Volume 003: Doorbuster retail special

1. Black Friday: Fewer riots in Walmart this year.

Tl;dr: Discounting spreads out, prevents fights, goes global. 

This year felt more like Black November than Black Friday. Because of a late Thanksgiving, discounting started earlier and is lasting longer. When you add in double-digit increases in online shopping, the specific day itself is rapidly losing its impact. Bloomberg even renamed it Blasé Friday. (Blasé or not, anything that causes fewer riots in Walmart is a good thing, if you ask me.)

Meanwhile, Black Friday is entering the retail lexicon in other parts of the world, with Russia, the Czech Republic, Britain, France, Germany, and South Africa all partaking in this most American of shopping occasions—although not always willingly.

2. “Dear Mr. Bezos…”
Amazon preys on Allbirds.

Tl;dr: Anonymity is a terrible brand strategy. Try being different instead.

Last week, the founders of Allbirds called out Amazon for copying their products by asking them to copy their approach to sustainability instead. A novel response and a desperate one. Their real problem is that like other DTC brands, their embrace of anonymity and genericism provides zero protection from copycats. Without meaningfully distinctive and legally protectable brand assets, companies like Allbirds aren’t just making it harder for themselves to grow, they’re turning themselves into prey for predators like Amazon. 

This isn’t a new tactic for Mr. Bezos. With around 135 of its own created brands, Amazon regularly copies popular products from smaller third-party vendors and then pushes them to the top of their search results. 

As an aside, I’ve spoken to many startup entrepreneurs who claim brand differentiation is unnecessary because they’ll “out-execute” the competition. Well, you can’t out execute Amazon, so you’d better find different fast.

3. Rot or resurrection. What happens when a mall dies?

Tl;dr: The abandoned mall is the abandoned factory of the 21st century. Just uglier.

9,300 US stores are expected to close in 2019, and analysts predict 20-25% fewer malls by 2022. This is a vast shift due to our changing shopping habits, leaving abandoned malls to become our version of previous generations’ abandoned factories. 

Which got me thinking. What happens to a dead mall if we’ve seen the revival of industrial buildings into galleries, breweries, stores, homes, and offices? Rot or resurrection?

Sadly, most seem to be just rotting blights on the landscape, but there have been a few exceptions. Ironically, some have become warehouse space for online shopping, while others have become college campus extensions, doctors' offices, water treatment plants, and even a mega-church.

But you have to go further afield for the oddest. In Bangkok an abandoned mall flooded and is now home to thousands of fish.

4. Clothing rental goes all Lord & Taylor on us.

Tl;dr: A membership future for traditional retail is here.

While LVMH's purchase of Tiffany made headlines, by far the most interesting retail deal this year was Le Tote's purchase of Lord & Taylor. Clothing rental seems to have a bright future for a number of reasons, mostly because of millennials and Gen Z. They have less disposable income, so they must do more with less. They dislike the impact fast fashion is having on the environment. And they’re generally more open to paying for usage rather than ownership (think Spotify or Netflix). 

For Le Tote, combining its digital business with a physical environment where people can try on, rent, and return garments can potentially extend a different retail model. One that is more of a membership club than a store. 

Interestingly, one stated reason for the purchase is the Lord & Taylor brand. While it’s seen better times, it’s better known than Le Tote, and for just $75m it allows them to scale their offerings in a way and to an audience they couldn’t easily reach before. While it’s risky, this looks like a really smart move. Look for others like Rent the Runway to follow.