“Amazon is building an empire, and Shopify is trying to arm the rebels.”
— @tobi

But what happens when *all* the rebels are armed and competing with each other?

10 takeaways for ecommerce companies

1. The Hard Thing About Easy Things

If everyone can do something, there’s no advantage to doing it, but you still have to do it anyway just to keep up.

$SHOP isn’t arming the rebels.

Like everyone getting a cheat code in GoldenEye, when every rebel is armed, none really is.

2. Ecommerce penetration has doubled in 3 months, from 16% to 34%, and the platforms are killing it.

Over the past 6 months:

$ETSY up 169.7%
$SHOP up 118.8%
$SQ up 83.1%
$PYPL up 65.1%
$AMZN up 53.4%
$EBAY up 44.3%.
Even $UPS is trading at all-time highs.

3. But only 1 DTC company has exited for over $1bn (2 if you include Harry’s).

Razors are the only category with multiple big exits, because there are so few high-quality razor factories. Only some of the rebels have access to the best weapons.

Per @fromedome:

Aside: My dad always told me to study Michael Porter, and there’s a reason: his frameworks still work.

As @daveambrose pointed out, Christensen’s Law of Conservation of Attractive Profits explains why platforms get the big outcomes and brands don’t, too.

https://twitter.com/daveambrose/status/1293178900831506433?s=21

4. Value Chain

Compare the early DTC value chain (Harry’s) vs. today’s.

Harry’s Integrated R&D, Manufacturing, Retail, and Marketing, partly because they had to.

Today, you could take your whole value chain off the shelf using modularized inputs for everything.

4. Value Chain Cont’d

Manufacturing: Alibaba, @TeamAnvyl @MadeWithGembah
Retail: @Shopify @BigCommerce @stripe @magento
Marketing: $GOOG $FB @instagram @MarketerHire
Logistics: @ShipBob Boxc @QuietLogistics1 $FDX
Support: @Returnly @Zendesk @kustomer

Everyone with a Cc can use.

5. Porter’s Five Forces

Framework to analyze an industry’s competitive dynamics. Oversimplified: the weaker each force is, the better your competitive position.

Shopify et al strengthen the Five Forces and weaken DTC cos’ competitive position and drive down profits.

6. More direct competitors and substitutes means companies are forced to spend more on tools and marketing.

Who wins and loses?

Shopify wins.
Facebook and Google are the biggest winners.
FedEx, UPS, USPS win.
Ecommerce tools win.
Customers kinda win.
Commoditized brands lose.

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https://twitter.com/packym/status/1293357095962771458?s=21 https://twitter.com/packym/status/1293357095962771458