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May Twenty

We now share an additional midweek Fix, going deeper on core topics. Today Merchant and we alternate with newTV. We will get this onto a separate database - but if you want to unsubscribe but not lose Fix / Friday let me know. And I would love your thoughts on how we make this better  - hit reply.

Facebook Shop
 
So the big news for Merchants is that Facebook now does Shops. Partnering with Shopify, anyone can quickly and easily set up their Shopfront within Facebook and get access to all the Facebook tools - Messenger and WhatsApp to answer customer questions, Ads to drive traffic and Checkout for sales. It pulls together so many initiatives from Facebook and strengthens their position in social commerce - and takes the battle to Amazon.
 
Reading the Shopify announcement of the partnership we can now understand why their Shop app launch a few weeks ago felt a little emasculated - some of the obvious gaps now get filled here.
 
The pipeline looks promising too - Instagram Shop coming soon and brands will get support for Live Shopping and Loyalty programmes. 
 
A good FT article includes this quote from analyst Rch Greenfield; “People don’t want to go to third-party websites or go to checkout, they want one-click buy. They want it simple, easy,” 
 
This is a major play by Facebook and they should see significant benefits; a new surface for advertisers as people browse, better understanding of people's interests and purchases and a new revenue stream as they take a cut in Checkout. It's a significant step towards their ambition of being the first Super App in the west.
 
This VC firm shared a good article on Why every new consumer brand needs an Amazon strategy. We believe every smart brand now needs a Merchant Strategy - how do you best navigate Facebook, Amazon, Google and Shopify? 
 
Action? There are lots of specialists catering to each of these platforms, but you need Big Picture thinking. Where could you get that from?


Fashion 
 
Given the success of Instagram it's inevitable that Facebook Shop will quickly get lots of Fashion and Luxury brands. It's a category that Amazon has never quite cracked - although they keep trying. Their support for Common Threads - a new initiative with Vogue - is the latest gallant attempt - but their user experience at the product level just doesn’t feel right. Does this make you want to buy a $500 cashmere hoodie?
 
This piece goes deeper (though it was written before the Shop announcement) and one designer nails it saying I would certainly, never count Amazon out.” But this piece argues that Amazon Is Not Going to Rescue Fashion
 
Fashion is a fascinating space with some big players and a lot of revenue. One often overlooked is Zalando - and in their recent earnings call they described a really smart initiative. They have been supporting lockdown stores by helping them upload their store inventory onto Zalando - sometimes visiting the store to help list products - and then promoting it on their site. They take no commission and fast track payments - giving them a boost in sales and in new partnerships. I suspect it’s easier for these category specialists to move more upmarket than it is for Amazon to get Fashion.
 
Partners
 
So part of that Merchant Strategy is who else could you partner with? Partnerships can bring benefits but also bring problems. In the food delivery sector the big brands can and do ‘exploit’ their restaurants - as this bill shows
This Buzzfeed piece looks more closely at how Grubhub use dedicated phone numbers to take control of restaurant customers.
 
Grocery & Last Mile
 
More and more people are getting into the grocery delivery space. Aldi have partnered with Deliveroo and Uber Eats are running ads to promote their grocery delivery. Deliver service Shift are offering a grocery service too.
 
The traditional Grocery players continue to do well. Walmart saw store sales increase by 10% in Q1 whilst  ecommerce sales surge by 74%. And they confirmed they are retiring the Jet brand they paid $3.3bn for, but much of the talent acquired is still with them. 
 
It’s interesting to see what categories were popular across the lockdown at Walmart - it started with grocery and moved to exercise equipment. (Google is a great source to understand what's popular - right now in the UK there is a big focus on golf and tennis.)
 
Their competitor Target reports later today but we can expect similar results - helped by their focus on home delivery and buy online pickup in store ( or BOPIS as the analysts term it). They have also been doing well with private label.
 
Learning
 
Lots of commentary on how things are changing and what happens next. It's probably too early to call precisely but we can see trends that are likely to stick.
 
A long NYT piece asks  Will Shopping Ever Be the Same? Well no. This quote sums up one key issue - do people feel safe?
 
“The most basic thing people will be looking for is health and well-being: Am I going to be safe?” said Mary Portas, a retail consultant and broadcaster. “That said, the fact people want to come to that space means they are going to buy. They have made the effort. They have intention.”
 
This plays to things like BOPIS and curbside pick up - minimising the time instore. And does it also signal the demise of browsing?
 
Goldman Sachs on Reopening Retail and the Future of Shopping is worth watching. They ask whether the habit of online has become sufficiently entrenched to change behaviours in the future. The question of Safe shopping comes up - as does impact of retail bankruptcies - These chains in jeopardy have hundreds of stores and tens of thousands of employees.
 
The head of Consumer and Marketplace at Nike makes some similar points and describes how their experience in China has given them a Playbook for reopening stores. The data from their push into online will shape their business;
 
Whether it's the SNKRS, NRC, or NTC apps, or videos on YouTube, O’Neill says Nike will continue to monitor how people are using these apps and use that data to shape the future of its business, post-pandemic.
 
Mckinsey have advice for adapting;
 
The next normal is still taking shape, and customer expectations will continue to shift in response. Retailers that focus on customer experience and respond with agility and innovation in their omnichannel experience will fare better and strengthen their ties to customers.
 
VC firm A16Z have shared some good thinking on Growth in Turbulent Times in their podcast.
 
Web of 2PM with some smart thinking on DTC ideas taking shape. I am convinced there is a real opportunity with premium publishers to add real value to their audience through an enhanced commerce offer. Keen to develop this thinking so shout if this resonates with you.

Action? Are you learning enough from this fast moving world? How do you plan to action this learning? What could you be testing now?

Plus
 
How Oars and Alps is fine-tuning its Amazon strategy – Glossy
 
Pinterest launches partnership with Shopify
 
Remember "Blanding"? Well, Websites Are All Starting to Look the Same Now, Too
 
As Physical Retail Declines, Storefront Explores VR Pop-Ups. You should also check out the partnership between Appear Here and Darabase for their very cool AR 
 
Introducing Italic Black - Italic - new membership model for luxury retail
 
It's like QVC — but through a live-stream. How U.S. boutiques are reaching customers in China
 
Biggest podcast goes exclusive with Spotify
 
QR codes are going to be huge - iOS 14 may have a new AR app that can read Apple-branded QR codes
 
Amazon interviewing some key customers - John Denny of Cavu 
 
Shop Pay Is the Fastest and Best-Converting Checkout Experience on the Internet. You should add this - we find that a range of payment options almost always improves conversion. Apple / Android Pay and Paypal in particular. 
 
To Do List
 
There are some interesting events happening at the moment and we will point out some of the best
 
Brent Hoberman and his team know how to put on an event and have curated some of their illustrious network for a series of Zoom talks. I joined the one with Martin Sorrell and it was fascinating. Future guests include the founders of PayPal, Klarna, Rent the Runway, Eventbrite, Calm and Yammer. Sign up here
 
Amongst the Fix community we have more than our fair share of smart strategic planners and a few of them are involved in the second Group Think - great guests and well worth the modest fee - details here.
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