2PM - ANOTHER HIT 📉

What's Next in Digital Marketing / 2PM Original: For Apple, hardware is the afterthought. Content, digital land, and privacy is at the forefront. Two announcements in the past 24 hours confirms as much. This week, Apple won its first Oscar for best picture. And according to Nikkei, Apple is lowering the output of iPhones and Airpods as inflationary pressures and supply chain issues persist. From where will the margin come?

The answer can be found in Apple’s recent investments. Between 2017 and 2021, Apple’s ad revenue climbed from $300 million to $4 billion, mirroring Facebook’s steep climb from $750 million to $4.2 billion between 2009 and 2012. Apple is nowhere near the size of Meta’s advertising business (the company reached $115 billion in 2021) but there’s reason to believe that Apple could grow a considerable business in a timeframe comparable to what was seen at Facebook (now-Meta).

Understanding Lululemon's female customer

Consumer Data / NPD: It's rare that Matt Powell believes in an upstart shoe operation. Over the years, he's ridiculed everyone from Yeezy's impact at Adidas to Off-White's influence at Nike. He sees something special in Lululemon, however. Powell believes that Lululemon's prospects may be more (economically) impactful by focusing solely on women's feet. More here: NPD Checkout data indicates that Lululemon’s female customers in the U.S. are very loyal to the brand. Driven by the brand’s higher price-point compared to its competitors, women who bought Lululemon activewear spent 30% of their total activewear purchases there, in the 12 months ending January 2022 — capturing more of their customers’ spending on activewear compared to brands including Fabletics, Under Armour, and Adidas, which each capture less than 10% of their customers’ activewear purchases.

Apple could add $10 billion of revenue by selling more ads

Advertising / Barrons: We covered this in the lead essay but this one is a bit more specific. Credible media sources are all suggesting that this is the direction that Apple is headed and it makes sense. More here: How ironic it would be if Apple was the next great online advertising sales business. Apple certainly has been playing an important role in the online advertising market in recent months, rolling out new rules for iPhones that make it harder to track consumer behavior. The move has created issues for companies — in particular, Facebook parent Meta Platforms — that rely on data about consumers’ behavior to precisely target advertising.

Why DTC brands rushed to B Corp certification in Q1

DTC Brands / Glossy: Appealing to ethically-minded consumers is atop the list for many brands. Taking a stand, especially as it relates to economic and environmental impact has become important for retailers pursuing millenial and Gen Z consumers. More here: In the last two months, DTC fashion brands TomboyX, The Bshirt, Proem Parades and Anuka Jewelry have all received B Corp certification. Meanwhile, Toms, a brand that is already certified, increased its B Corp score by 25% in the same period by upping its charitable donations to one-third of total profits. For these brands, many of which are only a few years old, getting the certification early in their existence is a key way to establishing their values early and drawing in an ethical-minded customer. 

Updated for March 23: the next update goes live for Executive Members for the upcoming Wednesday letter. Here's last week's top 20:

DTC, DNVB and other initials that don't mean what they used to

Physical Retail / Furniture Today: This report will be plastered across the offices of every commercial real estate broker. As the cost of advertising continues to rise, Apple's privacy changes will send more of the modern brands to traditional paths of customer acquisition. More here: At the end of the day, however, it turns out that stores are still the best way to reach consumers profitably on a day-in-day-out basis. And selling direct-to-consumer exclusively via e-commerce is a little tougher way to make money than it seemed a few short years ago, even with the disruption of a pandemic in the mix.

Fanatics inks partnership deal with WWE

eCommerce / WWD: Fanatics continues to be one of the most interesting examples of what building a vertical brand (capturing supply and demand online) means today. More here: As part of the deal, Fanatics will reintroduce a new eCommerce and mobile destination, WWE Shop, offering apparel, hard goods, such as title belts, headwear, accessories and other products. Fanatics will also work with WWE’s in-house team to design and distribute merchandise collections immediately to celebrate big moments in the sport.

Rogen's rebranded cannabis brand stacks like lego

DTC Brands / It’s Nice That: Excellent design was obviously crucial to turning something disposable into a collectable product. For the packaging, the structure design remains simple; a drawer system has been implemented alongside a selection of bold block colours. 

How retailers are rethinking their businesses for the digital age

Advertising / Ad Exchanger: From established retailers to maturing direct-to-consumer businesses, AdExchanger examined how well-known US retailers across categories have reshaped their businesses in three areas: new marketing models, repositioning of advertising as a revenue source, not as an investment and, finally, their first-party data ambitions.

Gucci CEO Bizzarri talks metaverse

Metaverse / Vogue Business: In less than 18 months, Gucci has launched multiple NFT drops, scooped up virtual real estate and established a metaverse team. This speedy and all-in adoption is surprising, even by Gucci standards, in an arena many argue is pure hype and lacks value. 

Whole Foods is key to Amazon's physical strategy

Physical Retail / Business Insider: Amazon said earlier this month that it's closing several of its retail store chains. Analysts say it's evidence that Whole Foods and Amazon Fresh will take on new importance. Consumers visit supermarkets often, making them ideal places to interact with all Amazon offers.

The word “surrender” is the theme of the moment for two long-rivaled entities. There’s a scene from the television adaption of Mike Isaac’s best-selling book “Super Pumped” that foretold this week’s logistics news. In the scene, Kalanick’s rival is a fictional executive from San Francisco’s Municipal Transportation Agency. He asks Kalanick for the rights to Uber’s ride-hailing technology, promising to sweeten the deal for him.

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