Jul 10, 2024
Etsy is aiming to return to its roots by implementing new “rules” that require all items to incorporate “a human touch” or fall into one of three categories: made by a seller, handpicked by a seller, or sourced by a seller. The e-commerce site has become overrun with mass-produced, generic items from resellers just as you would see on Amazon, Temu, or Shein. Etsy CEO, Josh Silverman, wants the company to embrace its mission of “keep[ing] commerce human,” an important goal as it aims to differentiate itself in the fast-growing e-commerce market.
After struggling in recent years, the publicly traded company is taking a risk by turning its back on the mass-manufacturing e-commerce market, which is estimated to cross $6 trillion this year. Etsy’s CEO recognized that with a growing number of competitors, they need to focus on what they do best, which is supporting a marketplace for creatives, artists, and two-legged individuals. It’s a move that keeps the main thing, the main thing. While it’s easy to get distracted by the allure of huge TAMs, drifting too far from one’s core demo can lead to brand confusion and the loss of business. Fortune does favor the bold.
Saks Fifth Avenue is acquiring Neiman Marcus with the help of Amazon and Salesforce. The two tech companies will take minority stakes in the new company, which will be called Saks Global. With the help of Amazon and Salesforce, Saks Global will aim to collect high-quality customer data, offer more personalized options, and improve the online shopping experience. Amazon has not invested in a brick and mortar retailer since Whole Foods, but the deal should help with its goal of entering the luxury space.
Given the challenging conditions for department stores, both Saks and Neiman Marcus have long been contemplating the best path forward. While the acquisition is expected, the inclusion of Amazon and Salesforce is unexpected. On the surface, it appears to be a data play - having live customer data across online and physical stores will make them better at advertising which in turn makes them better at selling. We wonder if they might use some of the brick and mortar space to function as ad space in the physical world -- Walmart is doing it successfully, why can't they?
As a result of rising real estate inventory across New York City, Manhattan home prices have started to decline. The sky-high prices in the city have grown unsustainable, and fewer buyers coming to the table means the gap between buyer and seller expectations is shrinking. The average price of real estate in Manhattan fell 3% to just above $2 million, and luxury apartment prices fell for the first time in over a year.
This is an example of supply and demand 101. The ‘higher for longer’ interest rate environment has started to trickle down to the New York real estate market, as borrowing is more expensive and fewer buyers are willing to pay high prices. Monetary policy decisions affect various corners of the economy, and it has created a buyer’s market in Manhattan, a natural outcome that proves the Fed’s policy decisions are working.
Disclosures:
As of writing, AMZN is a holding in Titan's Flagship strategy.
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