2PM - No. 366: There is a fix.

With department stores disappearing, malls could be next

Capstone / New York Times: Malls were already facing pressure from online shopping, but analysts now say that hundreds are at risk of closing in the next five years. That has the potential to reshape the suburbs, with many communities already debating whether abandoned malls can be turned into local markets or office space, even affordable housing.

The Genesis of American Over-Retail: Mall Retail and 1954 [Read 2PM's Archive]

1954: The U.S. Supreme Court abolished racial segregation in schools after Brown vs. Board of Education was decided. This meant that urban areas around the country were characterized as unlivable by some. Nowhere was this felt greater than in the midwest, where affluent families and government-funded veterans moved to the suburbs to allow their children to avoid certain schools. These neighborhoods were often deed restricted to secure borders. In some cases, incorporation allowed suburbs to form city governments that lorded over the rules and regulations of the area – written and unwritten. This massive exodus to the American suburbs corresponded with a construction boom in the outskirts of many metropolitan areas.

Shortly after this Supreme Court decision, Eisenhower enacted the “Accelerated Depreciation” (AD) program. This allowed the owners of commercial real estate developments to deduct building costs from their tax burdens. This new form of tax deduction enabled builders to extract wealth from their developments 10x faster than the year before. Thomas Hanchett’s “U.S. Tax Policy and the Shopping-Center Boom of the 1950’s and 1960’s” notes that there was one regional mall in 1953. No less than 25 were approved immediately after this decision. America grew from one mall to 25 in one year.

What if digital fashion week is the best fashion week ever?

🦠 Digitized Economy / GQ: Fashion designers are often at their creative best when they binge on excess-cigarettes and other vices, sure, but also budgets, price tags, colors, silhouettes. For most of its history, fashion has operated in this creative mode, with rock star-like designers presiding over Coachella-like fashion weeks.

The rising cost to acquire customers online

eCommerce / Retail Dive: For certain direct-to-consumer brands, the pandemic invited some of their highest sales as consumers were forced to shop online while physical stores shuttered. In May, Chewy's first quarter net sales grew 46% year over year to $1.6 billion, Casper's rose 26% to $113 million and Wayfair's direct retail net revenue increased 20% to $2.3 billion.

The pandemic is rewriting the rules of retail

🦠 eCommerce / Harvard Business Review: But Cincinnati-based Crossroads Church seized the opportunity to re-imagine its pastors’ weekly sermons. Now they film pastors delivering messages at different locations to help reinforce that week’s message (for example, talking about the importance of a strong foundation at the site of a historic church).  Similarly, retailers can take advantage of the greater flexibility and new contexts that digital affords by, for example, depicting a single clothing item on multiple models to show what it looks like on different body shapes and sizes or using videos to demonstrate how real customers actually use a tool.

Editor's Note: I especially enjoyed the practical example of eCommerce applied to traditional industries in this one.

Our cash-free future is getting closer

Fintech / New York Times: The pandemic is propelling a shift toward a cashless society in ways that no other single event has. Experts say that's not necessarily a good thing. PARIS - On a typical Sunday, patrons at Julien Cornu's cheese shop used to load up on Camembert and chèvre for the week, with about half the customers digging into their pockets for euro notes and coins.

Is anyone watching Quibi?

Streaming Economy / Vulture: Katzenberg and Meg Whitman, Quibi’s CEO, attributed the slow start in part to the pandemic. T-Mobile, Quibi’s most important launch partner, could hardly flex its marketing muscle when most stores were closed. The “on the go” users the app was meant to capture were now stuck at home. Of the 40 million newly unemployed, a disproportionate number are the young digital natives Quibi is trying to reach. But plenty of streaming companies have seen the stay-at-home orders as a boon: Instagram Live is surging, and mobile-phone use is up, with shocked iPhone users posting screen-time reports graphing dramatic spikes. 

2PM Archive: The VC-subsidized media model is failing

Sex toy sales are up and publishers are seeing an opportunity to grasp

🦠 Content x Commerce / Digiday: Seave said that while affiliate sales are the most logical way for publishers to monetize their sex toy content in a commerce capacity, drop ship sales could also work. For a general publisher trying to create their own inventory business with branded products, however, Seave said that it is something that would not necessarily translate to audiences because general publishers are not specialists on the subject. 

PSG and Fanatics' landmark ecommerce partnership

Brand Equity / Sports Pro Media: For Fanatics, the company now gains an even broader set of ecommerce rights, taking over global distribution for the club’s merchandise operation. Fanatics also becomes the master licensee for PSG, meaning it will be able to make or sublicense to third parties all club products, except for those made by the club's technical partner Nike.

Shoppers across the country are retreating again as coronavirus cases surge

🦠Retail / CNBC: Retail traffic in the U.S. was down the most so far in 2020, on a year-over-year basis, during the week ended April 18, according to data from the retail consultancy ShopperTrak. It fell 82.6%. From then until the past 14 days, there were slight improvements. Those declines shrank each week, according to ShopperTrak, which is part of part of Sensormatic Solutions. The decline had eased to being down just 34% from the year prior, for the week ended June 20. 

How Netflix beat Hollywood to a generation of black content

Streaming Economy / New York Times: The company didn't set out to build a big library of Black programming, but now it's the envy of its rivals. The Black documentarian Stanley Nelson says his phone has been "ringing off the hook" as America is looking again at racism and the Black experience.

Editor's Note: by not being blind. 

Shopify has made the industry more interesting, accessible, and newsworthy. But it is not the only participant in this burgeoning ecosystem: Magento (now Adobe), Demandware (now Salesforce), SAP, BigCommerce, Squarespace, BigCartel, WooCommerce, Weblow, Square, and Wix have played pivotal roles in the development of either enterprise or merchant-level markets. Shopify is neither the biggest platform with respect to merchant volume or gross merchandise value (GMV). It sits squarely at the center of the two extremes. Yet somehow, it became the de facto operator of the DTC era.

Read the memo here