2PM - Letter No. 908: The Amazon 'Para-State'

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No. 908 / The 'Para-State': The lead features a unique deep dive on Amazon's growing powers, some say it rivals a sovereign nation. The most clicked from last week's member brief: (1) YouVersion, ignored by mainstream media, is worth learning from (2) 50 DTC brands set to take off (3) and why your last text message is probably from a brand

We've added and ranked
99 additional DTC brands (🔐) and pruned multiple from the existing list. Join the executive membership to access the archives, the DTC power list, and more.

Partner Update: Several retail brands have already reached out wanting an introduction to this team. Also, Vuori just implemented Bold Metrics site-wide! Bold Metrics sizing solutions leverage Machine Learning algorithms trained on over 45 Million AI body avatars to match your shoppers to their best fit based on their unique body measurements.


Deep Dive (Excerpt): Vice Media’s recent report on Amazon’s economic power is entitled: “Amazon Is Now a ‘Para-State’ Governing Global Commerce, Researcher Says.” With the changes caused by ATT and the iOS 14.5 upgrade, it’s only emboldened Amazon, which currently ranks in the top five advertising companies: 

This is not just the result of Amazon’s shifting rules, according to the report, but its total dominance of seller ad data, which it charges sellers access to.

We have covered retail media in depth. Amazon’s use of third-party sellers to fuel this first-party data trove is quite the oversight on our part; I’d never thought of it that way. Amazon is harvesting data by collecting vendors into a system, handling logistics for them (reducing cost of entry), and serving as the outwardly-appearing vertical operation to the customers of Amazon Prime.

Here’s what you may not understand about Amazon’s third-party marketplace system: there may not be a more powerful economic engine on the planet. 

Read More Here

Amazon is now a 'Para-State' governing global commerce

Featured Report / Source: Fearing antitrust investigations, Amazon has promoted itself as a hub for entrepreneurs and made nods to the American fantasy of "mom and pop" small businesses. But the tech giant's sprawling third party seller workforce are not like traditional small businesses.

Amazon’s trickle-down monopoly

Featured Report / Source: Amazon’s Trickle-Down Monopoly recounts a history of third-party (3P) sellers who have played a key role in building up Amazon’s retail business—and thus, Amazon as a whole—over the last two decades. By assembling and analyzing the direct accounts of dozens of small-to-midsized 3P sellers, both in the United States and abroad, this report describes the conditions of their surprisingly secretive work. 

Why does it feel Like Amazon Is making itself worse?

Featured Report / Source: Let's say you're a regular Amazon shopper in need of a spatula. You might start your journey by typing the word "spatula" into the search box with a qualifier or two ("silicone," "fish," "magenta"). In response, Amazon will produce a very large list presented in a large paginated grid or, on a phone, a bottomless scroll.


The Taoist philosophy behind Alibaba, China's eCommerce giant

Sociology / BigThink: The Alibaba digital ecosystem benefited from and helped accelerate one of the greatest successes of economic advancement in history: China’s meteoric rise over the past four decades from a deeply impoverished, struggling agricultural nation into what is now both an industrial and postindustrial powerhouse that is generating unprecedented wealth for its citizens.

Also: The Digital B2B Outlook (2023) .pdf 

Returning mall normalcy?

Data / Placer: Looking at visits year over year (YoY), indoor malls, open-air lifestyle centers and outlet malls saw visits increases of 4.1%, 5.2% and 2.7% respectively. The wider trend of YoY uptick is significant because of the draw these formats have shown in the face of powerful economic challenges. They also indicate the lingering power of key shifts to tenancy strategies that many top-tier malls have deployed. 

Also: American Dream Mall missed another $8.8 million payment 

Instacart deploys scan & pay as shoppers demand digitization

Fintech / PYMNTS: “Our technology helps [grocers] provide a more convenient and delightful experience for their customers,” David McIntosh, vice president and general manager of Connected Stores at Instacart, said in a statement. “Scan & Pay is helping customers to stay on budget while shopping in-store. [We’re] making it even easier for customers to get what they need, when they need it.”

Stores are pushing vendors to cut prices

Grocery CPG / WSJ: Major retailers from Target to Whole Foods are leaning on their suppliers to cut prices and capitalize on cooling inflation - and prevent shoppers from buying less and turning to discount stores. Retailers usually negotiate prices with vendors at least annually. But this time, the stakes are higher.



Updated For Feb 5: Over 95 brands have been added! And several “dead” brands have been eschewed. All categories of the list have been updated with major movement throughout the list. Highest ranked “top” brands include: BloomChic, Beis Travel, Petlab Co, Monos, Little Sleepies, Born Primitive, Papier, and Trinny London. We’ve updated the “previous” column to better illustrate positive (+) and negative (-) movement. A “0” means no movement at all.

Is this Alo Yoga's moment?

DTC Brands / BoF: Lululemon still has size on its side: it has nearly 500 brick-and-mortar locations and nearly $8 billion in revenue last year, to Alo’s 34 stores and $200 million in sales in 2020, the most recent year the company has released financials. It’s got a lock on the mainstream customer. But it’s Alo that has the cool factor — Bella Hadid, Kaia Gerber and Justin Bieber wear the brand, which debuted a ski collection at New York Fashion Week last fall and has a virtual “sanctuary” on Roblox.

WhyNotDesign's identity flips hot beverage branding on its head

Design / It's Nice That: When The Tea Tips approached WhyNotDesign for a new identity, it had one specific goal in mind: to create a look that would attract a younger generation of tea drinkers. He Yuxuan, design director at WhyNotDesign therefore knew that he would have to eschew the "gentle, ethereal and nature" aesthetics popularised by large tea brands like Twinings and Lipton.

Tom Brady plugs brand by tweeting pic in his underwear

DTC Brands / CBNC: Back in June, Brady promised on his Twitter account that he would recreate a few promotional photos from a BRADY brand marketing campaign that highlighted the line’s underwear collection if he raked in 40 thousand likes on his Tweet. Well, fans came through and Brady had to deliver.



Memo: It’s one of the most impressive media properties in the world and one of the best (and most obscure) examples of linear commerce that I’ve stumbled upon (move over, Michelin). But you won’t find many success stories written about it.

Today, its track record, growth, and technology are on par with many of the strongest technology companies in the United States. It has one ownership group, no venture capital, and – with the exception of one 2013 New York Times article – it has gone virtually unnoticed by business or mainstream media. And still it is home to one of the largest online communities in the world. With just 165 employees (many of whom could work for any major tech company), it is responsible for over 545 million users and 5.5 billion app opens. Over 497 million videos have played through the app, it has 2,600 translations to cover as many formats and languages as it can. It sounds world changing to me. There are only few precedents for this type of reach.


Read More Here

Editor's Note: this one received positive and negative feedback when published last week but I do believe in the merits of writing about it. YouVersion successfully combined original and UGC-content to earn 500 million downloads and what I estimated as well into the eight figures in annual, in-app transactions. 

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High Street, Columbus, Ohio · USA

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