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.

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Issue No. 230: The Top 25 DNVB’s of 2017



Click the above graphic for more data. In what will likely go down as a pivotal moment for Amazon’s voice commerce battle against hardware newcomers like Google, the devices were of the most incentivized.

In Electronics, historically the best-selling category on Prime Day, Amazon’s collective portfolio of Echo, Echo Dot, Kindle, and Fire tablet devices, accounted for 26% of all eligible deals and 44% of page one deals, according to L2 data.

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Issue No. 222: 🗣Hi, SiriAlexaGoogle.

Say hello to the HomePod by AppleOf all of today’s WWDC advancements, this is the most interesting to me. Voice Commerce and audio advertising are both on the rise. As such, it should be interesting to see how Apple competes with Google’s “Home” (the superior ad business) and Amazon’s “Echo” (the superior commerce business). For a device like this, entertainment may not be enough to make it an essential home tool. Advantage, Amazon?

Graphic of the week


This about more than athletic shoes. In many ways, this race between the three largest American athletic brands will signify how all brands must evolve to compete in a rapidly changing market. If you missed out, read the latest by Yahoo’s Daniel Roberts with great quotes by 2PM reader and seasoned retail analyst, Matt Powell.


Issue No. 206: You best not miss

Generation Z, in size and power, is not to be underestimated. Buying power: $44B annually, $200B annually when their uncanny ability to influence parents is considered.
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Issue No. 190: Am I Typecast?

Last Word: On proprietary products and eCommerce


Issue 189’s most read article contained four indicators of eCommerce success, one of them is depicted above. Internet retailers are nearly 3x more valuable when they source and/or manufacture a product that cannot be found elsewhere.

A great example of this is the new initiative of Pittsburgh’s Cotton Bureau, who is relatively quiet startup with a thriving marketplace for well-designed tees. For example, they sold 3,100+ units of one design in January 2017. Their custom site converts exceptionally well, they’re currently sporting a 🔥7.7% conversion rate in 2017.

Led by Michelle Sharp, Cotton Bureau’s Blank will manufacture their own t-shirt blanks and will attempt to do so domestically. The timing couldn’t be better, as American Apparel will leave a void for companies desiring high quality t-shirts for their own branding or product lines.

From yesterday’s announcement:

Today, we’re lifting the lid on Blank, our project to design and produce better t-shirts from the ground up: our sizes, our fits, our fabrics, our colors. Over the last six months, we’ve been building relationships with people all over the garment industry: pattern makers, fabric suppliers, cut-and-sew operations, industry consultants, full-service apparel factories, fit models, and more. We’ve even produced a few samples. We’re going to need all the help we can get, which is why reached out to for funding last year (remember this cryptic line?) and hired a project lead to give it the attention it deserves (we’ll introduce her in a bit). Exciting, huh? It’s something we’ve been talking about forever, and the fact that it’s actually happening is a bit surreal. Let’s answer some questions.

Read more about Cotton Bureau’s “Blank” initiative here. If you’d like an introduction, email and I’d be happy to connect you to their team. Cotton Bureau is one of four partners. – @web

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.