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A. The Leak / Recode: The document makes blunt assessments about the uphill battle to overcome competitors like Amazon, Target, and Instacart. It was the leading report on Friday so we added a more in depth original analysis.
Excerpt: The 100-page document from February, which was viewed by Recode, was created for advertising agencies that Walmart invited to compete to handle the planning and buying of ad placements for the retail giant. The memo makes several blunt assessments about the uphill battle Walmart faces to hold onto its once-dominant retail market position, including in the US grocery industry, where the company has long been No. 1 in sales.
The Analysis: A 100-page document leaked to Recode and published Friday is a catalog of the retailer’s weaknesses. In it, the world’s biggest retailer details the ways its competition – namely Amazon, Target and Instacart – is catching up and how it’s failing to stay ahead in ultra-imperative categories like subscriptions and online grocery. It’s a telling sign of the times that even after a year of pandemic-fuelled growth that lined the pockets of essential retailers, increasing Walmart’s valuation by $20 billion, the leaders are on shaky ground. Never mind what that means for the little guys.
As Recode’s report makes clear, how Walmart acts now will secure its future positioning. Already, it may have lost the match to Amazon, which is poised to finally unseat it as the largest retailer in the US according to an April report released by Edge by Ascential. What’s notable is how much other non-Amazon companies are catching up, with Instacart positioned to nearly equal Walmart’s online grocery business as of February. For Walmart to thrive in the future, it needs to invest in people. Not just its customers, who it will have to convince to sign up for Walmart+ and not churn out, but also its store employees, who are responsible for far more than restocking shelves and ringing up customers in the age of micro-fulfillment and last-mile delivery. In the next era of retail, Walmart can’t win the former cohort without investing in the latter.
Customer retention has been a pain point for Walmart, which Recode reports was under pressure to launch an Amazon Prime rival. A reactionary strategy is already a risky one. While Walmart has plans to add more services to its program (the most successful, in terms of retention, is the gas perks), there’s little detail. From Amazon’s success, we can draw assumptions on what people look for in these subscriptions: Fast, cheap and reliable delivery. To master that at Amazon’s scale, Walmart needs to empower its stores – and its store employees – to be able to fulfill these orders, giving customers more options and better service. A lack of investment in its store employees, many of whom don’t receive benefits and rely on erratic scheduling, would sink Walmart’s subscription strategy.
There are signs that worker conditions could improve thanks to mounting public pressure. In step with growing support for a $15 federal wage, unionization efforts are gaining momentum. Walmart’s starting wage for workers still stands below Amazon’s and Target’s. And while Instacart’s courrier model is far from idyllic, drivers have freedoms and incentives that Walmart employees don’t. For Walmart to secure its future positioning, and stem subscriber churn, its work starts at the store level.
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Metaverse / Vogue Business: As brands are increasingly expected to act as platforms that broadcast their ideas and values, there’s potential for virtual worlds, which can serve as a full funnel medium and help enhance brand value, experts say, as well as invite direct customer feedback. They’re also easily changeable and can be tailored to individual customer preferences, unlike physical retail spaces, says Amal Jomaa, head of fashion at So Real, a software company providing digital solutions for fashion.
Editor's Note: Absolutely. 2PM published a primer on this concept for members (🔐).
There are eight requirements to achieve a Metaverse: (1) integrated economy (2) an underlying social fabric (3) vast diversity (4) immersive experience (5) frictionless experience (6) a sense of user identity (7) law and order (8) and a persistent world, one that never turns off.
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Advertising / Jeff Kaufman: Both paywalls and ads have a range of advantages and disadvantages. Some of these vary by medium: books are expensive enough to print that they couldn't be funded by advertising; an analog radio receiver is simple enough that a paywall would require draconian legal force.
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Sponsored: Yotpo is taking an interesting approach to building the marketing cloud for the DTC industry. They've offered the 2PM audience a spot in a Yotpo x Shopify webinar detailing how they will approach SMS marketing and it's worth your time.
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Media / The Atlantic: Many readers love bullish, controversial superstars — and will pay serious money to follow their work — but legacy publications struggle to contain such figures. In a polarized media environment, editors face considerable pressure from advertisers, activist groups, politically engaged staff members, and purist readers to eject troublemakers and iconoclasts. Then, when the superstars go to independent platforms, newspapers and magazines lose the varied menu they once offered, ratcheting up polarization even further.
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Digitally-Native / Banknotes: Curie has been the recipient of my undivided energy, love, and attention for two years now, and there are still so many more ways I want to expand. Our year-over-year growth rate right now is an incredible 530%, and I’m looking forward to continuing to grow my three-person team and brand thoughtfully, always centering on our goal of creating safe, functional, and innovative products people can trust to get the job done.
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eCommerce / The Fashion Law: The referral, which came in March by way of Tribunal d’arrondissement in Luxembourg, was made in the context of proceedings that Louboutin — the holder of the famous red sole trademark — filed against a number of Amazon entities, including Amazon EU Sàrl, over third-party listings of counterfeit shoes on its third-party marketplace platform, and the stocking and delivery of these goods by Amazon through its corresponding Fulfilment by Amazon program.
Editor's Note: pay attention this one.
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Native Commerce / WWD: Judging from a job posting on The RealReal’s own site, the designer position, which will be based in either New York or San Francisco, will set the “overall direction in the conceptual and final development of product lines within TRR (private label),” describes the listing.
Editor's Note: Marketplaces moving to owned products is inevitable, it seems.
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Linear Commerce / Yahoo Finance: A burgeoning eCommerce business could help the firm surpass its $250 billion valuation when it goes public, countering concerns around Beijing’s crackdown on the country’s internet behemoths. Preparations are said to be underway for a listing that would be one of the world’s most anticipated debuts. The startup is working with advisers on the offering and is choosing between Hong Kong and U.S. as the listing venue, people familiar with the matter have said.
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The Influencer Economy / Business of Fashion: The brand, dubbed Social Tourist, is born out of a multi-year brand partnership with the D’Amelio sisters, who have served as brand ambassadors for Hollister — Abercrombie & Fitch Co. Co.’s Gen Z-focused brand — since last year. Social Tourist is the next step in that relationship. The D’Amelio sisters appear in the brand’s marketing, wearing logo-covered athleisure, but were also involved in the brand’s creation.
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Audio / TechCrunch: As Clubhouse struggles to maintain its growth — data from mobile insight firms including AppMagic suggests that Clubhouse installs have drastically dropped in recent months — the Android app could prove pivotal in boosting the startup’s reach across the globe.
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Logistics / New York Times: Known as an “indirect source rule,” the effort is unusual because it largely targets emissions from the trucks that service warehouses, rather than the warehouses themselves. In the past, similar approaches have been made to address the heavy traffic drawn by sports stadiums or shopping malls.
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Figs prints money. Figs broke the simulation. Figs rewrote a DTC playbook that expires each quarter; theirs will last for the next years of brand development, growth, and exits. The scrubs brand is the brainchild of Co-Founder and Co-CEO Heather Hasson, whose “ah-ha” moment came about while listening to a friend explain her pain points as a nurse-practitioner. Near the top of the list? Uncomfortable scrubs, a utility for the the millions of healthcare industry workers in the United States (Figs’ chief market).
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