INT. CENTRAL LONDON, 9AM THURSDAY:
Arrive at office.
Log onto laptop, open the browser. Head to the Financial Times website.
At the top of the home page: “Unilever restructures after failed Kraft bid.”
The third story: “Predictability of consumer staples due for a drastic rethink ”.
Hmm… This is all looking familiar…
Later that morning, check in with The Washington Post. Its lead: “Retail apocalypse: troubles at the America mall come to a boil”.
I think I need a holiday or something.
This story seems to be following me around. Maybe I need to clear the cookies off my browser…
INT. CENTRAL LONDON, 2PM FRIDAY
Idly flicking through finance Twitter. Get clobbered by the following chart from Joe Weisenthal
Look at that!
Okay, it’s still early in the year. That 2017 bar is extrapolated from four months of data. But still, that’s a lot of closures.
EXT. DOWNTOWN BALTIMORE, MARYLAND. 7AM TUESDAY.
Over breakfast at the hotel restaurant, scan the headlines from the Wall Street Journal. Wouldn’t you know it:
Under the surface
This story is bubbling away under the surface. And once you start noticing it, it pops up everywhere.
The story isn’t just the death of retail – it’s about an old business model getting replaced by something new.
The big old fashioned retailers made piles of money basically by keeping out the competition. The big shops squashed small shops lower prices. The big brands squashed small brands by crowding them out of the supermarket shelves. They used big TV ad campaigns to take over the market.
But things change.
Big companies don’t have a lock on retail any more. Tiny businesses are starting to beat them at their own game.
Tiny companies can get their ads in front of the right customers, thanks to smart ad technology.
Tiny companies can get their stuff on the shelves… or skip the supermarket part altogether and sell online.
It’s tough on the old dinosaur retailers, and the big CPG brands. It’s hard for big, old companies to change.
But frankly, who gives a stuff about them.
Getting it from both sides
Big retail is getting it from both sides. At one side is Amazon, which is bigger and cheaper than any of them. They can’t compete with Amazon on price or customer experience.
And at the other end, its getting hit by small brands and small specialist shops. Small brands are using new digital advertising technology to get their wares in front of the customers. And small shops are offering a better customer experience.
So how to profit from story?
When it comes to Amazon, the ship has already sailed. It’s made 59966% for its early investors. But it’s not likely to make anyone rich at this point.
At the other end of the scale, things are more interesting.
In The Penny Share Letter I’ve recommended three different ways to play it. I’ve tipped a tiny specialist food maker which is getting it’s product onto the shelves for the first time. I’ve tipped a cosmetics maker which is using digital marketing to build up a stable of “mini brands”. And I’ve tipped a digital marketer which is putting tiny companies on the map in a way which wasn’t possible before.
To find out how to profit from the rise of new retail, click here.