MGR eCommerce Edge Weekly | February 25, 2020
Top News This Week
The Coronavirus is Getting Much Worse, Get Ready
A month ago I wrote that everyone in eComm needed to be very aware of the Coronavirus (now known as COVID19), and to keep an incredibly watchful eye. At the time most public health officials were not yet worried, saying that this virus would be under control soon, and that its spread would be limited to China.
They were wrong. Today the CDC made an official statement telling Americans to prepare for imminent outbreak.
I’m not a virologist or a healthcare expert, but I can say that this will have a serious impact on global trade and supply chains.
The danger of the virus may be much worse than initially thought. Many experts estimated the death rate being somewhere between 0.2-3.0%, there is now strong reason to believe it is much higher. Simply look at the number of resolved cases, and you should be frightened.
As of today there have been 30,586 resolved cases, meaning the patient either recovered or died. Of the resolved cases, 2,708 have resulted in death. This means the current mortality rate lies at just under 9%.
We must hope for the best, but prepare for the worst. First and foremost, make sure you and your family stay healthy, as that is much more important than your short term profits.
But, on the business side, if you rely on China for your manufacturing or parts of your supply chain it is time to search for alternatives ASAP.
The best solution is to try and find manufacturers in your own country, whether it be the US, Australia, Canada, or the UK. Even if your cost of goods take a big jump, and your margins or price competitiveness take a hit, it’s better than not having any inventory at all.
This does not need to be permanent manufacturing change, but it is a good idea to start reaching out to local suppliers sooner rather than later, because they may soon not have the capacity to take you on due to all the new demand from companies like yours.
But above all else please make sure you and your family stay safe.
Top Amazon News: Amazon’s Winning with Media, How Others are Competing with Prime
Amazon is planting more flags in the “Media x Commerce” space.
Amazon has poached Heidi Klum and Tim Gunn, hosts of the famous and long running Project Runway show that pits aspiring fashion desires in a competition with each other, and they will now be hosting an Amazon Prime Video exclusive show called Making the Cut.
Why is this significant? Because at the end of each episode viewers will be able to shop the winning look and have it delivered to their doorstep the next day.
This is the future of commerce as I discussed in my “Macro View” edition of this newsletter three weeks ago. Amazon is clearly showing that even though they’re now a huge mega-corp, they can still move fast like a startup when it comes to the next wave of eComm.
Retailers and eComm brands are turning to Postmates and other “last-mile” delivery companies to compete with Prime
Postmates reported that clothing deliveries are up 60% in the last year, and that overall retail deliveries are up 300%.
Prime works because Amazon has invested billions into building hundreds of warehouses across the US, but what if retailers and eComm companies leveraged the hundreds of thousands of retail stores spread across every city and town? Making every retail space dual as both a storefront and a delivery depot.
Combine that with Postmates’ delivery driver workforce and you have a distributed warehouse system that competes with the next-day delivery speed of Prime. I expect many more brands to explore this strategy in the coming years as everyone scrambles to compete with Amazon.
Other Notable Links:
1. [Podcast] Amazon selling tactics, we answer your most frequently asked questions (P.S. if you want your questions answered on the next episode feel free to reply to this email) – MGR
2. Disney CEO, Bob Iger, is stepping down effective immediately – CNBC
3. How Gen Z is using Instagram to shop – GLOSSY
4. Supreme X Oreo is the collab we never knew we needed – FORBES