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While competitors like Gymboree and Babies ‘R’ Us disappear, Carter’s keeps opening new stores and markets, continuing 30 consecutive years of growth: “Carter’s owes much of its recent success, analysts say, to a deal it forged with Target in the early 2000s. Instead of selling its existing line in Target stores, executives offered to create a spinoff—Just One You Made by Carter’s. The line includes basics, as well as flashier ensembles like lemon print rompers and dinosaur-covered bathrobes, designed to win over browsing shoppers. …
“An exclusive line for Walmart followed soon after. In 2017, the company created Simple Joys by Carter’s for Amazon Prime to reach more affluent and ‘digital savvy’ Millennials. As a result, the retailer’s biggest competitors—Walmart, Target and Amazon—are also its largest customers. ‘Carter’s has found a secret formula—all of these brands are all under one roof, and they reinforce the mother ship brand, which is Carter’s,’ said John D. Morris, an analyst for D.A. Davidson & Co. ‘I can’t think of another retailer that’s managed to be as successful in that area.’”
In search of fashionable young men, ThreadBeast, a streetwear subscription company that spends $500,000 a month on marketing, is now spending half its media budget on Instagram: “As previously reported by Digiday, brands have moved media dollars from Facebook to Instagram, specifically to Instagram Stories, where three million advertisers are buying media, according to Facebook’s Q2 earnings report. ‘There are few places to connect with young male consumers online,’ said Quynh Mai, founder and CEO of digital agency Moving Image & Content. ‘There’s YouTube, gaming platforms like Twitch, even Reddit, but none of those platforms give you the targeting capabilities that Facebook and Instagram have. ThreadBeast’s move away from Facebook to Instagram makes sense as brands see Facebook as a place for an older generation.’”
Opendoor is already changing the way we buy homes, but it still faces many challenges (like how to make money): “With $1.3 billion in funding, the startup has aggressively pioneered an industry niche known as iBuying, the online buying and selling of homes. Since its launch in 2014, the company has bought and sold 50,000 houses in 23 cities across the US. This year alone, Opendoor is on pace to purchase $5 billion in homes. While iBuying currently accounts for less than one percent of the $1.6 trillion worth of annual real estate transactions in the US, that number is expected to rise: Opendoor’s competitors now include other tech startups as well as such real estate stalwarts as Keller Williams and Realogy’s Coldwell Banker.
“Opendoor has a clear head start in the race to remake the real estate industry for the internet age. But with the push to get bigger faster have come growing pains. Automating parts of the home buying and selling process has introduced security issues in Opendoor’s easily accessible open houses. It’s not clear when the startup will turn a profit—and to what extent it will need the help of local Realtors, who may view the company as a threat to their livelihood. And the company still faces the question of what happens if the housing market takes a turn for the worse.”
Livestreaming is changing the way we mourn, as funeral homes increasingly offer the service to their clients: “Gary Richards, founder of OneRoom, a company that offers livestreaming services to funeral directors in New Zealand, Australia, Canada, and the US, says he’s noticed that many of the families that use his service are recent immigrants from the Philippines, Vietnam or India, who are looking for a way to connect with family and friends from back home. He says he’s also noticed a considerable number of Americans looking to bridge the east and west coasts. [Co-owner Chad] Techner says that when the [Ira] Kaufman Chapel began offering livestreams in 2010, the setup was simple: A single stationary camera in the chapel, connected to a computer with an ethernet cable. Demand quickly grew, particularly from people who wanted to livestream funerals being held elsewhere. Now, the chapel has livestreamed funerals from temples and synagogues, in people’s homes, at a senior living facility, and even graveside. He says that around 85 percent of families at the chapel opt for streaming.”
NakedPoppy is an online beauty marketplace for those who hate shopping: “NakedPoppy’s patent-pending personalization algorithm helps customers quickly find makeup that matches or complements their skin tone. ‘I’m not the person that is up to trends or is keeping up with the YouTube stars,’ NakedPoppy’s product chief [Kimberly] Shenk tells TechCrunch. ‘When I walk into Sephora my stomach drops … I am the kind of woman that wants to set it and forget it. Just give me the right thing and let’s move on.’ The NakedPoppy team hopes its algorithm expedites the makeup shopping process for those who view the task as a chore not a hobby. Accounting for skin type, skin color, skin undertone, age, eye color, hair color, allergies, sensitivities and more, the startup presents each customer a filtered and tailored list of the 400 items its carries, ranging from lipsticks to foundation to blush and more.”
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Brands that sell on Amazon face fines if they don’t improve their packaging: “Since last fall, Amazon has told companies they must make packaging for thousands of larger products more compact and easier to open by Thursday. Eventually, Amazon wants every product it ships to meet similar standards, according to the company and its suppliers. In a letter to vendors, Amazon said the requirements will make packages more environmentally friendly. Amazon declined to comment on its packaging policies.
“The new packaging requirements are the latest example of Amazon’s power to get vendors to change the way they do business. The company has also been pushing brands to sell products in quantities and at prices that best fit its storage and delivery systems; brands that don’t comply are being cut from Amazon’s site. In addition, the e-commerce company is asking makers of consumer products to develop brands for Amazon to sell exclusively rather than creating its own private-label products from scratch.”
Even Google employees want to break up Big Tech: “Google employees have it good. They make lots of money (the median salary at Google is nearly $250,000), enjoy beautiful offices, extraordinary perks, and an altruistic mission: ‘to organize the world’s information and make it universally accessible and useful.’ That hasn’t stopped them from giving a big chunk of their 2020 presidential donations to candidates who’ve said they will break up big tech companies like Google and limit their power.
“Elizabeth Warren and Bernie Sanders, candidates known for their grassroots support and who are leading the charge to break up Big Tech, received the highest number of donations out of all presidential candidates from Google employees. … In interviews with Recode, Google employees who donated to Sanders and Warren said that breaking up Google could help consumers and spur more tech innovation by allowing for more competition from upstarts. Some even said they thought regulation could force Google itself to return to its startup roots, recreating the bootstrapped work culture that they say enabled the company’s initial success. (Google executives don’t exactly agree.)”
FOOD AND BEVERAGE
Using labor and techniques from Egypt, a New York farm has become the go-to market for Manhattan’s high-end chefs: “At first glance, the Norwich Meadows Farm stand at the Union Square Greenmarket in Manhattan looks like any other, with its rows of onions and lettuce, and a banner with the words ‘fresh’ and ‘organic’ in big green letters. But there’s something the chefs who regularly crowd the stand know that other customers may not: Its owners, Zaid and Haifa Kurdieh, have an uncanny ability to spot the next big thing in produce and grow it in bulk. Their farm here in Norwich, a former manufacturing town about 60 miles southeast of Syracuse, is a prime reason that Jimmy Nardello peppers and Persian cucumbers have become ubiquitous in New York City restaurants. …
“If the Kurdiehs’ produce is uncommon, so is the way they grow it—with technology and farmers from one of the world’s oldest, most advanced agricultural nations: Egypt. Each year, they enlist about 25 farmers from that country to work for six to 10 months. They use high tunnels, unheated greenhouses developed in the 1950s and still not widely used in the United States, and even adapt some varieties that are popular in the Middle East. ‘The entire world has been affected by Egyptian farming practices,’ Mr. Kurdieh said. ‘The Nile River has been farmed forever. These folks are the cradle of Arabic cultural civilization. It’s in their blood.’”
Food-delivery services like Takeaway and Just Eat are merging ($11 billion) to keep up with the competition from Uber and Amazon: “Size is becoming increasingly important for delivery firms as they expand into untapped markets and as more consumers are willing to pay for the quick delivery of meals and groceries to their workplaces or homes. Delivery will account for 10 percent of restaurant sales by 2022, according to brokerage firm William Blair. Analysts say food-delivery companies aiming to compete globally can gain an edge by tying up with rivals. Earlier this year, Amazon led a $575 million funding round for Deliveroo to help fund the UK company’s meals-delivery battle with Uber. In December, Takeaway.com agreed to acquire the German division of Delivery Hero for €930 million.”
Sierra Energy has a 4,000-degree furnace that vaporizes trash and converts the gases into plastics and fuel: “The company isn’t aiming to replace recycling or composting, but to handle the millions of tons of waste that currently goes to landfills. ‘We take what’s leftover,’ says CEO Mike Hart. The technology can process nearly anything, including medical waste and hazardous waste. ‘It allows you to recycle the entire waste stream,’ he says. … Unlike an incinerator, it doesn’t produce emissions as it works; all of the gas is captured for reuse. The gas can be used to create a variety of products, from jet fuel to plastic or fertilizer, instead of making those products from fossil fuels. If the gas is used to make fuel, that fuel will still produce emissions, but fewer than the fossil alternative.”
Can deepfake technology reduce retail returns? “A face-swapping app now in beta called Superpersonal allows users to map their faces, including the smallest facial gestures and expressions, onto a virtual body to create a highly-realistic, on-screen representation of themselves … A second solution by an Austrian team called Reactive Reality allows users to make lifelike video avatars of themselves to interact with, try on and move around in virtual clothing. … As for its uses at retail, though, deepfake technology represents a potential evolution of remote try-on technology that promises greater convenience for shoppers and fewer product returns.”
Property owners are building lounges, arcades, and even arenas to host esports tournaments: “‘We’re seeing investment in esports facilities happening on multiple fronts,’ said Brian Mirakian, brand activation director at architectural and design firm Populous, which specializes in sports venues. ‘Live events are going to be a critical factor.’ Developers are spending tens of millions of dollars in some cases on esports stadiums that host videogame league tournaments. … In June, mall owner Simon Property Group said it would be investing $5 million to become a shareholder of Allied Esports International Inc., and it plans to launch an esports competition that will be held at some of its malls in New York and Los Angeles. … Lodging companies are embracing the craze, too. The New Yorker Hotel sold hundreds of rooms during a recent tournament at the Manhattan property with more than 1,000 rooms.”
OXFORD STRATEGIC ADVISORY DEALS OF THE DAY
Ford Motor Company has acquired Journey Holding Corporation, a company that has developed vehicle tracking software and app-based technology for public transportation.
Thinkstep, a provider of consulting services intended to build business value from sustainability, reached a definitive agreement to be acquired by Sphera Solutions, a provider of software and information services intended to help customers create sustainable value.
Catalyst Software, a developer of a customer success platform for customer management, raised $15 million in a Series A Round.
DataRobot, a developer of a machine learning automation platform designed to deploy accurate predictive models, raised $200 million in a Series E Round. The valuation of the company is $1 billion following the round.
Microhotels are growing in popularity, and operators are taking note: “[Microhotels]—which are most common in but not exclusive to big, expensive cities like New York, London and Paris—are designed, as one hotel expert put it, down to their last square inch. Their guest rooms are small—often half, or less, the size of a typical room in an urban hotel—with furniture that often can be folded up or stowed away, and bathrooms that usually have showers and toilets but no bathtubs. … Another plus for developers, said Mark Van Stekelenburg, managing director of CBRE Hotels Advisory, is that the design of microhotel guest rooms makes them cheaper to clean and maintain …”
And that’s what’s ahead.