2PM - Which is the dinosaur?

The eCom Advantage Shifts / Intro: As retailers face down a holiday season that will be impacted by a looming recession in the United States and ongoing global supply chain challenges, they’re doing everything that they can in order to get in front of potential inventory issues.

A lot rides on the holiday shopping season for retailers to meet their annual forecasts. And since the start of the pandemic, the holidays have become increasingly challenging to navigate. Big-box retailers like Target and Walmart are putting new measures in place in order to make sure they have what they need in stock from brand partners, and that their supply chains don’t break down when orders increase. (Read More...)

Why eCommerce disruptors are trading like brick-and-mortar dinosaurs

Source No. 1 / The Information: eCommerce is on sale. Online commerce companies including ThredUp, Rent the Runway, Stitch Fix and Farfetch have seen their valuations tumble, putting them in the same ballpark as aging brick-and-mortar giants like Macy’s and Nordstrom. Already South Korea’s internet search giant, Naver, has taken advantage of the collapse to snap up Poshmark. Which of the other stocks is worth betting on—and which should investors avoid?

Some stocks in this group are holding up slightly better than their peers, showing where investors are likely the most optimistic about acquisitions or the benefit of partnerships.

Editor's Note: This week's lead article is a rebuttal of sorts, it's just a different lens that potential brand partners and retailers should use to view the "eCom recession."

The new DTC Power List was updated for October 11 with new data for 700 companies; the list his been re-adjusted to measure historical performance. Join here to gain access to this growing list. 

TikTok to expand eCommerce to the US and Brazil

eCommerce / SCMP: TikTok is planning to expand its e-commerce business to the US and Brazil as it seeks new sources of revenue and user growth amid persistent political scrutiny over its ties to China. The viral short video platform, which is owned by Beijing-based ByteDance, has posted more than 300 related jobs on LinkedIn over the past week, including positions for recommendation algorithm engineers, advertising merchant product managers, and heads of its household and make-up goods categories.

Editor's Note: Here's what we published on the TikTok job-listing that preceded the announcement of eCommerce transition. 

Untold: Inside the Shein Machine review

eCommerce / The Guardian: Fast fashion has done away with seasonal collections and high-street store displays, replacing them with websites offering styles that piggyback on social media trends and are sold in short bursts, until the next thing catches the crowd’s eye online and the brand starts flogging that instead. Fast fashion firms turn over high numbers of low-cost items quickly, a process that has now been turbo-charged by Shein: its clothes are priced so competitively, customers don’t mind if they only wear them once or not at all. 

Retailers, brands, and tech bet on live-streamed shopping

New Media / WSJ: Many U.S. marketers view the trend with caution because it hasn’t yet delivered significant sales in the U.S. But revenue from U.S. live-stream shopping is predicted to grow to $20 billion this year from $6 billion in 2020, and to $57 billion in 2025, according to research firm Coresight Research Inc. Some U.S. marketers see live shopping as a critical way to build awareness and trust among young consumers, attract new customers and collect data on shoppers, including their behavior online before making a purchase. 

Second Amazon style location in the country opens in Ohio

Physical Retail / Columbus Dispatch: The second Amazon Style store in the nation debuts Tuesday at Easton Town Center. The store occupies the 28,000-square-foot former home of Forever 21, at 3985 Gramercy St., in the Easton Station building. Amazon Style features hundreds of brands and thousands of styles and makes use of advanced technology to create an unconventional shopping experience, boasts the company.

Caraway to sell cookware in Target stores

DTC Distribution / CNBC: Target said in a statement that Caraway’s addition is part of a broader effort to attract customers with an interesting mix of merchandise, from young brands and unique items to popular national names. It sells other digital-first and direct-to-consumer brands. Earlier this month, it began selling an exclusive line of Tupperware, a brand that has been typically sold in person at parties and online.

Thought: this goes back to the "Target / Walmart advantage." Turns out DTC was just a channel all along.

Amazon to stream new NFL Black Friday game in 2023

Linear Commerce / Axios: The NFL will add a Black Friday game in 2023 to be streamed on Amazon Prime Video, the partners announced Tuesday. Driving the news: The first-ever NFL game will take place on Nov. 24, 2023 at 3pm ET - the day after Thanksgiving - and will exclusively stream on the e-commerce giant's video platform.

Re-read: all about retail media networks 

Using AI, meta generates videos from text with 'make-a-video'

New Media / designboom: Facebook's Meta calls its new artificial intelligence system Make-A-Video state-of-the-art. It builds on the recent progress that text-to-image generation technology has undergone which uses descriptions to churn out moving images from the texts. Meta has taken the advancement under its wing as it joins the troupe and lets its audience create their own GIF or videos with just a few words or lines of text.

THE INVENTORY GLUT / Executive Member Brief: Jie Zhang, the professor of marketing at University of Maryland’s School of Business recently explained two key factors that contribute to the current inventory glut facing many retailers. These factors have combined to reduce shipping prices and increase inventories in warehouses as retailers like Nike have invested heavily in reducing exposure to physical retail. The timing couldn’t be worse. These are the four points contributing to the current state of the retail economy according to Zhang:

Many retailers expected demand hikes at the peak of last year would continue into 2022, but there have been drastic shifts in consumer spending patterns since the beginning of this year. Consumers have cut back on buying goods and instead ramped up spending on travel and services.

Procurement decisions must be made about one year ahead of time, which makes it difficult for retailers to back out even when they realize the problem.

There have been major supply chain disruptions. Many retailers did not receive shipments of orders in time for the peak selling times last year and now are stuck with excess inventory that consumers do not want to buy.

Inflation, reaching a 40-year high level, has affected consumers’ ability to afford many products.

These factors are impacting even the most well-positioned of retailers. Take Nike for example.

Nike has a massive inventory problem on its hands and it’s not alone – it’s a problem facing other brands and retailers as supply chain chaos, unstable consumer confidence, and volatile customer demand has skewed forecasting and production lines over the past two years. A problem birthed in the events of 2020 influenced a directional change in 2021. (Read More...)