Why category leading brick and mortar retailers are likely the biggest long term Covid beneficiaries

Key excerpts:

• Wal-Mart’s digital revenue in Q2 was an annualized $42 billion, growing 94% — faster than Amazon. Best Buy’s digital revenue in Q2 was an annualized $19.4 billion, growing 242% — faster than Amazon.
• Perhaps the simplest way to express what has happened during Covid is to note that Amazon has actually lost share in e-commerce during Covid.
• These retailers also all now understand the playbook they need to run online — they can simply copy what worked for Amazon.
• One of the more interesting observations from attending Jet.com board meetings was that almost any small e-commerce acquisition was accretive as Jet could immediately lower shipping costs for the acquired company by at least 10%.
• I have looked at cohort curves for dozens of e-commerce companies across multiple categories and geographies and I can make one authoritative observation. Once you have a customers name, email address, mailing address and credit card data saved in an account they created and that customer has made two or more purchases, the odds that they continue to repeat are high. Even more so today with the ease of saving your password in Safari, Chrome and IOS or logging into an app with FaceID.
• Covid has gone on long enough for consumers to form new habits in terms of both where they shop and how they shop. BOPIS will always be the cheapest same day delivery service because the consumer is effectively paying for the cost of the delivery by driving themselves to the store.
• Generally speaking, their weakest, most leveraged, most discounting prone competitors have gone bankrupt during Covid. So in addition to a structurally improved e-commerce business that should persist post Covid they will have a stronger offline competitive position post Covid.
• Time will tell, but I am reasonably confident that category leading brick and mortar retailers are going to be the biggest long term beneficiaries of Covid. These retailers used to be called “category killers,” but that terminology has fallen into disuse as it seemed silly in the face of Amazon. I suspect we will begin to call them “category killers” once again.