2PM - No. 374: Make it last forever.

CNBC: Record online sales won't last forever

A. eCommerce / CNBC: We’re now quite familiar with this year’s boom in eCommerce. Recent growth has been drastic, to say the very least. People’s habits have shifted to the online store out of necessity and preference, but some think the growth and success won’t be sustainable.

But it will, we've seen this before. In 2003, China's SARS epidemic gave away to an eCommerce boom of epic size and duration. Prior to SARS, the country trailed the United States in eCommerce-driven retail. Today, their online retail economy is approximately 3.5x the size of that in the United States. The shift in the eCommerce race happened within a two year span. The U.S. is now experiencing a similar effect (see story "B" below). As previously stated, there will be a J-curve effect caused by the return to the stores but that will be temporary. Why: two separate forces are happening in tandem. Brick and mortar retail is shuttering at an alarming pace. And agglomeration (an assemblage of consumers) is now happening in digital spaces vs. traditional ones. 

From: On The Fourth Day of Quarantine

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.

• China (2019): $1.935 trillion (Alibaba leads)
• United States (2019): $611 billion (Amazon leads)

COVID-19 pandemic accelerated shift to eCommerce by 5 years, new report says

B. eCommerce / TechCrunch: Department store retailers will need to more quickly pivot to omnichannel fulfillment capabilities in order to remain competitive in the new environment. Specifically, they will need to drive traffic to their stores through services like buy online and pickup in store (BOPIS), and will need to offer an expanded set of ship-from-store services.

How invisible technology and infrastructure overhauls will save retail

Retail / Digiday: Outside of the DTC and digitally native brands (who have grown up in an eCommerce ecosystem), the integration of needed infrastructure isn’t as easy as it might seem. Adaptation and change aren’t convenient from a psychological or sociological POV, and the same holds true here. The answer may be in the works, as invisible tech looks to address shortcomings.

The real China reshoring isn't what you think

Supply Chain / Wall Street Journal: The rhetoric has long been a push towards bringing operations back to the respective homeland. Now, with citizens of key economic nations (like China) staying in their country for life and travel alike, the idea of reshoring needs to be re-examined. Companies and brands need to be on the inside (literally).

The altered state of the rental market

eCommerce / Glossy: Le Tote filed for bankruptcy in early August, and at the time noted that its subscriptions had declined since March. Urban Outfitters has decreased investment in its rental company, Nuuly, which it just launched in May 2019. Meanwhile brands and retailers are increasingly tackling the business model, with Eloquii, Selfridges and Ganni, in collaboration with Levi's, launching rental services in this month alone.

Spotify is developing a 'virtual events' feature

Streaming Economy / TechCrunch: An upcoming feature in development at Spotify could help turn things around, by again connecting artists with their fans through ticketed live music events. This time, however, instead of helping fans find live concerts, as in the pre-pandemic days, the new feature will alert fans to the artist’s upcoming “virtual events.”

The direct to consumer boom in food tech

DTC / The Spoon: The latest [insert unused vivid descriptor here] is companies creating their own direct-to-consumer sales channels. Beyond Meat became the latest DTC entrant this morning by announcing its new eCommerce site through which it can sell its plant-based beef and sausage products.

These brands made direct-to-consumer mainstream

DTC / Built In: Hundreds of direct-to-consumer (DTC) brands took off in the late 2000s and 2010s. Their aim has been to shake up traditional commerce by selling products directly to end users over the internet, cutting wholesalers and retailers out of the process. Their marketing dominates social media feeds, subway platforms and podcasts.

5 hidden trends in North American eCommerce

eCommerce / Digital Commerce 360: These are just a few of the many beneath-the-surface trends that emerged from the 2020 Top 1000 report. But don’t get comfortable with them. With the coronavirus upending shopping in many ways, no doubt the 2021 report will reveal a host of big shifts in the fortunes of North America’s leading online retailers.

Will travel retail rebound? Beauty says yes

Travel Retail / Vogue Business: Patricia Abergel, general manager of export and travel retail at Clarins Americas, says travel retail will remain a significant part of the company’s business, “we just have to be patient”. At SK-II, business is beginning to pick back up, particularly in China, according to Seth.

Editor's Note: This is good news for Away, who has recently (and smartly) pivoted to good boy carriers. 

The TikTok ban should worry every company

Relevant / Harvard Business Review: If data collection by a company with overseas connections comprises a threat, there are threats all around. The data that TikTok collects pales in comparison to, say, what most American tech companies (as well as banks, credit agencies, and hotels) collect, both visibly and less so.

Editor's Note: read below

With the current administration’s target on TikTok and its proposed acquisition, I began to think about the second- and third-order effects of the politicization of the digital media and commerce markets. This is one of the first moments in American history where government policy proposed a limitation on a widely used consumer technology.

Read more here