…and Amazon's need for (delivery) speed
| #BookTok haul incoming (Noam Galai/Getty Images) | |
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Yesterday's Market Moves | | Dow Jones
35,560 (+0.28%) | S&P 500
4,589 (+0.15%) | Nasdaq
14,346 (+0.21%) | Bitcoin
$29,236 (-0.16%) |
| Dow Jones
35,560 (+0.28%) | S&P 500
4,589 (+0.15%) | Nasdaq
14,346 (+0.21%) | Bitcoin
$29,236 (-0.16%) |
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Hey Snackers, This is very cool: scientists said they've revived ancient worms buried in Siberian permafrost for 46K years. The nematodes, last awake in the era of woolly mammoths, survived in a state of "suspended animation." Welcome to 2023, little time travelers.
A look at markets in July (hello, August): the three big US stock indexes rallied last month, led by tech gains, as recession fears waned and "soft landing" hopes rose. The S&P 500 and Nasdaq notched a fifth month in the green — their longest streak since 2021. | |
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Barnes & Noble tries to capture some indie-bookstore magic to compete with Amazon | Using the oldest trick in the book… to sell books. Barnes & Noble, once viewed as the ultimate corporate bookstore bad guy, now faces the same challenges of the small shops it overtook: competition with a juggernaut (Amazon). Since being acquired for $475M by activist hedge fund Elliott Management in 2019, B&N has shifted its strategy away from mass-appeal uniformity, becoming more like a collection of indie bookshops. Localized: Store managers now have control over book purchasing, placement, and pricing, with the idea being that shoppers in LA have different tastes than those in Cleveland, and managers should have the flexibility to adjust for that. Cover shopping: A $4M renovation at an NYC store has new wood floors, cozier colors, and displays optimized for browsing and discovery. Self-helped: The strategy is paying off. Since the acquisition, B&N's return rate (unsold books sent back to publishers) has dropped from about 25% to 9%.
Tapping into the "shop local" boom… One reason B&N may be looking for inspiration from indie booksellers: they're thriving. Membership in the American Booksellers Association (a trade org for independent bookstores) rose to ~2.2K businesses last year, a more than 20-year high. 200 additional indie bookstores are expected to open in the next year. An added benefit of being small is agility: they can adjust for fast-changing #BookTok trends. Rising e-comm platforms like Bookshop.org and Libro.fm — which launched internationally last week — have also boosted online sales for independent stores by 580% since 2020. |  | THE TAKEAWAY |
| "Not Amazon" hits with customers… By buffing out some copy-paste corporate sheen, B&N can remind customers that, compared to Amazon (which holds more than half of the US book market), it practically is a small business. The local-appeal strategy isn't new to the corporate world: Starbucks operated unbranded "stealth Starbucks" stores from 2009 till 2019. | |
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Amazon's doubling down on same-day delivery as ultra-speedy shipping becomes the norm | Fast and furious… Amazon's putting its same-day biz into hyperdrive. Yesterday the ecomm titan said it delivered 1.8B+ one-day and same-day Prime packages so far this year — 4X as many as in 2019. It's ramped up its fast-delivery options by same-day-shipping everything from iPads to instant coffee. Last quarter, over half of Prime orders in the 60 biggest cities were delivered within one day or the same day. Now: Long list: Amazon plans to double its same-day warehouses, which could mean building dozens of new facilities. Short trip: It says same-day shipping can curb costs by cutting package travel distance by 15%. Touchpoints, aka the # of times a package is handled, drop by 12%.
America's need for speed… Amazon makes up over a third of all US online shopping and has been investing heavily to make same-day and one-day deliveries the norm. McKinsey said almost half of shoppers will ditch their e-carts if shipping times are too long or aren't visible. Now other retailers are hopping on the ASAP delivery trend to keep up. Walmart has nearly tripled sales of its store-fulfilled delivery over the past two years, and Target plans to spend $100M to grow its next-day-delivery biz. | | THE TAKEAWAY |
| Setting a high bar has risks… Amazon has set the gold standard for quick delivery, but it needs to hold the rep to keep dominating. While Amazon's still by far the ecomm leader, brick-and-mortar giants like Walmart can catch up by using their sprawling network of stores as fulfillment hubs. Meanwhile, some analysts worry that Amazon's upfront building costs may affect its bottom line. We could get more delivery updates when Amazon reports Thursday. | |
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The Biden admin's new plan for student-debt repayment | Backup plan… The Biden admin has a new plan to lighten debt loads after SCOTUS struck down its attempt to cancel up to $20K for millions. Introducing — drum roll plz — the SAVE plan (Saving on a Valuable Education), an income-driven repayment plan that, instead of wiping away a single lump sum, could ease borrowers' debt over time. How it works: Income-driven plans limit repayments to a set percentage of borrowers' discretionary income. SAVE slashes that percentage in half for undergrad loans (from 10% to 5%), while limiting the build-up of interest. Time limit: Smaller loans will be forgiven sooner. In previous plans, debts were wiped away after 20 years of borrowers making payments, but with SAVE, loans of $12K or less will be forgiven after a decade, plus one year for every additional $1K (so $13K after 11 years, $14K after 12 years, and so on). Raised floor: Borrowers who make less than ~$32K (or ~$67K for a family of four) won't have to make payments at all. In practice: Under the previous federal income-driven plan, borrowers paid back nearly $11K, on average, for every $10K in loans. Using SAVE, they'd pay closer to $6K.
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| When (and if) it'll happen… The SAVE applications site went live yesterday, and the payment plan is expected to fully kick in by next summer, with parts going into effect this fall (when student-loan payments are set to resume). Experts think it's likely that SAVE — estimated to cost the gov't between $138B and $361B, compared to debt cancellation's $400B — will be challenged in court, but say it stands a better chance than full cancellation did. | |
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What else we're Snackin' | Tide: Procter & Gamble's sales grew 5%, fueled by Crest toothpaste and Pampers price bumps. But sales volume fell as some customers switched to cheaper alts, weighing down P&G's forecast. 1BDR: The pace of rent price growth is finally slowing. It's a good sign for cooling inflation in general, since core inflation (which excludes the volatile food and energy categories, but includes shelter) has been sticky. Blue: 30K jobs are on the chopping block after shipping giant Yellow (and its 12K trucks) shut operations over the weekend. Rival transpo cos said they've already seen an uptick in business. Kart: Walmart paid $1.4B to nab more Flipkart shares, after dropping $16B in 2018 for a majority stake in the Indian ecomm giant. India's digital market is growing fast (Flipkart says it has 450M+ customers). Offbase: Before the SEC sued Coinbase last month, CEO Brian Armstrong said the regulator had told his exchange to delist every crypto except bitcoin. Removing the 200+ tokens could devastate the biz and squeeze the crypto market.
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Snack Fact Of the Day | AMC said it had its best week ever for box-office sales thanks to Barbenheimer | | |
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Tuesday | Job-openings report Earnings expected from Aflac, AMD, Bloomin' Brands, BP, Caesars Entertainment, Caterpillar, Denny's, JetBlue, Marriott International, Merck, Molson Coors, Norwegian Cruise Line, Pfizer, Pinterest, Starbucks, Sysco, and Uber
Authors of this Snacks own bitcoin and shares of: Amazon, Molson Coors, Norwegian Cruise Line, Starbucks, Uber, and Walmart | |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more | |
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