Whew. What a week of business news – going back to Amazon + Whole Foods which broke too late last Friday for me to cover in time for Saturday. It was definitely a great test of the speed of our platform, just trying to keep up. This email practically wrote itself.
Here are a few of the many things we are seeing this week (Warning: Slightly longer read than usual):
Amazon’s purchase of Whole Foods makes a lot of sense from a customer acquisition perspective. While market analysts and pundits are touting the virtues of Amazon + Whole Foods from a distribution and price leverage standpoint, don’t lose sight of the alignment between the two companies’ consumers. Beyond the obvious demographic similarities, namely affluence and education, Whole Foods will bring a younger, more urban customer under the Amazon tent. Given that current Whole Foods customers are over 3X more likely to already buy some groceries on Amazon, this marriage could spell trouble for Whole Foods’ most adjacent competitors – if not the whole grocery retail industry.
Don’t ignore Amazon’s move into the apparel subscription box business either. It feels like we’re speeding toward a day when this entire write-up is about Amazon. For now, we should keep an eye on the growth of Prime Wardrobe, the Bezos crew’s answer to services like Stitchfix and Trunk Club. Never heard of those companies? All the more reason to expect Amazon to wipe them out, especially considering the reach and leverage AMZN has with brands. If you don’t read the article, one interesting observation was the 15-20% rate we see of potential buyers. That’s becoming a magic number for “early adopter” products. We’ll see if Prime Wardrobe can break through where smart watches, VR, home assistants, and other tech novelties haven’t yet.
Pinterest is a surprising destination for business owners. I’m embarking on a lengthier study of 63,000 business owners in our respondent database – their lifestyle, media habits etc. Though several weeks away from sharing that, I came across a fascinating discovery: Namely, a significant over-indexing of Pinterest users among business owners and entrepreneurs – like, equal to or even higher than Twitter. Who knew? Well, now you do.
Not unlike Amazon + Whole Foods, the Coach + Kate Spade combination looks like a result of smart consumer segmentation. Distracted by so much ‘breaking news,’ it took us a month to finally breakdown Coach’s planned acquisition of Kate Spade. On paper, it has all the makings of a winning combination – Spade brings a decidedly younger, more social-media-savvy consumer to the older, less-social Coach brand. It’s hard to grow a brand without those market mavens today, especially in fashion.
The immediate returns on Travis Kalanick’s not-so-voluntary resignation from Uber are relatively positive among riders. We reported on this one the day the news broke. Although most U.S. adults were unaffected by the announcement of Kalanick’s departure, the topline results suggested that people are now more pessimistic about the company. However, when we cut the numbers, we saw that current Uber users were 2X more likely than non-riders to be more optimistic. In any event, you’d have to think the company has nowhere to go but up from a PR perspective. Right?
As expected, our LGBTQ tracking research generated a lot of attention, mischaracterization, and invective. People on the pro-LGBTQ side of the political aisle used our Wednesday announcement to subtly jab at the Administration. Reactions from the conservative side ranged from baseless attacks on our methodology to suggestions that, by legitimizing this research, we might be encouraging more people to adopt an LGBTQ lifestyle. Welcome to 2017.
For the record: Our mission at CivicScience is, very simply, to produce honest, objective, and accurate data about the U.S. population (and hopefully beyond someday), for business leaders and policymakers to apply as they see fit. It is not our company’s job or goal to advance our own social, political, or commercial agenda.
That said, personally speaking, I was a little prouder to go to work this week.
Hoping you’re well.