2PM - No. 759: THE WEX ERA

NBA Star Partners With Shopify / CNBC: Butler saw a void at the secluded Disney campus because he didn’t consider the coffee options were good. Butler used his espresso machine and coffee beans from El Salvador to sell coffee for $20 per cup. Butler found that coffee-lovers confined to the campus were willing to purchase a superior coffee. And it allowed him to capture a dominant share of the roughly $2,000 per diem provided to players. He sold options, including the “red eye,” which is coffee combined with a shot of espresso, and macchiatos, cappuccinos and lattes.

2PM Insights: Like a version of a kid's lemonade stand (but a $20 per cup), Jimmy Butler’s coffee business started in the NBA's Disney World bubble during the 2019-2020 season. Now, it’s a legitimate Shopify venture representing the commerce platform's next ambitions.

BIGFACE Coffee launched on October 1 with Shopify, where Butler has joined the Jon Wexler-led creator program. As part of the deal, Butler keeps all profits from his business, while Shopify gets access to his IP, including his image and likeness, which can be used in promotions. It sounds like a simple deal, but there’s more to BIGFACE than just coffee. The site sells merchandise, including $30 mugs, a $90 crewneck, a $500 box of four coffee varieties that’s also an NFT (non-fungible token). A limited release of 500 units were marketed. The rundown of products included  a mobile espresso station that can also be purchased for $100,000.

Butler told CNBC that while he’s taking the business seriously, he’s not in it for the money. It’s also not only about the coffee. Butler is creating a viable brand that can be carried with him after his NBA career is over. Athletes are coming up with more inventive ways to make their mark beyond their sport, whether it’s a coffee business that doubles as an NFT trade or a fashion brand a la Brady that’s independent from typical sportswear giants used to working with athletes. But Shopify is due to benefit in name recognition that may help them improve upon this six month trend (April to September):

For Shopify, the deal is also another step into Web3, which it opened the door to in July when it announced merchants on its platform could sell NFTs. Shopify’s also recognized the potential for athletes to lead this transition. From July:

The first brand to launch NFTs on Shopify is the Chicago Bulls. On the first day, the NFTs sold out in 90 seconds, according to Shopify (though it’s unknown how many were made available in the first place). The goal is to make it much easier to buy and sell NFTs, particularly for the uninitiated who might have found this confusing. In making NFTs just another ‘thing’ to buy on Shopify, the more average consumer who may be turned off by crypto talk is now back in the conversation.

Shopify has been laying the groundwork for this new venture. When it hired Jon Wexler from Adidas, it hoped to inject a new cultural relevance into a business that prides itself on the technical. Now, BIGFACE Coffee is the experiment’s first major output of Shopify's creator program. It’s a project that combines demand, earned media, and a pulse with the technical prowess and support of Shopify Inc. It uses what Shopify has been known for (physical products) and pairs it with built-in demand (creators) and tests newer forms of commerce and technology (Web3 products / new front end design concepts / etc). Yes, BIGFACE packages a selection of its products with NFTs. It’s a brave new world and Shopify wants to centralize some of the decentralized. But whether or not Shopify becomes known as a major player in the cryptocurrency asset space, it will certainly benefit from this strategy. 

Butler gets to keep all of the revenue, Shopify gets the buzz. And the Ottawa company that wants to become the go-to in retail moves one step closer to becoming synonymous with the industry.

Warby Parker and Wall Street's verdict On DTC

DTC Brands / BoF: This week, Warby Parker shares began trading in what was probably the most anticipated of this year's spate of fashion IPOs. The US eyewear brand went public via a direct listing, so it did not sell any new shares. The stock vaulted 36 percent from its reference price of $40 a share in its first day of NYSE trading on Wednesday.

By 2PM: Here was the breakdown of the Warby Parker S-1 if you are interested in why the long term strategy seems like a solid one. 

Inside the 'buy now, pay later' gold rush

eCommerce / Protocol: Offering pay-later has become "table stakes" for any eCommerce operation or payments company, says Tom Seo, a fintech venture capitalist at Dash Fund. "Something is wrong if you don't have it.” But there are many ways to offer "buy now, pay later" — and the details make a big difference to consumers and merchants, as well as the companies offering the deals. 

Can Fidji Simo turn Instacart into more than just a delivery company?

eCommerce / Fortune: Simo, once Facebook’s most senior female product executive, has an ambitious strategy for getting the company back on track. At its heart is a plan to expand Instacart’s business model, layering a Facebook-like social and ad platform over the company’s core grocery delivery service, and creating new tech products for retailers and other partners.

DATA DRIVEN GROWTH: The Good has more than a decade of experience helping brands convert more visitors into buyers. Learn about their Conversion Growth Assessment™, which gives you expert advice and prioritized recommendations in a week or less.

Christmas at risk as supply chain ‘disaster’ only gets worse

Supply Chain / Bloomberg: One effort is trying to create a new shopping event in early October that will include retailers such as Guess? hosting livestream events on their websites. However, this seems like a gargantuan task considering eCommerce has trained the masses that purchases arrive in a few days like clockwork. Retailers have also traditionally saved some big promotions for the week before Christmas to drive a late spending push. 

Gen Z is driving a renaissance of thrift stores

Retail Real Estate / Axios: The secondhand market is projected to reach $77 billion by 2025 — up from $36 billion in 2021 — and is growing at a whopping 11 times the rate of the broader retail clothing sector, according to a report from the retail analytics firm GlobalData and the online thrift store ThredUp.

No Stock for Christmukkah. As early as September 12, artificial Christmas trees, decorations, and all of the trimmings were for sale at your neighborhood Lowe’s, on display in front of the Halloween and Thanksgiving decor. The early turn for the holiday season isn’t exclusive to hardware stores. A recent report by AdAge cited similar behavior by Williams Sonoma, Sephora, Hanna Andersson, and Pottery Barn.

Dapper Labs took NFTs mainstream, now DAOs

Blockchain / Decrypt: DAOs, or decentralized autonomous organizations, are a hot topic in the crypto world of late. Essentially, they’re online communities empowered by ownership stakes — typically in the form of tokens — that can take nearly any focus, including funding investments, social interactions, or crypto project governance.

Inside the utterly bizarre analytics of Ozy

Data / Garbage Day: Ozy’s Instagram shows a follower count of 654,000. Which is pretty impressive! Except it hasn’t always been that high. In fact, according to social analytics tool CrowdTangle, their account had about 50,000 followers up until August 14th. Then between late August and September, the page gained 600,000 followers. There is really only one legitimate way this can happen: An incredibly viral post. But if you go through Ozy’s Instagram during that time period, you find something else entirely.

On the internet, we're always famous

Sociology / New Yorker: The Western intellectual tradition spent millennia maintaining a conceptual boundary between public and private — embedding it in law and politics, norms and etiquette, theorizing and reinscribing it. With the help of a few tech firms, we basically tore it down in about a decade. 

The Parasite Economy / 2PM: Convenience doesn’t come without a cost. When people are willing to pay for a fast and easy service that eliminates friction in their lives, other people become responsible for making that service happen. The spread of the 15-minute economy has given more people the option to order immediate deliveries of anything from pharmacy medications to snacks to full grocery orders. That means more people are needed to deliver to them. The result is influenced by a bifurcation of wealth and a new labor structure, where workers are separated by what side of the algorithm they’re on.