Issue No. 257: Snap Inc. and eCommerce


Snapchat, Nike, Darkstore and Shopify teamed up to pre-release the Air Jordan III “Tinker” on Snapchat with same-day delivery. There are a few implications to consider here.

In the United States, eCommerce is dominated by consumer search. Product discovery still lags behind. While Amazon continues their efforts to insource a tried and true discovery mechanism that is currently outsourced to digital publishers (in exchange for affiliate revenue), the hole in the system remains. So, leave it to the embattled media company known for discovery to attempt the leap.

Perhaps Snapchat is attempting to lean into this role? There might just be a product market fit.

Snapchat’s push into eCommerce is a long time coming and it couldn’t happen at a more appropriate time for the Los Angeles media company ($SNAP). Here’s what Jason Del Rey noted about the the partnership between Shopify and Snapchat for Nike’s Jordan brand:

Over the All-Star weekend, Nike hosted a special concert in Los Angeles, the host city of the game. Attendees were guided to use the Snapchat camera to scan a code displayed on a basketball-hoop backboard to view the new Air Jordan III “Tinker” sneaker in the app.

Guests were then able to purchase the sneaker right within Snapchat with the help of technology from the e-commerce software company Shopify. And most of the kicks were delivered to customers on the same day, thanks to a logistics startup called Darkstore.

@DelRey, Recode (read here)

May 2016’s 2PM Issue No. 46 was entitled “Snapchat, the eCommerce Giant.” It was titled as such because it featured a now-noteworthy article by Maya Kossoff that preceded much of the conversation that you will read about Snapchat’s recent experiment with Shopify and the Jordan brand.

The ability to buy tickets without leaving Snapchat is the biggest coup for Snapchat and Twentieth Century Fox, which placed the ad buy, and it suggests the company is making serious moves toward expanding into the e-commerce space.

@MeKosoff, Vanity Fair (read here)

Snapchat’s potential to combine advertising campaigns with ease of purchase sets itself apart from Instagram who has yet to develop a partnership with Stripe or Shopify. I was excited about that direction before Snapchat focused on their Spectacles campaign. But even with Spectacles, Snapchat began honing the ideas that we’re now seeing.

Here’s what I wrote in 2PM Issue 191 (2017): 

The most successful marketing campaign that Snapchat has led in the last two years wasn’t through traditional advertising, it was through traditional retail and eCommerce. […]  There is a virtuous cycle in modern digital media and eCommerce that shouldn’t be ignored. Consumers want to go where they are influenced to act. And advertisers would be smart to create content in those same spaces.


With Jordan, Snap is dipping its toe into the possibility of monetizing just about anything via app-integrated sales channels. Snap openly classifies itself a camera company, rather than a social media app. That’s why it’s explored products like Spectacles, which turned sunglasses into a video camera. And while right now, Snap is only selling one limited edition sneaker drop for Jordan through a live event, it’s easy to imagine Snap leveraging the close relationship that its 187 million daily active users have with its camera to any number of third-party brand partners.

Mark Wilson, Fast Company (read here)

Facebook has done a marvelous job of iterating around Snapchat’s original ideas, all but trouncing the high flying Snap, Inc. Only time will tell if this flavor of content x commerce is another one of those ideas that we’ll find reimagined for Instagram.

Read more of the issue here.

Issue No. 224: Better never than late.


What we can learn from the fall of J. Crew

What went wrong?
  • Rise of eCommerce
  • Failing mall traffic
  • Discounting culture
  • Increased competition
  • And as BOF says, “post-recessionary mindset.”
  • “As J.Crew’s fashion credentials began to grow, its focus on staple items suffered and an increasingly cool and expensive product mix alienated once-loyal customers.”
  • Use of cheap textile materials, 2013 and on
  • Complete ignorance of the athleisure movement
Moment of Truth (1): 

July 2013, when an unhappy customer wrote Drexler an email saying, “I am so disheartened and disappointed that you are leaving your core values and styling and abandoning your loyal customers. I would have thought you had learned your lesson at the Gap!! Why mess with these iconic brands and change them into something they’re not?”

Drexler’s Response: 

“We are on it for sure,” he emailed the customer after the call. “I hope you see a difference this Fall.” 

This was the beginning of the low quality of product that has flooded J. Crew stores and outlets.

Moment of Truth (2):

Back in 2014, Drexler repeatedly said J.Crew would never get into the so-called “athleisure” segment.

Drexler’s Response:

J. Crew launched an athleisure effort with New Balance, in late 2016, that has been widely panned as ‘late’ and ‘bland.’

Read the full rundown here on BoF. 

See more of the issue here.

Issue No. 183A: Ways and Means



The Ways and Means Committee issued  this Jan 24th statement on the same day that a 100+ member delegation of retailers from Columbus, Ohio traveled to Washington to address the potential pitfalls that all (foreign-manufactured) major retail brands will face when this tax reform is enacted. The NRF-backed delegation included the Columbus-based brands: DSW, Ascena, Abercrombie & Fitch, and Value City. Columbus is also the headquarters to retail brands like: Victoria’s Secret, Bath and Body Works, La Senza, The Limited, and Express. The collective concern of Columbus’ retail delegation is palpable.

A major retail senior financial analyst submitted the following to 2PML:

Obviously this is a long way from being law, but I’m worried. It’s not cut and dry. Lot of retailers that may finish goods in the US use imported intermediate goods. This impacts everything.”

It’s an interesting time for fashion retail in the United States. While “Modern Luxury Companies” are thriving (they are extensively covered in LeanLuxe), it’s hard to ignore the many variables that will affect their ability grow. For one, the young brands that manufacture in Asia will have a complex set of issues to address.

For existing domestic manufacturers, the impending policy is a favored one. These startups and heritage brands have been managed to grow on gross margins of 45% vs traditional retail gross margins of 80-90%. Think everyone from Mizzen+Main to Filson, Red Wing Shoes, Gitman Brothers, and L.L. Bean. Brands like these will benefit from these tax reforms. But it’s not all fun and games when a projected six million American retail workers will be affected by these pending regulations.

The fashion industry’s low margins have punished companies such as the recently sold American Apparel, which tried to sell affordable, mass-market clothes while offering its employees living wages. The share of domestically produced clothing in the U.S. in 2015 was 2.7%, down from 10.2% in 2005 and 46.2% in 1995, according to the American Apparel & Footwear Assn. Over the same period, apparel consumption has grown more than 60%.

“There’s absolutely no possibility of fashion making a reentry to the U.S.,” said Bjorn Bengtsson, a professor at Parsons School for Design in New York. “The reason is labor. Most U.S. manufacturers are having tremendous difficulty finding skilled labor. We have to train people. But even then, salaries are not going to be as low as in countries like Bangladesh and Myanmar.” David Pierson, Chicago Tribune

eCommerce will very quickly become the go-to investment to reduce costs for many of these companies, large and small. As costs to manufacture rise, the retail workforce and their real estate will shrink.

However, these shifts could be a boon for digital advertisers and media agencies. But as mall retail continues to dive, as consumers shift to Amazon, etc. for retail, who knows how many of our great retail brands will maintain throughout the impending transition from bricks to clicks and foreign-made to domestic.

See more of the issue here.

Issue No. 64: 🚀 RocketCode, West Elm, Foursquare, and is 👻 stealing filters?

Last Word: Long $AMZN


A recent study has shown that 39% of Target shoppers love Amazon Prime. With nearly two years of gains lost in the last month, Target has become another major retailer on the heels of a consumer shift in purchasing. To add to this shift, Amazon is aware that Target shoppers have become the low hanging fruit for marketing ROA efficacy.  In short, compared to typical U.S. Adult, Target shoppers are more likely to consider prime than general population or Wal-Mart shoppers.

Target are likely to see more Amazon Prime ads in the coming months. It seems that visitors will be…targeted…for holiday ad campaigns in the coming months, as Amazon continues to trounce its competition in the consumer packaged goods space. This is as basic as using Foursquare and/or Facebook’s locational data to bolster Prime signups.

This also lends to the theory that Amazon will begin carrying / acquiring retail brands (because 📈 gross margins) to appeal to shoppers who want to use Amazon for all of their needs. Target isn’t the only major retailer that is seeing attrition of their more-affluent shoppers at the hands of Target’s greatest increases in digital and foot traffic are Black Friday or collaboration related (Lily Pulitzer, etc).

See more of the issue here.

Issue No. 8: Model 3 Day and ‘Bey and Jay’

The most read link: Postmates launches Amazon Prime-style subscription service, hits 1 million monthly deliveries

By Megan Rose Dickey

Postmates, which is now completing 1 million deliveries a month, is digging in deeper to the e-commerce space with the launch of Postmates Plus Unlimited, a $9.99 per month subscription service that gets you free deliveries on all “Plus” orders over $30, minus the service fee. Plus merchants include American Apparel and thousands of other partners in the Postmates preferred merchant program. By the end of the year, Postmates will have 10,000 Plus merchants across 40 U.S. markets.

Postmates Plus Unlimited kind of sounds like Amazon Prime, amirite? When asked about competing with Amazon, Postmates VP of Growth Kristin Schaefer told me that Postmates has been very anti-Amazon from the very beginning. At the same time, Postmates sees Amazon as its biggest competitor. Read more here.

See the rest of the issue here.

Issue No. 3: Gone in 18 Seconds


Business leaders don’t prefer man-hour intensive tasks that distract them from executing the overall mission. Though Microsoft’s AI Twitter bot failure was very public, it seems that there will come a time when entrepreneurs can hand over the reigns to their social media accounts or reposition their lower level customer care team members (the most human capital intensive commitment) to allow machine-learning bots to perform those tasks. The notion of this is no longer decades away. But will consumers prefer doing business with machines?

See the rest of the issue here.