2PM - Monday Letter:

Middle Income America / Summary: In this report, we break down two ideas assigned to the midwestern (and southern) consumer. Once viewed as "middle-income America," cities like Nashville, Austin, and Columbus are redefining certain consumer characteristics. Those cities have retailers rethinking how wealth distribution is assessed beyond the top 6-10 major cities. The south and the midwest was long thought to represent a higher concentration of middle income consumers than coastal cities like New York, San Francisco, and Los Angeles. Luxury retailers like Gucci and Prada are looking beyond midwest stereotypes and finding positive results. (Read More...)

The hot new trend for Gucci and Chanel: middle America

Source No. 1 / WSJ: Gucci in Columbus, Ohio. Chanel in Troy, Mich. Hermès in Naples, Fla. Welcome to luxury's latest frontiers. After years focused mainly on expansion in China, luxury brands are rediscovering the U.S., opening boutiques across America in cities where they have never previously operated stand-alone stores.

Middle-income shoppers spend less on apparel

Source No. 2 / RetailDive: But the consumer backdrop that Cowen describes is setting off a chain reaction of sales declines, rising inventory, markdowns and losses that is prompting cost-cutting, especially in the big-ticket areas of payroll and advertising, according to retail consultant Brian Kelly. 

UPDATED: The new DTC Power List was updated for August 8 with new data for 700 companies and notable changes to the rankings. Join here to gain access to the list each week. 

Allbirds 'dramatically' slows pace of new hires as loss widens

DTC Economics / CNBC: Allbirds on Monday trimmed its financial forecast for the year and announced a number of efforts to cut costs as the sustainable shoe maker reported a wider quarterly loss compared with a year earlier. The company citied a slowdown in consumer spending toward the end of June and said it has "dramatically" slowed the pace of corporate new hires and backfills for departing employees.

China's eCommerce shift empties out clothing markets

eCommerce / SCMP: Alibaba, owner of the South China Morning Post, on Thursday reported its first-ever quarterly sales decline. Few Chinese consumers are willing to loosen their purse strings when nearly every economic sector is facing sweeping job cuts, from technology to entertainment.

Uber and DoorDash found a way to make food-delivery profitable

Instant Needs / Quartz: The pandemic accelerated competition for on-demand food delivery, and in the United States, there were two clear winners: DoorDash and Uber, which together control 96% of a market that has doubled over the past two years.

Here's how Gopuff is becoming the next big food delivery player

Instant Needs / NRN: As the boundaries between retail and restaurant delivery continue to blur, Philadelphia-based Gopuff wants to be the next big on-demand industry disruptor. Gopuff started out as mainly a hookah and convenience store goods delivery platform, but now has expanded to include groceries, alcohol delivery, in-house virtual restaurants, and most recently, ghost kitchen partnerships with major foodservice brands like BurgerFi.

What the start-ups that avoided the DTC crash have in common

DTC Economics / BoF: If the buzzword of the direct-to-consumer boom was "disrupt," the word of the bust is "next." When Allbirds announced it was cutting 8 percent of its corporate staff last week, it did so to "set up the next phase of growth."

Walmart considers deal With Paramount, Disney and Comcast

Consolidation / NYT: It is unclear whether any of the streaming companies are inclined to reach a deal with Walmart. Disney operates the Disney+, ESPN+ and Hulu streaming services; Comcast owns the Peacock streaming service; and Paramount runs the Paramount+ and Showtime services.

The iRobot acquisition is about advertising. Before Apple began its push for privacy that sent social media advertising into a tailspin, few companies understood the consumer more than Meta, the parent company of Facebook and Instagram. Meta’s most recent earnings report showed the company’s first ever year-over-year decline in advertising revenue. The data that Facebook was able to use powered some of the most effective advertising tools of the last fifteen years.

Apple upended the digital ad industry when it introduced new iPhone privacy controls last year that made it harder for companies such as Meta and Snap Inc to target and measure ads on their apps. [1]

Today, an advertiser may find more value in partnering with Amazon than any of Meta’s advertising products. In 2018’s Crashing the Duopoly, we laid out the long-term potential of Amazon’s advertising foundation. (Read More...)