备忘录：Shopify POS Go 的挑战

Shopify’s mission has long been to is to arm the rebels. Now, it’s making necessary changes to its business model in order to stay relevant as the strategies of the “rebel alliance” evolve with the times. As we wrote at the precipice of the pandemic:

When you arm the rebels, do whatever you can to make sure that they win.

After specializing in developing software for websites and offering eCommerce tools for DTC brands, Shopify is now investing its time in helping retailers sell more in offline retail. Its new payments device, called Shopify POS Go, lets merchants handle in-store checkouts that connect to their online Shopify stores:

Made for modern retail: POS Go is Shopify’s most powerful, secure, and revolutionary mobile POS device that fits in your hand. Turn it on and instantly connect to critical features to grow your business.

POS and in-person payments have become one of Shopify’s fastest-growing divisions, Quartz reported. The growth reflects a post-pandemic return to in-store shopping as well as brand recognition that the direct-to-consumer strategy is an incomplete distribution strategy. As more brands push into in-store retail, having inventory awareness across all channels is a must. From Quartz:

For example, many shoppers enjoy being able to buy online and return in person, or vice versa, but disjointed software for these kinds of hybrid interactions can turn that into a headache for many merchants.

Shopify isn’t just recognizing that there’s a void to fill in physical retail, it’s right-sizing a previously “overly aggressive bet on the speed at which the economy would move online,” according to the Financial Post. Indeed, Shopify was the primary infrastructure of the venture-financed DTC era. It made it possible for both resource-rich and resource-poor brands to quickly and easily start and operate online stores. The more that this class of brands built their businesses online, the more Shopify expanded upon its own capabilities. These add-on tools included email marketing plugins and customer acquisition integrations. Over the years, it adapted to meet the needs of its rebels and it’s doing the same now as it expands to account for offline sales.

According to Shopify, this particular period in its fabled history is somewhat of a reckoning. While sales shifted online during the pandemic, they’ve now moved back offline and brands with only online DTC levers to pull for growth are at a great disadvantage. The move to the marketplace and the in-person retailer have been closely followed by 2PM:

随着电子商务的不断发展和界限的模糊，市场模式对于数字原生品牌来说将变得更加重要。最有能力的零售商将随时随地接触到顾客。

Shopify needs to follow the brands as well, in the best way that the company can, otherwise it risks irrelevance. The company spent the summer months shaken by the clear signs that online commerce’s heyday during the pandemic was not to last after restrictions were lifted. Shopify announced that it would be cutting 10% of its workforce in July, with CEO Tobi Lutke taking the blame for betting too big on eCommerce’s quick growth jump. 2PM reported at the time:

Marketplace strategies for brands is the answer to customer lifetime value. Just this week, Glossier signed to sell within Sephora. Just a few years prior, Glossier was adamant that it would remain a direct brand. More DTC retailers will move to develop wholesale relationships with top marketplaces.

有指标表明，在线市场在经济困难时期更有弹性。如果将电子商务零售股（亚马逊、京东、阿里巴巴、Ebay、Etsy 等）与软件股（Shopify、BigCommerce 等）进行横向比较，市场平台的表现要好于软件公司。而这正是 Shopify 的积极转机所在。

The momentum is moving in the direction of marketplaces, especially the largest of them (to include Walmart). Shopify is still the infrastructure for many brands’ who require online presences but something has to give. The question becomes, how does Shopify equip brands that are moving into the enterprise marketplace format? Shopify must move beyond app integrations to meet its vendors where they want to be. That is, in physical stores and / or stocked in the warehouses of these top marketplaces. How does Shopify apply its new focus as (an enabler of physical retail) to a stodgier part of the retail industry? I believe that Shopify’s next win will be a major equipment contract with a national retailer, a move that will communicate Shopify’s commitment to omnichannel retail and the many merchants that now require it to grow.The solution may be in the words from Shopify’s VP of Product, Arpan Podduturi:

[Shopify’s POS Go] is the type of experience that you would find at an Apple store or Nike store but given to the masses to small-medium businesses all over the world who can now bring that level of service to their stores.

A Shopify partnership with a retailer as notable as Nike would capture the imaginations of Wall Street, its many merchants, and the marketplace retailers who do want greater access to the brands that Shopify considers its core audience. SHopify has to make moves now though – the brands certainly are.

作者：Web Smith | 编辑：Hilary Milnes，美术：Alex Remy

 

Member Brief: Liquid Death Wins

The old adage goes: “First they ignore you, then they laugh at you, then they fight you, then you win.” It seems as though Liquid Death’s “laugh at you” stage lasted longer than what is typical. There is a reason that many analysts failed to see the power of Liquid Death. More on that in a moment.

本会员简报专为以下人士设计 执行委员为了方便加入，您可以点击下面的链接，获取数百份报告、我们的 DTC 权力清单和其他工具，帮助您做出高水平的决策。

在此加入

备忘录沃尔玛友好库存

As retailers face down a holiday season that will be impacted by a looming recession in the United States and ongoing global supply chain challenges, they’re doing everything that they can in order to get in front of potential inventory issues.

A lot rides on the holiday shopping season for retailers to meet their annual forecasts. And since the start of the pandemic, the holidays have become increasingly challenging to navigate. Big-box retailers like Target and Walmart are putting new measures in place in order to make sure they have what they need in stock from brand partners, and that their supply chains don’t break down when orders increase.

Last week, Walmart laid out its plans in a corporate communications blog post for navigating around supply chain problems this season, framed as an update for customers about how the retailer intended to fulfill demand with its “stable and strong” supply chain. That a company is sending out supply chain-centered messaging to customers is in itself a sign of the times – previously, people could just assume all was working as it should behind the scenes. That’s not the case anymore. Walmart listed all of the steps it’s taken to ensure its supply chain is ready for the holidays. These include:

  • Closely working with carriers and optimizing the supply chain for in-stock items.
  • Store fulfillment from Walmart’s 4,700 locations, which it notes are located within 10 miles of 90% of the population. It also promotes its express delivery, next-day and two-day shipping and store pickup options.
  • Delivery through its Spark Driver platform, a local delivery service that can reach 84% of households.
  • An extended return policy including curbside returns.
  • In-home Delivery and return pick-up from home for Walmart+ members.
  • Expanded DroneUp delivery network, which delivers packages via zone, currently available in 34 locations, plus its autonomous and electric vehicles.
  • Four new fulfillment centers that will be build over the next three years. These next-gen centers put automation at the forefront. Automated technology will also be rolling out across distribution centers.
  • And finally, hiring an additional 40,000 seasonal employees including supply chain associates and an additional 1,500 drivers.

These are the measures being taken to get in front of supply chain issues. Walmart’s investment in employees, technology, delivery and pickup options and more are this season’s customer sell: buy with us, and you won’t have to worry about out of stock notifications or delayed orders. That’s an advantage that only a few retailers have – in addition to Walmart, Target and Amazon are competing by throwing resources behind the looming supply chain problem and recession. Customers are more likely to buy with competitively priced companies. The pressure is on.

The pressure is also on brands who sell in these stores to not miss their own delivery windows. As 2PM has written about before, Walmart and Amazon are now attractive retail partners for all the reasons listed above in Walmart’s pre-holiday measures. They have the deep pockets to brace for impact.

Brands that are unable to meet their delivery windows will be hit with fines from retailers like Walmart and Target as they do whatever they can to keep products in stock. It’s an end to the leniency normalized earlier in the pandemic; now, if brands can’t make their orders, the retailers are hitting back. It marks a power dynamic shift. For years, brands have foregone retailers, and have become more selective about where they choose to sell, and have looked for more amenable terms in their contracts with retailers. Now, retailers have the upper hand again as external forces like inflation, the recession and supply chain tangles have made brands once again reliant on stores for max volume.

As Bloomberg reported today, Walmart and Target are cracking down on brands:

Walmart is telling suppliers that their shelf space will be reviewed more frequently than in the past, a person familiar said, and that vendors with persistent out of stocks could see their products quickly replaced. The retailer also is looking to capitalize on trends, including those sparked by social media, by quickly swapping items in and out.

Anything less than exact compliance can result in penalties from fines to losing shelf space when contract negotiations come up – a particular challenge for small brands that often have limited resources to scrutinize shipments.

The brands have become more replaceable while the retailers have become more selective. Walmart, with its vast store network and supply chain capabilities, could become the dominant marketplace this holiday season and beyond. Brands are recognizing that they need the mass retailer to survive. In a September report, we wrote:

Utility, not trendy exclusivity, has helped Walmart become a magnet for direct-to-consumer brands that previously resisted its gravitational pull. It seems that the company needn’t imitate Amazon or Target at all to get to this point. There are a few reasons: Walmart is recession-proof and it drives profitable sales (at volume) to the most important consumer audience – the American middle-class. It has the size and reach, even if it doesn’t quite have the sexiness of other retailers. With brands focused more on the bottom line, Walmart is an attractive partner to turn on the proverbial sales spigot to gain new customers.

As we head into the end of the year, the power shift will continue. It’s no longer up to the brands to decide Walmart is now worthy of their presence – they will have to prove their worth to Walmart as well. It has the control of its supply chain to tightly manage everything that’s coming in and being sold off of its shelves. This holiday season could set a new standard for the retailer-brand relationship, one that tips the scales back to mass retail’s favor. And Walmart is positioned to win over the rest.

作者：Web Smith | 编辑：Hilary Milnes，美术：Alex Remy 和 Christina Williams