备忘录敌人，第二部分

 

In a new feature detailing the trajectory of Shopify, Bloomberg unpacked CEO Tobi Lütke’s distinct management style, the company’s history, and its pointed differences from Amazon. While Amazon’s obsession with its customer and “everything store” tag define it, Shopify is merchant-obsessed and now striving to be the “everywhere store”, underscored by its early-pandemic move to completely virtual work. After years spent building the backbones of small businesses’ online stores, Shopify went public in 2015 and has catapulted to greater heights since the pandemic’s onset as traditional retailers moved online.

Its trajectory is one that Amazon missed out on. A 2015 headline in Recode stated: “Amazon Will Shut Down Amazon Webstore, Its Competitor to Shopify and Bigcommerce.” The report by Jason Del Rey added:

The eCommerce software business focused on small and midsize businesses has become more competitive in recent years as young companies such as Shopify and Bigcommerce have raised gobs of venture capital to expand their tool sets and attract more customers.

Six years later, we’ve learned via Bloomberg that Amazon sold its merchant platform (Webstore) to Shopify for $1 million. In exchange for the more than 80,000 merchants who switched their business to Shopify, Amazon Pay was enabled on the Shopify platform. From Bloomberg:

Bezos and his colleagues believed that supporting small retailers and their online shops was never going to be a large, profitable business. They were wrong – small online retailers generated about $153 billion in sales in 2020, according to AMI Partners. “Shopify made us look like fools,” says [a] former Amazon executive.

Shopify’s success is not due to Amazon’s Webstore misstep, but it afforded the company an advantage in capitalizing on a piece of eCommerce that Amazon underestimated. Amazon didn’t take direct-to-consumer sales seriously enough to work that into its long-term business plan, and it went so far as to set up a competitor for success in that area of retail. It was focused elsewhere, including on its private-label brands. Amazon communicated to many that entrepreneurs aren’t its bread and butter, rather the end customer is.

By focusing on product retail, Amazon left the field open for Shopify to excel in the art of brand development, something that Amazon has notoriously minimized as it built its own retail empire with the Amazon brand at the forefront. With Shopify putting its merchant brands first, its scope expanded beyond small merchants by earning the trust of leading retailers as well. The validation from Amazon, granted when it turned over its Webstore merchants, also helped.

Now, Shopify is stretching its legs to emerge from behind the scenes, tapping creators and big names to appeal to young customers and brands on the rise. Last fall, it hired former Yeezy GM Jon Wexler to lead its creator and influencer program, a move that has already led to deals like BIGFACE Coffee, created by NBA star Jimmy Butler. In No. 759, we wrote on the Wexler era and Shopify’s foray into persona-led brands:

BIGFACE Coffee is the experiment’s first major output of Shopify’s creator program. It’s a project that combines demand, earned media, and a pulse with the technical prowess and support of Shopify Inc.  It uses what Shopify has been known for (physical products) and pairs it with built-in demand (creators) and tests newer forms of commerce and technology (Web3 products / new front end design concepts / etc). Yes, BIGFACE packages a selection of its products with NFTs.

With earned media and more flair, Shopify intends to work on its own brand next. The road ahead will not be easy, however. Shopify is still behind in the critical are of fulfillment management and third-party logistics. While it began investing in fulfillment in 2019, the “last mile” is largely left to merchants whereas Amazon has shouldered one of the heaviest burdens for its sellers.

In this way, Amazon has taken steps to regain its edge on Shopify. Over the summer, it inked a partnership with BigCommerce to provide fulfillment for its merchants, a move that gives a direct Shopify competitor an edge on the leading SaaS provider by extending the power of Amazon’s biggest advantage, full-stack fulfillment. The possibility of it creating a Shopify-killer isn’t ruled out. “Amazon is a worthy rival,” Lütke told Bloomberg. But if the numerous developments covered above are any indication, Shopify’s rival may become a fulfillment partner. In Amazon’s Moat, we explain:

Through years of investments, Amazon has created its own cargo shipping fleet and is leasing planes, along with the opening of an Air Hub in Cincinnati, to avoid out-of-stock problems that have begun plaguing other retailers at this stage in the holiday shopping season. Amazon has stretched its business in myriad ways, but its advantages are no longer just product and digital-driven. On October 5, a container ship ported in Houston, Texas with a ship filled entirely by Amazon.

Shopify’s product pipeline does not include a fleet of shipping vehicles or investments into a midwest air hub, or transnational shipping strategy that consolidates shipments for its vendors. Amazon has passed FedEx in shipping volume and is poised to capture UPS and USPS’s market share as well. Additionally, Amazon will spend $52 billion on warehousing and shipping. Amazon is now in command of nearly 175 million square feet of warehousing with the ability to process, pack, and deliver over 50% of the goods that it sells. [1]

Amazon is approaching a truly vertically integrated logistics network on par with the largest delivery companies in the world. [2]

虽然 Shopify 现在占据优势，但亚马逊的履约系统网络正迅速成为必不可少的。Shopify 的劲敌，最终可能会成为它最需要的合作伙伴。

Edited by Hilary Milnes with art by Alex Remy and Christina Williams 

Frenemies, Part I: Shopify vs. Meta

备忘录建立粉丝团

An insurance company, a service provider, a media brand, and an exclusive driving club: Hagerty wants to be all-in-one. The brand has taken the best of modern brand development and applied it to a car insurance business that is 37 years old. Of the nearly 11 million pre-classic vehicles in the United States, nearly 12% are insured by Hagerty.

For most, car insurance is not an emotional purchase. Insurance companies, despite their savvy marketing teams ten to lack brand affinity; this is by nature. Hagerty, a classic car insurer backed by Progress Insurance, wants to change that. Now publicly-traded as of last week, it’s bringing brand, media and culture to the forefront. When you think of classic car insurance, Hagerty wants you to think of their service but also the emotional attachment and status of association with the insurance provider. Can it pull it off? It certainly has the pedigree with the backing of Progressive Corporation. In 2015, The Progressive Group of Insurance Companies expanded the definition of a classic car and partnered with Hagerty to offer its service. 

In an earlier conversation with PYMNTS, CFO Fred Turcotte explained his vision.

The way that we view it is that the collectible vehicle segment is its own unique sort of industry. It has factors that maybe don’t weigh into the standard auto market. For instance, in the standard auto market, the people that buy insurance are trying to get from point A to point B. It’s about mobility. In our world, it’s much more than that. It’s about family. It’s about fun and freedom and passion, and status in some cases. People love these cars.

A key step is to build the business beyond insurance. As an insurer of classic cars, Hagerty taps into the lifestyle and personality around the pastime, with a YouTube channel, editorial team and magazine.

The monthly edition is sent to 1.2 million readers, according to the feature article by the New York Times, while an exclusive edition is sent out to top-tier collectors. Additionally, Hagerty maintains a non-profit foundation that promotes car collecting. It runs car storage and lounge spaces for customers called Garage + Social. It’s also stretching its tentacles through acquisition: Hagerty recently purchased a classic car rental platform called DriveShare. An age-old industry (insurance) that focuses on vintage assets (cars) may be one of the more well-executed linear commerce opportunities.

Hagerty’s journey to the public market through a SPAC proves that the DTC model can be useful in stalwart categories like insurance. Linear commerce is cultivating a brand beyond insurance for Hagerty by tying its client services to broader media operations, experiential marketing, and setting out to grow car culture. All of this because, Hagerty is tapping into an avid community of people who care about classic cars, and therefore need insurance. The underlying approach is to promote car culture and build, in McKeel Hagerty’s words, an ecosystem:

The purpose of the company is to save driving and car culture,” Mr. Hagerty said flatly, as we piloted a zippy, Hagerty-insured 1972 BMW 2002 tii toward the tip of Lower Manhattan. “If we’re going to save car culture, we have to make investments outside of the core business, and really help create a whole ecosystem.” Achieving this lofty goal required hundreds of millions of dollars in additional investment, he said: “That would have been tough for us to afford just as a private company.

Now public, Hagerty can become a bigger force in nascent niche, supplying protection and opportunity to classic car enthusiasts. There is risk of Hagertizing the classic car industry, that is remaking too much of the ecosystem in one company’s image. But one thing is for certain, Hagerty insurance has taken the best of modern brand development and community building. This is not all what separates Hagerty from other insurance providers. The NYT report on the company explained that “[McKeel] Hagerty said he sincerely wants to help people find the pleasure in “the experiential sides” of the automobile.” And that while older consumers are the majority of its current customer base, Hagerty is hoping to attract Generation Z and millennial consumers. From Forbes Wheels:

In some corners of the enthusiast sector, soaring prices in the used and classic-car market are creating some lamentation about unattainable cars. Is there room for Hagerty to not only make an impact on current owners but Millennials and Zoomers coming of age in the market? CEO McKeel Hagerty says the answer is a resounding yes.

Most insurance providers optimize for risk minimization (age, car make, mileage, and joylessness). Everything about the Hagerty company strategy seems to idealize maximization of life’s premium joys at the risk of, well, more risks and higher premiums.

Edited by Hilary Milnes with art by Christina Williams and Alex Remy 

备忘录Peloton 跳动的心脏

 

Peloton has mastered the playbook for responding in moments of brand crisis. That playbook’s name is Ryan Reynolds.

The fitness company finds new ways to capture news cycles. The company may have been the first to ever experience a massive sell off after a fictional portrayal involving its product’s placement. In the first week of December, CNBC reported that Peloton shares fell 11.35% on Thursday, which was the same day of the debut of the Sex and the City spinoff titled “And Just Like That … ” By the following Sunday, Ryan Reynolds commissioned this new advertisement for the company.

Peloton on Twitter: “And just like that…he’s alive. pic.twitter.com/bVX8uWypFZ / Twitter”

And just like that…he’s alive. pic.twitter.com/bVX8uWypFZ

At the end of the first episode of the Sex and The City reboot, Carrie Bradshaw’s love interest clips into his Peloton for his 1,000th ride and when he dismounts, he has a heart attach and dies. Peloton was unaware of the plot line when HBO applied to use the company’s trademarks, instructor, and other intellectual property. The ordeal begs the question: does a company that doesn’t love its portrayal have any legal recourse? Before Peloton could entertain filing suit against HBO for the show’s impact on its stock price, Ryan Reynolds stepped in once again.

Almost two years ago to the day, Reynolds came to Peloton’s rescue. An ad for Reynolds-owned Aviation Gin starred Monica Ruiz, the actress who became infamous as the “Peloton wife” in an ad spot that earned a negative market reaction and plenty of Twitter pile-ons. As the story goes, Reynolds heard about the Peloton ad at 2:34 PM on a Tuesday as the company’s stock was falling and turned around his own ad within hours. It earned $9.3 million in ad exposure in just two days. Reynolds’s quick reaction brought levity to what was an overall grim moment for Peloton.

Reynolds has struck gold again with his latest attempt to pump … life … into Peloton’s sinking stock. A 38-second ad spot narrated by Reynolds puts a new spin on Peloton’s recent association with the death of major Sex and the City character Mr. Big in the new HBO reboot And Just Like That. Peloton was collateral damage in the show’s push to modernize the classic series. In the reboot, Big has become a Peloton junkie, and his affinity for his favorite instructor mirrors the attachment that many other loyal riders have for the spin class’s stars. As the New York Times reported, Peloton appears to have been blindsided by the appearance in the show and could have taken potential legal recourse.

Instead, Reynolds, one of the most respected (and perhaps unexpected) marketers of late made lemonade out of lemons with his marketing company Maximum Effort’s new spot. It was a similarly quick turnaround to the one seen in 2019: the show’s first two episodes premiered on December 9; throughout the weekend Peloton lit up on Twitter as people responded to the plot twist. The ad was filmed on Saturday with no involvement from HBO, according to the Times, and it was released on Sunday.

Peloton on Twitter: “if we can put that spot together in 48 hours, you can do your workout today / Twitter”

if we can put that spot together in 48 hours, you can do your workout today

In the viral advertisement, a comedic voiceover by Reynolds reminds people that regular cycling is in fact good for you, as Chris Noth (who plays Mr. Big) appears alive and cozied up to the ad’s other star, Peloton instructor Jess King. The ad spot reclaimed the narrative in Peloton’s favor after its stock fell by as much as 11% in the aftermath of the show’s premiere. The timing of the bi-annual Reynolds boost couldn’t be better.

Peloton’s still struggling to maintain its position in an increasingly crowded market and has shown signs that it may be in for a tumultuous year of rebuilding the momentum found over the pandemic. The feature in And Just Like That is hardly its only problem from this year; it had to recall its treadmill, it has dealt with manufacturing shortages, decreased demand, and intensifying competition. In Peloton’s Diffusion, we explained:

There is mounting pressure from iFit (1 million subscribers), BeachBody (2.6 million subscribers), and a host of nascent fitness apps like Obe Fitness who are each eating into Peloton’s mobile app subscriber-base. There is market pressure from Lululemon and Mirror, Tonal’s continued growth, and the resilience of companies like NordicTrack and Life Fitness. And then there is Equinox and SoulCycle, who have the hardware to compete for Peloton’s prized in-home market and the physical real estate to attract affluent users out of their homes. And lastly, there is the end of the pandemic.

The events of the past week have gone to show that Peloton’s greatest assets are its star instructors. Put them at the forefront and the stock might respond in kind, they’re Peloton’s beating heart.

Edited by Hilary Milnes with art by Christina Williams