TikTok Poaches Facebook, Retailers Copy Amazon Go, and Second-Hand Clothing Sites Thrive

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FOOD AND BEVERAGE

DoorDash has opened the country’s first shared food-delivery company kitchen: “Today, the San Francisco-based on-demand food delivery brand unveils its first shared commissary kitchen with multiple restaurants, including [Patrick] Mock’s newest The Halal Guys, under one roof. A fifth and final restaurant will join the kitchen soon. The to-go-only concept, dubbed DoorDash Kitchens, is the first commissary in the nation run by a leader in the food delivery business and represents a possible future for a restaurant industry beleaguered by high rents and staffing difficulties. Mock will share the 6,000-square-foot Redwood City space with three other popular Bay Area brands that are firsts for the Peninsula: Nation’s Giant Hamburgers, Rooster & Rice and Humphry Slocombe. … Coolest part? Cross-ordering between some merchants: You can get a pint of Humphry Slocombe ice cream with that Rooster & Rice order.” 

PRICING

Meetup, owned by WeWork, is facing criticism for trying to charge users $2 to attend events: “The policy, introduced in late September, requires anyone attending a Meetup event to pay $2 when they RSVP. Organizers have the option of covering the cost of each attendee themselves if they don’t want to charge participants. Event organizers already pay a membership fee to list their events on Meetup. The policy would also lower that fee to $24 per year from up to $200 per year. Meetup is positioning the change as a reduction in costs for organizers, but some say if they choose to cover the $2 themselves, they’ll end up paying more than $240 per year, making the app unaffordable. … In a statement to Forbes, a Meetup spokesperson said the changes are a ‘small payment test’ and that they haven’t committed to a permanent policy yet. The company denied the change is connected to WeWork’s financial troubles, saying the policy has been in the works for some time.”

HUMAN RESOURCES

Amazon is the latest employer to try to control health spending by sending workers to care providers hundreds of miles away: “Amazon … will pay travel costs for workers diagnosed with cancer who choose to see doctors at City of Hope, a Los Angeles-area health system. More than 380,000 of the Seattle-based company’s employees and families across the US are eligible for the travel benefit. Travel programs are winning over employers despite added costs for airfare, hotels and gasoline. Proponents say companies can get competitive prices and employees get better care—such as avoiding unnecessary treatment—by shopping around the country instead of always relying on local providers.  … Still, travel programs require more work to run, [Health Transformation Alliance CSO Lee Lewis] said, and employees can be reluctant to be away from home when ill or undergoing a procedure. … By paying employees’ way to travel for medical care, Amazon hopes to increase workers’ choices and curb health spending by getting workers to top specialists and reducing the chance of the wrong diagnosis or treatment, said Dene Sparrman, the company’s director of global benefits.”

TikTok just moved into Facebook’s neighborhood and is looking to poach its best employees: “The Chinese-owned company recently moved into an office space in Mountain View, California, that was previously occupied by Facebook’s WhatsApp messaging app, multiple people told CNBC. The new location gives TikTok a presence just miles from the Menlo Park headquarters of Facebook, elevating the rivalry between the two companies from a battle for young users to a competition for talent. … Since 2018, the company has hired more than two dozen employees from Facebook. The appeal to leave Facebook for TikTok stems from a desire to work at a popular social media company as it goes through an extreme growth phase, two former Facebook employees who are now at TikTok told CNBC. Although Facebook offers unrivaled perks, such as free food throughout the day, TikTok is offering salaries that are comparable and competitive to that of its rival. One person said TikTok has been known to offer salaries that are as much as 20 percent higher than Facebook’s.”

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RETAIL

More retailers are copying the technology of Amazon Go stores: “In San Francisco, Standard Cognition Corp. operates Standard Store, a demonstration store where shoppers press a button on an app when they enter the store, instead of scanning at a gate; they can walk out or pay at a kiosk. Last month, Standard Cognition signed a deal with a Boston Red Sox minor league affiliate in Worcester, Mass., to power a fan store at a baseball stadium that is being built. Michael Suswal, the company’s co-founder, says event spaces and small retailers have expressed interest in its technology. Amazon is scaring retailers and other businesses into thinking ‘that they need to learn more about this technology,’ Mr. Suswal said. 

“Regional grocer Giant Eagle Inc. is hoping cashier-less technology will give it an edge. The Pittsburgh-based company, which operates more than 400 stores in the Northeast, plans next year to open its first ‘pick and go’ store in its hometown, powered by technology from Bay Area startup Grabango Co. Grabango says it plans to rely solely on advanced cameras to track customers and refrain from using costly shelf sensors and entrance gates. The items would be tallied automatically to speed checkout, but shoppers would still pass by a cashier, who would be available to take cash.”

In keeping with a recent trend, many major retailers will close on Thanksgiving this year, taking some of the pressure off small businesses to stay open. And on balance, it’s what customers prefer: “Overall, 52 percent of respondents in a survey last year by Morning Consult opposed stores opening for shopping on Thanksgiving Day. But the details are more nuanced, as different generations have different views on the matter. … 53 percent of Generation Z (defined in the survey as age 18 to 21), 39 percent of Millennials (age 22 to 37) 30 percent of Generation X (age 38 to 55) and 23 percent of Baby Boomers (age 54 and up) support retailers staying open on Thanksgiving Day. So, if your primary customers are Generation Z, many of whom prefer shopping in physical stores to online shopping, you may want to stay open at least part of the day.”

FASHION

While many fashion companies struggle, the resale of clothing online is doing just fine: “Using the Internet to sell secondhand clothes really began in 1995, with the launch of eBay, but you had to search through millions of listings to find what you wanted. TheRealReal offered only luxury clothing and jewelry, and, unlike eBay, it took possession of consigned items and guaranteed that they would be examined by authenticators, to rate their condition and to eliminate counterfeits, by checking brand markings and serial numbers. Clothes were photographed in a studio on headless mannequins against a white background, so that the site looked clean and consistent, as opposed to the DIY pictures that appear on eBay—a genre that can include items spread out on a bed and half obscured by a cat that wandered into the frame. In its first year, TheRealReal sold ten million dollars’ worth of clothing and jewelry. It has since sold more than eight million items, and when it went public last June—the first clothing reseller to do so—it had a valuation of $1.5 billion. …

“According to a report by the consignment company ThredUp, which used research from GlobalData, a retail-analytics firm, resale was a twenty-four-billion-dollar market in 2018, and will grow to sixty-four billion dollars by 2028, making it one and a half times the size of the behemoth fast-fashion business—the Zaras and H&Ms and Forever 21s of the world. Luxury companies make no money from the resale of their items. So far, they have ignored resellers like TheRealReal, or grudgingly appreciated that people who get in the habit of buying Louis Vuitton second-hand might eventually graduate to buying retail. In a few instances, though, the relationship has been prickly: Chanel is currently suing TheRealReal, claiming that the site has no authority to verify the authenticity of Chanel products, and therefore doesn’t have the right to claim that the Chanel items it offers are real.”

TRADE

President Trump’s “Phase 1” deal with China hasn’t been signed and isn’t fully negotiated but could help some companies: “From Mr. Trump’s perspective, the centerpiece of the pact is a commitment by China to buy $40 billion to $50 billion of American agricultural products per year. Administration officials said that target would be reached in the second year of the pact’s enactment. That volume would be a huge increase over what China was buying before the trade war. American farm exports to China peaked at around $25.5 billion in 2016, according to the American Farm Bureau, then dipped to $24.3 billion in 2017. … American officials have not specified which products would be purchased, or how they arrived at a $50 billion figure. But to many analysts, that level of exports seems hard to achieve. Mr. Trump himself acknowledged this on Saturday, saying on Twitter that ‘there is a question as to whether or not this much product can be produced.’”

OXFORD STRATEGIC ADVISORY DEAL OF THE DAY  

Creative Snacks, a manufacturer of organic snacks has been acquired by Kind Snacks. “The acquisition marks the first of its kind for KIND, which anticipates the move will allow it to expand its share of the healthy snacking market through a broadened product portfolio and multi-brand approach.”

STARTUPS

Chile-based Algramo is bringing a mobile refilling station for laundry detergent and other goods to the US in an effort to reduce plastic waste: “Algramo, which means ‘by the gram’ in Spanish, started offering customers the chance to buy as much or as little of a product—in addition to rice, the machines sell things like lentils and cleaning products—as they wanted, in a reusable package, with no difference in the price per gram. … The new model, which is aimed at middle-income neighborhoods in the city, uses ‘packaging as a wallet,’ letting consumers load funds into an account linked to the RFID tag on the package. A ‘sustainable consumption credit’ offers a discount on the next purchase when consumers bring the package back. The system also makes it possible to sell detergent more cheaply than in stores in part because the brand isn’t paying for packaging for each sale.”

VENTURE CAPITAL 

An electric bike-sharing company, Wheels, has raised $50 million: “A dozen electric scooter companies have received more than $1.5 billion in investments in total to date, according to a report issued earlier this year by Boston Consulting Group.”

Algolia, a developer of a hosted search platform, raised $110 million in a Series C round.

Herow, a developer of a contextual engagement platform to make app experiences better for mobile users, raised $18.6 million in a Series B round.

Thimble, a provider on an online mobile application designed to offer on-demand professional insurance services, raised $22 million in a Series A round.

And that’s what’s ahead.

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