Issue No. 262: Next Two Years | Part Two


The past is prologue, or so they say. While Part One (see 6-10 here) focused on the great stories of the last two years, Part Two focuses on what can happen within the next two years.

5. A 2PM “Top 50” Shopify retailer will acquire its eCommerce agency.

Somewhere a founder is saying, “Wait, we can do that?” And for a small handful, it can make sense. This simple question may persuade a top 50 retailer (see database here) to acquire their go-to eCommerce agency. There is a particular type of brand that this would make sense for. Here are the qualifiers. The digitally vertical native brand:

  • has a trusting and transparent relationship with their agency.
  • is focused on building the brand before the thought of hiring engineers
  • has founders with a non-technical background
  • is a company that does not employ an existing CTO
  • is a brand is doing $20M+ in online retail

The relationship between Glossier and Dynamo stretches back to when the beauty brand was first founded. In 2014, Dynamo took on Glossier as a client, helping to launch the brand in the U.S., developing its website and eCommerce platform and acting as what agency co-founder Bryan Mahoney called its “in-house tech department” in a post on the brand’s “Into The Gloss” blog in 2016. After helping to launch Glossier, Mahoney moved to New York to become its VP of engineering. Following the acquisition, Mahoney has been named CTO at Glossier.

Josh Kolm, Glossier Acquires Dynamo

4. Walmart will acquire another DNVB by the end of 2018.

Let’s face it, selling to Walmart is no longer a substandard exit. There’s a coolness factor at Walmart, these days. In the new commerce economy, it’s something to be proud of. Whether it is Outdoor Voices (no. 76) or Homage (no. 75) or Bevel (no. 79), I expect Walmart to drill down on their mission to attract more millennial consumers to the brand. These were just three of the brands that could make great sense for Marc Lore’s acquisition machine.

From Member Brief No. 5.

According to eCommerce CEO Marc Lore, Walmart continues to search for M&A opportunities that differentiate its online offering and attract millennial shoppers. He added that the company is “definitely still in acquisition mode,” and the acquiring of specialty brands can “help us get the fundamentals right” on both Walmart and He noted that future acquisitions will range from $50M – $300M.

3. Google wants to compete against Amazon.

Brands just want commerce to be easy for them, what’s adding one more node to the omni-channel operation. Google Shopping Action is a service by Alphabet that could be the answer to the shopping simplicity that Amazon has trademarked. Google’s understanding of the online retail consumer may be superior to Amazon’s. And this is good news for the search engine’s collective of launch partners.

[Google Shopping Action] has partnered with major retailers like Ulta Beauty, Target and Walmart by allowing them to list their products across Google search through the Google Express shopping service.

“The consumer is much more demanding,” said Daniel Alegre, President of Retail and Shopping Global at Google at ShopTalk. “In their minds they expect Google to understand the question really well and know so much more.”

Google Shopping Actions features a universal shopping cart and instant checkout with saved payment credentials across and Google Assistant. It enables one-click re-ordering, personalized recommendations and basket-building based on a customer’s purchase history and loyalty.

Daniela Forte, Multi Channel Merchant

From Member Brief No. 5.

Google to let users buy directly from search results. In what seems like somewhat of a competition with platforms like Shopify, Shopping Actions is a new Google feature which allows users to purchase items directly from search results.

  • Retailers can list their products on Google search, the Google Express shopping service, and Google Assistant on home devices and mobile.
  • Google provides a universal shopping cart across platforms
  • Shoppers can save their payment credentials and make purchases from retailers with instant checkout.
  • Google charges retailers a cost-per-sale fee.

2. Apple Pay becomes the new one-click.

The ad wasn’t well received but the technology has been. With online retail shifting from desktop to mobile, faster than ever, Apple Pay is vying to become the go-to ‘face’ for many of the growing number of vendors that are pursuing mobile-first strategies.

Here is the problem that Shopify is hoping to solve with their bet on Apple Pay for online retail:

A general manager of financial services at Shopify, told Karen Webster in a recent conversation, is that the checkout experience “is a weird three-page mess that really hasn’t evolved over the now almost three decades people have been shopping online.”

Granted, the UX has gotten a bit nicer, and some streamlining efforts have been baked in, but at its base, Hashemi noted that it’s the same bad experience: The customer has to enter their shipping data, billing data and card information “over and over again, and multiple properties.” “This is a checkout process that just desperately needs to go away,” Hashemi stated.

1. Spotify will release a hardware collaboration by the end of 2018.

Screenshot_2018_02_20_12.02.37Spotify benefits from its platform agnosticism. If you try hard enough, you can use their service on any hardware device. That doesn’t mean that they aren’t experiencing hardware drama that could stall an IPO. If you ask your Alexa to play a song, it will use the Amazon Music service by default. If you ask Siri on HomePod, it will use Apple Music. If you ask Google Home, it will default to Google Play. Needless to say, Spotify has read the writing on the wall. The streaming service is afraid of being completely cutoff from the hardware ecosystem and will likely land a hardware deal with an incumbent speaker manufacturer by the end of Q3 2018.

Spotify wouldn’t necessarily need to build its own audio equipment from the ground up. The music app could instead partner with an established speaker maker like Bose on such a product. If this were the case, Spotify would have a hardware product where its services are at the forefront instead of an afterthought. Meanwhile, its hardware partner—a company similarly being left out of the smart speaker conversation—would have an additional avenue to compete against products by Amazon, Google, and Apple.

Christina Bonnington, Slate

Read more of the issue here.

By Web Smith | | @2PMLinks 


Issue No. 254: An Open Letter to DNVB CEO’s


Pictured: Outdoor Voices, led by Founder Tyler Haney


You deserve more praise. I worked alongside one of your kind for a time. I learned a lot about the personal costs of building a product and then a brand from scratch. Frankly, the costs are high.

By the time that people know who you are and what you’ve accomplished, demand is probably already there. That $3-5M in revenue is as close to automatic as it gets. In fact, that accomplishment has lost its luster. Now it’s on to $15-25M. But people rarely see what you had to go through to get to that $1M mark.

What people don’t know is that DNVB executive teams build two products from scratch, supply and demand:

  1. The product: the shirt, or the luggage, the pants, the shades, the coats, or whatever it is that people know you for.
  2. The brand: the aura of that product, the name recognition, the association, the behind-the-scenes partners, the spokeswomen, the ambassadors, the inevitability of success.

You stressed over supply chain woes. You cried some nights. Your cofounder or your creative director drove you nuts because they didn’t realize how close the company was to crumbling.

You stressed over cash flow problems. You cried some more. Your job was equal parts: (1) innovating and (2) just figuring it out.

You stressed over the difficulties of getting Trent, the very normal VC, to see your vision early. Some DNVB’s paths were easier than others. But yours was not easy at all. Absolutely nothing was given. And still, you held it together.

And after all that, you managed your minimum viable product. You were in possession of 10,000 units that people didn’t really want because those units weren’t close to the fifth-generation products that are on the market today. That first-generation of leggings just weren’t that great. So you relied upon the brand to get you through those days. You managed to convince consumers, retail / tech media, and investors that your success would be inevitable. And that your brand will be around for 100 years. They felt the impact of those statements and they agreed with you. But everyone that reads this knows that the mirage was hard to keep it up in the beginning.

“We may not be great today but we will be. Buy in early.”

Turning a logo into a greater meaning takes a decade and you had to do it before those 10,000 units of first-gen mediocrity bled you dry.

So here we are, years later and it’s still hard – but it’s not as hard as it was. There are dozens of DNVB CEO’s, just like yourself, who understand the toils of creating supply and demand for your company. And then stressing over the balance between the both of those products.

DNVB CEO’s run brands that are relatively lean and almost always running at a deficit. You don’t have the ad budgets and marketing forces like the legacy companies or the software platform. But you survive. And once you make enough noise, retail pundits will call you on your inefficiencies and inexperience. They’ll actually root against you. That’s what retail ‘experts’ do. But please know that many of us praise what you’ve accomplished in such a short period of time.

You started your company in an age that required your retail independence. On day one, your brand couldn’t depend on wholesale purchases from Nordstrom or Target or Whole Foods or Walmart. And that independence made you more viable in the long run. And now, those retail powerhouses are now knocking at your headquarters.

So please, continue to innovate. And when you’re emotionally or mentally maxed out, remember that your companies will be the foundation upon which the future of retail is built. People will wear you, consumers will shop you, and malls will bend over backwards to work with you.

And then, the retail experts will reluctantly write that your brand successes were inevitable all along.

See more of the issue here.

Issue No. 251: 10 thoughts for 2018


  • Brand: Nike will make small gains against Adidas by copying the German brand’s “creators” playbook (click above) but Adidas will remain the brand for rebels and the message will resonate better in 2018, as consumers shun the status quo.
  • eCommerce: Podcasts will continue to mature their eCommerce operations. There will be more examples of refined stores and high quality brand plays in merchandise.
  • Digital Media: Netflix is on to something and may scare the likes of AMC and Cinemark in 2018. Will Smith scored a big win with 11M week-one views. This is out of the 53 million Netflix subscribers. Expect the streaming service to redefine what Netflix means by building on the critical momentum of “Mudbound” and the viewership success of “Bright.”
  • eCommerce: Amazon will cut its affiliate spending by upwards of 40% in 2018. This will most likely affect independent media groups and some of BuzzFeed’s most recent efforts.
  • Digital Media: 2018 will be the year that Youtube influencers take ownership over their eCommerce presences and flock to white glove services that are fully vertical.
  • DNVB: Walmart will buy 1-2 more digitally vertical native brands in 2018. They will also test a smaller-box urban storefront, by a different name, for their higher end brands.
  • Brand: Brands with evergreen products will reduce Google SEM spend and shift to Amazon search products. Remember, Amazon is now a $1B+ advertising business.
  • eCommerce: Spurred by GGV Capital’s belief in China’s commerce sector, brands will begin spending considerable time working with China’s trove of mobile-first eCommerce platforms to grow through international channels. In 2008, it was SEM. In 2012, it was social. In 2016, it was the Soho pop-up. In 2018, it will be American exports in China.
  • eCommerce: Shopify will develop a ‘featured’ marketplace for its top Shopify and Shopify Plus performers and it will compete against the likes of Wish and others. Expect this to be launched in the form of a mobile app with one-click purchasing. Tobi, Harley, and crew will also launch their first of many private label brands to appear on this marketplace app.
  • Digital Media: 🗣2PML will become a leading commerce podcast in 2018. It will become the go-to 20 minute pod for polymaths with little time for market research, continued education, and Porter’s Five Forces analysis.

Follow @2PMLinks for this thread and other updates.

See more of the issue here.