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Apr 10 2017

No. 209: Amazon wants to dress you.

This is issue no. 209. The last issue had a 46.26% open rate with 5.41% of you going to this article on how machine learning is shaking up eCommerce and customer engagement.

An interesting press release here: Ebay and Flipkart have teamed up in India (more below), making them a prime acquisition target for China's Alibaba. India is the fastest growing eCommerce market in the world.

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Today's Top Intelligence (12 Reads)
Amazon Wants To Dress You
CAPSTONE: Retail consultant Sucharita Mulpuru thinks Amazon would fit perfectly as a retailer “that competes with Old Navy and Macy’s,” but John Blackledge, a senior research analyst at Cowen, says Amazon is clearly after the mid-to-upper market with its fashion venture “simply because of the ticket on luxury.”
Read On
CAPSTONE: The number of malls in the U.S. grew more than twice as fast as the population between 1970 and 2015, according to Cowen Research. By one measure of consumerist plentitude—shopping center “gross leasable area”—the U.S. has 40 percent more shopping space per capita than Canada, five times more the the U.K., and 10 times more than Germany. 
ECOMMERCE: As part of the deal, eBay also said it was selling its own India marketplace to Flipkart and entering into an exclusive arrangement in which eBay merchants outside of India can sell to Flipkart shoppers and Flipkart sellers can more easily sell to eBay shoppers outside of India.
BRAND: The Central American produced apparel is slated for its wholesale operations. Customers like bands and others in need of events merchandise are more price sensitive than retail customers, a Gildan spokesperson told the Post, adding that the company hasn’t yet decided where to make its retail merchandise.
ECOMMERCE: Wal-Mart’s effort to tap that online growth often is portrayed as a direct attack on Amazon.com Inc., the online-retailing behemoth. Wal-Mart prefers to frame its strategy as capturing more of the e-commerce market by blending its in-store, online and mobile-app offerings so that customers can easily move from one to the other to make purchases. If it snatches business from Amazon in the process, all the better.
BRAND: R/GA has a nearly 20-year relationship with Jordan’s parent company Nike, and much of its work has focused on interactive projects like the Nike+ FuelBand and assorted digital design efforts. The agency eventually began making TV spots for Nike as well, and this is its first broadcast campaign for Jordan. Of course, the new project also includes classic interactive elements in the form of emojis and iMessage stickers from the Jordan brand.
BRAND: The Adidas rocket ship shows no signs of slowing: the latest semiannual teen survey from Piper Jaffray says that the resurgent athletic apparel brand has become the No. 1 new label worn by male teens, knocking out Nike (NKE), the Dow Jones industrial average component that has reigned in that category since fall of 2014.
RETAIL: Looking at the loss of retail jobs in isolation is only part of the picture. One also has to look at the growth in fulfillment and transportation jobs, since the internet has fundamentally reshaped how people buy and receive products. As such, the labor needs of the industry are shifting. By looking at these two measures in tandem, one can glean a better picture of the reality of the shifting job market as a result of the changing commerce landscape. 
MEDIA: Subscriptions or memberships show an audience is willing to pay. Plus, the cash comes before the service is delivered and thus helps finance upcoming operations. (Financial professionals call this type of cash "pre-revenue.") Subscription revenue is also more predictable than advertising or affiliate marketing, both of which can fluctuate wildly based on market conditions that are out of any company’s control. 
LOGISTICS: Just north of Brooklyn’s Sunset Park neighborhood, ShipBob, which opened its first warehouse less than two years ago, stores merchandise from over 300 retailers in rows of neatly stacked white plastic bins. Workers walk the aisles, plucking out jars of artisanal mustard and organic conditioner, which they hand off to packers who prep the items for shipping.
ECOMMERCE: Not only is there the cost of delivery, including returning the frames, but it also requires a lot of extra stock to be held. That was the problem faced by Italian eyewear startup Quattrocento, so its founders came up with a potentially ingenious alternative: the paper try-on.
DNVB: Gillette has bled market share for the last six years, which has only been accelerated by Harry’s, Bevel, and Dollar Shave Club. Each of these three challengers offer fairer pricing standards, which forced Gillette to just last week to reduce prices on their razor blades in an effort regain market share.
Who will own product advertising?
Amazon has a much richer dataset of user intent and purchase data to target users than FB or Google. They already dominate product search today and I would bet that Amazon can be the disruptive force to challenge AdWords. Their flywheel is second to none.

This was a good quote. Though focused on eCommerce, 2PM covers online publishing and advertising for this reason. Big or small, the brightest eCommerce groups borrow from the brightest in media and vice versa. 

Here is a great smaller-scale example: MindBodyGreen ramps up eCommerce. 

Amazon's growth as an eCommerce company is tied to its growth as a publisher. As such, Amazon's advertising business will eventually thrive as Bezos has invested in streaming, digital magazines, and owning most of our consumer lives. The intent to buy is a powerful indicator of success and stateside, it's harder to find a place with more consumers willing to spend money than Amazon. Their advertising platform will eventually disrupt Google's Adwords and Facebook's Newsfeed for this very reason. 

Whereas "eyeballs" determined the last 25 years of tech growth, cart conversions will determine the next 25 years. The great digital businesses understand that this is the foundation. Amazon and Alibaba are building commerce-driven ecosystems where eyeballs and clicks aren't enough. Retailers have no choice but to reward them for sales efficacy with higher margins, increased leverage, and more ad spend. 

While there are only a few corporations that will achieve Amazon or Alibaba's magnitude, there is an estimated 35-40% of the global market (2020) that will be available to younger businesses that cultivate a community of well-intentioned, connected, and entertained buyers. 
It's 2 PM [PT] · West 54th Street · New York 10019 · United States of America
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