GENERAL MARKET OVERVIEW
January saw increased spending from consumers, driven in part by subsidies (monetary benefits given to an individual, business, or institution, usually by the government) from the most recent $900 billion aid package.

Reports showed that individual consumer spending, whose income is less than $60,000 a year, increased more than 20% the week of January 3rd (the start date of the stimulus package).

​Why it matters: Consumer spending is the primary driver of the US economy. With greater relief packages comes greater disposable income.

Even more gains from sales are expected in the upcoming months. Congress is currently considering Biden’s $1.9 trillion stimulus plan, which will include an additional $1,400 checks for households that qualify.

​
AMAZON SPOTLIGHT
As dominant as Amazon truly is, it has yet to master the retail department. Amazon is the nation’s leading apparel retailer, topping $30 billion in sales. In the apparel segment, it beats out Target and Walmart and the category was the most purchased on Amazon in 2018. However, Amazon is not thought of first when searching for new and trending styles. It does provide the basics, like the sneakers you have worn down to the soles and the other interchangeable and big name items in your wardrobe.

So why isn’t Amazon a trendsetter?

Amazon is trying to figure that out too. Over the past few years they have invested in and envisioned a fashion influence that has yet to be realized.
- In 2006 they acquired ShopBop.
- In 2019 they created The Drop: a platform within amazon for curated limited-edition streetwear style related brands and events.
- Over the past few years, worked to develop over 100 of its own private-label brands.
- But the most influential development…remains the Launch of Amazon Luxury.

Luxury Stores are available exclusively through the latest version of the Amazon mobile app, and exclusively to the U.S market and Prime members. All items are sold directly from luxury brands and are guaranteed to be authentic (don’t worry, prime shipping applies).

What brands will be available in Luxury Stores? The vague response leads us to wonder which luxury labels will actually sign up?

After all, what makes luxury truly luxury is everything opposite of what makes Amazon, Amazon, right?


TIKTOK TAKEOVER
While many retailers and companies have invested millions and years into data science, TikTok is emerging as a resource that can provide the same data research, and more. Gen Z has grown up with technology as a part of their lives and with an overall $140 billion in market power, it’s become the target market that brands are aiming to attract and please. Retailers have had to get more creative than ever before in rethinking and executing their strategies if they want to stand a strong chance of reaching, building and forming a relationship with our generation in the long term.
- 60% of Tik Tok’s audience is Gen Z.
- 97% of Gen Z consumers use social media as their top source of shopping inspiration.
- 2019 data revealed that 16 to 24 year olds spent an average of seven hours per day online — 3 hours spent solely on social media.

TikTok is looking to expand upon current features to further explore and monetize the role of retail in its app. Plans include the introduction of an option for creators to tag links to products, earn commissions on sales and general advertising capabilities expansion. Additionally, TikTok is also looking to give brands the ability to present their products on the app.
- Burberry was one of the first luxury brands to implement paid and organic content on TikTok across the US and UK. As part of its Fall 2019 campaign, Burberry challenged users to upload videos of themselves attempting to do a TB hand gesture (the Thomas Burberry monogram).
- Uniqlo utilized TikTok to promote its 2019 spring/summer collection. Users were encouraged to upload videos wearing their favorite outfits from the collection to compete in a contest to have their video played in store.
- Ralph Lauren, to celebrate the US Open, asked consumers to share a time when they won a real life challenge. RL frontwoman Diana Silvers, actress and tennis player, took part in the campaign with video content that utilized TikTok’s latest feature that lets customers buy directly within the app and easily shop the brand’s polos, tennis skirts and shorts.
- E.l.f. Cosmetics experimented with TikTok last year. Before having a formal presence on TikTok, their hashtag had 3 million views. After developing a formal image on the app and generating quality content, their Eyes Lips Face campaign last October exceeded their goal of hitting 1 billion views within three days.

​
HONORABLE MENTIONS
- @VirgilAbloh has collaborated with AmorePacific, a South Korean beauty and cosmetics conglomerate, on a limited-edition collection of skincare products. As part of the launch, Off-White also developed a custom Yut Nori fabric mat, game board, chips and sticks (The traditional game is associated with the Korean New Year).
- Rihanna and FVMH bid the Fenty Luxury house farewell…. But don’t panic because Fenty Beauty, Skin and Lingerie will continue.
- Gucci’s Q4 2020 Sales Fall 10% and fall short of market expectations.
- Estée Lauder reported a surprise rise in second-quarter sales (beating estimates) benefiting from strong demand for premium skin-care products and fragrances in China.


STOCKS TO FOLLOW

Adidas:
Ticker: ADDYY
Share Price: 178.02 USD
Market Cap: 69.708B p/e: 39.97
Backstory: Founded by the Dassler brothers after WW1, in 1948 the company split (after a personal fallout) into two: one brother’s company which was eventually called Puma, and the other’s which became Adidas. Adidas is a German manufacturer and retailer of athletic shoes and apparel. In the early 21st century, it was the largest sportswear manufacturer in Europe and the second largest (behind Nike) in the world.
Current news: On Feb 16th, Adidas officially announced that they are selling Reebok.
- Adidas purchased Reebok 15 years ago in an attempt to compete with Nike in the NBA and NFL (Reebok had a presence in both at the time).
- The purchase price at the time? $3.8 billion. But since then, the company has underperformed in general and wasn’t able to capitalize on the growth of athleisure throughout the pandemic.
- Reebok’s annual revenue shrunk by $2 billion from 2006 to 2014.
- Analysts see this as an opportunity for Adidas to seek relief from pandemic losses and refocus their attention on the primary brand and name.
- Potential buyers include: VF Corp (who added Supreme to their portfolio just a few months ago) and Authentic Brand Groups (ABG).

Shopify:
Ticker: SHOP
Share Price: 1435.01 USD
Market Cap: 174.95B p/e: 554.06
Backstory: Shopify, one of Canada’s largest tech companies, is a commerce platform for managing businesses which started in 2004. You can create and customize an online store, sell in multiple locations—including web, social media, and brick-and-mortar locations. It’s pretty much the be-all-end-all for small businesses and entrepreneurs with a completely cloud-based service that provides the flexibility to run a business from anywhere. Cash is generated through monthly subscriptions and merchant services.
Current News:
- In October, TikTok partnered with Shopify to allow its merchants to sell their products on TikTok through shoppable video ads.
- About 1.7 million merchants from a variety of industries and walks of life.
- Shopify’s Chief Executive Tobi Lutke has said the pandemic accelerated the e-commerce industry’s evolution by about 10 years (which from an investor standpoint brings up the question of whether or not there will continue to be upside)
- On January 18th, Amazon quietly acquired Shopify competitor Selz, another business that helps small businesses build online stores.
​


Citations:
https://www.inputmag.com/style/virgil-abloh-off-white-protection-box-skincare-cosmetics-amorepacific
https://www.wsj.com/articles/shopifys-fate-is-tied-to-that-of-small-businesses-11613574445?mod=business_major_pos4
https://www.businessoffashion.com/briefings/retail/amazon-fashion-after-jeff-bezos
https://www.forbes.com/sites/pamdanziger/2020/01/28/amazon-is-readying-major-disruption-for-the-fashion-industry/?sh=34d064e867f3
https://www.theverge.com/2018/10/23/17970466/amazon-prime-shopping-behavior-streaming-alexa-minimum-wage
https://www.wsj.com/articles/amazons-retail-side-wont-be-a-side-hustle-11612526408
https://www.wsj.com/articles/lower-income-covid-19-aid-recipients-seen-boosting-consumer-spending-11613298600
https://www.voguebusiness.com/technology/voice-assisted-styling-amazon-alexas-big-bet
https://www.retaildive.com/news/what-the-future-of-tiktok-means-for-retail/584483/
https://www.retailconnections.co.uk/articles/what-can-tiktok-do-for-retail-brands/
https://www.voguebusiness.com/technology/voice-assisted-styling-amazon-alexas-big-bet
https://www.retaildive.com/news/what-the-future-of-tiktok-means-for-retail/584483/
https://www.wsj.com/articles/shopifys-fate-is-tied-to-that-of-small-businesses-11613574445?mod=business_major_pos4