A Tale of Two Recoveries: Popshelf, The K-Shaped Recovery, and Spending Power

Oct 16, 2020

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In this episode, we talk about marketplaces, subscription services, the K-Shaped economy recovery, and more.

In Future Commerce #041, Sucharita Mulpuru said that marketplaces are where businesses are going to thrive.
“Consumers want more in their online shopping experience and they want to be able to transact more often with the brands that they know and love in products that aren’t just the core.” - Phillip Jackson
Moving towards a marketplace strategy has a lot of moving factors—operations, partnerships, capabilities. “Implementing and managing a marketplace is not just about technology. It’s about strategy.” - Phillip Jackson
Marketplace is becoming more normalized for eCommerce brands, in the same way that AR and VR have taken time to normalize and implement.

Marketplace shipping times haven’t been trusted recently and there’s a movement back into stores due to poor customer service in the rise in eCommerce during the spring.
There’s an expectation of a 25-35% increase in eCommerce sales for the holidays, compared to 1-1.5% increase in retail. This is going to cause problems in supply/delivery chains for eCommerce and in social distancing and capacity limitations in retail.
Customer service will be the most important thing for eCommerce during the holidays. With shipping delays and product supply challenges, merchants will need to proactively communicate with their shoppers.

11% of Americans have subscribed to Walmart+, Walmart’s subscription service for free deliveries and other benefits.
Walmart+ is a direct competitor to Amazon Prime and Walmart has spent a lot of time strategically trying to “catch up to” Amazon. Different services have different appeals (for example: Walmart with fuel and groceries, Amazon with Prime Video) and Walmart is trying to see what sticks.

Twilio acquired Segment, a standalone CRM tool for eCommerce. Bundling and integrating the subscriber information from Twilio with a CRM like Segment is notable and could be powerful.
Tanay Jaipuria, via Twitter: “Surprised Segment didn’t go public - could’ve been worth $5-7B in this market.”
“[Segment is] doing 150-200 million in revenue… how much more powerful are [Twilio and Segment] together to have that much actual information on huge segments of the population?” - Phillip Jackson

Dollar General Launches Pop Shelf

Dollar General is launching a five dollar chain that’s in competition with Five Below.
Target market is millennials and individuals with up to $130,000 income. This has potential to tap into a “Woke” section - like organics and fair trade.
Due to inflation, the buying power of a single dollar has gone down 20% over the past 10 years. Due to this and competition with eCommerce and the digital transition of retail businesses, Pop Shelf is stepping into the next tier and growing there with the current market.