No. 364: The Genius of Amazon (Unlocked)

Featured: The Genius of Amazon

eCommerce / 2PM: But Amazon’s strategy does imply huge creative disruption in the jobs market even as the economy reels. In addition, viral outbreaks at its warehouses have reignited fears about working conditions: 13 American state attorneys-general have voiced concern. And Amazon’s role as a digital jack-of-all-trades creates conflicts of interest. Does its platform, for example, treat third-party sellers on equal terms with its own products? Congress and the eu are investigating this. And how comfortable should other firms be about giving their sensitive data to aws given that it is part of a larger conglomerate which competes with them?

Editor’s Note: this article was licensed to 2PM Inc. by The Economist via legal copyright. On occasion, 2PM will license paywalled articles to share with the entire community. This fee is supported by 2PM's Executive Members. 

The demise of America's malls can deal a blow to the towns that depend on them

Retail Real Estate / CNBC: The coronavirus pandemic is speeding up the demise of America's struggling shopping malls, which could deal a devastating blow to some towns that depend on them. When a mall goes dark, a community loses more than just a place to shop and grab a slice of pizza at the food court's Sbarro.

Here's a selection of 2PM's research on this topic: 

(1) The Connected Mall Thesis (Members)
(2) Derek Thompson discusses cities (Yearly Members) 
(3) The Ballad of Victor Gruen (All Readers)  

Silence of the Lamb

Retail / Die, Workwear: It's been barely a month since J. Crew filed for Chapter 11 bankruptcy, making it the first major retailer to fall during the coronavirus pandemic. Since then, an alarming number of fashion-related businesses have followed, including Neiman Marcus, Aldo, John Varvatos, JC Penney, and J. Hilburn.

MrBeast partners with MSCHF

Newish Media / Verge: Finger on the App can handle “millions of concurrent players,” Donaldson told The Verge, and that comes with some concerns. Donaldson, his team, and MSCHF were especially interested in “making sure someone couldn’t just duct tape their hand to the phone,” so they require you to occasionally move your finger in specific ways, he said. With millions of players signing up to try to win money, Donaldson knows that much of it is out of his control, but it’s that chaotic element that he’s most excited by.

How brands nurture micro-communities

Newish Media / Vogue Business: Social media is like an overcrowded bar where there's nowhere to sit. The result is people are enjoying it less - and that's a problem for marketers, according to Sucharita Kodali, vice president and principal analyst for retail at Forrester.

Editor's Note: Most successful brands today are fan-made. They’ve been emboldened by imagined communities of consumers who share tastes, ideals, and interests. As social media became a widely used tool, so did the ability to communicate – globally – at lightspeed. Technology gave a platform to peer-to-peer advocacy that had yet to be seen. Read more here. 

How the Coronavirus will reshape architecture

🦠Deep Generalism / The New Yorker: In recent months, we have arrived at a new juncture of disease and architecture, where fear of contamination again controls what kinds of spaces we want to be in. As tuberculosis shaped modernism, so covid-19 and our collective experience of staying inside for months on end will influence architecture’s near future. 

Coronavirus changed everything except T.J. Maxx

🦠 Retail economics / WSJ: The coronavirus pandemic ushered in a surge in online shopping, and most retailers are scrambling to adapt. Not T.J. Maxx. The discount chain isn't looking to quickly ramp up e-commerce beyond its minuscule level or add new features allowing American customers to buy products online and pick them up in stores.

Editor's Note: There is a polarization of American wealth and it’s progressing at a dizzying pace. Look no further than San Francisco, where the newly homeless camp against the walls of four and five star hotels. The dichotomy is striking. Or consider New York City, where there may be slightly less of a wealth disparity (to the blind eye). Yet, the city’s private helicopter traffic is growing noisier while the subway system is failing many who are fighting to remain in the middle class. Read more here. 

Alibaba and JD.com handle a record $136.51 billion in sales

eCommerce / CNBC: Known as 618 because it falls on June 18, the festival was being closely watched for signs about the health of the consumer in the world’s second-largest economy, as it looks to recover from the coronavirus pandemic. JD.com said transaction volume totaled 269.2 billion yuan ($37.99 billion). This figure is the total value of all orders for products and services placed on the company’s online platform, regardless of whether the goods are sold, delivered or returned. That was more than the 201.5 billion yuan in transaction volume last year. 

Carvana's hands-off approach faces a bumpy road ahead

🦠 eCommerce / Digiday Group: Seemingly unintentionally, Carvana was perfectly situated for a socially-distanced world. Before the pandemic, the used car sales app targeted a generation of socially awkward app-users, many of whom were finally aging into buying their first car. Much like purchasing a pizza, with Carvana, customers swipe, select and shop.

All platforms are not created equal

Technology and Data / Breadcrumb VC: I have previously explained how network effects shape three broad types of tech businesses - marketplaces, interaction networks and data networks. In addition to these, there is one other type of business where network effects play a central role - platforms. Unfortunately, the tech and startup world has spent much of the past decade using the term "platform" to describe everything from operating systems to analytics tools, algorithms, APIs, etc.

A tidal wave of bankruptcies is coming

Retail Economics / New York Times: Experts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving. Already, companies large and small are succumbing to the effects of the coronavirus. They include household names like Hertz and J. Crew and comparatively anonymous energy companies like Diamond Offshore Drilling and Whiting Petroleum.

Modern Retail editor Cale Weissman wanted to understand the Black perspective of those of us in eCommerce. I didn’t have many answers for him. I worked to moderate my responses, struggling to mask volumes of persisting frustrations within the digital industries. At one point, Weissman asked for a list of venture-backed founders in the direct-to-consumer space. There was, of course, the obvious answer. Tristan Walker rolls off the tongue. But I didn’t have a novel response in that moment and I was ashamed of that. There are so few Black professionals in this space. For the vast majority of prospective executives, founders, or investors, they’re still waiting.

👉🏽 Temporarily unlocked report