This past week, Big Tech reported earnings (with mixed results) and Facebook rebranded to Meta. To absolutely no one’s surprise, the Meta move was neither inspiring nor convincing. In a rather obvious attempt to shift the narrative from negative (and looming regulation) to… really anything else, the artist formerly known as Facebook is now taking the house-of-brands, Alphabet-like approach.
This is two years after they refreshed the brand to “FACEBOOK”.
So, some obvious missteps and reactionary moves from Mark Zuckerberg and company—but, he’s not entirely off-base and there’s lessons to be learned from them:
- Brand trust enables you to make bold moves. Without it, you get enough memes to open an art gallery. Anyways, it’s no surprise that Meta has negative trust, and is trying to contain the blast radius of Facebook’s fallout.
Zuckerberg creating a holding company is sharp, though, because ideally, he would take a back-seat and let a more charismatic, likable face lead. Likeable CEOs better shield companies from negative press (see: Away). Zukerberg has the stopping power of a wet sock, while Facebook needs a titanium plate.
- AR / VR is a hot space. The sector is forecasted to hit $766B by 2025 (+73.7% CAGR). Facebook, at its core, is a social media platform with advertising. It’s a largely solved problem. Not to say it’s not a cash cow, but it has a limited outlook at this point. AR / VR on the other hand, is largely untapped. Snapchat, Pinterest, Etsy, all of Big Tech, and more are converging on it. Zuckerberg is pointing the crosshairs in the right direction, and it will be a competitive, crowded space.
For Retail, we would much more expect Augmented Reality to be the winner here. Beauty brands have been experimenting with this for quite some time. Instead of placing them inside a virtual world, offering additional information or augmentation of what customer is already seeing is much easier and helps in purchase decisions. - Technology is progressing beyond screens and apps. The hardware, however, isn’t there yet. Wearing the Oculus Quest 2 sets you back $300 and totally decimates any chance of getting a romantic relationship. Until the hardware scales down to eyeglasses in form, function, and weight, mass adoption is far off. Like, a decade or so.
However, Retailers engaging with AR / VR technology can gain a first-mover advantage, and understanding the current iteration of digital evolution (ie. shoppable products and recipes) will give clues on how they might best engage with customers beyond the (phone) screen when AR does reach mass adoption.
So, will the Meta vision pay off? It’s easy to be a naysayer here. Shifting the focus to another chapter from Mark feels disingenuous when their current one is such a mess. It’s very smoke and mirrors. That said, this is the next big space within technology and will be a battleground in Retail.
Here’s to hoping for an interoperable, federated, and customer-centric future.
Here’s the rest of the best from last week:
Kroger’s Home Chef is a billion dollar brand.
The Kroger Co. and Home Chef announced today the meal solutions brand reached $1 billion in annual sales. Founded in 2013 by Pat Vihtelic, Home Chef merged with Kroger, America’s largest grocery retailer, in 2018. Since then, Kroger and Home Chef have advanced the availability of mealtime shortcuts and solutions, offered new product innovations, and continued to transform how customers approach preparing meals.
Earnings Report: Microsoft & Alphabet (Google) crushed it, Amazon not so much.
There was some concern in the tech sector after SNAP shared disappointing earnings last week, but looks like Microsoft and Alphabet are just fine. Alphabet showing the biggest quarterly gain in 14 years, with revenue growth of 40%. Microsoft had a tremendous quarter, with their Azure cloud division growing 36%. Meanwhile, Amazon came in with some disappointing results as earnings fell nearly 50% in their third quarter. Higher costs on everything from labor to shipping took a toll on Amazon’s profits. There was some silver lining, as AWS saw 39% growth – although the Web Services group accounts for only 7% of the total business.
Amazon now delivers more US packages than FedEx.
The reason Amazon is experiencing high costs is that they now deliver more packages than FedEx. In 2014, Amazon delivered approximately 0.2% of all US packages. Today, Amazon controls one-fifth of the delivery market, and is on track to overtake UPS and even the US Postal Service (USPS), according to data from the logistics firm Pitney Bowes.
Tesco announces Gorillas rapid grocery delivery tie up.
Gorillas, in the news last week for surpassing a $1B investment round announced this week a partnership with Tesco, reminiscent of what Instacart announced with Kroger and Stop & Shop last month with 30 min delivery, in which they are piloting picking and delivering from Tesco microfullfillment sites within 10 minutes!
Amazon earnings fall nearly 50% in third quarter.
Higher costs on everything from labor to shipping took a toll on Amazon’s profits in the third quarter, the company said on Thursday. Net earnings plunged to $3.2 billion in the third quarter, down from $6.3 billion in the third quarter of 2020.
“We’ve always said that when confronted with the choice between optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter—and you can see that during every phase of this pandemic,” – Amazon CEO Andy Jassy
Dorothy Lane Market to open first Cincinnati area store in Cincinnati.
One of our long term favorite grocery stores Dorothy Lane Market is opening up a new location in Kroger’s backyard (very close to their newly opened Ocado Shed). Dorothy Lane Market is an icon in the upscale gourmet Grocery market. The Mason store will be the first Dorothy Lane Market location in Greater Cincinnati. The grocer currently operates three locations in the Dayton area: in Oakwood, Washington Township and Springboro.
The grocer has been family owned and operated since 1948, offering high-quality foods and known for its famed Killer Brownies — a decadent fudgy, gooey, double-layered brownie nestled with pecans and velvety caramel. Seriously, they are that good! We are really looking forward to their grand opening, scheduled in early 2023.
Target is ramping up fulfillment ahead of the Holiday.
The Holiday wars are picking up! Target is adding new features to its drive-up, order pickup, and same-day delivery services in time for the holiday season. Other new features include “Shopping Partner,” which allows a customer to send someone to pick up an order in their place and a “Forget Something,” will let customers easily place a new order at the same store after their initial order has been placed and then obtain all their products at once.
Amazon looking to hire 150,000 workers.
In case you missed it, lots of places are hiring. And in case you missed our feature on Monday about that, you can read it here. Add Amazon to the list of retailers looking to bulk up the workforce ahead of the holiday season.
BJ’s taps H-E-B exec Rachael Vegas as chief merchant.
Former H-E-B and Target executive Rachael Vegas has joined BJ’s Wholesale Club as executive vice president and chief merchandising officer.
BJ’s said Monday that Vegas starts as chief merchant effective immediately. The Westborough, Mass.-based warehouse club chain also announced the promotions of Tim Morningstar to executive VP and chief membership officer and Monica Schwartz to executive VP and chief digital officer.
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