2PM - No. 780: The Holiday Gifting Antidote

Etsy’s advantage / Fortune: In the intro to a recent article on Etsy's anti-Amazon stance, I wrote: Etsy will play an enormous role in holiday season 2021 as many shoppers will rely on resale and artisanal markets to fill supply chain gaps. [1] This is straight from the CFO: "Etsy kind of sits in a sweet spot here because we have 5 million sellers that are all over the world,” she explains. "All of those sellers are sort of individual, locally operated businesses." The company took a survey to ask how sellers are doing regarding supplies, Glaser says. "Over 95% of them responded that they're very well situated for tapping local supplies for what they need," she says."

Here's the takeaway: Etsy sellers need to be thinking about their supply chains, too, as the crafts marketplace prepares for a busy season and potential inventory shortages. CFO Rachel Glaser believes Etsy is in a better position compared to other retailers when it comes to potential supply chain disruption, thanks to its 5 million-seller network largely made up of global artisans with localized operations. They’re not planning major inventory buys and dealing with clogged ports, they’re smaller, more bespoke businesses that Glaser says gives customers more options. To better assure people shopping on Etsy, nearly 100% of listings have delivery guarantees, Glaser told Fortune. And last week, the company published tips for sellers on how to deal with supply chain disruption.

Etsy’s advantage, essentially, is availability. As Glaser points out, because of Etsy’s deep breadth of seller options, customers who find that one seller is out of stock will easily find a substitute. Availability is the key, and Etsy will be marketing itself as an alternative to big box retailers who may find their shelves starting to empty as December rolls on. This is the culmination of months of lead up as retailers have tried to get ahead of the game this holiday season. As 2PM wrote in September:

This means Black Friday will look different. In previous holiday seasons, pricing incentives were the sales hook. This year, retailers won’t need to offer flash sales or free shipping: availability is the hook. Plainly put, if a quality product is available to ship before the holiday season, it will likely be purchased.

Earlier, by July, it became clear that the supply chain would be the star of the holiday season, and that logistics would take center stage. This is coinciding with an already busy shopping year as customers unleash spending bottled up during the pandemic. Companies like Etsy could stand to benefit; as we head into the Black Friday and Cyber Monday weekend, the true tests will begin.

Black Friday Special: Conversion Bear has partnered with 2PM Inc. throughout the month of November to help brand retailers sell more products. They're offering a 30-day trial during the year's most important month. You're going to want to be store #2. 

Casper disrupted the sleep economy; then the covers came off

DTC Brands / Marker: For other DTC brands to succeed on the public market, they will need to do two things at once: maintain their SaaS multiples that has them trading with multi-billion dollar market caps, and also build viable retail companies in the meantime. Companies like Allbirds and Warby Parker are doing things Casper did not, like building out large store networks. [From: Casper Acquired] "In a whirlwind two years, the mattress-in-a-box company has gone from being the lead disrupter in the ‘sleep economy’ with a value of $1.1 billion, to a sale to a private equity firm for around $300 million. To put its downfall into context, the company has been sold for less than it raised in capital ($350 million). In the deal, which is expected to be concluded in early 2022, the firm agreed to pay $6.90 per outstanding share, a nearly 90% premium on the current stock price of $3.55. In short, it could have been even more of a nightmare."

Inside UPS' boot-camp for driver trainees

Holiday Logistics / CNBC: This is a great inside peer into the preparations of one of three most important logistics companies in America (UPS, FedEx, and Amazon). Here's a look at how they are preparing for December, it just may work out after all. "The UPS training includes: driving in a mockup of a neighborhood, carrying boxes on a machine that simulates a slippery sidewalk or floor, making a delivery in 90 seconds and other tricks of the trade. Tristan Christensen, UPS’ head trainer, told CNBC that about 20% of candidates make it through the curriculum she designed to make drivers efficient and their deliveries profitable."

Updated For November 22: The DTC Power List has updated to include 70+ new brands with 100 added over the previous few weeks. It can be used as a CRM for industry comparables, industry developments, sales leads, or story leads. It grows more detailed by the week.

Desperate parents turn to shopping bots to hunt for hottest christmas gifts

Holiday Shopping / Wall Street Journal: Bots are for the fortunate and have been for some time. It seems as though the use case will expand beyond sneakers and collectibles. I am glad to see this acknowledged because it will surely continue to play a role as supply chain constraints continue.  "The use of bots — or botting — was popularized a few years ago by sneaker enthusiasts looking to get their hands on high-end pairs released in limited quantities. The programs have since expanded to target different products and services, including appointments for Covid-19 vaccine shots and spots for workout classes when those were scarce. Shopping-bot developers say there has been an increase in people using their software to buy just a few items at a time."

TikTok doubles down on eCommerce

A. Linear Commerce / South China Morning Post: This TikTok strategy will likely carries over to the Americas with the help of Shopify. Does anyone have any insight here? "The app’s features include “seller registration, product management, order management, return and refund management, promotion management, customer service, data analysis, campaign registration and seller education”, according to a description on the app’s Google Play page, which provides two app screenshots in Malaysian and Indonesian languages."

Twitter is the latest social media network to combine shopping and livestreams

B. Linear Commerce / The Verge: Surprisingly, Twitter has great odds at succeeding here thanks to Jack Dorsey's dual role (Twitter, Square). This is a great overview of how every major platform is trying to capture eyeballs and wallets."Twitter joins a growing trend towards shopping-focused livestreams on social media, providing a modern QVC-style shopping experience with influencers and integrated shopping links. In this month alone, Meta’s Facebook has announced a test of a “Live Shopping for creators” feature, Pinterest debuted a live shopping series called “Pinterest TV,” and YouTube expanded its livestream shopping feature with a week-long shopping event called “YouTube Holiday Stream and Shop.” It’s a trend that’s well and truly taken hold in China, where Bloomberg reports that Gen Z consumers are increasingly shifting away from traditional eCommerce retailers towards making purchases via social media."

Crypto x Consumer, Part 2. Web3’s influence on retail is just beginning. Like Nike’s investments into digital goods and services, Starbucks is in position to become the consumer packaged goods leader in the next generation of the web.

Starbucks began as a coffee roaster, but today it’s just as much of a financial services company. Let’s look at Starbucks’ history of product innovation.

During the second wave of American coffee culture, Starbucks rose to prominence by borrowing the blueprint of its predecessor, Peet’s Coffee & Tea. Before Peet’s, espresso was purely an Italian product. Bolstering the availability of international beans, roasting styles, and drink preparations defined the second wave. To expand its product offerings and distribution, Starbucks acquired manufacturers, brands, and intellectual property (the Frappuccino trademark was acquired) over the course of 50 years and 32,660 stores. With the groundwork laid by Peet’s, the Starbucks supply chain and menu democratized the world’s coffee products, which were once exclusive to specific cultures. Today, coffee is on its third wave, which accounts for companies started after 2000. But there is no third wave without Starbucks and they just may make the biggest contribution to this latest wave yet.
 

StarDAO (🔓)