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Linear Commerce / Business Insider: The video app said its new livestreamed shopping feature is similar to traditional TV shopping channels — but for mobile, the FT said. Users can purchase products with a few clicks after watching a quasi-infomercial. Though some social media apps have slowly added in-app shopping capabilities, traditional TV shopping channels like QVC and HSN have been moving to digital video commerce for years, adding to their popularity.
China is back in focus: Owned by China’s ByteDance, TikTok’s fast ascension as a leading social app in the West has opened the door for brand involvement. Companies have verified official accounts, and every few swipes leads to an ad. TikTok has reached social media milestones faster – for instance, it’s already formalized a Creator Fund as of October 2020 to nurture the talents of the people making videos for TikTok. Now it’s hitting the gas on an e-commerce strategy, primarily focused in the US, that would raise its e-commerce coherency to near Instagram levels. According to the Financial Times, sources say TikTok plans to roll out links to shop, programmatic ads, the ability for brands to showcase product catalogs in the app and live streamed shopping. It’s not clear how these new shopping tools will show up – for instance, will a brand product catalog be an ad spot? – but for TikTok users, the upcoming rollout will determine how the app matures its commerce model and whether or not it sacrifices its creative appeal in doing so.
TikTok has shown its power in moving product sales. Popular content on the app includes interior design and morning routines, all of which put products at the forefront. And it’s accessible, too, considering the TikTok audience’s younger demographic: drugstore skincare brand Cerave’s Renewing SA Cleanser is a newly cult product that now regularly sells out at Walgreens and CVS thanks to TikTok fanfare.
Bridging organic product discovery to an e-commerce strategy is tricky territory. Instagram’s spun itself into a modern shopping mall; it’s also falling out of favor among younger social media users. How TikTok toes the line between convenience and overt commercialization will dictate the app’s next journey. If it goes right, there’s a lot of money on the table.
Additional note: Just as TikTok's plans to launch a live stream product in the United States, China banned new U.S. unicorn Clubhouse after an encouraging cross-border conversation.
It was a rare moment of cross-border dialogue with people on the mainland of China, who are usually separated from the rest of the online world by the Great Firewall. [1]
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This week's DTC Power List update expanded the list to 464 brands. Chewy, Yellowpop, Article, Depop, Fenty Beauty, and IPSY were this week's biggest movers. This database and a host of other tools are available to Executive Members and I encourage you to join the full membership so that you can add 2PM to your set of resources. Click below for the full list.
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Fintech / Reuters: Nearly 40% of U.S. consumers who used “buy now, pay later” have missed more than one payment, and 72% of those saw their credit score decline, according to a study by Credit Karma, which offers customers credit score checking for free.
2PM Forecast (4/2020): On According to Atlantis Financial Research, defaults in China have risen from 1% to 4%. And with overdue credit up 50%, delinquency has increased from 13% to 20%. Once a conservative country with respect to debt-to-income ratios, China’s consumer habits mirror America’s. The aggregate debt load of China has doubled since 2015. Globally, it’s even more frightening. Some projections by the International Labour Organization cite 25 million global jobs lost with a potential debt load of $3.4 trillion. But here in the United States, economic matters are shaping up to be an historic outlier of devastation.
Read More: The Credit Report (Members)
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Retail / The Atlantic: Boohoo’s founders understood that the company had to hustle to keep customers’ attention—to “be fresh all the time,” as Kane has put it. “A traditional retailer might buy three or four styles, but we’ll buy 25,” Kane told The Guardian in 2014. Not having to keep hundreds of stores stocked meant Boohoo could be flexible about inventory management.
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Retail Real Estate / Chain Store Age: The nation’s largest mall operator has filed court papers seeking to block the approval of Ascena Retail Group Inc.’s Chapter 11 reorganization. Simon objects to the approval of the plan out of concern that Sycamore, which bought Ascena’s Ann Taylor, Lane Bryant, Loft and Lou & Grey out of bankruptcy, plans to close more stores than was originally agreed upon.
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DTC Health / Fast Company: Doctors are already incorporating telehealth into their practices and shifting elements of care out of the office and into the home. There is also a wave of online-only national health care providers that have been waiting in the wings for a moment just like this. These companies — Teladoc, Hims & Hers, Doctor on Demand — have been invaluable in taking care of Americans whose typical primary care practice has closed or who are too afraid to go into the doctor’s office.
Additional reading: On DTC and Integrated Health (Members)
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Brand Equity / The Fashion Law: A mashup between a Birkin bag and a Birkenstock, MSCHF’s “Birkinstocks” look a whole lot like those from the German footwear company, albeit with one significant point of differentiation: all of the leather is sourced from more than $122,500 worth of genuine Hermès Birkin bags, according to MSCHF.
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Linear Commerce / Musings of a Wandering Mind: FaZe Clan is made up of 50 esports players and 55 content creators, with a combined reach of over 75 million YouTube subscribers, more than 6.5 million Twitch followers, 40 million Twitter followers, 35 million Instagram followers and 2.5 million Facebook fans. And this is constantly growing.
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eCommerce / Modern Retail: As Amazon’s overall customer base ballooned this past year, so did the size of its top sellers. According to Amazon’s most recent earnings report, seller services — the amount that third-party sellers pay Amazon in commissions, fulfillment fees and so on — grew 57% year over year in 2020. Per Jungle Scout, 2% of Amazon sellers now boast lifetime profits of over $10 million. The third-party vendor Pharmapacks, for instance, brings in at least $250 million in annual sales.
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DTC Brands / Hypebeast: Despite the hold these major brands have on the industry in terms of both the footwear and apparel, there are a bunch of exciting and alternative activewear brands out there that don’t fall under the multi-million dollar category. The smaller independents — the boutiques instead of the department stores, if you will — are currently leading the way in terms of innovation and design, yet aren’t getting half as much notice they deserve.
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Advertising / Huddle Up: It hasn’t even been 12 hours since the Super Bowl ended, and his music represents 8 out of the top 10 trending songs on Spotify already. That’s what 100M viewers can do for you, not to mention the billions of social impressions generated before, during, and after the performance. Simply put, it’s one of the greatest promotional events in the world.
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Blockchain / The Hustle: These digital highlights come in “card packs” that start at $9. Each pack contains a different set of highlights that you can trade on the platform. Only one of each highlight is released, creating scarcity. According to Gharegozlou, “cardboard cards are hard to authenticate, grade and move,” while these digital assets can be “sold at any time, don’t have to be evaluated and can have additional functionality over time.”
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On DTC brands and pandemic effects. The merits of fashion retail have never been logical but for the best operators, there is a way to make sense of the chaos.
Likeability, brand equity, and appeal can shift in an instant. But there are predictors of success and failure. Historical benchmarks have long been available to serve as guideposts for the savviest retailers looking to navigate tumultuous times of the present. Manufacturers have thrived during war, recession, protest, and pandemic, and only the poorer performers cited external factors as cause for concern.
A common misconception in the digitally native vertical brand industry is that the previous year of the pandemic is thwarting the growth of fashion retailers, harming sales projections, stifling growth, or shuttering doors. The hard data contends there’s more to the story. Of the current top 100 fastest-growing direct-to-consumer brands tracked by 2PM, 40 are fashion retailers, while four are in the top 10. This has been a breakout year for fashion.
Continue Reading...
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