Why category leading brick and mortar retailers are likely the biggest long term Covid…

Beyond an erroneous belief that e-commerce was unprofitable which kept them from investing in e-commerce, brick and mortar retailers struggled online for cultural reasons.

Many of the perceived Covid winners such as e-commerce, videogame and streaming media companies have simply been pulled a few years forward into a future that was inevitable. Their destiny did not change. The future for those businesses simply accelerated whereas the future for category leading “brick and mortar” retailers has changed dramatically ... See more

The future was always going to be omnichannel. Pundits have been prematurely predicting this for many years, but it is finally happening. There is a strange belief in certain circles that the future will be e-commerce only and that brick and mortar stores have no value.

I sometimes think that investors do not appreciate how large and rapidly growing the e-commerce businesses at some of these category leading retailers are. Wal-Mart’s digital revenue in Q2 was an annualized $42 billion, growing 94% — faster than Amazon. Best Buy’s digital revenue in Q2 was an annualized $19.4 billion, growing 242% — faster than Ama... See more

It doesn’t matter how clean and well lit your stores are and how friendly and knowledgeable the employees are if the stores are in the wrong place at the wrong cost or they don’t have the right products at the right prices.

Perhaps the simplest way to express what has happened during Covid is to note that Amazon has actually lost share in e-commerce during Covid. The largest e-commerce share gainers in most categories have been category leading physical retailers as well as the DTC businesses of most brands.

And almost none of these critical functions mattered online.

While allowing advertising to dictate the buy box was immensely effective at increasing their take rate (anyone who believes this is actually advertising is confused — Amazon is just increasing their take rate and calling this dynamic advertising), this may end up being a very profitable short term decision that creates significant long term pain. ... See more

It was not until Wal-Mart bought Jet.com in 2016 that retail executives began to broadly wake up and embrace e-commerce. Marc Lore was the CEO and founder of Jet.com and an excellent e-commerce executive who had founded diapers.com and soap.com