2PM - No. 370: The Failing Fundamentals

Introducing "The Study"

Deep Generalism / 2PM: Over the past few weeks, 2PM has designed, developed, and implemented a new way for you to keep track of our most critical briefs and memos. Today, we are launching the first stage of The Study, a central location for evergreen essays and the concepts that can help operators move their industries forward.

Pandemic fuels demand, Prime membership in Amazon Q2

eCommerce / Thoughts (2PM Team): Amazon reported Thursday that it has experienced a significant uptick in second quarter sales, as well as a noticeable increase in advertising and subscription services and fees from Marketplace sellers. These developments and more helped the company double their quarterly net income from that of Q2 2019.

TikTok Ban? Creators and fans are big mad

A. New Media / Thoughts (2PM Team): Following President Trump’s comments threatening to ban TikTok in the United States, creators took to the social platform to defend the cruciality of both their work, and the site itself. Long hailed as a mere comedic pre-teen dancing app, it is clear that the political, cultural, and social ramifications of the TikTok community’s voices and actions have caught the attention of even the most powerful.

Microsoft pursuing TikTok purchase by September 15th, may invite U.S. investors to deal

B. New Media / Thoughts (2PM Team): Microsoft announced Sunday that they will continue exploring a potential purchase of TikTok from Chinese company ByteDance. This statement comes following President Trump’s strong opposition to the app. Microsoft claims that they have since had discussions with the President regarding this potential acquisition, and that they will continue to do so.

Alibaba expanded during the last health crisis - and its co-founder has advice to share

eCommerce / CNBC: Just because the restaurant’s shut down, customers don’t stop eating and the alternative is adapting to takeout. The adaptability of the business is very important. Teamwork and internal communication are key to adapting to a new normal.”

Editor's Note: We published On The Fourth Day of Quarantine in March of this year. 

This is an incredible excerpt. In 2002, China’s gross receipts in online retail were projected to reach $4.8 billion by 2004. The United States reached $17 billion by 2003. In the same year that America’s market surpassed $17 billion in sales, Alibaba hovered around $10 million – a far cry from American giants like Ebay or Amazon. By 2003, Amazon reached $3.92 billion in net sales. But by 2005, Alibaba leaped from $10 million to $1.2 billion. Today, these numbers are drastically different: China is leaps and bounds ahead.

GPT-3 will accelerate the privatization of internet communities

Data Science / Napkin Math: I was screaming at my computer because this document was generated entirely by a machine learning language model called GPT-3. Yes, that’s right. A computer created a 3-step process on how to recruit board members, all on its own. Are you yelling at your computer yet?

How to understand new things

Deep Generalism / Nabeelqu: Intelligent people simply aren’t willing to accept answers that they don’t understand — no matter how many other people try to convince them of it, or how many other people believe it, if they aren’t able to convince themselves of it, they won’t accept it.

How the cult of Brandy Melville took over the internet

Brand Equity / i-D: Validation is key to the brand’s appeal. As Hailey explains: “Brandy Melville sells the idea of being special for wearing their clothing.” In many ways, “Rare Brandy” reselling is a manifestation of Brandy Melville’s ethos of exclusivity, artificially creating extra-rare, extra-special, and extra-expensive pieces, extra-worthy of validation by peers.

On the apparel brand that plants 10 trees for every purchase

Brand Equity / Vogue Business: “We’re a tree-planting company that sells apparel, not an apparel company that plants trees,” says Emsley. “In hindsight, there are a lot of easier ways to plant trees than building an apparel brand.”

Amid Congressional scrutiny, Amazon posts 40% growth in third quarter

eCommerce / Modern Retail: During the last three months most people were forced to buy their goods online, and Amazon remains the largest e-commerce platform in the United States; data from eMarketer puts Amazon at 38% of the U.S. digital sales market share, with Walmart coming in second at 5.8%.

Excerpt: A paradox for Black Friday and smaller retailers is that the gross merchandising volume (GMV) in online retail for the month of November will achieve a record high. Most of this volume will be attributed to Walmart, Target, Dick’s Sporting Goods, Academy, Best Buy, and Amazon’s decision to emphasize eCommerce before (and potentially on) the biggest shopping day of the year. By closing all physical stores for Thanksgiving, the market can anticipate digital ad spend of historic proportions. This spend, in turn, may lead to a rise in customer acquisition cost (CAC) for smaller retailers.

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