This is issue no. 201. The last issue had a 🔥52.76% open rate with 3.93% of you going to this article on Shopify's eCommerce revolution. Don't count Wal-Mart out yet, the acquisition is quickly changing the culture.

Wal-Mart Stores Inc. is creating a technology-startup incubator in California’s Silicon Valley to help identify changes that will reshape the retail experience in the next few years, including virtual reality, autonomous vehicle and drone delivery, and personalized shopping.

The incubator will be called Store No. 8, a reference to a Wal-Mart location where the company experimented with new store layouts. Marc Lore, chief executive officer of Wal-Mart’s e-commerce operations, announced the incubator Monday at the ShopTalk conference in Las Vegas.

- Spencer Soper, Bloomberg

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Today's Top Intelligence (10 Reads)
Athleisure’s Next Phase
She’s not the first celebrity to launch a collection in the space popularly known as athleisure: Beyoncé has Ivy Park, Kate Hudson has Fabletics, Carrie Underwood has Calia — and that doesn’t even begin to scratch the surface. And, though noteworthy, the fact that she’s setting a precedent for celebs linked with lines (many of whom are cool with contributing their name and calling it a day) is just icing on the cake. 
Read More
BRAND: Poser predicted Nike’s revenues will grow 7.3 percent, while EPS will reach 56 cents. But he and Lyon both agree that after several quarters of double-digit futures growth last year, the company’s gains in that area will continue to taper. Futures orders — a calculation of merchandise the company has committed to delivering to retailers during the next six months — are a unique measure for Nike and have long been regarded as a key indicator of its growth.

AMAZON: Sorrell thinks Amazon is a huge threat to Google when it comes to search. If you're a sneaker brand, the most valuable place to advertise is when someone is actively searching to buy a pair of sneakers. On Google the person might just be researching, but with Amazon the consumer is most likely in the market to make a purchase right away.
RETAIL: One of the projects was dubbed the “Store of the Future” and consisted of a team building out a prototype for a small-format Target store that would be part showroom and part warehouse, with robots picking items behind the scenes to have ready for customers as they checked out, sources say. The store was also expected to more closely integrate Target’s e-commerce offerings and include space for more experiential activities like classes and meet-ups.

ECOMMERCE: Wal-Mart subsidiary last week announced its acquisition of ModCloth, an online retailer of vintage women's apparel. No financial terms were disclosed, but it didn't feel like a success for either ModCloth or the venture capitalists who had invested over $70 million into the business since its founding 15 years earlier. 

DATA: Artificial intelligence in fashion is stuck in the same catch-22 as technology like virtual and augmented reality. They’re all consistently on the cusp of disrupting the industry, but as a majority of cautious retailers wait in the wings to watch as others test it out, no real progress is being made. The edge AI has over VR is that it can actually make an impact on how companies operate internally.

ECOMMERCE: GMV is often confused with revenue, though it is anything but that. For beginners, GMV is the total value of goods sold through a marketplace. The metric is used to value online consumer businesses in their early years when they aren’t making any substantial revenue or profit. Revenue is the (small) commission they earn on the sale of that item.

MEDIA: To hear this from Systrom is a tad startling, given that Instagram became synonymous with photo sharing within months of its debut. But as the app closed in on serving a half-billion users worldwide, its designers came to believe that its purposefully stripped-down experience, originally built with artful photos in mind, was too limiting and formal. What had once been a creative constraint had become a straitjacket.

MEDIA: And so targeting becomes no less important just because brand dollars shift to mobile. There's no reason that mobile app install ads will stop generating revenue simply because brands spend heavily on mobile; mobile isn't a trend, it's a secular technological and consumer behavioral shift, and increased advertising spend is across the board. But with its data set and targeting capabilities, Facebook can benefit from brand spend in the same way it has benefited from mobile app install spend.
DATA: The data is collected via Foursquare’s existing database of locations (which powers over 100k apps including Snapchat) as well as anonymized in-store visit data collected from users of Swarm and Foursquare who have opted in to always-on location sharing. Foursquare then normalizes this data to make sure it accurately represents the U.S population as a whole.

Last Word: What's after search?
A16Z’s Benedict Evans wrote a blog that sticks with me every day. In it, he expounded on an earlier tweet: Amazon is Google for products, but we have no Facebook for products. He went on to write: 

Amazon in particular and eCommerce in general is good at search. Amazon, very obviously, is Google for products. It's good at giving you the best-seller you've heard of or the water filter for your fridge (the long tail). It's not so good at the things in the middle. Amazon is great at selling you what's on the table in the front of the bookshop, and at selling one copy a year of a million or so obscure titles, but it's not very good at showing you what's on the shelves at the back of the bookshop.

At 2017’s Shoptalk, the future of eCommerce is the height of the conversation and the question remains. In an economy where eCommerce site builds have been commoditized by Big Commerce, Shopify, and Demandware and SEO is cheaper than ever, what comes after commerce by search?

The answer is discovery. The internet is optimized for direct-response advertising and search engine marketing but as those tools became commonplace, their returns diminished. Discovery-equipped eCommerce sites will play a major role in the future of online retail. Whereas Amazon is great for shopping for what you *know* that you want, we have no “Facebook for eCommerce.” 

In my recent conversation with Erica Matthews, Alibaba’s Head of Corporate Relations, and Liyan Chen, we discussed what most American consumers don’t yet understand about the shopping vs. buying contrasts. Alibaba continues to eclipse impossibility in the east by digitizing the sensational social experience of shopping.

So while Benedict Evans is correct in his assessment that America doesn’t have a Facebook of eCommerce, Alibaba has served that role well, for China, from their Hangzhou headquarters. 

Some of the smartest young, eCommerce companies are enabling consumer discovery, aiming to own the sales funnel from start to finish. Stateside, that race is not a foregone conclusion. But it would be smart to look east if you want to know how it's done.

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