I hold a pessimistic viewpoint because it's a lot more insightful to look at losses than it is gains.
With so much brick-and-mortar retail shut-down, retail has to happen somewhere, so it's going to happen online. Increases in product sales online could result in net declines for the product group when you factor in the loss of B&M sales.
I think the logical result here is pretty well-represented in how some public companies in this space's stocks prices are playing out. Distribution companies are likely to prosper because their competition has decreased substantially:
* Amazon is at an all-time high
* Overstock has recovered their dip
* Wayfair is recovering their dip
* Chewy is at an all-time high
None of this means the manufacturers who these distributors are selling are doing well, though.
On the flip side, the product categories that are down substantially online are likely facing devastating loses. They already aren't selling in retail so if ecomm is it and they're down there, it's really bad.
Outside of distributors, I think the D2C ecomm space is a huge mixed bag but likely net negative for a few reasons:
1. A lot of DTC companies play in the product categories that are seeing lower online sales
2. Most DTC companies are positioned as being accessible, but still premium. There are cheaper alternatives people may be more inclined to go with, given the economic uncertainty.
Given that, layoffs at Away, Everlane, Third Love, Stitch Fix, Casper, etc. make sense, even if online sales as a whole are up. Some of them may even need to start paying attention to unit economics now! I'd guess a lot are scaling back advertising and trying to focus on lower-cost acquisition channels to keep a tighter grip on cash flow.
Amazon not only recovered their dip, but renewed their 52 week max several times already. And they don't even make much from online retail. To make matters more interesting, AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.
> To make matters more interesting, AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.
Because a lot of the online services that are seeing higher use (whether it's telework support, e-commerce, or otherwise) are, in whole or in part, hosted on AWS.
Amazon makes almost 50% of their annual revenue from online retail. Many billions of dollars. It's by far their biggest product category.
Yes, through accounting magic, they're making the majority of their profits via AWS, but that's part of Bezos's long-term strategy and could be changed on a dime (at the potential expense of the long-term growth he's targeting).
Top line, most of their business is from online retail, not AWS.
(edited because my original was a bit of a flame, and didn't clarify profit vs revenue distinction)
Amazon makes substantially more from AWS than its retail segment. Retail revenue is higher but revenue does not equal profit. For instance last quarter AWS revenue was 13% compares to retail but it contributed 52% of operating income.
Tomorrow they could decide to use the AWS profits for growth, and reduce the growth spending on Amazon by the same amount, and suddenly the sense of your sentence is reversed.
If AWS wasn't profitable, AMZN would not be able to grow, and its share price would immediately fly off a cliff. But you know this already. You just want to argue.
> If AWS wasn't profitable, AMZN would not be able to grow
Amazon wasn't even profitable until 10 years after its founding. So that's demonstrably incorrect.
BTW, the thesis that "if a business isn't profitable, it wouldn't be able to grow" flies in the face of hundreds of successful venture capital businesses funded by the yCombinator (founder of Hacker News) and many other venture capitals funds. Profitability is one variable in a very complex mix.
I personally like the idea of bootstrapping, which does require profitability, but that's not the only way to successfully grow a business. You can also grow a business using debt, or by using equity.
> AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.
With so many people inside everyone is using online services: streaming, shopping, chatting, video, audio, gaming.
Almost anything "online" is very likely to run at least something on AWS these days.
I am presently scaling a client on Shopify who started at a 30k a month ad budget. Today we scaled past $8,000 per day (So a little under 250k a month). I fully expect and we'll hit $500,000 a month in ad spend for them monthly probably in the next 2 weeks. The combination of increased screen time and major companies pulling ad dollars has cratered media prices, and in the process, created a once in a decade opportunity for DTC brands that have cash on hand and are ready to scale up production. This announcement from Shopify themselves surprises me not at all.
I'm seeing the opposite. I'm seeing clients who are able to turn off a $30k/mo ad budget and instead seeing sales double based on such an increase in organic traffic from strong SEO.
Just started 3/22. They aren't exactly flying off the shelves. We're getting good traffic but conversion rate is very low.
Would you expect a business like mine to be doing well in this climate? Since we're a new business it's hard to tell if it's our product or the market that is our problem.
As someone who's not a skier, the descriptions are a bit confusing. I read through most of the page thinking this was a service where I could pick any place and you would make a map of it (which would be really cool actually, although I have no idea what would be involved in doing that), and then when I got to the bottom, there were suddenly options for a bunch of places I've never really heard of.
If you're marketing only to skiers, I would make that more clear from the beginning (like, put a picture of someone skiing at the top). Alternatively, I would actually consider buying one of these even though I've never been to these places just because they look cool, but in that case I'd want more information about why you chose these places and what makes them interesting in particular.
(and the maps do look really nice! Actually, this is making me wonder if you could integrate with Strava or something and overlay the details of your trip on top of the map, but I'm not really the target market for that, so I don't know if that would work well or not).
This is purely anecdotal but I'm buying as little as I can to not overwork mail carriers. I just moved into a new place and I have no art and while it's not critical to me it's something I'd typically start buying right now but I've literally only bought necessities (plunger, detergent, soap) and haven't even looked at actual house stuff.
Not sure how common my quarantine shopping style is but I doubt I'm a rarity.
The art is super cool. Hopefully it gets more attention once this is all over.
I think, as others have alluded, this particular market might be tough with mountains being closed down. I have an aerial photograph of Burke above my workstation and a few other maps on my walls -- I always purchased them shortly after forming a connection to a place. That's just my anecdotal experience of course!
For marketing, are you also placing them on location? If so, I can likely help with placement in Burke Mountain Hotel. Edit: my email is in profile
There is something about the aesthetic of the maps that doesn’t appeal to me, at least as they appear in the photographs. They almost look like they should be tilt-shifted models a la Game of Thrones intro, but they are flat, so maybe some dissonance there?
I also don’t get what options I should be buying, and feel like I may not be the target market because I don’t appreciate the copy about the materials used (which I wouldn’t think would necessarily be the same people who like mountain cartography or are climbers.)
Obviously, take a tire-kicker’s feedback with a massive grain of salt. And I can tell that a ton of effort and love has gone into these, which is appealing.
Those look great, but it seems like that might be a tough market for a while. I think most skiers (at least the ones I know) are still really bummed about the shortened season and probably aren't looking to shell out some cash for something that just reminds them of that fact.
Yea, I was suspicious of how these would do so late in the ski season and that was before a global pandemic happened.
The plan was never to just sell ski maps, so we're thinking expanding the product line is the next move. Hopefully this line does well once colder weather returns.
Those are rather nice. Have you thought about pivoting to mountaineers? I don't ski but I pore over peak maps and wouldn't mind a couple of 14ers on my walls.
If you're doing furniture, you should be in good shape. What I'm hearing from friends & family is that since folks are spending lots more time at home these days, plans for replacing old and tatty furniture are being made.
I am not being judgemental, rather trying to understand how you get fish of that size with your far-from-well-designed website (from your profile), and far-from-rich marketing contents. Is that luck? Or, your lack of time to work on your own presentation?
Again, I am seriously not being judgmental, I am curious.
You aren't wrong it's been on my list forever to work on my site. FWIW some of the best media buyers I know though literally don't have websites.
I've been doing Facebook ads for 9 years. My team and I are a white label agency so we do the media buying for creative shops, designers, content marketers, etc. So I didn't land any client. I partnered with the folks that did. I got the partnership by putting out a ton of content on Youtube (Over 20 hours worth), through doing a 30 episode deep podcast on running an advertising agency, and being super helpful in a number of Facebook groups, Linkedin groups, etc. for years.
Putting out relevant content and networking is where it's at, too. Even if your website actually was bad, you'd probably be fine.
I used to get a lot of work for web design without a website. I had a resume with good references and urls leading to good work samples. That's the stuff that counts. There was no shortage of jokes about not having a website though, and everyone thought they were the first person to tell me 'the cobbler's children go barefoot', haha.
Then the website must be breaking on my side, even though I cannot see any error (neither in Safari, nor in Chrome), only a couple of warnings. This is good for GP to fix the issue, I guess.
Same here. We have provide a warehouse management system specifically for e-commerce warehouses, as SaaS. We are (one of) the biggest player in the Netherlands, and since "social distancing" started here 4 weeks ago we see Black Friday 2019 levels of orders every day, for 4 weeks straight now.
We have some customers that saw there orders come to a stop, even a few bankruptcies already. But almost all see a 30-40% bigger order flow. Some customers that sell DIY hair products see a doubling or tripling in orders per day and revenue.
When I talk to the biggest e-commerce players in the Netherlands and the top 3 parcel shippers, they all see (near) black friday levels of orders/shipments.
Same in France, most makeup brands are x2-x3, fashion is x1.5 to x6
In France there is no increase of unemployment, instead they are at home getting paid, I guess they have a lot of money to spend as they can't party or go the restaurant
This sounds like the lipstick effect [0] - consumers buy inexpensive luxuries when they're feeling cash-strapped. Tends to be a leading indicator of recessions (though I don't suggest that's the exact phenomenon that's happening here)
It's hoarding though. Nobody is going to be wearing that makeup right now until they can start going out. Sales are going to crater once everyone has their 4 years supply.
And that too will be devastating to companies
France's unemployment numbers don't include the many contract workers that are not full time employees under French law. A lot of them are out of work right now and receiving nothing from the French government.
Because French law makes it so hard to fire a full-time employee, many businesses only hire workers on a part-time basis.
In contrast, most US unemployment numbers generally include all individuals seeking work, regardless of the type of employment they previously had.
False, unemployment numbers include part-time and fixed-term contracts, and they've only gone up 42k compared to last year[1]. Part-time and fixed-term contracts are covered under the French partial furlough reimbursement plan.
The French numbers are more than 42,000. Under the partial furlough program, they've simply re-labeled unemployed workers to be "partially furloughed" workers rather than unemployed.
Using that definition, the US COVID-related unemployment numbers aren't nearly as bad, since millions have been "furloughed" rather than "permanently laid off."
People always say unemployment is undercounted, especially in the US, but I believe the rates are based on surveying people and anyone is counted if they say they want to work (more).
I'm very skeptical that furloughed people would not be counted, because I just don't think the process works that way.
Of course, maybe things have changed. The depressing thing about cynicism is it means you end up having no resistance to it becoming a reality.
I've been talking to as many companies as I can during all of this. The surge is not evenly distributed but a lot of companies are seeing surprising upticks in online traffic and sales.
The big question though is how long will this last? I think the general population has not yet appreciated the possible severity of the ensuing economic downturn.
A lot of trade publications are already starting to sound the alarms on how ugly this could get. A return to 2008 era aggressive discounting is likely going to happen. Retail partners may be crippled by the quarantine. A lot of brands are going to be assailed from many directions simultaneously, it's going to hurt.
> I think the general population has not yet appreciated the possible severity of the ensuing economic downturn.
My fear as well. The swiftness and ferocity of this downturn is like nothing ever, AFAIK. 22 million out of work in 4 weeks. Many are unlikely to get their jobs back. So while certain companies are seeing upticks due to logistics of the lockdown, I don't think it's safe to assume it would continue long after SIP ends.
Their original job? Sounds plausible. Any job? Surely that would be a political choice for their respective governments? Unless there’s a reason we can’t repeat the famous infrastructure jobs programs from a century ago - I’m no economist, so I genuinely don’t know, but Hoover Dam Mark 2 sounds good to me.
Is this like the Hoover dam but with 100x longer environmental reviews and 10x more expensive due to special interest grifts that then cripple the investment before it fails 10yrs later? And the only people who made money were a bunch of private consultants hired by the government to do the reviews and executive staff the pseudo-market company behind it?
I haven't heard of a single major infrastructure project that hasn't followed that trajectory. Reading about Obama's two solar projects are a good starting point. But nothing beats Keystone XL.
It's no wonder it hasn't happened and it's not for lack of trying or tax dollars being spent. Even here in Canada it's the same story every time and we have a far more receptive political base for spending the tax money. So I'll never be convinced that's the real hurdle.
That was my point. It won’t end up in workers hands unless they actually start work on the project. Otherwise it will go to a small group of consultants, gov connected executives, and most importantly endless amounts of lawyers and activism groups.
Did anyone in Europe do a jobs program at that point? My GCSE history only covered the economic impact of forcing Germany to pay reparations for WW1, and treated The New Deal as unconnected.
> Unless there’s a reason we can’t repeat the famous infrastructure jobs programs from a century ago
Right now we can't for a very similar reason that we couldn't prior to 1933.
But there's an election this year, so that can change.
> Hoover Dam Mark 2 sounds good to me.
Hoover Dam actually wasn't an infrastructure jobs program to counteract the downturn, it was planned and approved before the 1929 crash and subsequent Depression.
i saw a lot of brewers move to the shopify platform but the revenues are just not the same as when attached with the restaurants and taprooms. Many are expected to fail which means they will drop off shopify. I think overall, shopify will still be up since this is a wonderful acceleration of a change that was already in progress. But yes, this curve will flatten too as small retail starts failing and wallets dry up.
Shopify is majority GCP, minority AWS for its cloud infrastructure [0]. Curious how they are splitting workloads between these two clouds during this extended usage spike.
Just want to add a datapoint: I run a skincare brand (www.mendskin.co) for men. No discernible difference in traffic, but a significant drop in conversions. I've stopped all Ads because the click through rate actually increased, but the conversions plummeted.
I've been hearing over the past 2 weeks that online traffic and revenue has been soaring for others, but I'm skeptical. I think it's just traditional brick & mortar shops that never had the time nor the impetus to set up an online presence now doing so. Just my 2c.
Most of the items I have ordered from non-Aamazon small businesses during COVID-19 crisis is backed by Shopify platform. Their checkout form has a very unique layout so it is easy to tell without looking at the page source.
My hunch is that Shopify is seeing surges in some areas because Amazon has been picked over for many items and can no longer adequately stock what consumers are looking for in some cases.
Many small Shopify retailers have pivoted quickly and are stocking some items that Amazon is having trouble keeping in stock.
We run an omni-channel API connector service for our wholesale distributors to connect Shopify/marketplaces to our own back-end on-premise ERP, and the distributors that have utilized this service are seeing record breaking numbers that are in-line with what Shopify is saying.
The downside? We launched this service less than a year ago and could’ve showcased some staggering numbers if we launched earlier. We’re trying to show the limited data we have to our customers to convince them to pivot to e-commerce while their wholesale channels are suffering.
This is a fundamental repricing, going forwards ecommerce will become the norm as the slow adopters move onto it quicker. SHOP could be worth way more under a post pandemic economy. This isnt the same economy as three months ago, certain companies are worth more and certain ones are worth less. The money to be made in options is in understanding these repricings and exploiting them, a stock at ATH right now is a stock that may actually grow more in the future, its post pandemic outlook is only in the process of being priced in......
question as I've been looking at Shopify direct ship: Is it viable anymore? I mean sourcing from hundreds of suppliers listed on their Oberlo service all the while competing with thousands of others who are trying to sell the exact same products as well as the suppliers themselves selling it at much lower price (same price as their wholesale price) on Alibaba, etc.
Shopify material makes it sound like you can easily sell it for 4x the cost if you spend enough on marketing, etc. Has anyone here have experience setting up dropshipping on shopify recently and making a decent profit?
It'll be interesting to see if this results in much extra revenue for Shopify. They have extended their free trial from 14 to 90 days, and if a lot of the traffic is via new merchants, I assume some percentage of them may close the store once their brick and mortar opens back up. (That may be sooner than a full resolution of the pandemic - Texas for example announced retailers can all open back up in a week for pick-up orders)
In the past 3 weeks, we have helped over 150 brick and mortar retail stores (our customer base) open Shopify stores. They are not only opening stores, but doing meaningful revenue.
Shopify has not be helpful as an organization, and their processes and red tape have been a challenge. But, it's apparently working for them.
We run an e-commerce platform and have seen our traffic/signup numbers jump from initial launch fairly dramatically in recent months, which we can only attribute to the current climate at the moment as we're not yet doing a hard marketing push.
I work around stuff related to the online shopping supply chain. We are absolutely seeing black Friday numbers. Really wondering if this forces people out of old habits and into new ones. Retail might never be the same.
I'm quite surprised at the lack of comments about the fact that a little over a week ago, Shopify withdrew guidance and now an insider made comments during their quiet period before earnings that materially affected stock price. Elon Musk has been called out by SEC a few times for this type of activity
To add yet another data point as the many other commenters have already done: I work at UPS in a distribution hub. Today, Friday April 17th, we're doing parcel volume of around 215,000. On a typical Friday this time of year we do around about 120,000 parcels. My hub is hiring more workers, extending shifts, and asking more workers to work double-shifts. Volume has increased so much at some hubs that the volume is being re-routed through other hubs to help deal with it. Why else would Amazon be hiring 175,000 people in a month? We're experience peak season volume in April.
It's two facets. On the one hand, people are definitely buying more essential products. They are also definitely visiting more ecommerce sites. They're bored, online shopping is a thing to do.
Most people aren't at the point where they feel they need to drastically cut their spending. Most developed countries have some sort of payment going out to at least the unemployed. Also, even the newly unemployed have only been in that position for a few weeks.
The people who are still employed, whether that's remote or whatever, have a surplus of money they normally would spend on things like travel, events, and dining out. They are absolutely not worried about spending money on discretionaries.
The reality is, people still have a ton of money to spend. And less places to spend it. This recession is just barely getting started.
Same here. We're seeing very out-of-season numbers. In fact we saw another massive uptick this week that was suspiciously timed with the stimulus direct deposits going out (Tuesday/Wed morn).
Everything! Art prints, books, photo books, workout gear, gardening equipment, seeds, kitchen equipment. Purchasing tangible items seems to bring more joy than it did two months ago.
If anyone is looking for a good way to support an arts non-profit with their stimulus check, checkout Aperture, they are having a huge sale on books. I'm not affiliated; I just like photo books.
>Purchasing tangible items seems to bring more joy than it did two months ago.
I wonder if this will remain true after Covid lock-in ends. It felt like the pendulum had swung awfully far towards people valuing experiences over items.
Everything? Amazon is crushing it and clearing out the space for essentials. Costco Online is selling out of food and sundries as soon as they refresh the web page.
Anecdotally, I'm getting UPS packages delivered at any time between 8am - 10pm. The night driver has to use a headlamp to read building numbers.
A local bakery spun up an online sales site for pickup or delivery. They sell cakes but also groceries. I bought flour and raspberries from them. When I went for pickup, they had dozens of bags prepared in the window. Clearly doing good business, all online.
I feel like it's unfair that you're getting downvoted. This seems like a genuine question. Clearly people are buying groceries and toilet paper but with so many people out of work, it may be surprising to hear that people are buying non-essentials.
All those side projects you never had time for. I setup my turntables and ordered a new DJ equipment. Workout gear demand has gone through the roof. Anything related to cooking, such as baking ingredients are sold out.
Thanks for the responses. Personally all my hobbies (that cost money, anyway) are outside the house, so my discretionary spending has gone basically to zero. Good to know that some people are still spending on non-essentials though!
I wonder if gyms will ever come back from this. Gold's announced yesterday they are permanently closing 30+ locations. Even when people go back out, gyms were never the cleanest places to start with. Some places will require masks for the near future, so how does that work at a gym? Now that I'm been forced to finish my home gym, I'll likely cancel my membership once things open again.
Personally, I really miss going to the gym. I like the routine of going somewhere else, and having lots of other people around. My gym has lots of equipment and classes I want to try, and also has saunas and pools that I really miss. I am working out in my living room or basement now, and it's really not the same.
I’m worried about the YMCA. They do an admirable job of serving the community and poorer populations, but they apparently do so (at least here) by discounting on income.
If they lose any significant portion of the people who could afford to buy home equipment, can they still serve those who can’t?
Yeah, I'm fine with my small contribution to the cause; it's been very important to me over the last few years, so I'm not in any hurry to terminate my membership.
Whether I'll use it again once it's open, though, is a much trickier question.
I prefer to workout with other people around vs being at home all day. Crossfit gyms have a community feeling but I don't want to do those type of workouts. :P
I went to my local big box store maybe three weeks ago and the whole fitness section had been cleaned out. It seems like bikes are getting very popular (at least here in PNW) and I wouldn't be surprised if it's very hard to find a decent bike in 2 or 3 months. As we cycle through the seasons different items / categories are going to get unexpectedly popular. Nobody really knows how to keep themselves sane during August in a pandemic, but there's probably a product or product category that will help with that.
I expected the same. Colleague of mine runs a local SaaS to give restaurants an online presence, including online ordering. This week orders went up 60%...because people got their $1200.
Americans don't know how to budget and will buy stuff just because they feel like it.
Edit: I did buy a pricey swing set for my 2 toddlers. But I wanted to buy one last year was denied. This lockdown convinced my wife otherwise.
>India announced a Rs 1.7 lakh crore economic relief package >ensuring cash transfers of Rs 500 a month, and food >security. However, the package is less than one percent of >the country’s GDP.
With so much brick-and-mortar retail shut-down, retail has to happen somewhere, so it's going to happen online. Increases in product sales online could result in net declines for the product group when you factor in the loss of B&M sales.
I think the logical result here is pretty well-represented in how some public companies in this space's stocks prices are playing out. Distribution companies are likely to prosper because their competition has decreased substantially:
* Amazon is at an all-time high * Overstock has recovered their dip * Wayfair is recovering their dip * Chewy is at an all-time high
None of this means the manufacturers who these distributors are selling are doing well, though.
On the flip side, the product categories that are down substantially online are likely facing devastating loses. They already aren't selling in retail so if ecomm is it and they're down there, it's really bad.
Outside of distributors, I think the D2C ecomm space is a huge mixed bag but likely net negative for a few reasons:
1. A lot of DTC companies play in the product categories that are seeing lower online sales
2. Most DTC companies are positioned as being accessible, but still premium. There are cheaper alternatives people may be more inclined to go with, given the economic uncertainty.
Given that, layoffs at Away, Everlane, Third Love, Stitch Fix, Casper, etc. make sense, even if online sales as a whole are up. Some of them may even need to start paying attention to unit economics now! I'd guess a lot are scaling back advertising and trying to focus on lower-cost acquisition channels to keep a tighter grip on cash flow.