The $11 billion e-commerce purveyor of dollar-store value tchotchkes, Wish, was built on the foundation of cheap shipping subsidies. The Universal Postal Union (an arm of the UN that governs international shipping rates) previously provided a subsidy such that any package weighing less than or equal to 4.4 pounds could be shipped more cheaply from China than within the United States. But on July 1, the subsidy was eliminated and shipping costs doubled overnight.
Since January 2019, 36,000 small businesses in the United States and Europe have partnered with Wish to stock their items. In return for putting a few kitschy knick-knacks on their shelves, they get access to Wish’s 80 million active users. These users are generally low-income folks who either can’t afford or refuse to shell out the $119 per year for Amazon Prime membership, which affords customers oft-discounted goods and free shipping. Wish saves on operating costs for warehouses and workers, and consumers save money on the back end.
Wish hopes to increase their small business partners to 100,000 businesses by the end of 2020. That goal is ever more important given the subsidy cut that now disincentivizes their initial model. If customers want the same low-price goods they have grown used to, they will now have to pick up their parcels from a local retailer that Wish is bundling and funneling orders through. These partnerships – though they may water-down the quality of offerings by small retailers – provide an innovative solution for small business that have struggled to survive closures and capacity restrictions since the coronavirus outbreak took off in the US.
Granted, the world will keep turning without services like Wish. The website is the ultimate data-collecting scam. You can’t enter the website without logging in, and once you do, you have to select your age range and the gender you’ll be shopping for: women or men (Can’t I shop for everyone, including those in between and outside the binary? Get with the program, Wish!) Can’t they figure out my shopping habits by spying on me through cookies like everyone else?
At least they offer 10% off during your first three days of shopping! AND 50% off if you login 7 times in your first month! How’s that for a predatory shopping experience?
But I digress. If capitalism has taught us anything (as much as it pains me to put this in writing) it’s that America cannot rely on the government for nimble, holistic solutions that support the shared interests of public health and economic health. At least not for this particular public health crisis during this administration, if not always. Instead, we consistently rely on the private sector to offer us innovative solutions to our daily frustrations: transportation access (Uber/Lyft), grocery shopping (Instacart), affordable prescriptions (GoodRx), job hunting (LinkedIn/Indeed), and more. What makes this different?
Small businesses have suffered deeply from this pandemic and subsequent recession. Metlife and the US Chamber of Commerce conducted a poll of small businesses published on July 29, which found that 70% of respondents are worried about long-term financial hardship due to closures, and 58% worry about permanently closing. Retailers could pivot to set up e-commerce solutions to their brick-and-mortar woes, but the barrier to entry using that technology costs time and money that owners may not have as they fight for PPP loans, rent forgiveness, and negotiating interest rates.
The United States practically guarantees affordable manufacturing can only be imported from Asia. And so long as capitalism guarantees there will always be a class of consumers surviving on the lowest margins of our society, there will always be demand for cheap goods. Every purchase matters for a small domestic retailer to stay open and afloat. If the flow of these goods through American small businesses offers owners a way to keep their doors open and low-income consumers a way to keep purchasing – even if only by small tokens of increased foot traffic and impulse buys – it’s worth it.
Are Gen Z more fickle in their shopping, or do brands just need to keep up?
(BUSINESS NEWS) As the world keep changing, brands and businesses have to change along with it. Some say Gen Z is fickle, but others say it is the nature of change.
We all know that if you stop adapting to the world around you, you’re going to be left behind. A recently published article decided to point out that the “fickle” Gen Z generation are liable to leave a poor digitally run site and never return. Now of course we’ve got some statistics here… They did do some kind of due diligence.
This generation, whose life has been online from almost day one, puts high stakes on their experiences online. It is how they interact with the world. It’s keyed into their self-worth and their livelihoods, for some. You want to sell online, get your shit together.
They have little to no tolerance for anything untoward. 80% of Gen Zers reported that they are willing to try new brands since the pandemic. Brand loyalty, based on in-person interaction, is almost a thing of the past. When brands are moved from around the world at the touch of your fingertips there’s nothing to stop you. If a company screws up an order, or doesn’t get back to you? Why should you stick with them? When it comes to these issues, 38% of Gen Zers say they only give a brand 1 second chance to fix things. Three-quarters of the surveyed responded saying that they’ll gladly find another retailer if the store is just out of stock.
This study goes even further though and discusses not just those interactions but also the platforms themselves. If a website isn’t easy to navigate, why should I use it? Why should I spend my time when I can flit to another and get exactly what I need instead of getting frustrated? There isn’t a single company in the world that shouldn’t take their webpage development seriously. It’s the new face of their company and brand. How they show that face is what will determine if they are a Rembrandt or a toddlers noodle art.
The new age of online shopping has been blasted into the atmosphere by the pandemic. Online shopping has boosted far and above expected numbers for obvious reasons. When the majority of your populace is told to stay home. What else are they going to do? Brands that have been around for decades have gone out of business because they didn’t change to an online format either. Keep moving forward.
Now as a side note here, as someone who falls only just outside the Gen Z zone the articles description of fickle is pompous. The stories I’ve heard of baby boomers getting waiters fired, or boycotting stores because of a certain shopkeeper are just as fickle and pointed. Nothing has changed in the people, just how they interact with the world. Trying to single out a single generation based on how the world has changed is a shallow view of the world.
Chasing Clubhouse success? How the audio chat room trend affects products
(BUSINESS NEWS) It is inevitable that when a new successful trend comes along, other companies will try to make lightning strike twice. Will the audio chat room catch on?
Businesses are always about the hot new thing. People are the always looking for the easiest dollar with the least amount of effort these days. It tends to lead to products that are shoddy and horribly maintained with the least amount of flexibility in pleasing their customers. However, you also have to look at the customer base for this as well. You follow where the money is because that’s where its being spent. It’s like a merry-go-round, constantly chasing the next thing. And the latest of these is the audio chat room.
During the pandemic the entire world saw an eruption of social audio investments. Silicon Valley has gone crazy with this new endeavor. On the 18th of April this year, Clubhouse said it closed on some new funding, which was valued at $4 billion for a live audio app. This thing is still in beta without a single penny of revenue!
The list of other companies who have pursued new audio suites (either through purchase or creation) include:
This whole new audio fad is still in its infancy. These social media and tech giants are all jumping headlong into it with who knows how much forethought. A number of them have their own issues to deal with, but they’ve put things aside to try and grab these audio chat room coattails that are running by. It’s a mix of feelings about the situation honestly. They are trying to survive and keep their customers.
If a competitor creates this new capability and they stay stagnant then they lose customers. If they do this however without dealing with their current issues then they could also lose people. It’s an interesting catch 22 for people out there. Which group do you fall in? Are you antsy for a new toy or are you waiting for one of these lovely sites to fix a problem? It’s another day in capitalism.
This web platform for cannabis is blowing up online distribution
(BUSINESS NEWS) Dutchie, a website platform for cannabis companies, just octupled in value. Here’s what that means for the online growth of cannabis distribution.
The cannabis industry has, for the most part, blossomed in the past few years, managing to hit only a few major snags along the way. One of those snags is the issue of payment processing, an issue compounded by predominantly cash-only transactions. Dutchie, a Bend, Oregon company, has helped mitigate that issue—and it just raised a ton of money.
Technically, Dutchie is a jack-of-all-trades service that creates and hosts websites for dispensaries, tracks product, processes orders, keeps stock of revenue, and so much more. While it was valued at around $200 million as recently as summer of 2020, a round of series C funding currently puts the company at around $1.7 billion—approximately 8 times its worth a mere 8 months ago.
There are a few reasons behind Dutchie’s newfound momentum. For starters, the pandemic made cannabis products a lot more accessible—and desirable—in states in which the sale of cannabis is legal. The ensuing surge of customers and demand certainly didn’t hurt the platform, especially given that Dutchie is largely responsible for keeping things on track during some of the more chaotic months for dispensaries.
Several states in which the sale of cannabis was illegal also voted to legalize recreational use, giving Dutchie even more stomping ground than they had prior to the lockdown.
Dutchie also recently took on 2 separate companies and their associated employees, effectively doubling their current staff. The companies are Greenbits—a resource planning group—and Leaflogix, which is a point-of-sale platform. With these two additions to their compendium, Dutchie can operate as even more of an all-in-one suite, which absolutely contributes to its value as a company.
Ross Lipson, who is Dutchie’s co-founder and current CEO, is fairly dismissive of investment opportunities for the public at the moment, saying he instead prefers to stay “focused with what’s on our plate” for the time being. However, he also appears open to the possibility of going public via an acquisition company.
“We look at how this decision brings value to the dispensary and the customer,” says Lipson. “If it brings value, we’d embark on that decision.”
For now, Dutchie remains the ipso facto king of cannabis distribution and sales—and they don’t show any plans to slow down any time soon.
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