Issue No. 259: Walmart’s Next Acquisition


Over the weekend, 2PM released the first executive member brief. It covered quite a bit of ground in an in-depth report on Walmart v Amazon eCommerce called Walmart Ventures.

Here is a small excerpt:

The competition between Walmart and Amazon has never been stiffer. Consumerism has always been about the heart, until Amazon made it about efficiency and logic. But for items as intimate as what you wear and what you sleep on, is logic enough?

Walmart is betting on the heart again by focusing on brand affinity, representation, and reinvigorating consumer faith. By using eCommerce as the tip of the spear, their brick and mortar presence will innovate along with it.

It’s no secret that I tend to believe in Marc Lore’s vision for a modern Walmart. In my recent report, I focused on Walmart’s brand-equity growth by means of DNVB acquisition (Modcloth, Moosejaw, Bonobos, etc). And 2PM Executive Member Taylor Holiday called me on it:

Solid stuff as always Web. The question I have that this post ignores a little is related to logistics power. You touch briefly on the convenience element that Amazon focuses on and I wonder how Walmart will seek to combat this? The thing I believe would be super super interesting would be Walmart could combine the DNVB style slick brand launch with convenience of a logistics super power. Imagine Allswell style brand with Same Day Delivery. Now that would be interesting.

Taylor Holiday, Managing Partner of Common Thread

In my report, I made two tables available: (1) Walmart’s existing acquisitions and (2) Walmart’s target acquisitions. To Taylor’s point, in discussing Walmart’s appetite for acquiring sexy DNVB’s (or building them from scratch), it’s easy to overlook that they’ve also acquired Parcel (2017). Walmart is working on building that logistics super power. And if they can’t finish the job, another $1B+ acquisition is on the way.

Walmart on Parcel’s acquisition: 

New York City is the top market for both Jet and, and because of the density of the area – along with the proximity of our fulfillment centers – it’s the perfect place for high-impact innovation. Born and bred in New York City, Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market. This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs. We plan to leverage Parcel for last-mile delivery to customers in New York City – including same-day delivery – for both general merchandise as well as fresh and frozen groceries from Walmart and Jet.

As further proof that logistics is on the minds of Walmart executives, look no further than last night’s Oscar’s campaign.

The star of each 60-second spot is the same as for Walmart’s current ad campaign – the retailer’s signature blue shipping box – a nod to corporate priorities in the battle to catch Amazon in e-commerce. 

Jack Neff, AdAge

And if I had to project Walmart’s war room strategy, a Postmates acquisition comes to mind. Nationally, it’s one of the most trusted of the last mile platforms and it’s proven that it can operate in many of America’s largest markets. Couple this with the company’s recent emphasis on grocery delivery and you’re looking at quite a bit of shared virtue. Walmart’s grocery business is of its highest priorities.

Assuming that Parcel’s acquisition was a test, the Postmates acquisition could be the beneficiary of Walmart’s single-market experiment. After DoorDash’s recent $535M raise, this is an acquisition that makes sense for the gritty and resourceful Basti Lehmann and company. And it’s a purchase that is in Walmart’s price range. Paging Marc Lore.

Read more of the issue here


Member Brief No. 2: Walmart Ventures

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Amazon v. Walmart. It’s no secret that the two behemoths are investing heavily in eCommerce growth, what may be a secret is the basis for how they are approaching it. For the sake of this member brief, 2PM will focus on eCommerce brand and platform development, specifically the differences between the two competitors.

Read the brief by signing in. Not a 2PM Executive Member yet? Learn more here.

Issue No. 252: 10 to Observe in Content and Commerce


She who controls supply and demand will rule the internet. Publishers are recognizing that they must become whole ecosystems to thrive and commerce is a key component (again).

The ‘content and commerce’ movement was supposedly dead when Ben Lerer (Thrillist) and Jason Ross (JackThreads) chose to part ways. With this failure (hint: it really wasn’t a failure), it emboldened many in publishing to proclaim that commerce didn’t work.

Across newsrooms, from coast to coast, many publishing executives ignored investing in eCommerce between 2014-2017. Affiliate marketing teams were prioritized over ad sales teams and as a result, well-written articles went from literary showcases to collages of products to purchase.  As ad sales continue to dwindle and affiliate sales remain on shaky ground, many of the healthiest digital publishers had a paradigm shift of sorts:

  • How do we gain independence from platforms like Facebook?
  • How do we hedge against falling ad sales and a weakening affiliate market?
  • How do we foster community within our readership?

For many non-subscription and subscription digitals alike, merchandising has been used to address each of these questions. By building community, publications become a destination. Digiday covered this phenomenon, “The story behind that New Yorker tote bag.”

The must-have signifier of urbane sophistication in 2017 wasn’t Yeezys or torn jeans. It was a tote bag that The New Yorker gives to new subscribers.

The bag itself isn’t new — it’s been a gift the glossy has given out since 2014 — but thanks to Donald Trump and an iconic design, the bag became a hit. The magazine’s marketing department has distributed over 500,000 of them to new subscribers and existing ones, who soon started asking for bags of their own.

Continue reading “Issue No. 252: 10 to Observe in Content and Commerce”

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. 248: The nine boxes

On: “The End is Already Here” by @LukeOneil47

For quite sometime, I was fascinated by the storm that is digital media. If Jonah Peretti is scared, so is just about everyone else. Buying, selling, shifting, moving, falling, rising – the tectonic plates beneath the foundation of digital media are moving ever faster. Only visionaries capable of playing three dimensional chest will remain on the sturdy ground. Count Jessica Lessin as one of them.

After a three-year stint in and around the digital media space, I have seen enough to know that executives must be forward-thinking to survive this whirlwind. I know some who are, I know many who are not. So O’Neil’s words strike me because many will read them today after reading Peretti’s words on Buzzfeed’s future. Here’s a striking para from O’Neil’s essay:

Dailies who aren’t already well ahead of the game in terms of reverting back to subscription models, or of significant enough national prominence, or don’t find their own relatively benevolent billionaire owner, will continue to either be neutered or flattened out by conglomerates into content distributors. The ones that don’t will buy some time, but will ultimately become vanity projects read only by people wealthy enough to remain interested in the superficial comings and goings of other wealthy people.

To Luke’s point,the remedies that I envisioned were tactical departure for most in the media space (and very difficult to execute). These were the five points on my whiteboard:

  1. Build a premium subscription product for our most loyal. Do not ignore this advice, bosses. Recurring revenue is something that we can build upon.
  2. Let’s treat news like a commodity but let’s treat our platform as a brand. This means avoid discounts or promotions. It also means that we must think like a CMO.
  3. Direct-to-consumer commerce and native advertising partnerships should be influenced by affiliate data. Affiliate revenue is a treasure trove of data.
  4. Let’s measure success, not in DAU or MAU but in affiliate / D2C commerce conversion. What are eyes without the ability to influence the mind (i.e. cart conversions)?
  5. Let’s build a community, not a readership. Communities persist, readerships do not.
Read Neiman Lab’s 2018 predictions in journalism, including Luke O’Neil’s “The End is Already Here.
This is just my opinion. – @Web Smith


See more of the issue here.

Issue No. 239: The United States of Amazon

A Last Word: The United States of Amazon


Acquisitions continue to accelerate across the retail landscape. It’s clear that whether the acquisition is made by Amazon or by a competitor, the business decision is driven by a new competitive landscape that is heavily-influenced by the Seattle behemoth.

Amazon isn’t just thriving along a new frontier, it has become the frontier and with so many “theaters of war” that it would take a 17 page white paper to explain each strategy. The closest comparison has far exceeded the Microsoft example. It’s now closer to Standard Oilwhose monopoly was broken up over 100 years ago. In a digital era that is still relatively unregulated, it will be harder for the federal government to stymie Bezos progress. And most consumers would protest, as Amazon has elevated lower costs and ease of purchase as retail necessities.

In issue no. 239, consider how each of the areas highlighted have been or will be affected by Amazon, Inc. The company is a power player in: warehousing, aviation, publishing, eCommerce, film, shoes, grocery, cloud storage, logistics, fashion, manufacturing, and now advertising.

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.