Issue No. 105: Basic, slow innovation, brick & mortar weakness, and the fall of the preppy leader

Last Word: Brick & Mortar is Weakness

In the past several months, we’ve watched populous eCommerce marketplaces and consumer packaged goods (CPG) companies exit in outsized fashion. Jet.com netted their founder $750M for three two three years of work; the company exited for $3.3B. DollarShaveClub.com sold for $1.1B, earning their founder $250M for five years of work. We’ve observed $13-30M (Bevel, Outdoor Voices, Series B’s for eCommerce only retail brands that don’t have any distinct product differentiations.

I can’t speak to the longterm but for this 5-7 year cycle, the market is rewarding vertical brands who focus on farming their consumer data. M&A seems more likely for brands that own 100% of their relationships. The one exception is Bevel, who now distributes through Target. Target’s checkout data rivals any eCommerce platform’s ability to track sales tendencies. And unlike Amazon’s marketplace experience, Target will share their data with brands like Bevel and Harry’s.

We’re really beginning to see the tipping point of small business eCommerce. And for the brands patient enough to build online-first, it is beginning to pay off.

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Shopify was 2015’s best performing tech IPO. A further sign that the market is rewarding eCommerce vendors and the startups that support them.

See more of the issue here.

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