2PM - No. 785: The new MOAT

From Manufacturing to Transport / Stratechery: Amazon's moat is everything from manufacturing to the transport of the finished product. From the factory to the front door, no other retailer is more prepared for today's supply chain constraints. It’s a one-stop shop from Chinese ports to customers’ front doors, thanks to all of those domestic investments in logistics, and as long as the supply chain is a challenge, the Anti-Amazon Alliance will be at a big disadvantage. This isn’t the only area where Amazon is increasingly attractive to third-party merchants: Apple’s App Tracking Transparency (ATT) changes favor Amazon in a big way as well. What makes a modular ecosystem possible is platforms that allow disparate parts to work together, such that the sum is greater than the whole."

Here's the takeaway: Amazon’s upperhand has long been its ability to build a moat, so that the external forces affecting other retailers don’t infringe on its business. The ongoing supply chain crisis is no different, and as customers begin to scramble for last-minute gifts, Amazon is sitting in the right position as it usually is. (Read More)

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Allbirds boosts inventories by 55% due to long lead times

DTC Brands / Retail Dive:  If this two-year period has taught us anything, it's that inventory control is a necessary function for brands. This is a great example of the full stack retail strategy that emphasizes supply chain management as much as front end brand development. Allbirds prides itself on its "small, tight-knit supply chain" and multi-year relationships with suppliers in the country, as well as in China, Indonesia, South Korea, Peru and the United States. In addition to a tight-knit supply chain, Allbirds also uses a vertical distribution model. That model allowed the startup to maintain premium pricing while shortening go-to-market timelines, Allbirds co-founder and co-CEO Joey Zwillinger told investors.

Kohl's under pressure to sell or change eCommerce business

eCommerce / Axios: Saks began a trend, Macy's and Kohl's may follow. Here's what we wrote in October on the tipping point of this separation trend. In short, the public market is valuing eCommerce companies at higher multiples. "Omnichannel is falling out of favor among some department store investors, with Kohl's being asked to follow the recent examples of Saks Fifth Avenue and Macy's. The basic argument is that shareholders can get more defined access to the faster-grown business, and the legacy companies more cash to transform their physical properties."

Even in the metaverse, not all identities are created equal

Sociology / Bloomberg: "The complexities of the real world are starting to bleed into the Metaverse — the virtual arena where identity functions as both a reflection on and determinant of social capital. [...] “As more black investors show up in this space, which I think is happening, those dynamics will change,” said Web Smith, the founder of media company 2PM Inc. “What you’re going to see is a lot of high-net-worth individuals that represent a wider diversity of America will move into this market and in six months’ time we won’t be having this conversation.” If this interests you, we published The Newly Rich to start a conversation on the changing dynamics of crypto's target market.

Madhappy has attracted fans like Gigi Hadid and Cardi B

Brands / Business Insider: This caps off an excellent year for MH (No. 159). From February's report In Good Fashion: Madhappy used savvy merchandising, a persisting message, and their partnership with LVMH to earn Lebron James’ attention in the NBA bubble. The brand is now one of the most coveted streetwear brands born in the last five years. "Madhappy was founded in 2017 by four friends. In 2019, LVMH invested $1.8 million in the company. The founders said they wanted to spark conversations about mental health through streetwear. They reflected on how they got their start with their first pop-up shop."

Why investors don't care whether DTC brands are profitable

DTC Brands / Business of Fashion: Out are the costly “growth at any cost” tactics. In are the 26% contribution margins, 55% brand recognition, 60% repeat purchases, and relatively inexpensive customer acquisition strategy. [1] Investors care, I think that they understand that today's crop of brands are more focused on profitability than ever before. "Even though companies like Allbirds are not yet profitable, they are set up for success because they tightly control their distribution and pricing, said Matt Hayes, co-founder of the new direct-to-consumer marketplace The Fascination, who also co-founded internet mattress brand Leesa."

BuzzFeed tumbles in turbulent debut for digital media

Media / Bloomberg: The stock, which trades on the Nasdaq under the ticker symbol BZFD, was down 12% at 11:15 a.m. in New York, after surging earlier in the day. 

Apple's iPhone successor comes into focus

Metaverse / Wall Street Journal: While the company hasn’t disclosed its plans, analysts and other industry insiders expect Apple’s first AR device could be announced by the end of 2022.

What happened to Amazon's bookstore?

eCommerce Origins / New York Times: The bookstore is the oldest part of Amazon, still central to its identity but no longer to its bottom line. 

For the first hour and 14 minutes, I researched his years between 15 and 41. And then the tone of the DJ set’s flavor of music shifted for a few minutes and inspired me to write what you’ll read below.

To me, the moment represented the feeling in a museum when you feel spoken to by art. You relate to the context of what you see t in front of you and you look over to the person to your right and you explain it with a passion. As I switched from research to writing, I was “talking” to the person (you) on my right through written word.

These are my thoughts on one of the great polymaths of our time. The final three paragraphs were added upon his passing. .

Unlocked (🔓)