Cotton Bureau is back at it again with this one and I'll explain the connection. Sleeping Giants has been in the news lately for how they've galvanized efforts against Google's faulty display ad practices and Fox News' evening advertisers. Here is Issue no. 206's "Last Word" by Google data.
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The core of this idea – developing, then selling products that a community’s already clamoring for – is not dissimilar to what Kaufman sought to do at his old startup Quirky, which was supposed to source ideas from a community, then develop, market and ship them in record time (it also burned through $180 million in venture capital before collapsing into bankruptcy).
DNVB: First, this is one of the first of what we’re anticipating to be several more modern luxury fundraise and acquisition announcements for 2017. Second, it’s only April, but L Catterton, through its Growth Fund, has has made some very savvy investments in modern luxury companies this year: Rhone, Mizzen, and Pinarello. And let’s not forget: They’d also be the arm responsible for carrying out the Rapha purchase by LVMH, if it were to happen.
ECOMMERCE: It appears Ralph Lauren dropped that in-house system for Salesforce. After all, Ralph Lauren couldn't wait another year to build out its ecommerce platform. In its most recent quarter, Ralph Lauren said ecommerce same store sales fell 10 percent while brick-and-mortar fell 3 percent in its fiscal third quarter.
MEDIA: For Amazon, the push into sports distinguishes its programming ambitions from Netflix Inc. and Hulu, the online streaming service co-owned by Walt Disney Co. , 21st Century Fox , Comcast Corp. and Time Warner Inc. Both Netflix and Hulu have steered clear of sports and other live content.
ECOMMERCE: Indeed, Amazon has struggled to court a lot of prestige designers willing to associate with the other mass market brands it sells. To counteract this, they’ve streamlined the Amazon Fashion landing page and styled lookbooks in the vein of its sister site Shopbop. Though Calvin Klein and BCBG Max Azria are sold through the site, the rest of its offerings fall into the lower-priced contemporary market, with brands like French Connection and MinkPink.
MCOMMERCE: The app that was pitched to brands, investors and customers as the ultimate mobile marketplace for fashion has backpedaled. It has also changed its identity. When asked to say simply what Spring is, Tisch said: “We’re delivering a personal shopping assistant that lets you shop your favorite brands and discover new ones, and offers the best customer experience anywhere, all at the same time.”
LOGISTICS: The courier recently announced it’ll be adding Saturday ground pick-up and delivery service to its repertoire, expanding a pilot program launched last year in Atlanta, Philadelphia and Los Angeles. UPS said it’ll be bringing the service to 15 additional metropolitan areas including Boston, Chicago and New York this month. By November, Saturday delivery will be available in nearly 4,700 cities and towns across the country and more than 5,800 markets come 2018.
DATA: For most categories in our research, CGI explains a full 60 to 80 percent of the variation in sales growth from one purchase to the next (Exhibit 4). The tight linkage between CGI and growth underscores the importance of initial consideration to a company’s brand strategy and suggests the new metric should be a useful benchmark for assessing brand health.
RETAIL INNOVATION: Maybe the most significant effort thus far comes from the Boston-based label Ministry of Supply, which has permanently installed a 3D-knitting machine at its Newbury Street flagship in the city. Aman Advani, a cofounder of the quickly growing label, which makes performance clothes for the office, says it took a 60-foot crane to install the 3,000-pound machine. “This isn’t a niche product,” he explains. “This is step one of a longer route to a sustainable and strong production method that’s here to stay.”
RETAIL BLOODBATH: Buying credit default swaps tied to individual retailers is more precise than shorting CMBX tranches, according to Citi’s analysts. They estimate CMBX indexes may only have 10 percent exposure to mall properties, with a greater proportion tied to non-retail properties such as office buildings. What’s more, buying CDS protection against individual merchants can be cheaper and maintained over a longer term -- an important point given that distressed retail stores could survive for years before they default.
ECOMMERCE: Based on valuation at time of exit, Alibaba ranked first as the most highly valued VC-backed e-commerce exit during the time period. The top 7 companies all exited at valuations over $2B+. It is worth noting that total funding often does not directly correlate with a company’s valuation. Such is the case with Russia-based Avito, which had only raised $168M, yet was acquired in a corporate majority deal for $2.7B by South African conglomerate Naspers.
Last Word: What's in the pipeline?
I've made some careful changes so far and I believe that it's improved how many of you interact with 2PML on a daily basis. For one, I've reduced the number of letters from five per week to a more sustainable (and digestible) three per week. The percentage of readers who clickthrough to external articles (my measure of success) has risen from 23.1% to 31.2% in the last 20 issues. Additionally, the overall open rate rarely falls below 50% now, a good sign.
To build on this, I am planning a few additional improvements that will go into effect no later than Issue 240. For one, the next two partnerships will be announced: an eCommerce behemoth and a $1B+ venture capital fund. I'm extremely proud to have rounded out the longterm partners for this project. However, here are few improvements that will better serve you:
Update no. 1: Once per week, there will be a subscription-based, long-form analysis of the week's newsworthy advancements in eCommerce, brand, or digital media. Professionally written, edited, and delivered to you before Saturday brunch.
Update no. 2: For the readers who want access to that content, there will be a custom-built forum for you to communicate with one another or even contribute content of your own.
Update no. 3: As such, 2PML will be hiring an analyst for the weekly long-form product. Email me for info: email@example.com
Many readers use 2PML to influence decision-making in the fields of retail, investment, and business / fashion journalism. The upcoming private community and weekly content will provide another platform for no more than 600 leaders to consume and communicate with their peer groups.