Aug 20, 2019
181 CEOs just renewed their vows with society Read More To love, honor... and generate profits at all costs forever. Since economist Milton Friedman first articulated it in the 70s, the purpose of corporations has been to maximize shareholder value — "profits." But now the Business Roundtable (a club of 181 big CEOs) wants to change that. Led by JPMorgan's Jamie Dimon, the group met up, probably ate well, and then recommitted itself.
Old vows (Since the 70s/80s): Ruthless capitalism
New vows (yesterday): Sustainable capitalism
Customers, employees, diversity, ethics, the environment... The Business Roundtable wants them all in a corporation's purpose — Apple, Amazon, and Bank of America's CEOs agree. We're already seeing major brands act on it: Think Nike's sponsorship of Colin Kaepernick through his social justice campaign, or Patagonia donating tax cut savings to environmental causes.The Takeaway:Capitalism is evolving for wokeness... It's created immense wealth, value, and innovation — it probably drove the motivation for whatever device you're reading this on. But a shocking less than 50% of Millennials believe capitalism is good. As young consumers reject Big Beer, Big Food, and Big Fashion, corporations are realizing the value in acting with principles. Now the Business Roundtable is building a framework around that.
Aug 14, 2019
New US tariffs on China get delayed... because of holiday shopping Read More iTariffs... President Trump announced them just 2 weeks ago. With everything else already tariff'd, the US planned to tax the remaining $300B worth of consumer products made in China starting September 1st — including the iPhone. Yesterday, he said nevermind: waiting until December 15th for most new tariffs so American shoppers can have a Merry Christmas.
Teachers hate procrastination... Markets don't. The tariffs were essentially a 10% tax that would hurt profits for companies manufacturing in China, while raising prices by 10% for everybody. Here's who wins with Tuesday's sudden flip:
Apple: Shares popped 4% because iPhones and MacBooks won't get 10% more expensive until after most holiday shopping is done. Made in China AirPods, the Watch, and HomePod still get hit on September 1st, though.
Mattel & Best Buy: The stocks rose 5% and 6% as Made in China action figures and speakers will remain tariff-free through the holidays.
Nike: Sneakers were also on the exemption list, so the swoosh jumped up 2%.The Takeaway:This sends a message to China... If the trade war has political or stock market costs, America might cave. Credibility is important in negotiations, and Trump's credibility takes a hit with this one.
Political cost: Since American buyers pay US tariffs, not Chinese exporters, this latest round would have grinched Christmas for American households.
Stock market cost: If tariffs caused poor holiday sales, stock markets likely would've suffered.
Aug 13, 2019
Nike unveils its 1st kids kicks subscription box: "4 pairs/year for $20/month" Read More If baby Jordan went back-to-school... he'd subscribe. A stealthy sneaker club startup called Easy Kicks has been delivering shoes to 10K member families. Turns out it was Nike all along. Easy Kicks just got rebranded as "Nike Adventure Club" for kids 2-10, and it's Nike's 1st-ever subscription service:
The tiers: 3 options — Get 4 pairs of sneakers per year for $20/month, 6 pairs for $30/month, or 12 pairs for $50/month.
The feel-good: Send back the kicks and Nike donates or recycles them.
The asterisk: Pediatricians say that's way too many shoes for even fast-growing kids.
Subscriptions — so hot right now... From Dollar Shave Club razors to Lola tampons, subscriptions guarantee recurring revenues for the biz and build brand loyalty (plus, customers don't have to shop/think anymore). Now, Kid-scriptions are gaining traction because they grow so fast (ðŸ˜) they constantly need new stuff. Here's who else has boxes for size "24 months" up to "16 husky":
Walmart partnered up with kids' clothing startup Kidbox.
Foot Locker invested in Kidbox rival Rockets of Awesome.
Algorithm-powered fashion subscription Stitch Fix launched a kids version last year.The Takeaway:It's all about the upgrade... The biggest surprise for Nike was how offering different price tiers let users test it — and then commit. Intensely. Most began at the cheap $20/month option, craving more adorably small kicks. And then they paid up for the fancier tier ("just $10 more for 2 more pairs!"). Nike's pricing strategy was the real winner.
Jul 2, 2019
The Women's World Cup is handing Nike (multiple) records Read More Technically... Nike reported its earnings last week. Technically it missed analysts' expectations for the 1st time in 7 years. But we're more focused on CEO Mark Parker's call with investors after the earnings report. Just in time for today's USA vs. England World Cup match, he thinks 2019 is a "true tipping point" for women's sports.
Women are winning Nike... 14 of the 24 Women’s World Cup teams enjoy a Nike swoosh across the chest. And the combo of Nike spending big on this ad, covering almost 2/3 of the jerseys, and record TV ratings are doing it. These Nike stats just arrived:
The US Women's National Team jersey is the #1 selling soccer jersey — men's or women's — ever sold on Nike.com.
And enthusiasm for women's apparel has extended to bras — Parker announced Nike's now the biggest seller of bras across North America.The Takeaway:Nike vs. Lululemon... That's the biggest matchup worth watching right now. Both are focusing on the opposite genders in the same (non-US) places. It's a fight worth watching.
Lulu’s 5-year plan: Double men’s sales and quadruple international sales (especially in China) since the majority are sold to North American women.
Nike’s focus: Sell more to women and to China — 75% of its apparel sold is to men, and China is its fastest-growing market with nearly 20% of all sales.
