2PM - No. 375: The Shopify Strategy

Former Adidas Yeezy GM Jon Wexler is joining Shopify

eCommerce / Complex: In his new position at Shopify, Wexler will aim to expand the company's partnerships with creators and artists, enabling scalable entrepreneurship for a whole new set of small businesses. Ahead of Shopify's announcement of the new hire, Complex spoke with Wexler and Loren Padelford, VP and GM at Shopify, about the past, present, and future of their partnership.

Operator Insights. This was a coup by Shopify that will pay dividends once the strategy takes hold. Shopify is known for supporting the industry's venture-backed DTC brands. Wexler is known for his high profile relationships. Of the list of 433 brands and exits that 2PM tracks (Member Access Here), nearly 250 of these brands are built with Shopify technology. But what you will also notice is that Shopify's name is less common among the top 40 on the list. Of the dozen or so that are Shopify-powered, Kylie Cosmetics ranks first. And this is where Wexler comes in. In the Complex interview between Wexler and Padelford, the Shopify VP mentions Wexler's eye for insight: 

I don't think Wex gets enough credit for just how transformative not being so focused on athletes was for Adidas. Focusing on those creators and that community that had been left aside and not paid attention to from this industry. That, to me, was such a great insight.

Shopify will continue to slowly poach enterprise-level clients from legacy vendors like Salesforce, Oracle, and Adobe. But in the meantime, the creator class has been known to achieve comparable amounts of revenue for the platform. In our report on Shopify's partnership with Jeffree Star (Member Access Here), the creator was rumored to have earned $54 million in under 60 seconds. The partnerships that Wexler can develop will mean more enterprise-level revenue without the red tape of corporate bureaucracy. And little direct competition from other challengers like BigCommerce.

It also means that Shopify will have an easier time recruiting top talent. With the momentum that it has, who would say no to that company?

Airbnb is experiencing a resurgence while hotels are still suffering

eCommerce / Axios: Following the initial surge of the virus, Airbnb has seen an improbable amount of success. Running parallel to this reality is the badly wounded hotel industry, which is still pleading for federal help. In a summative sense, the Airbnb trajectory could be a promising sign for many in the new normal.

Coffee, ketchup and Nike Air Max: it's the COVID consumer economy

Retail / Reuters: The trends born out of the COVID-19 era may not always make sense on the surface-level, but dive in a bit deeper, and reasonings can be traced and contextualized. Shifts in behavior are quite telling during this time, and companies are listening.

How Everlast is going beyond boxing

Brand / Modern Retail: Everlast, the household boxing company that has sponsored athletes as prodigious as Muhammad Ali, has seen massive growth as of late. They’re not just a boxing operation anymore, and their movement towards more general athleisure and non-workout apparel is not going unnoticed by consumers.

Experts dissected TikTok's algorithm and say a US buyer will struggle to replicate its magic

New Media / Business Insider: What differentiates the app is its "For You" page, which throws up a beguiling mix of highly shareable short videos. Like YouTube and apps like Netflix, this centers on a system that recommends what users should watch next. What's uncanny about TikTok is how good it is at it.

Streetwear was declared dead. It's still here

Luxury / Vogue Business: Luxury’s pivot to more sophisticated menswear, interrupted by the pandemic, is now retreating back to streetwear and the casual wardrobes. Large luxury brands like Dior and Louis Vuitton are able to balance both, producing tailoring alongside streetwear drops and launches. Smaller luxury menswear brands from Ami to John Elliott are sticking to streetwear to weather the storm.

Digital shift gives rise to DTC brands

DTC / PYMNTS: There are two kinds of DTC brands that have arisen. The first had to go direct-to-consumer as products because they didn't have a shot at traditional retail exposure. The second group went direct to the consumer because its manufacturers didn't like the retail exposure they were getting.

The quest for monopoly

Advertising Data / Napkin Math: A few weeks ago the CEOs of the four large tech companies - Facebook, Apple, Amazon and Google - sat in front of Congress to testify. They’d been summoned to a hearing to address the issue of online platforms and market power. It was a big event. For over three hours the four men faced a grilling from legislators over their market dominance. The chair of the subcommittee overseeing the hearing set the tone: “American democracy has always been at war against monopoly power.”

Netflix's Reed Hastings deems remote work 'a pure negative'

Streaming Economy / Wall Street Journal: In his new book “No Rules Rules: Netflix and the Culture of Reinvention,” Mr. Hastings likens being employed at the streaming giant to being part of a sports team: Getting cut is disappointing but carries no shame. “Unlike many companies, we practice: Adequate performance gets a generous severance package,” reads one of Netflix’s mottos.

Macy's wants out of malls after decades anchoring them

Physical Retail / Quartz: Macy’s will begin opening several smaller “off-mall” Macy’s and Bloomingdale’s stores over the next two years, CEO Jeff Gennette said during a call with analysts today. “We continue to believe that the best malls in the country will thrive,” he said. “However, we also know that Macy’s and Bloomingdale’s have high potential off-mall and in smaller formats.”

Are luxury brands losing the battle against Alibaba's counterfeiters?

eCommerce / Jing Daily: Alibaba is eager to crack down on counterfeiting, as the success against them directly affects its global reputation and the development of its luxury vertical, Luxury Pavillion. Yet, while it is promising to hammer down on infringing goods, the tech giant’s “streamlined notice and takedown” anti-counterfeit initiative has struggled to keep up with counterfeiters, who are adept at mimicking luxury and designer brands and selling them to Tmall and Taobao’s 874 million combined consumers in China.

Why TikToks trounce Stories

New Media / Constine’s Newsletter: What would you rather watch if you only have 15 seconds? A spontaneous pan across a landscape? Or a meticulously storyboarded skit? One takes orders of magnitude more time, effort, and creativity to make, yet both can be consumed equally quickly.

Every week, there is a new retailer in distress. It’s time to consider how much of America’s retail economy was built on a class of consumers that was never as static as once believed: the middle class.

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