This is issue no. 224. The last issue had a 46.38% open rate with 7.28% reading up the "incredible" rise and fall of J. Crew.
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One of 2PM's esteemed partners, Cotton Bureau is a rare case for a startup. The eCommerce brand launched out of a web development agency and never looked back. I spent yesterday afternoon at the new Pittsburgh headquarters of the booming retailer as they prepare for the summer launch of their latest project: Blank. This launch will be covered in depth, over the months to come.
If you know anything about their brand, you'd agree that yesterday was the perfect day to visit.
Stitch Fix, an online apparel retailer, thinks algorithms are the future of designing garments and has begun to bring these items to market. (In her 2017 report, trend forecaster Mary Meeker of the venture capital company Kleiner Perkins mentioned Stitch Fix’s algorithmic design approach as an e-commerce “aha.”) But will this strategy yield better things, or will it just lead to the normcorization of design?
The Takeaway: From Kith to Kanye West to Kylie Jenner, it seems that limited-edition "drops" are the keys to buzz and retail success, and when it comes to powering those hyped-up launches online (and, more recently, at pop-ups), Shopify is leading the way. The Canadian tech company powers over 400,000 brands and retailers' (including Kith's and Kylie Jenner's) e-commerce sites and is known and favored for its robust, scalable back-end infrastructure that prevents the site crashes that can often result from sudden surges in traffic (like, during a drop).
The Takeaway: As if malls didn’t have enough problems, count one more: retailers looking to slash the duration of their leases. After more than a dozen bankruptcies this year contributed to thousands of store closures, visibility for the industry is so poor that retailers are pushing for lease renewals as short as a year or two — down from five to 10 years.
The Takeaway: The Chinese firm, which runs the popular Taobao and Tmall e-commerce platforms, has set a target to achieve US$1 trillion in gross merchandise volume in 2019 – the 2020 financial year – which would make it roughly the 16th- or 17th-largest “economy” in the world, according to Ma. He said Alibaba’s gross merchandise value today already made it the 22nd-largest “economy” globally, just behind Argentina.
The Takeaway: More than 8,000 U.S. brick-and-mortar stores could close this year, twice the number as 2016, analysts say, because of plunging sales. Among the chief victims are retail workers: Amazon says it's adding 100,000 employees, but a multiple of that number have lost their jobs in recent years. One in 9 Americans work in bricks-and-mortar retail, almost 16 million people in all.
The Takeaway: I've recently discussed Under Armour's poor management decisions and upcoming challenges. I've been bearish on this stock since last September, when it still traded in the high $30s, and I believe it still has room to fall. A key problem for Under Armour is that the competition is simply too intense. Let's take a closer look at four companies that could eat Under Armour's lunch in the near future.
The Takeaway: But there is one thing that separates the run-of-the-mill, well-compensated NBA player and the elite group where four cracked the top 10 best-paid sports stars in the world. “It’s gotta be the shoes,” said the Mars Blackmon character, as played by Spike Lee, in a series of Nike Air Jordan ads that started in 1988. In today’s NBA pay hierarchy, the shoe deal is the biggest factor.
The Takeaway: US online shoppers are making more mobile purchases, more cross-border purchases, and more frequently shopping on e-commerce marketplaces and using alternative delivery methods, according to UPS’ newly released annual Pulse of the Online Shopper study.
eCommerce Capstone: Part of the rise comes down to the fact that the suburbs are generally growing faster than cities, but it’s not just that. From 1990 to 2012, the poverty rate in large metro areas grew by 43% in suburbs, compared to 17% in urban areas—though it is worth noting that urban poverty rates, at 21%, are still nearly double the 11% suburban rate.
The Takeaway: Frenzy is the latest in a series of mobile pushes in the streetwear market, an industry traditionally shrouded in secrecy and exclusivity. In order to cut down on the hysteria of product drops, traditional retailers like Nike and Adidas have started driving consumers to their mobile apps where they’re notified of launches and provided with exclusive access. Meanwhile, under-the-radar brands have taken to private Facebook groups to announce new products and sell directly through the social platform.
The Takeaway: One indication that times have changed: The small shops fear Starbucks less than they once did. A decade or so ago they wouldn’t have dreamed of opening near a Starbucks, several independent founders told me. Now they believe they’re no longer competing for the same clientele.
"As J.Crew’s fashion credentials began to grow, its focus on staple items suffered and an increasingly cool and expensive product mix alienated once-loyal customers."
Use of cheap textile materials, 2013 and on
Complete ignorance of the athleisure movement
Moment of Truth (1):
July 2013, when an unhappy customer wrote Drexler an email saying, “I am so disheartened and disappointed that you are leaving your core values and styling and abandoning your loyal customers. I would have thought you had learned your lesson at the Gap!! Why mess with these iconic brands and change them into something they’re not?”
“We are on it for sure,” he emailed the customer after the call. “I hope you see a difference this Fall.”
This was the beginning of the low quality of product that has flooded J. Crew stores and outlets.
Moment of Truth (2):
Back in 2014, Drexler repeatedly said J.Crew would never get into the so-called “athleisure” segment.
J. Crew launched an athleisure effort with New Balance, in late 2016, that has been widely panned as 'late' and 'bland.'