Issue No. 261: Two Years Later | Part One


On March 22, 2PM begins its third year. The purpose of the 2PM letter remains the same. It’s a weekly (or 2x/week) rundown of news, intel, and commentary that shapes our industry. It’s humanly-curated (with extreme care) and each week, the balance of the articles is influenced by the most read links from past weeks. 

This project began as an initial letter sent to 30 industry friends with a simple philosophy: by studying adjacent industries, you can improve your own. As such, the letter has evolved into a trusted source of information and commentary for many of the brightest in media, commerce, data, and branding.

So with that, I’ve highlighted impactful storylines from the last two years. Part one of two will feature the first of five events, shifts, and developments that will influence your industry’s next three to five years.

10. Shopify solidifies its standing as a go-to for top 100 eCommerce.

Platform objectivity is really important here, there’s little evangelism here.Here are the most commonly seen options: custom cart, WooCommerce, Big Commerce, Magento, Salesforce (Demandware), or Shopify. I believe that established brands should build on the platforms that are best for them but the numbers are the numbers.

Based on some recent research, I’ve polled the most notable 110+ eCommerce brands and a resounding 40+% of them are hosted by Shopify. This has tremendous implications for the Shopify agency industry. Current leaders in that space: Bold Commerce, BVAccel, Pointer Creative, Wondersauce, Fuel Made, and Worn. I anticipate that one of them to be acquired by a top 25 brand in the next two years.

9. Affirm redefines consumer credit.

Early in 2015, I encountered Affirm for the first time (albeit late). I was constructing a luxury eCommerce platform for men and I was hunting down ways to bolster the site’s conversion rate. Affirm was one of the first company’s that I reached out to because the premise of the service was simple:

  • offer financing at eCommerce checkout
  • remove friction (long applications, credit checks)
  • keep interest rates low and honest

This process was perfect for the online retailing of higher end items ranging from $500-$10,000. Hodinkee executed this concept to perfection. And now, they are pushing “honest financing” into physical retail.

People can sign up through the website or at checkout on some web stores for financing from Affirm that’s paid off in monthly installments. On Monday, the company said it’s making the micro-lending program available through Apple Pay, letting customers tap their iPhones to pay in brick-and-mortar stores.

This essentially makes Affirm a credit card provider without physical cards or credit scores. The San Francisco-based company pitches itself as superior to traditional credit cards from American Express Co. or Visa Inc. because it’s transparent about fees and charges no interest on purchases from more than 150 retailers.
Julia Verhage, Bloomberg Technology

8. Walmart pivots towards a startup culture.

When Walmart acquired, the legacy retailer acquired a new direction led by Marc Lore. Many in the industry remain skeptical of Lore’s ability to bolster Walmart’s position in a market that’s deeply influenced by Amazon, Alibaba, and digitally vertical native brands. But to his credit, Walmart’s market cap is rising. In fact, it saw an all-time high on January 28, 2018. I’ve applauded his innovations. These innovations include his streamlining Walmart’s omni-channel operations, acquiring popular online retailers, and incubating native brands like their new Allswell.

From Member Brief No. 2:

The Allswell brand is strong, it’s independent, it’s inviting. It looks like a Silicon Valley-backed DNVB for bedding and mattresses. But most importantly, it appeals directly to upper-middle class women. If you notice, the “King” bed is now known as the “Supreme Queen”, a nice touch in an era (rightfully) dominated by the rhetoric of feminism and gender equity. Allswell is a play to capitalize on this cultural momentum.

7. Glossier forges a new path for content and commerce.

One of the core tenets of 2PM’s commerce beliefs is that to succeed, you must control both key levers: content and commerce. I’ve called this linear commerce. There isn’t an operation that is executing as well as Emily Weiss’ Glossier.

From the brand’s inception – which spawned from the hyper-popularity of Weiss’s beauty blog Into the Gloss – the beauty company has gone against the proverbial grain of the beauty business. Marketing a sense of authenticity and belonging rather than the beauty industry’s traditional fictitious glamour story, the female-dominant company (Dear Tech People reports 79% of Glossier’s staff is female) captured the love and attention of the coveted Millennials.

Janna Mandel, Forbes

From Member Brief No. 1

Glossier / Into The Gloss has achieved that proverbial line, the result of two planes intersecting to form infinite opportunity. Glossier is operating similarly to Kylie Cosmetics, but in a way that could be more sustainable for the well-funded D2C brand.

The majority of Glossier’s influence referral comes from their blog while the majority of Kylie Cosmetic’s influence referral traffic comes from Jenner’s Instagram and Youtube accounts. While Jenner’s influence is currently stronger, Glossier owns their influence plane.

6. Subscription media becomes the new standard.

Just ten years ago, paywall was a dirty word. And then the New York Times’ innovative commerce department developed a strategy that readers are willing to play for quality. In 2018, with the exception of Axios, Outline, and Inverse, there aren’t many examples of notable media startups who haven’t pursued subscription revenue as their focus.

I’ve cited TheSkimm, Skift, and The Information as innovators in this space.

The newsletter reports a 30% open rate. Since its launch, TheSkimm has expanded to offer podcasts, an e-commerce business and a paid app featuring a calendar of upcoming news and televised events. TheSkimm will use the new influx of money to build more subscription services, perhaps with the help of Google Ventures and Google, and enrich its video and podcasting options, along with plans for data analysis.

Melinda Fuller, MediaPost

In issue No. 262, 2PM will count down the last five storylines. If you have any feedback on 6-10, email me:

Read more of the issue here.

Issue No. 250: 🗣 Listen up!

The 2PM community is a vibrant one of thousands of smart, curious, and polymathic-types who lead in professions to include: branding, commerce, data, and digital media. covers the many ways in which these industries converge and where there is disruption or opportunity.

After a few months of lobbying by my wife (and great feedback from subscribers), 2PM will begin releasing a weekly podcast that will recap news and developments. In addition to recaps, there will be a scripted deep dive into one retail touchpoint each week. If you’re a member of this community and you have something to contribute, expect an invitation to join the pod.

The format will be 20-25 minutes per week, with a link to the audio in your inbox at 2PM EST on Monday. The pod will be direct, succinct, and digestible – just like these letters. Expect more news on format and partners in the final few issues of 2017’s letters.

This is the opinion of Web

See more of the issue here.

Issue No. 247: Welcome Back

Opinion: DNVB’s must become luxury brands

There are a great many tidbits in this essay, in addition to the original infographic above. The notion of moving a brand up-market is one that I believe very strongly in – not only as a price-anchoring function but as a product differentiator and brand builder.

This is the first essay that I’ve featured by the New York venture capitalist but it’s a worthwhile one. It’s lengthy but it’s worth your time.

Excerpt: Building a luxury direct-to-consumer brand is easier said than done, but take comfort in the fact that it can be done. Every generation has its share of holdover brands from the last, but millennials, like our parents before us, have a cadre of all new logos and experiences we want to be seen in, on, and around. Unlike our parents, we care about the experience of the purchase as much as product itself and are willing to pay serious premiums for individualized VIP treatment. Use that to your advantage. Provide a level of service your competition won’t, and tack that additional cost to the end of the price tag.

Read more here.

See more of the issue here.

Issue No. 246: DNVB&’s will be just fine

A last word: eCommerce is a bear

Consumers are becoming brand agnostic and DNVB’s seem to be holding on to their loyalty by appealing to internet-first consumers. It’s expensive but for some DNVB’s, there may be a positive outcome.

Read: From a digitally-native gold rush to an impending bloodbath

One passage stood out when I read Richie Seigel’s latest for his Loose Threads project.

While many people believe that Digitally-Native Brands have both larger addressable markets and cheaper acquisition avenues to realize their potential—leading to this influx of capital—there is little proof that these theories will result in long-lasting or profitable companies.

Building a successful brand takes time. While many Digitally-Native Brands have tried to take shortcuts—raising more money and spending it faster—many of these companies find themselves in precarious positions, with investors breathing down their necks, employees’ livelihoods in their hands, and uncertainty about what comes next.

When I reached out to a prominent (profitable) DNVB founder / CEO to discuss this prediction, we both agreed that it had merit. There will be many bad DNVB exits. But there will be even more heritage brands that will fail along with the stores that propped them up for years.

You know that age old adage, you only have to outrun one person to escape a bear’s pursuit? In this analogy, heritage brands are the ones being outrun by DNVB’s.

Of the heritage brands that Seigel lists in his second para, the publicly traded ones are trading at an average of -25% on the year. This includes Columbus’s own L Brands (owner of Victoria Secret); VS is a heritage brand that’s anchoring a crumbling stock due to inbound intimates competition from a growing number of DNVB’s.

In addition, most heritage brands rely upon department stores and costly ten-year leases to bolster sales. Most of these investments are quietly financed by toxic amounts of private equity. Someone check on J. Crew for us.

Wal-Mart, who invests heavily in DNVB’s, understands the importance of the internet as a platform for retail. They are doing something interesting to compete against Amazon:

“Wal-Mart Stores Inc. is near a deal to add Lord & Taylor to its website, part of a broader effort by the retail giant to build an online shopping destination that can compete with Inc., according to people familiar with the matter.” – WSJ

This is why Wal-Mart is doing this: They will now sell fashion’s heritage brands through, becoming a new-aged destination for all things department store: including Patagonia, Ralph Lauren, Nike, and maybe even Commes De Garcons.

This is while their six most recent acquisitions are also helping them appeal to new audiences. has already announced a private label. And it’s no secret that Wal-Mart is building a strong case with Mark Lore’s new strategy. In time, Wal-Mart will be a machine capable of launching new private-labeled brands that target the consumers of the heritage brands of old.

Mark Lore’s recent Lord & Taylor move has Bezos’ tutelage written all over it.

Amazon, Alibaba, and Wal-Mart are vying to become this century’s version of the department store. And every brand should be nervous but it’s the (eCommerce-lagging) heritage brands that should be most afraid of the bloodbath. These brands have invested little in eCommerce and even less in the types of communities that innovators like Stitch Fix seems to have fostered.

As consumers become more brand agnostic, heritage brands are closest to being devoured by the bear.


See more of the issue here.

Issue No. 238: Inclusivity has many forms.

The Launch of Cotton Bureau’s Blank

I first mentioned Cotton Bureau in Issue No. 203, where I expounded on what I found fascinating about the Commerce startup (and fourth fastest growing company in Pittsburgh). Most recently, their focus has been on sizing inclusivity. In Issue No. 217, I wrote:
Cotton Bureau is one-step closer to filling a void left behind by American Apparel’s bankruptcy. They’ve begun manufacturing a new type of tee for all shapes and sizes. It’s called “Blank” and it has the potential to solve a gaping sourcing issue in a major fashion segment.Women and men needed better, more accurate t-shirt sizing. 

From this simple assessment,Blank was born. From the now-successful Kickstarter for the project:

You see, finding a wholesale t-shirt manufacturer that fits all our criteria has been…challenging (to say the least). We need a brand with modern fits, a wide range of colors and fabrics, ethical manufacturing, reliable quality and consistency, always-available stock, and it’d be reeeeal nice if it was made in America. Finding a brand that checks all those boxes and oh yeah also fits women is damn near impossible. If you can find a women’s brand that comes in our preferred colors and fabrics, it’s only available in mega-tiny junior sizing. If it’s sized to fit most women, the cut is awkward, the fabric isn’t anywhere near our standards, and it comes in whatever color you want…as long as that color is pink. It’s frustrating for us as a company, and every bit as frustrating for you as our customer.

In a recent conversation with a Senior Editor of a lauded men’s publication, the gentleman posed the question to us: “but what’s the angle to cover for men?” He asked this un-ironically but in doing so, it established why I believe there will be a successful product market fit for Blank’s offering.
Sizing woes can illicit a sense of embarrassment or even shame from consumers – especially men. Men seem to be more ashamed to seek a solution to sizing inaccuracies. But this is nothing new, it took a decade of female consumers lauding performance fabric sportswear for men to do the same. Now, athleisure is leading the industry in product innovations and companies like Lululemonand Outdoor Voices are widely accepted by all.

Long before American Apparel exacerbated the sizing issue by marketing their products as exclusionary, this practice was found in tween retailers. Many can remember being a normal-sized kid while needing to purchase an XXL tee from A&F or American Eagle. In a normal world, XXL would be worn by an NFL tight end. Today, you’ll see the same practices at Hollister and other retailers who target teenage and young adult consumers.

For adults, sizing in t-shirts hasn’t improved either and the product shaming has only increased. American Apparel set this market trend, years ago. Though it’s now owned by Gildan, producing a wider offering with accurate sizing would still be viewed as detrimental to the brand.
By the conclusion of our chat, that Senior Editor recognized that there was, in fact, an industry problem and he welcomed the solution. I have a feeling that many consumers will welcome Blank, just the same.

This is the opinion of Web Smith.
See more of the issue here.

Issue No. 234: A sign of things to come.

New Media: Quality, Specialization, Community

Each section of the newspaper is being unbundled into highly-specific, subscription-driven verticals behind paywalls and it’s the next evolution of local media.

We don’t need 5, 10 pieces a day, we don’t need 20 pieces a day in a city, if we can get 3 stories that you can’t get anywhere else in a city, we see unbelievable subscriber yield. That’s the pitch, do great work, be surrounded by the best talent in the market, and great things will happen. We’ll handle the rest, we know how to acquire users beyond your Twitter followers, we know how to find them on Facebook, acquire them, retain them, and we’ll handle the production, we’ll handle the platform, and you just do great work. Frankly, to most folks, that’s refreshing. Some outlets still do great work, but especially at the local level they’re really sliding around figuring out how to make it work for their organization. – Alex Mather, Cofounder of The Athletic

In a recent interview with Ben Thompson (Stratechery), Mather discusses his business model for The Athletic. Even if you aren’t a sports fan, you should still pay attention to what they are building. This is a loose comparison but consider the growing number of subscription-driven media groups and how they’ve disrupted national or local papers. The Information (unbundled “tech”), Stratechery (unbundled “business”), Skift (unbundled “travel”), and TheSkimm (unbundled “lifestyle”) are each making waves. I am adding The Athletic to the tracking list of media groups who’ve embraced the the subscriber sales funnel as a core competency. The Athletic is your local sports section done right or at least that’s the mission.

According to The Athletic, 8,000 – 12,000 subscriptions achieves break even in each metropolitan area covered (Chicago, Toronto, Detroit, Cleveland, and the Bay Area). To get there, their tech stack enables “a paywall, insider access, more advanced analytics, and a mobile experience to differentiate.” As media evolves, optimizing for eCommerce efficacy will become a core competency.

See more of the issue here.