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April TwentyTwo

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.

We use the term Merchants to avoid the confusing acronyms DTC, DNVB, O2O, ECom, MCom omnichannel etc. Our focus is on the Merchants selling things in the best way possible. The current crisis is a remarkable opportunity for a fresh think on retail and we’re watching and learning. And sharing.
 
The biggest news this week is that Google have stepped up and made it free to sell on their Google Shopping tab;
 
Beginning next week, search results on the Google Shopping tab will consist primarily of free listings, helping merchants better connect with consumers, regardless of whether they advertise on Google. With hundreds of millions of shopping searches on Google each day, we know that many retailers have the items people need in stock and ready to ship, but are less discoverable online
 
With a Paypal partnership and talk of integrations with Shopify Woo, BigCartel etc this is a big play from Google and a challenge to Amazon. Google has a huge amount of intent signals and this makes it easier for Merchants to respond. And at some point does the huge volume of free listings trigger the needs for Paid listings to get stand out? (This is US only for now but should roll out quickly)
 
Action? Read the guide on how to join Merchant Centre and what you need to do - and get as much done as you can
 
One of the best resources for data on what's actually happening with the Virus is this CommonThread collection - lots of data points and some good analysis. Within the collapse in costs some people are doing well. As one of the participants suggests there is lots of window shopping going on - so if nothing else that 1st party data may be useful in the future.
 
As ad prices are slumping some sectors are active - this article has quite a few examples of how businesses are taking advantage. There are quite a lot of fluffy stories about luxury good sales doing well  - maybe the US are revenge shopping too? We mentioned Next having to close their site after an hour and the new BooHoo results show similar demand - whilst March sales were hit hard April sales are up year on year. A tweet from the Shopify CTO confirms their traffic is doing well
 
As we help thousands of businesses to move online, our platform is now handling Black Friday level traffic every day!  It won't be long before traffic has doubled or more.
 
But the WSJ points out that traditional retailers are pretty desperate to shift Spring stock and are discounting heavily - Black Friday in April - so it’s different for different people. If you are a brand that is positioned well, it could be a good time to go to market. 
 
Action? Look at how you might quickly and cheaply test current demand for your products. And think through how you can make your advertising work harder. 
 
For Facebook I recommend you read (or re read) this great thinking on how to; Use Facebook the way it was intended to be used, which means bringing real value to users with fast, fresh, and native content, and running signal-rich, liquid campaigns 
 
I keep coming back to grocery delivery as it seems the space that is telling us most about the changes we are going through. Circumstances are driving huge amounts of trial and the incumbents have found it really challenging to flex their model to cope, but we are now seeing some fresh thinking.
 
Waitrose is rolling out their Rapid Delivery service - up to 25 products delivered within 2 hours. This is really interesting as it comes across as high service but can be delivered through smaller vans and maybe even bikes. And the 2 hour window makes the £5 charge seem quite reasonable. 
 
That is significant because the sad truth about grocery delivery is that everyone loses money on it. It’s estimated that it costs £10 to do a delivery - largely down to the utilisation of the vans. Because grocery orders tend to be big, the vans can make less deliveries and because density isn't (wasn’t) that high, the vans are often half empty.
 
Amazon are thinking along the same lines with an Ultra Fast Fresh service planned. This would make Amazon Fresh a free service for Prime customers and is planned for July. It would give Amazon UK some fresh impetus for Groceries which is a major priority in the US  where they rolled Fresh into Prime late last year, saying
 
“Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits,” said Amazon VP of grocery delivery Stephenie Landry 
 
The news that the Amazon investment in Deliveroo has provisional approval offers some real benefits to Amazon here. Those ubiquitous bikes aren't much use for a full weekly shop but could manage a typical basket. For all delivery businesses (grocery, fast food or parcels) driver utilisation is key. Deliveroo is already delivering groceries with partnerships with M&S and Coop and many independent stores.
 
Uber are back in the grocery business too - they trialled it a few years ago then it morphed into UberEats - and Lyft are getting involved too. In China ride hailing service Didi has its drivers doing grocery shopping for delivery - creating a sort of Instacart service - and Meituan are extending their dominance of food delivery with unmanned vehicles for Grocery delivery. 
 
Whilst Waitrose - like most supermarkets - rely on pickers in existing stores, Amazon intend to refit some existing depots to handle grocery. The masters at this are Ocado but even they have found that these big, purpose built depots don't flex well with hugely increased demand. In the US we see micro fulfilment centres getting traction - could that be a European option too? 
 
The new Uber services are worth a closer look. Direct is a delivery service and partners range from Australian Vets, The Portuguese Post Offices and the Bill Gates foundation for medicine distribution. Connect lets people send parcels across 25 cities.
 
Action? Could fast delivery be beneficial for your brand? How could you test this with a local delivery partner?
 
Plus
 
McKinsey have some thinking on how CPG brands can prepare for the new normal - drawing on learnings from China;
 
Early lessons from China suggest that three to six percentage points of online market share will be “sticky,” driven by older generations newly comfortable with digital channels and by new consumer segments who have overcome barriers to trial (such as account setup). Also, in the medium term, we expect shoppers to prefer the “safe” experience of shopping online to the prospect of shopping in crowded stores.
 
The new Mary Meeker report on the effects of CoronaVirus is a long read but clearly shows we will face a new normal - though it will take some time to see what that actually is
 
As the head of Instagram Beauty points out businesses that are not nimble are going to struggle
 
One type of store that is really struggling? Department Stores - this is a good look at their struggles. When did you last go to a Department Store?
 
Farfetch founder on how they are coping 
 
Good twitter thread showing how well Facebook Ads can work if you get out of the way.
 
Good podcast on Amazon advertising - found via the FordeBaker newsletter
 
It’s great to see so many small local businesses embrace online to keep their brand alive.
 
Finally - really interested in how brands leverage community and membership models are one strategy. So watching how Supply does with a buy the razor and free blades for life model. It's brave to take the opposite approach to such a well established business model


Action? There is so much opportunity for smart Merchants right now - lets talk about how I might help you seize it - hit reply
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