2PM - Monday Letter: Solving Leaky Margin

Unlocked Member Brief / Excerpt. That could mean brands get closer with Amazon, which this week helped merchants boost sales via its Buy with Prime feature that promoted discounts across non-Amazon sellers’ sites during Prime Day. After 2PM reported that Shopify brands were getting swept into Prime Day through the new feature that puts Prime checkout on brand sites outside of the Amazon ecosystem, we got confirmation from several DTC brands that their sales did improve on those two days.

The ecosystem is so fragmented with platforms that have “more market share” than Amazon, an acknowledgment of the volume of separate storefronts stored on its servers. But it’s marketplaces like Amazon who should be more of a focus for brands. At least, that’s the opportunity ahead. (Read More)

Amazon is reportedly scaling back its private-label business

Source / Fortune: According to the Wall Street Journal, the company is slashing the range of items it sells under its own brands, such as Solimo and Amazon Basics. There are 243,000 items being sold under 45 house brands, but they apparently account for less than 1% of Amazon’s retail sales — a far cry from the 10% that former CEO Jeff Bezos set as a 2022 target a few years back.

Shein seeks U.S. IPO as soon as 2024

DTC Brands / CNBC: Here's a great primer on this incredible growth story. More Here: While these concerns have not dissuaded large investors such as Sequoia Capital China, IDG Capital, and Tiger Global Management, recent executive moves within Shein appear to focus on improving their ESG appearance in preparation for a public offering, according to Bloomberg.

Jassy breaks from the Bezos Way

eCommerce / WSJ: Amazon has always maximized volume and eaten losses with the belief that profits would follow with loyalty and scale. The strategy might be changing with the times (and Andy Jassy’s influence). More Here: Jeff Bezos' successor has set himself apart with a hands-on approach in Washington. In his first year leading Amazon, Andy Jassy has made more changes than many expected. Credit... Michael Friberg David McCabe and When Jeff Bezos was chief executive of Amazon, he took an arms-length stance toward the company's affairs in Washington.

Amazon Prime Day 2022 insights

eCommerce Data / Numerator: Numerator's Amazon Prime Day Tracker compiles a live look across Numerator data sources to bring immediate insights into what is happening on Prime Day. All insights shared below are an “early read” of what we are seeing, and will be updated continuously throughout the event.

Summersalt launches The Forecast content platform

Linear Commerce / Retail Dive: Joining other brands in launching content arms, DTC swimwear brand Summersalt has created a content platform called The Forecast, the company said in details emailed to Retail Dive. Summersalt hired Kristen Maxwell Cooper, formerly editor-in-chief of The Knot, to become the company’s first head of content, social and community.

UPDATED: The new DTC Power List was updated for July 18 with new data for 700 companies and notable changes to the rankings.

The way consumers buy beauty products is changing again

Beauty / Business of Fashion: Department stores used to be ground zero for consumers looking to try and buy new makeup or skin care products, only to lose their grip on the market to Sephora and Ulta. Now, another evolution is underway as big-box retailers and drugstores enter the fray.

Online retailers are feeling the pain

eCommerce / NPR: We were all buying all kinds of stuff online during the worst of the pandemic. That has slowed down now. Online retailers are feeling the pain, particularly small businesses that sell products on Amazon. Alana Semuels and Adrienne Ma from our daily economics podcast The Indicator explain why some of these third-party sellers are feeling squeezed.

Independent retailers create in-store, eCommerce experiences

Omnichannel Retail / SmartBrief: Wondering if my business was an outlier in abandoning our online selling since the onset of the COVID-19 pandemic, I spoke with five other New Jersey business owners to learn more about their experiences balancing eCommerce with physical storefronts. 

Shopify and Buy With Prime. It will be interesting to see if Shopify realized any additional gross merchandising volume thanks to Amazon’s Prime Day.

Shopify and Amazon are in a perpetual chess match, they are frenemies if you will. It’s not always zero sum. A move by one side is typically countered by the other but this one appears to be an exception. While Amazon is known for Prime Day, Shopify may benefit thanks to the growth of Buy with Prime within the Shopify ecosystem. (Read More)