Could it be possible that we're now talking about two separate apocalypses this week? It seems the media loves to talk about the circling of wagons and the end of decades-old institutions. This week, it's about retail survival and also about just how much longer car's exist as we know it. More on that later in the newsletter.

Retail optimism (or pessimism), depending on which side of the aisle you’re on, seems to have two distinct camps lately:

  1. Retail is hurtling into apocalyptic oblivion.
  2. Retail is doing pretty good, thank you.

This issue, we'll have stories that fit both of these narratives. At the onset of the week, a number of retailers announced store closures. And, on the flip side of the retail coin, a number of retailers announced more upbeat news, including Target who had unquestionably, their best year in well over a decade. For the record, we are in the camp that has belief in the opportunity and strength of retail.

From retail to technology, here's the top stories we're reading this week:

🎯 Target's Best Year In Over A Decade
🎄 Kohl's, Target Deliver Strong Holiday Quarters
🔥 How Foot Locker Suddenly Became Hot Again
🚗 Lyft IPO Is All About Destroying Car Ownership
😵 Major Stores Currently On 'Deathwatch'
🤔 Here's Why Mall Giants Aren't Freaking Out
💡 Macy's, Nordstrom, and Facebook Retail Strategies
🏪 Fifth Wall: VC Helping Digital Retailers Open Physical Stores
🛒 Amazon To Open All-New Grocery Stores
😍 Status as a Service [Longread]
📲 State of Native Social eCommerce [Longread]

Top Stories From This Week

🎯Bullseye: Target's Very, Very, Very Good Year

Target had its best year since 2005 | Via:

  • The gap between retail's best and worst performing companies widened during the holidays and Target is among the winners.

  • Some retailers like Target have the resources to spruce up their stores, lower prices, and speed up their online supply chains, while others struggle to stay relevant.

  • "As the shakeout in our industry continues, the separation between those who can afford to invest and those who can't is real," Cornell said.

  • The company's strategy to compete against Amazon and Walmart by focusing on Millennials and young parents with affordable brands and offering a wider array of merchandise is paying dividends.

Retail Wrap-Up: Kohl's, Target Deliver Strong Holiday Quarters, Hinting At Consumer Health | Via:

  • Over at Kohl’s, sales and earnings both handily beat analysts’ estimates, and holiday same-store sales also rose faster than the Street had expected.
    So here we seem to have more evidence of what’s looking like a better U.S. holiday shopping season than many had first thought.

  • Still, major U.S. stock indices didn’t move much early Tuesday following mixed action overseas.

  • China’s indices did rise, which analysts there said could be the sign of more optimism around trade.

  • In the risk-off sort of trading that dominated on Monday, it’s interesting to see that while the Cboe Volatility Index and bonds both moved higher, the gold market didn’t really get much of a boost.

  • Before that, investors looking for index performance could follow the Dow Jones Industrial Average, but that covers just 30 stocks and it’s weighted by price, making it a less representative way to monitor the market.


'They realized the world has changed.' How Foot Locker suddenly became hot again | Via:

  • To turn around slipping sales, Foot Locker has made investments in moving product more quickly and devised a way to drive online customer in stores, and vice versa.

  • The retailer has also generated a lot of buzz over the past year for its investments in digitally native consumer startups, including a $100 million investment in sneaker resale platform GOAT , $12.5 million in children’s apparel company Rockets of Awesome , a $3 million investment in children’s footwear brand SuperHeroic, and a $2 million investment in Pensole Footwear Design Academy.

  • These investments are meant to give Foot Locker more data into what consumers are buying through other channels, and gives the retailer apparel brands whose inventory flow it has more control over.

  • Over the past year, Foot Locker has cleared out inventory by continuing to close stores, and by recognizing, as Johnson said during the company’s first-quarter earnings call this year, that “the peak of product receptivity of our customers is much, much faster from the old days of seed to scale.

  • Apparel, and specifically children’s apparel has been one of the retailer’s fastest-growing categories for the past several quarters, which is where Foot Locker’s investment in Rockets of Awesome and Carbon38 may give it an advantage.

Carpocalypse now: Lyft's founders are right. We're in the endgame for cars | Via:

  • In the U.S., total car registrations have declined by about 10% Tire sales, a proxy for vehicle production are down in China, too.
    For example, in January, car sales in Britain declined 18.2%, to 1.49 million vehicles annually.

  • It was the eighth successive month of decline, according to SMMT , the industry body which tracks automobile data.

  • While an 18% drop sounds calamitous, it's mild compared to what's going on in Turkey, where consumers have cut their car purchases by a staggering 60% since January 2018, according to data collected by UBS analyst Gyorgy Kovacs and his team.

  • Today's cars last so long that if bad times happen consumers can simply stop buying new ones and get along just fine with their old ones.

  • The founders of the ride-hailing app Lyft filed their IPO papers last week, and their vision for the company is dramatic. Lyft (which works a bit like Uber) is not just about getting you from A to B, they say. Rather, founders Logan Green and John Zimmer believe that car ownership is in permanent decline and they want to help it die, they write in their S-1 filing.

  • "We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service, or TaaS. Lyft is at the forefront of this massive societal change," they told investors.

The Retail Apocalypse Is Heating Up in 2019. Here Are the Major Stores Currently on 'Deathwatch' | Via:

  • In a single 24-hour period last week, Gap, J.C. Penney, and Victoria’s Secret announced they would be closing more than 300 stores combined.

  • Sears Sears finished up 2018 by filing for bankruptcy and closing roughly 140 Sears and Kmart stores (the company owns both retailers).

  • For the time being, Sears is still alive, though it’s a shell of what the company once was: There are around 425 Kmart and Sears stores open, compared to 2,000 five years ago.

  • Last week, J.C. Penney said it would be closing 24 stores in 2019.

The retail apocalypse will claim 4,300 stores this year. Here's why mall giants aren't freaking out | Via:

  • More than 4,300 department stores are set to close this year as the retail apocalypse rips through American retailers.

  • Gap, J.C. Penney, Victoria's Secret announced more than 300 store closures last Thursday.

  • Department-store closures usually happen at low-quality properties rather than higher-end ones that are operated by mall giants such as Simon Property Group and Macerich, Kevin Brown, an analyst at Morningstar told Business Insider.

3 Takeaways From Macy’s, Facebook's and Nordstrom’s Retail Strategies | Via:

  • If there’s one lesson that haunts every retailer, it’s not that the customer is always right but instead that consumers are deciding what they want in the shopping experience at a rate faster than companies are able to adapt.

  • Retail isn’t dead—it’s growing for different use cases.

  • Lessons: Move to where the customer is and become a nimble organization.

Meet Fifth Wall: The venture capital firm that's helping digital retailers open physical stores | Via:

  • A wave of digital retailers is moving from the internet and into some of the empty mall space left vacant by companies in bankruptcy, like Sears and Payless ShoeSource, or trimming back their real estate, like Gap.

  • One venture capital firm is at the center of the new normal in retail as traditional sellers scale back their footprint while digitally native companies open some of their first brick-and-mortar locations.

  • Headquartered in Venice, California, Fifth Wall Ventures has backed more than a dozen businesses, including electronic scooter maker Lime, co-working platform Industrious and real estate analytics company VTS.

  • So far, the firm has invested in facial company Heydey, shoe maker Taft, furniture brand Interior Define, shirt company Untuckit, hair salon chain Madison Reed and grocer and food delivery platform Foxtrot, according to its website.

  • That's partly why Fifth Wall decided it could expand its business and create a new fund structure to raise capital and "promote collaboration" between landlords and burgeoning brands, Wallace said.

Amazon to open all-new grocery stores separate from Whole Foods | Via:

  • According to a report by The Wall Street Journal, Amazon plans to open dozens of new grocery stores that will be distinctly different from the company's Whole Foods Market stores.

  • Dozens of new stores are in the works, and the first may open before 2019's end. According to reports, Stores will open as soon as the end of this year.
    It appears Amazon wants to grab a larger sector of the market by offering a wider variety of items in these new grocery stores than it currently offers at Whole Foods locations.

Longreads We're Tackling This Week


Status as a Service (StaaS) | Via:

Big H/T to Alex Taussig and his great newsletter, Drinking From the Firehose for pointing us to this excellent article from Eugene Wei, about the origins of social media

It is very worth your time to dive in and spend time reading what is one of the best, most informative, and interesting long-form reads we've read in a long, long time. Eugene's exploration into social capital and how social media churns along based on the work of it's frenzied users -- each using it's features as levers and tools to generate the most interest amongst their social following. Along the way, you'll dive into the origins of Facebook and how they surged past earlier competition like MySpace and Friendster.

According to Eugene: "Most of the social media networks we study generate much more Social capital than actual financial capital, especially in their early stages; almost all such companies have internalized one of the popular truisms of Silicon Valley, that in the early days, companies should postpone revenue generation in favor of rapid network scaling. Social capital has much to say about why social networks lose heat, stall out, and sometimes disappear altogether. And, while we may not be able to quantify social capital, as highly attuned social creatures, we can feel it."

Instagram Shopping and the State of “Native” Social eCommerce | Via:

For the uninitiated, “native social eCommerce” isn’t about advertising but, instead, in-app buying via organic posts. Shopping on Instagram has been around since 2016 but was only released network-wide last year.

Once an Instagram business account connects its product catalog to Facebook through an approved platform like Shopify or BigCommerce, retailers can sell products in three ways:

Shoppable Posts: The first method is product tagging within organic posts. When clicked, tagged products send users to an Instagram details page, followed by a direct link to the onsite product page. From there, shoppers enter a site’s traditional checkout process.

Shoppable Collections: Just like other organic posts, as of Nov. 2018 users could begin bookmarking (i.e., saving) shoppable posts, which Instagram automatically collects a Shopping folder.

Shoppable Stories: At the same time shoppable collections were unveiled, Instagram also released shoppable Stories. Stories have always been the most valuable real estate on Instagram thanks to the ability of verified accounts (and accounts with over 10k followers) to add “swipe up” links. In essence, shoppable Stories functions similarly to shoppable posts by embedding clickable products and prices within them.