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Sociology / 2PM: The “new normal” isn’t the same for everyone. For the few, the new normal represents quality levels of access, comfort, and availability that the wealth class is accustomed to. For them, it’s as though little has changed. Rather than walking into stores, these customers have adapted to appointment-only retail, elevating the experience with methods that independent boutiques have used for decades. Five-star hotels employ skeleton crews to service the needs of wealthy residents with half of the intended staff. At airports, lines wade into 30-minute territory for a Starbucks coffee. Across the corridor, the AMEX Lounge provides refuge for those with unlimited credit, metal cards, and extraordinary credit scores.
Editor's Note: Against the backdrop of travel-related stocks rebounding and travel slowly returning to pre-COVID levels, this report covers a few key observations over six weeks of travel through Atlanta, Charlotte, Dallas, Asheville, Minneapolis, and Los Angeles. It's rare that 2PM features our own reports. This one is unlocked through Wednesday. It's worth your time.
2PM Data: Daily number of passengers screened (2019 - 2020) | Source: TSA
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eCommerce / Vogue Business: Unsurprisingly, recent demand for e-commerce has already risen. E-commerce revenue in the first quarter of this year grew 20 per cent, compared to 12 per cent growth a year ago, Salesforce reports. According to Index data, this is slated to be more than a temporary trend. Post-Covid-19, 60 per cent of luxury Chinese consumers intend to buy fashion through e-commerce platforms. Chinese stores are also exploring letting people shop by appointment — which only emphasises the need for e-commerce platforms to serve as the starting point.
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Real Estate / Retail Dive: According to a recent Coresight Research report, only one in five consumers expect to buy apparel in the first month after lockdown, and of those who have changed their purchase levels during the pandemic, one-third expect it to be more than six months before their spending returns to normal. Health and sanitation concerns will also color the way customers see stores, and occupancy limits will dampen the ambitions of many, including any retailer thinking of launching a pop-up in the near future.
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eCommerce / eMarketer: The US retail sector could take years to recover from the impact of the coronavirus, and the hit could be worse than that of the Great Recession. According to eMarketer's latest forecast on US retail sales (which includes auto and fuel), total retail sales will drop by 10.5% this year, steeper than the 8.2% drop in 2009.
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Sociology / The Atlantic: The shift from accumulation to consumption took place between the 1880s and the 1920s, a period Strasser says caused “a seismic shift in people’s relationship to the material world.” Before that, most possessions were either made at home or bought from peddlers, local craftspeople, or general stores. As American manufacturing and transportation took off around the turn of the 20th century, the economy of stuff began to centralize, setting us on a crash course with the big-box behemoths that largely dictate the country’s consumption patterns today.
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eCommerce / Modern Retail: Grocery delivery is turning its focus toward the smaller players. Instacart is the latest platform to focus on a growing area of grocery e-commerce - small, independent grocers. It announced a partnerships with C&S Wholesale Grocers - a grocery supply company that represents more than 3,000 independent stores.
From: The Grocery Report (2018)
The advantage is tipping away from tech and towards fully vertical solutions like Target, Walmart, Kroger, and the like.
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Retail / NRF: Neil Saunders is managing director and retail analyst for GlobalData, a market data and analytics firm. Saunders works with clients to help them understand the retail, shopper and market landscape - advising them on how best to develop, evolve and implement business strategies.
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eCommerce / Glossy: On Monday, June 8, New York's retail stores were allowed to reopen. For one of the biggest retail markets in the country, it could be an important milestone in getting fashion brands back on track. But many fashion brands have opted to wait, instead take a longer view of the path to reopening, driven by a multitude of factors.
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Advertising / Digiday: In March as the coronavirus crisis began escalating rapidly, publishers and ad tech companies battened down the hatches. Advertisers had begun to pause spend and the media industry executives braced themselves for an even worse second quarter. By most accounts, April was a terrible month too, according to the 13 publishing, ad tech executives and industry experts Digiday contacted for this article.
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Digital Media / PR Daily: No other generation is as quick as Gen Z to call out derivative and clichéd content. Companies must be strategic and purposeful when building out these experiences. According to the Boston Consulting Group, personalization will shift $800 billion in revenue to the 15% of companies who get it right. The most successful brands will leverage customer data and provide personalized content that users want to revisit.
Re-read: Gen Z Arbitrage
These are the brands that they’ve grown up with on social channels used over their iPhones: Snapchat, TikTok, WhatsApp, Instagram and others. The DTC arbitrage in 2020 and beyond will be closely tied to mobile payments.
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eCommerce / Tech Crunch: The report didn’t delve deeply into the contributing factors as to why overall retail sales will remain down despite stores reopening, but these would include the obvious impacts related to a coronavirus-triggered recession — like job losses and job insecurity, both of which prompt consumers to quell their spending. In addition, many consumers still continue to avoid brick-and-mortar retail entirely, instead only ordering their essentials online.
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Real Estate / Real Deal: About 40 percent of national retail chains once again skimped on their rent in May, according to the latest monthly report on collection rates. Among those are 24 Hour Fitness, AMC Theaters and Pier One, all of which have either announced potential bankruptcy or plans to liquidate assets.
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Memo: The Nike Report, Part II
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American economics is, often, the true driver of lasting change. In this context, Nike has served as one of numerous leading indicators at the intersection of sports and social change for nearly forty years. From Steve Prefontaine's rebellious nature (pictured), to Compton's own Serena Williams, to Lebron James' philanthropy and social activism. In an earlier 2PM report on the apparel and shoe brand, I explained Nike's deeper intentions for the then-controversial agreement with former NFL quarterback Colin Kaepernick.
Read the report.
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