This is issue no. 226. The last issue had a 49.96% open rate with 13.56% reading up on the direct to consumer revolution. Have a look at Hodinkee's year, thus far. This rundown doesn't even include their last two exclusives, worth over $2.5M in top line revenue. And the Brand Value Accelerator agency incubates their second D2C brand: IconicDuo.com
Jack Ma: "Amazon is an e-commerce company. We are not. We help other companies become e-commerce companies."
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Amazon’s new service aims to eliminate one of the major drawbacks of online clothing shopping -- the moment when customers realise they’ll never be able to squeeze into those new jeans that looked great on a website. Shoppers have been able to get around that hassle by buying several pairs in different sizes, but that means having to return those that are too big or small for a refund.
Capstone Issue: This is especially true of the fashion retail world, where companies like the Limited (onetime sister brand to Express, where Francisco Aguilera works, and formerly to mall staples Victoria's Secret and Bath & Body Works before parent company L Brands shed them) have been shuttering hundreds of stores around the country.
The Takeaway: As part of the newly minted Ritz-Carlton Yacht Collection, the five-star hotel brand will launch three small, ultra-luxury ships with laid-back itineraries and spacious, open-concept design schemes that flip the traditional cruise experience on its head. The maiden vessel will pull out of the shipyard late in 2019, with bookings opening next May—marking the first time that a hotel company hits the high seas.
The Takeaway: Saks' New York flagship has devoted an entire floor to the 16,000 square-foot wellness sanctuary that opened in May and offers fitness classes, a salt chamber and meditation alongside other merchandise. Celebrity fitness guru Tracy Anderson was the marquee name on opening night. After a sweat session, fitness aficionados can test the latest home gym equipment like a Peloton bike, get custom-fitted for golf clubs or get their nails done — a day's worth of self-care in one spot.
The Takeaway: As Yahoo Finance states, "In 2016, Adidas had $3.6 billion in US revenue, a 24% gain; Nike did more than three times that much." Clearly Nike is still on top, and as start-up sneaker brands (for instance Allbirds) gain traction in addition to new pushes from bigger sportswear labels like Under Amour and Puma, it's only natural that the market would become more crowded. However, it's impossible to deny just how red hot Adidas is right now.
The Takeaway: Apple’s HomePod is heading into a market dominated by Amazon’s Echo family of products with a device nearly five times more expensive than what consumers are paying on average for the Echo devices. Apple has made clear it is pitching its home speakers as premium music devices, even though HomePod has Siri’s voice-intelligence capabilities. As a music speaker, Apple will be compared with other premium speakers without voice assistants
The Takeaway: Prologis reports that e-commerce leasing accounts for approximately 20 percent of new leasing, up from less than 5 percent five years ago, driven by global e-commerce sales that are forecast to grow by more than 150 percent over the next five years.
The Takeaway: Farfetch and JD.com share an investor in Temasek, Singapore’s sovereign wealth fund, which contributed to Farfetch’s $110 million Series F round and also has a stake in many of Asia’s largest e-commerce companies. “If you look at the partners we now welcome on board, like Temasek, which has a huge, huge influence in South-East Asia and investments in all the major Asian internet players
The Takeaway: In February, Pinterest rolled out Shop the Look in partnership with a handful of brands, enabling users to shop for the individual items in a larger picture. Currently, no revenue-share arrangement is involved. According to the company, "Early results show Pinners engage with Shop the Look Pins 3-4x more than Pins without Shop the Look, save them 5x more and visit a brand's website 2-3x more."
The Takeaway: The company has some critical advantages over other online fashion players looking to scale up. For one, Amazon’s relationship with customers is deeply established across a wide catalogue of categories and products, making it much less vulnerable to the shifting trends that make fashion retail such a risky business. Second, there’s the company’s incredible arsenal of data linked to Amazon’s approximately 285 million active customer accounts.
The Takeaway: Buyers undergo intensive schooling. Trainers travel with new buyers for their first three years on the job. Buying techniques are codified at TJX University, an in-house training program that teaches employees how to identify value. Staff learn to evaluate products based on a formal formula that rates brand, fashion, quality and price on a scale of one to four. A total score of 16 is considered the perfect buy.
The Takeaway: It’s a far cry from the heavy colors and oozing lipstick logo for Kylie Cosmetics(™) or even Milk Makeup, which goes by the slogan “cool girls get ready quick,” and traffics in high-pigment, high-shine products that offer effects like “an iridescent, hyper-lavender sheen” or “super-intense color in one swipe.” Glossier never explicitly says whether these are the bad makeup choices it warned you against, but its aesthetic is subdued and refined, more Connecticut (where Weiss grew up) than Calabasas.
The Takeaway: While some founders use examples like Amazon or Uber to rationalize growth with significant losses, these businesses are exceptions in hyper-competitive categories where they are the truly the market leaders. This strategy works only for 1% of the top 1% of fast growing companies. For everyone else, it’s a recipe for disaster.
The Takeaway: Among the participants in the conference was Web Smith, director of e-commerce at Gear Patrol, an independent US magazine with a tech focus. He told The Point with Liu Xin that there was real enthusiasm among the audience. Maybe that was inspired by Ma’s loud and clear message. He said to US SMEs that “if you miss the opportunity to sell your products to China, you will miss the future.”
The Takeover: When Teespring raised $55 million in 2014 at its lofty valuation, venture-capital investors were amid a funding frenzy that drove sky-high values for consumer startups. Teespring counted Silicon Valley elites YC Group President Sam Altman, Andreessen Horowitz partner Lars Dalgaard and Khosla Ventures partner Keith Rabois as board members and investors. Mr. Altman left the board more than a year ago, he said.
The Takeaway: A potential partnership would lead to more competition for sporting goods retailers such as Dick's Sporting Goods Inc that are seeing some market share gains due to the bankruptcies of The Sports Authority and other smaller, regional chains. Shares of Dick's Sporting fell as much as 8 percent in early trading to hit a near one-and-a-half-year low, while Hibbett Sports Inc fell as much as 6 percent to hit a more than seven-year low.
Detroit, Michigan -- One of the more impressive brand statements I've seen was held for 3,000 participants at Detroit's COBO. From vendors to Alibaba employees to credentialed media, I was impressed by what I observed.
Walk around and you'll see examples of retailers like Stadium Goods, who are strong advocates for Alibaba's marketplace model. Then there were (very) small business owners who were less sophisticated than what you'd imagine, selling trinkets and cookies and their own version of coffee. This was all meant to represent Jack Ma's commitment to the little guy.
There were well-designed booths dedicated to discussing government policy and informational breakouts. There were even three dimensional data-visualizations peppered throughout the conference room floor, on display to help you understand a bit of what’s at stake here. Alibaba, a company whose entire mission is to make it easy to do business anywhere struck me as a contrast to Amazon’s reputation for being hard on brands with seasonal product lines.
When you hear about Amazon, “customer” is the Amazon Prime member who receives the package. For Alibaba, consumers are clearly important but the “customer" in Ma’s eyes is the small business owner.
There will come a time when brands must invest in a quickly approaching economy. Unfortunately for many of us, the eCommerce economy often devalues brand equity while holding ease of discovery and < 72 hour fulfillment as the new benchmark for brands - big and small. By 2020, the easier your brand is to find across digital channels, the more likely the business is to thrive.
I’m convinced that the majority of savvy brands will pursue a diversity of channels, with Alibaba and Amazon at the core of their seven point strategies. This may mean reallocating inventory from brick and mortar retailer distribution for some teams and it may also means hiring eCommerce executives that will be prepared to operate with platform flexibility while maintaining brand standards.
I left Detroit convinced that American retailers will be of Jack Ma’s finest customers and that there will be a lot of brand overlap between the two platforms. As Facebook and Google’s product search economy is cannibalized (stateside) by Amazon’s fast-growing search product, delaying an Amazon and Alibaba strategy may be akin to grasping to the nostalgia of your Blu-ray DVD collection.