Issue no. 245. The last one had a 39.52% open rate with 6.5% of you reading about the Supreme Court's insufficient stance on eCommerce's tax problem.

Brief: It wasn't worthy of a feature article but here is a great interview with the Warby Parker founders on how they've accomplished so much.

Today I will be recording an episode of Lumi's Well Made podcast and it will be an opportunity to discuss 2PML capstone topics. Respond to this email with any retail, eCommerce, or DNVB issues that you'd like to hear more about.

And over the last several weeks, I have been working on the next steps for 2PML. With some assistance, I have begun to lay the groundwork for a 2PML-based fund to work with in pre-seed DNVB's and subscription-based digital publishers. The target date for the first investment is Q2 2018. 

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Today's Top Intelligence (11 Reads)
How AI Could Change Amazon
Data: Now, imagine the AI uses that data to improve its predictions. We think of this sort of improvement as akin to turning up the volume knob on a speaker dial. But rather than volume, you’re turning up the AI’s prediction accuracy. What happens to Amazon’s strategy as their data scientists, engineers, and machine learning experts work tirelessly to dial up the accuracy on the prediction machine?

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eCommerce: As Bloomberg notes, this is yet another move by Amazon to own more of its own logistics process, and it could help the company optimize its inventory management process by providing more insight into parts of its supply chain that were previously opaque since they were beyond its direct control. Meanwhile, it should mean more quick Prime delivery options for consumers, provided Amazon's macro-level perspective can help it decide what should go where, and how, in order to best fulfill promises of expedited shipping times.

Brand: Users can say "Alexa, Ask Perry Ellis what I should wear to ..." and choose among nearly 150 programmed occasions, according to a company press release. Alexa replies by offering an appropriate look, taking into account the venue, weather and dress code, and sends the selection to the user’s Alexa app and email, where they can click to the Perry Ellis website and add items to their cart to purchase.

Retail: While brick-and-mortar retail posted relatively flat growth in the first-half of 2017, e-commerce has a different story to tell. Despite representing around 8% of total FMCG sales (including meal kits and grocery delivery services), online FMCG sales adds nearly a point-and-a-half of topline growth. This may seem small, but it equates to more than $700 million. And at less than 10% share of total FMCG dollars, it’s already having a sizable impact on growth—and at a very early stage.

DNVB: The direct to consumer economy is built on the promise of taking many of these commodities, building brands around them and then charging a significant premium for the products. These brands raise money on the premise that they will "disrupt" and "revolutionize" their relative spaces. The intended result of these sky-high ambitions is that direct to consumer brands will create a new middle of the market, although it remains to be seen if this new middle is strong enough to support big, long-lasting brands. At the same time, traditional brands are fleeing the middle of the market, an ominous sign for these new brands.

eCommerce: Regardless of the acquisition, Walmart and Jet's acquisition strategy is for the long term, not about immediate ROI. "We're looking to build a portfolio of brands," he said, in answer to a question about whether the retailer can monetize its new assets. "We're trying to accelerate growth on the existing site. It's an asset purchase more than ROI."

Brand: W+K found an LP with some old radio recordings the Colonel had done: “Hi folks, it’s celestial boating season, why not enjoy some Kentucky Fried Chicken?” The agency wasn’t sure what celestial boating season was but liked the idea that Colonel Sanders was diving very deep into a specific genre. “That was pretty modern and ahead of its time,” said Baldwin. “He was selling chicken with everything from records to Halloween costumes.”

Brand: Matix is a Los Angeles-based clothing company that designs durable clothing for skaters. The company was founded by two pro skateboarders, Daewon Song and Tim Gavin, who conceptualized the line after growing tired of their clothes getting ripped to shreds after making contact with concrete. According to Matix, the collaboration between the two brands is a celebration of both companies' vintage heritage.

eCommerce: During 2017, a shift has occurred when considering global e-commerce peers. As can be seen above, Amazon has not been the dominant investment choice. Companies ranging from Alibaba Group (BABA) to Wayfair (W), Overstock (OSTK) and Groupon (GRPN) have substantially outperformed Amazon through September 2017.

eCommerce: Stripe itself found that in its own analysis of the world’s 100 biggest commerce sites that 72 of them had three or more errors in their checkout flows, nearly half did not use auto-fill correctly, and one-fifth were failing to revert to numerical keypads for entering credit card numbers on mobile.

Brand: They decided to sell online only, after realizing, "Oh my God, there's too many bars, we can't get into Whole Foods," and quickly gained traction. (Today, RXBars are distributed nationally at Whole Foods, Target and other major retailers.) By summer 2014, Rahal and Smith had found partners to help commercialize the business, which allowed them to stop making the bars by hand and begin hiring staff. The company produced about 1.5 million bars that year.

Part Two: The Coming of Podcast Commerce
Part One Here

What do you notice about the response this tweet? Over the past few months, I've transitioned from building eCommerce functionality into existing media brands to supplying merchandising capability to influential media brands.

If you've ever listened to a podcast, you've listened to an ad read. Don't be too down on them. They support your favorite pod and people are actually being influenced by them. You'll be fascinated to learn that you a podcasts' ability to move merchandise may be unparalleled in the digital publishing sphere.

Mizzen+Main CEO Kevin Lavelle would tell you that the brand tipped into the mainstream, a bit faster than any of us imagined it would, after a few paid reads on the Tim Ferris Podcast.

Via Kevin Lavelle (2015):

Let’s talk specifics. Below is a ranking of our sales days, in order, and relative percentages of how our other top days compare to our best day for perspective.
  1. Day Three of Tim Ferriss First Podcast Sponsorship
  2. Fundraise Announcement, Wall Street Journal, 83% of Highest Day
  3. Day One of Tim Ferriss Podcast, 73% of Highest Day
  4. New York Times Profile, 69% of Highest Day
  5. Day Two of Tim Ferriss Podcast, 58% of Highest Day
A lot has happened since 2015 but the Ferris podcast remains a pivotal point in the company's growth.

Podcasts may be the most influential medium on the internet today. While podcasts must have visibility, the podcast host's objective is influencing the listener. This contrasts the model for many digital publishers, whose objective is to simply collect visitors and sell ads on purported volume. Influence-first journalism = eCommerce efficacy.

In Issue 246, 2PML will feature an in-line list of the top 15 most influential podcasts and online publishers. Your participation is requested. Respond to the tweet for your input to be considered. Or you can simply respond to this email with your thoughts. 
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