TRD Issue 48 - Briefing: Sam Altman Joins Microsoft, New Buy with Prime Features, US Retail Sales Decline Less Than Expected

Hello Subscribers,

The past three days have been like binge-watching a Netflix documentary series but in real life. 

Last Friday, OpenAI's board removed Sam Altman from his position as CEO due to his lack of consistent openness in communication. This news set off a flurry of speculation in the tech world, with people wondering whether Altman would return to OpenAI or start a new venture with co-founder Greg Brockman. However, the latest development is that Microsoft's CEO, Satya Nadella, announced on X that Altman and Brockman will join Microsoft to lead a new advanced AI team. Social media was abuzz with news and rumors about this exciting development.

Back to e-commerce, Amazon launched new 'Buy With Prime' features before Black Friday. These features enable Prime members to keep track of their Buy with Prime orders from the websites of participating brands. They can also chat with a customer service team using their Amazon account. Additionally, Prime members can return their BwP purchases at UPS, Whole Foods, and Amazon Fresh stores without having to box or label the items. In addition to the BwP updates, Amazon also announced a partnership with Hyundai and will enable the direct online purchase of Hyundai vehicles next year, a first-of-its-kind collaboration.

With less than five days until Black Friday and Cyber Monday, brands and retailers are gearing up for the final and most crucial shopping season 2023. As reported by the media, US retail sales dropped less than anticipated in October, indicating consumers' resilience. Despite the decline in sales, Target's share price has risen, reflecting investor confidence and highlighting the strength of consumers in the face of economic pressures.

Last but not least, Chinese e-commerce platforms are expanding globally, challenging established norms with aggressive pricing and marketing strategies and other significant developments in Asia.

Thank you for your subscription, and happy reading!

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Headline

Microsoft to Appoint Sam Altman CEO of New In-House AI Team

Why it is important

• Microsoft's support for Sam Altman signals a strategic shift and reinforces its commitment to AI, impacting its long-term innovation and market position.
• OpenAI's recent shake-up could speed up AI development, with other tech giants seeing the result as both an opportunity and a challenge.

What happened

• After the dramatic development this past weekend, Sam Altman joined Microsoft to head a new AI team.
• After at least 700 OpenAI employees signed an open letter to the OpenAI board, Sam Altman and Greg Brockman might not be the only ones joining Microsoft.

Source: Bloomberg

e-Commerce

Amazon Tacks on New Buy With Prime Features Ahead of Peak Holiday Shopping

Why it is important

• Amazon enhances 'Buy With Prime' (BwP), strategically positioning itself against emerging competitors like Shein and TikTok Shop during the holiday season.

What happened

• Amazon added new features to BwP to attract more merchants.
• Prime members can track BwP orders from brands' sites and chat with a customer service team via their Amazon account.
• Prime members can return items purchased with BwP at UPS, Whole Foods, and Amazon Fresh stores without boxing or labeling.

Source: Reuters

Amazon Shoppers Can Buy a Hyundai Online Starting Next Year

Why it is important

• Amazon's partnership with Hyundai could redefine e-commerce and automotive retail, changing how people buy cars and the sales model for the industry.

What happened

• Starting next year, Amazon will enable the direct online purchase of Hyundai vehicles, a first-of-its-kind collaboration. 
• This indicates a shift toward digital car sales and impacts traditional dealership models.

Source: Bloomberg

How China Took Over the World'sAmazon's Online Shopping Carts

Why it is important

• Chinese e-commerce platforms like Shein, Temu, and TikTok Shop are expanding globally, challenging established international e-commerce norms with aggressive pricing and marketing strategies.

What happened

• These marketplaces have gained significant traction in global markets, offering low-cost products and innovative shopping experiences.
• This expansion reflects China's growing influence in global e-commerce and challenges traditional retail models.

Source: Rest of World

Retail

US Retail Sales Fall Less than Expected in Sign of Consumer Resilience

Why it is important

• US retail sales fell less than forecast in October, indicating consumer's relative resilience.
• Despite declining sales, Target's share surge reflects investor optimism, highlighting consumer resilience in the face of economic pressures.

What happened

• Target reported a 4.9% drop in sales, yet shares rose 17%, driven by better-than-expected earnings.
• This paradoxical situation underscores the complex dynamics in retail, influenced by consumer spending shifts and economic factors.

Source: FT

Natura to Sell The Body Shop to Private Equity Firm for £207mn

Why it is important

• Natura's sale of The Body Shop to Aurelius reflects strategic shifts in the beauty industry.
• Natura sold another major brand this year after divesting Aesop to L'Oreal in April.

What happened

• Brazilian cosmetics company Natura sold The Body Shop to Aurelius, a PE firm, at a fraction of its original purchase price.
• This move signifies Natura's strategic retreat from global ambitions and The Body Shop's need for revitalization.

Source: FT

D2C

DTC Briefing: Q3 Proved to be a Period of “Diagnosing and Fixing"" for Publicly-Traded Startups

Why it is important

• The Q3 performance of publicly traded D2C startups reflects a critical phase of adjustment and strategic realignment in response to economic challenges.

What happened

• D2C startups like Allbirds, Warby Parker, and Figs experienced mixed Q3 results, with some facing sales declines.
• They adapt by focusing on profitability, exploring new product lines, and expanding distribution channels amidst a challenging economic environment.

Source: Modern Retail

Asia

Thai Central Group Becomes Majority Shareholder of Selfridges as Signa Woes Deepen

Why it is important

• Central Group, Thailand's retail giant, is now the majority shareholder of Selfridges, emphasizing the growing presence of Asian investors in the luxury retail market.

What happened

• Central Group has gained control of Selfridges amid challenges faced by its Austrian co-owner, Signa.
• This move strengthens Central Group's position in the European luxury department store sector.

Source: Reuters

Opinion: Taiwanese Among the Biggest Luxury Spenders in Asia, and Brands Should Take Note

Why it is important

• Taiwan's emergence as a leading luxury market in East Asia, with the highest per-capita luxury spending, underscores a significant shift in consumer behavior.

What happened

• Luxury consumers in Taiwan have become the highest per-capita spenders in East Asia, surpassing Japan and the U.S.
• This growth in luxury spending, driven by specific consumer personas and behaviors, positions Taiwan as a key market for luxury brands.

Source: Retail in Asia

LINE App to be Refreshed by 2024 for E-Commerce Revitalization, ID Integration Key

Why it is important

• LINE Yahoo's planned overhaul of the LINE app by 2024 is pivotal for revitalizing its business and staying competitive in Japan's digital landscape.

What happened

• LINE Yahoo, formed from the merger of Z Holdings, LINE, and Yahoo, aims to revitalize its business by significantly renewing the LINE app, enhancing e-commerce services, and integrating user IDs for a cohesive digital experience.

Source: NIKKEI