in boots in one area of the country, the company can "figure out the location where it's most efficient to ship the shoe from — and the place where it's least likely to sell," CEO Roger Rawlins said in an interview with The Dispatch. That way the retailer is able to keep its inventory at a reasonable level.
ECOMMERCE: Johnson praised the innovation and customer-first philosophy of Amazon and said big retailers need to copy those traits if they don’t want to get lapped. He argued that Walmart has the physical footprint and the money to beat Amazon — if it can focus on the right things.
ECOMMERCE: Net-a-Porter reports that average order value in the Middle East is 50 percent higher than the rest of world, so it is little surprise that 11 months ago Alabbar’s Symphony Investments announced a joint venture with Yoox Net-A-Porter Group (YNAP), which will see Alabbar focus his entire online luxury retail activity in the GCC exclusively through the joint-venture, of which Symphony Investments owns 40 percent. Off-price brands Yoox and The Outnet are set to debut localised sites in the region in 2018, while Net-a-Porter and Mr Porter will launch in 2019.
ECOMMERCE: Those who have gotten into e-commerce find the brand development, sourcing and shipping and customer service hard to do. In the shadow of Amazon, smaller retailers have struggled. Clothing is a crowded market. Lerer, realizing the lower value investors placed on e-commerce ventures, insisted that Thrillist was a media company.
“The problem was, to do it properly, the margins just evaporated,” Gushue said. “E-comm is the shittiest business when you look at how many parts need to be in place. It’s comically expensive to do it right. Everything gets destroyed by Amazon.”
Last Word: Why JT x Thrillist could have worked
If you read enough tech blogs, 2010-2012 was the height of the content / commerce play and today is but the graveyard of those attempts. When Ben Lerer aptly purchased Jason Ross's Jackthreads for $10m, I remember salivating. "There's no way that it could fail," I thought.
There is an old adage, "it doesn't matter how you make your money." For many businesses, this is true. One of the reasons that the marriage between Jackthreads and Thrillist failed? It does matter how Lerer makes his money. In the valuation game, all revenue is not equal. There is a premium multiple for some. Whereas, eCommerce firms are often valued at 3-5x EBITDA, media groups can exceed 8x EBITDA.
Who'd want to be an eCommerce company when you can privately raise money as a media company? This is at the root of Thrillist jettisoning Jackthreads. And coupled with some severe, margin-eating tactical errors, the former Columbus eCommerce retailer couldn't bounce back.
We are going to see more (not less) consolidation of digital revenue modeling. And the companies that manage it correctly will be around for quite some time. Yes, even with Amazon breathing down all of our necks.