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 In The Great Merch Race, 2PM explained that Fanatics and UMG Bravado are on a collision course. As “wearable intellectual property” continues to fuel online retail growth for artists, publishers, and everything-in-between, it will be the agencies that develop high-visibility / high sales rosters that will be acquired in the end. Artist-driven merchandising is the one vertical that Michael Rubin's Fanatics is not yet equipped to facilitate.
Linear Commerce / Excerpt: The world’s largest video site recently started asking creators to use YouTube software to tag and track products featured in their clips. The data will then be linked to analytics and shopping tools from parent Google. The goal is to convert YouTube’s bounty of videos into a vast catalog of items that viewers can peruse, click on and buy directly, according to people familiar with the situation. The company is also testing a new integration with Shopify Inc. for selling items through YouTube.
With offices in London, Los Angeles, New York, Berlin, Paris, and Tokyo – Universal Music Group’s Bravado is considered one of the only full-service agencies with the ability to market and distribute artist-licensed merchandise to the global consumer. Bravado boasts a portfolio of, both, well-known and up and coming entertainers. And the agency markets and distributes merchandise by way of online retail, brick and mortar stores, and live music venues.
While Shopify's business skews "DTC brands", the recent hire of Adidas' Jon Wexler signaled an emphasis on a more lucrative target: high-velocity creators and entertainment. The arbitrage opportunity for Shopify is the capturing of Universal Music Group's Bravado business. It's one of the most lucrative licensing deals in all of merchandising and it's where Shopify's improved integration could further ingratiate them to the creator economy. UMG leads all partnership channels with Youtube.
2PM Data: Most popular YouTube channels in the US in August 2020 | Comscore
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Streaming Economy / CNBC: It appears a sizable restructuring is happening over at Disney. As we’ve mused and foreshadowed in the past, the giant is beginning to see their DTC content model as priority 1a, moving forward. Organizational structure will iterate in order to support the push too, as the company has announced a centralization plan for their media, ad sales, and content operations.
From The 100 Year Titan:
January 2019: Disney is best suited for the DTC era. There is organic demand, loyalty, and the mechanisms to deliver it to your doorsteps. When the company announced an end to its streaming deal with Netflix, the writing was on the wall. The Disney+ product is slated to be the exclusive home for Disney films, television projects, and other original programming. According to Bob Iger, Disney’s CEO, the streaming service is the company’s priority in 2019-2020. He’s also assured the press that major releases (Marvel Studios, Star Wars etc.) will not go straight to the streaming service – though with time, even that will change.
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eCommerce / eMarketer: US eCommerce sales will reach $794.50 billion this year, up 32.4% year-over-year. That’s a much higher growth rate than the 18.0% predicted in our Q2 forecast, as consumers continue to avoid stores and opt for online shopping amid the pandemic.
From: On Paradoxes and Reading Waves
May 2020: Online retail will become the primary commerce channel for an even greater subset of the American consumer, as a result. Conservative estimates place eCommerce at 20% or higher penetration rate by September, a number that wasn't to be reached for another 5-10 years. This number reflects a total addressable market (TAM) of nearly $1 trillion, a figure that represents a nearly $ 400 billion growth in eCommerce market share. This figure was $611 billion in 2019.
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Resilient Retail / New York Times: With the utility of masks now widely understood, we’re seeing the effects of capitalism setting in. It has come in the form of a new mask economy, the repurposing of manufacturing facilities in the name of cleaning products, and now with a new brick-and-mortar chain, called Covid-19 Essentials. Its inventory is exactly as the store name would suggest, and they have something for everyone it seems. It’s a different dynamic — even the founders want this to go out of business.
Speaking of: Shopify launched a podcast by that name today - Resilient Retail
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eCommerce Strategy / Vogue Business: For an increasing number of brands, it is no longer sustainable to make clothes that might or might not sell. The traditional model of selling through multi-brand retailers has been called into question as these retailers struggle for survival in a bleak Covid-19 landscape. Likewise, the traditional fashion season model — of inundating consumers with new looks all at the same moment — invariably plays to the advantage of the big players.
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Retail Real Estate / Retail Dive: The unprecedented level of uncertainty, about the election, the virus and the economy, could be a spoiler, and the pandemic could bring the challenges of the second quarter into the fourth, others warn. Even with stores open and clean, and with e-commerce and curbside pickup viable alternatives, shoppers won't spend if they're under pressure and worried about their future. "The economy is not driven by stores being open," Witcher said. "You can open stores all day long, but if people don't buy because they're broke? The goal is to get the pandemic under control so people can stay employed."
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Additional Reads (if you have the time):
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New Media / Fast Company: In just two years, TikTok went from being a niche app where teenagers post videos of themselves lip-synching and dancing to one of the most dominant cultural forces in the country. In the first nine months of this year, the mobile app was downloaded by more than 64 million first-time U.S. users, according to Sensor Tower, double the number from the same period last year.
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New Media / The Guardian: Amy Hart earned her 1.2 million Instagram and 99,000 Twitter followers by appearing on 2019’s Love Island, where she had her heart broken while wearing a denim minidress. Like many of the show’s former stars, she is now an influencer: she tells fans where to buy clothes, makeup, even teeth like hers. But on 12 May this year, Hart influenced her followers in an entirely different direction. “Join a union!” the 28-year-old wrote on Twitter, above a 14-second video. “We’re in a really uncertain time when it comes to work and your rights and legislation,” she said. “If I can give you one piece of advice: join a union. They were my absolute saving grace when I was employed by a big company.”
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Trends / Quartz: With nowhere to be, barring a Zoom call, people are dressing for the workplace in a manner of comfort like never before. This is especially true when it comes to pants, the largest article of off-camera clothing. This mentioned unapologetic comfort is generally not an attribute of denim’s reputation, and the byproduct is an industry in freefall.
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A. Logistics / Modern Retail: Retailers have become more desperate to ensure a reliable stream of foot traffic during the pandemic, and accepting returns may be one way to do so. Some studies have indicated that people tend to return a greater percentage of items bought online compared to items purchased in-store. And, at least before the coronavirus, surveys showed that the majority of shoppers preferred to return items in-person, instead of through the mail.
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B. Logistics / Hartford Courant: Pitney Bowes, which processes 17 billion pieces of mail a year, is capitalizing on a surge that’s lifting giants such as Amazon and other internet sellers popular with customers increasingly buying online while avoiding stores and malls where the coronavirus could spread. Moody’s Investors Service said in May the transition to higher growth shipping is “strategically favorable over the long term given the growth potential in ecommerce,” particularly in comparison with declining mail volume.
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Preview: Member Practical No. 1
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Welcome to Practical No. 1, the first in a 2PM Member series of features on individual people and what they can teach industrialists about building in the new digital economy. Sometimes, the hardest part of the journey is navigating from Zero to One. Here, we will cover how they accomplished it. Practical will become a part of The Study, the leading resource for operator insights.
Here, David Perell answers the questions: How do you start with nothing? How do you build an audience without fame? And how do you remain focused on growth over the longer term? This first edition is unlocked for all readers. Subsequent editions will remain members-only.
Learn more here
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