The End of “Let’s Order In”

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There is currently a paradox that confronts the restaurant industry. On the one hand, restaurant companies consider the rise of delivery as an increasingly important source of growth. On the other, GrubHub Inc. just announced disappointing quarterly results and said that food delivery is only a means to an end, unlikely to ever be profitable on its own. There is a considerable amount of risk associated with this conclusion from GrubHub toward the broader restaurant industry. 

Jennifer Marston/The Spoon

The GrubHub Phenomenon

Restaurants have based much of their recent growth on consumer deliveries and rely heavily on only four companies – GrubHub, DoorDash Inc., Postmates Inc., and Uber Eats. Combined, these four companies have a 95% share of the market, which makes GrubHub’s latest quarter seem even more ominous. In a letter to investors, GrubHub stated that it did not believe “that a company can generate significant profits on just the logistics component of the business.”  In other words, delivery will always be a low-margin business, so profits cannot significantly be derived from conducting only deliveries.  

More specific to GrubHub, the company found that new customers tend to order fewer deliveries than earlier users. Customers are losing their brand loyalty and are more willing to switch to rival services, which may be due to an increase in competitors in the online food delivery industry. Lastly, those rival services now offer delivery from a wider range of restaurants than GrubHub. This all resulted in a net income of $1 million for GrubHub versus $22.7 million in the same quarter a year before. 

The Daily Rail

In defense of these results, GrubHub has argued that its value to restaurants lies in its potential as an online advertising partner and that delivery services are just a vehicle for generating ad sales. Therefore, GrubHub is profitable, but meal delivery just isn’t where the money is. However, where does that leave DoorDash and Postmates, both of which are unprofitable and have a combined valuation of $15 billion? Both companies must now strive to accept the initial public offerings each received this year since no one would want to bother putting more money into these unprofitable companies when investors can buy shares for much less in GrubHub. 

Uber Eats is a slightly different case than DoorDash and Postmates because of its parent company, Uber Technologies Inc. However, Uber is a huge money loser, and its shares have declined by almost 30% since the company went public in May and investors are looking for signs of profitability. Therefore, despite having a parent company, Uber Eats is in a similar predicament as DoorDash and Postmates.

A Painful 2020 for the Restaurant Industry

If food-delivery services start cutting back because of its lack of profitability, then this will affect the restaurant industry tremendously in 2020. For example, in a conference call to discuss its latest quarterly results, Cheesecake Factory Inc. said that off-premise sales now comprise 16% of revenue with delivery being 35% of that amount. Cheesecake Factory uses DoorDash for its deliveries. This means that restaurants are currently dependent on companies with a significant amount of risk associated with it.

So, if GrubHub continues to hurt its own stock, then there is a high chance that the restaurants it works with will be hit as well in 2020.

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Thrifting and Its Economic and Environmental Impact

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From a young age, my family and I would routinely clean out our home and take our give-aways to Goodwill. Around high school, I started going back to Goodwill to buy my clothes. My friends and I used to take trips to San Francisco to stop by Buffalo Exchange, Crossroads, Waste Land, and all the small stores in between. Second-hand stores have a strong presence in the fashion industry. Whether it is through occupying the online space through websites like ThreadUp, or traditional retailers like Macy’s creating spaces for secondhand clothes in their stores, thrifting is pushing the fashion industry towards an environmental and economic change. 

Nowadays, it’s as important to appear socially conscious as it is fashion-forward. Nearly everything in my closet has been bought at a flea market, a thrift/consignment store, taken from a friend’s closet. Whether I buy clothes that are new with tags from a thrift store, or a shirt that’s been around since the ’70s, I find solace in knowing like buying clothes that aren’t brand new–it’s less wasteful. According to an article by Forbes, “Millennials prefer to do business with corporations and brands with prosocial messages, sustainable manufacturing methods, and ethical business standards.”

Buying second-hand clothing used to be looked down upon, but it has become one of the trendiest and most mainstream habits. Recently in Austin, Texas, I passed by a Goodwill Boutique. Now that thrifting has become widely accepted, stores are becoming curated in ways that cater to tastes and habits the same way that larger brands do. In 2018, Goodwill launched this new shopping concept with internal stylists and secondhand pieces from fashion influencers. 

Thrifting is beneficial for all parties involved. First of all, the shopper saves money by purchasing second-hand items. Whether shopping at a consignment store, or a non-profit like Goodwill, money is either circulating back to the original owner or through the community. Also, clothes are being upcycled which prevents waste. Goodwill NYNJ alone saved 38 million pounds of clothing from the landfill last year. 

The fashion industry makes up 10% of carbon emissions globally. According to the Ellen MacArthur Foundation, one garbage truck’s worth of textiles is wasted every second. The fashion industry is not only responsible for these environmental concerns, but also provides the lowest-wages in the world with dangerous conditions. These facts go against the values of current and future consumers. If long-standing corporations will not make the changes at their own will, hopefully, they will under the threat of the second-hand retail industry. 

The future of thrifting will disrupt the fashion industry as we know it today. According to a report by Colliers International Knowledge Leader blog, “From 2017 to 2019, millennial and Gen Z secondhand sales increased by 37% and 46%, respectively.” While the fashion industry at large is worth more than $2 Trillion, the secondhand market is projected to hit $41 billion by 2022. According to Fortune, grown 21 times faster than the retail market in the past three years. As consumers become more environmentally conscious, these numbers will grow and large corporations will begin to notice the shift––and will hopefully make changes in their own companies to become more sustainable too. 

Selling $1 billion in 68 seconds: Alibaba hits record on Singles’ Day

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A screen shows the value of goods being transacted during Alibaba Group’s Singles’ Day global shopping festival at the company’s headquarters in Hangzhou, Zhejiang province, China, November 12, 2019. REUTERS/Aly Song

After 24 hours of frenzied shopping, Chinese e-commerce giant Alibaba said its sales for its annual Singles’ Day shopping reached 268.4 billion yuan ($38.3 billion) and hit another record high.

Singles’ Day shopping is also known as “Double Eleven”. Akin to Black Friday and Cyber Monday in the United States, as the largest e-commerce retailer in China, Alibaba began its annual sales promotion on November 11 in 2009, with merchants offering attractive discounts. But Singles’ Day is much larger. The Black Friday gained less than $25 billion in sales last year and less than $8 billion on Cyber Monday. Alibaba Group only spent 68 seconds to sell $1 billion of goods on their Tmall and Taobao and sold the first $10 billion in half-hour.

The event has been replicated at home and abroad, with promotions from rivals in China such as JD.com Inc and Pinduoduo Inc as well as South Korea’s 11th Street and Singapore’s Qoo10. JD.com Inc, the second-largest e-commerce giant, sold a total of 204.4 billion yuan($29.2 billion) of goods on Singles’ Day.

(Credit to Jiajun Chen)

According to the data from Alibaba Group, in the first year of Double Eleven in 2009, China’s online shopping market was not yet mature. Chinese people were not familiar with online shopping, and some remote families even did not have access to the internet. Most consumers lived in first-tier cities such as Beijing and Shanghai, so the sales were only 50 million yuan ($7.1 million).

However, an increasing number of people began to get access to the internet and enjoyed the convenience of online shopping with the rapid development of the internet in China. By this year, the sales increased by more than 500 times compared with 2009 and hit 268.4 billion yuan ($38.3 billion).

According to a report released by China’s Office of the Central Cyberspace Affairs Commission, 854 million people were actively using the internet in China by June 2019, and China’s internet penetration rate was 61.2 percent. Among the significant number of internet users, online shoppers accounted for 74.8 percent and reached 622 million.

“The younger generation is buying more, and the customer from rural areas, the customers from lower-tier cities, they are buying imported products,” Tmall General Manager Alvin Liu told reporters.


Alibaba’s massive 11.11 countdown party included American star Taylor Swift on a moving stage with LED lights that required 300 people to operate. (Credit to Alibaba)

To attract more people to participate, especially younger generations, Alibaba hosted a “Countdown Gala” featuring a performance by pop singers, including Taylor Swift. This year, Alibaba also focused on live-streaming through its platform. Over 200,000 brands from all over the world took part in the promotion of Singles’ Day, and some retailers hired social media influencers or celebrities to promote their products before the shopping festival.

Influencers are promoting products vis live-streamed video. (Credit to Alibaba)

“Nearly all our brands have opted for live streaming promotions some times this year,” says Josh Gardner, who helps overseas companies sell products on Tmall as CEO of Kung Fu Data.

My favorite fall vegetable is a sweet potato

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Michelle Obama is not the only fan of sweet potatoes. Sweet potatoes are a key ingredient in plenty of American dishes, especially during the fall. The starchy vegetable has also seen an increase in demand as new health trends show how nutritious they are. According to René Simon, director of the Louisiana Sweet Potato Commission, domestic demand for fresh sweet potatoes has been increasing 3% to 5% year after year, and exports too, with 14% to 15% of the crop exporting mostly to Canada and Europe

According to the “Vegetable and Pulses Outlook” by the U.S. Department of Agriculture’s Economic Research Service, in 2017 North Carolina produced about half the nation’s sweet potatoes, valued at more than $346 million, but that was expected to change somewhat. In September of 2018, Hurricane Florence hit North Carolina, stretching 450 miles wide while dropping a record-breaking rain, including seven inches in a day in one region.

The storms, plus heavy rains after a dry summer in Mississippi, Louisiana, Arkansas and Alabama, as well as North Carolina, created some harvest challenges. Wholesale prices of orange U.S. grade No. 1 sweet potatoes from North Carolina ranged from $14-16 at Hunts Point Produce Market in Bronx, N.Y., the week ending Nov. 25, 2017. That range jumped to $20-22 for the same week in 2018.

In 2019, North Carolina has shipped 1.3 million cartons of the 2018 season’s sweet potatoes, according to the Jan. 31 marketing service movement report, which is a dip from the same time last year, which showed shipments at 1.56 million cartons.

Weather was not the only challenge for the 2018 season. Labor shortages and costs have also been key factors that have affected the industry negatively. According to Kay Rentzel, executive director of U.S. Sweet Potato Council Inc, the labor pool is nearly non-existent in many areas, making agricultural reforms for guest workers a priority for the industry.

Louisiana has hardly any local farm workers and depends almost all on H-2A non-immigrant workers allowed to come to the U.S. for temporary or seasonal agricultural work. Other states have been dealing with his issue as well.

In conclusion, the sweet potatoes you’ll buy for this year’s casserole will be more expensive than last years. I’m sure this will not be a problem for Michelle.

https://www.thepacker.com/article/sweet-potato-supplies-weather-storms

https://www.thepacker.com/article/fresh-trends-data-shows-appeal-sweet-potatoes

https://www.wired.com/story/this-martini-wants-to-kill-climate-change-one-sip-at-a-time/

https://www.thepacker.com/article/sweet-potatoes-prices-fall-popularity-fuels-production

Barbie Knows How to Run a Business

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Scrolling through my Instagram feed, I saw the hijabi, Olympian fencer Ibtihaj Muhammad partnering with the biggest brand from my childhood: Barbie. As a young girl, I never imagined a hijabi barbie, let alone one that wasn’t white and blonde. I decided to look further into what Muhammad was promoting. Together, Barbie and Airbnb created a life-sized Barbie Dream House, complete with an infinity pool, memorabilia-filled rooms, and fencing lessons from Muhammad herself.

Life-sized Barbie Dream House, available for rent on Airbnb.

The sixty-year-old Barbie brand is adapting to changing society and capitalizing on some of the biggest trends of this generation. With a growing focus on diversity, strategic partnerships, and a mastery of media, Barbie is more than just a toy, it’s an empire.

Barbie Bimbo is No More

Source: Rehab.com

Barbie’s history with diversity is a rocky one. The brand has received far too many hate messages about it’s severely ill-proportioned doll. As shown on the figure to the right, obtaining a “Barbie body” is quite literally impossible. In real life, her neck would not be able to support her head, her waist can fit half of a liver and a few inches of intestines, and she would be unable to walk with her child’s foot size of 3.

People complain about skinny, photoshopped models depicting unrealistic body expectations, but Barbie was the worst culprit, with 92% of impressionable, American girls looking to her impossible figure. As millennial women became mothers, they decided that Barbie was unacceptable for their children. Thus, according to this Times Article, Barbie sales dropped 20% between 2012 and 2014. The brand’s sales were overtaken both by Lego, encouraging girls to build, and Hasbro’s strong, independent “Elsa” doll dominating the market. Barbie knew it had to adapt to survive.

Barbie measurements compared to models and anorexics (Rehab.com)

How, you might ask? Barbie realized that diversity is selling in today’s society. Girls like me never used to see themselves reflected in toys, on television, or in power. But today, people like Nasim Pedrad, Jameela Jamil, and Congresswomen Ilhan Omar and Rashida Tlaib are dominating the news cycles. Kim Kardashian, Beyonce, and Rhianna are leading a movement to represent a more curvaceous body type. As a result, Barbie began to release dolls of different races, hair colors, and occupations. In 2016, Barbie made the biggest, most complex move of all: They introduced four new body types. 

Now, you can get Barbie in Tall, Petite, and Curvy, along with the original doll. There are 7 skin tones, 22 eye colors, and 27 hair styles, according to CNN. Most recently, Barbie released specially designed dolls that come with a wheelchair or prosthetic leg. The “Career Dolls” feature women as marine biologists, astrophysicists, and engineers. Gone are the moments like October in 1992 when the “Teen Talk” Barbie was made to say “math class is tough.” Women’s empowerment is the new chic, and Barbie is taking notes. 

Barbie Knows How to Make Friends

Ibtihaj Muhammad Barbie Doll

Mattel and Barbie have well-placed strategic partnerships. They came out with their “Role Models” campaign in 2015, featuring dolls created in the likeness of amazing women in politics, science, athletics, and so much more. Some role models are not famous, as is the case with Iwona Blecharczyk, a professional truck driver from Poland. But in choosing celebrities like Gabby Douglas, Ibtihaj Muhammad, and Naomi Osaka, Barbie is bringing a vast amount of positive media attention to their company. 

Ashley Graham Barbie Doll

In my opinion, their best celebrity partnership is Ashley Graham. As one of the leading activists in the body positivity movement, she is a social media sensation and famous supermodel. Her  9.4 million followers love her, and have propelled her into landing jobs with Vogue Magazine, Harper’s Bazaar, Glamour, and the coveted Sports Illustrated swimsuit cover. Adding Graham as a role model in 2016 helped launch Barbie’s body positivity line in the most millennial-centric way possible.

Barbie has learned to partner with more than just individuals. The aforementioned Airbnb partnership brought extensive media attention to both companies, and Airbnb donated to the Barbie Dream Gap Project, helping girls achieve greatness. This was truly a genius move, and one of the most creative marketing ploys I’ve seen in a long time. 

Barbie on Screen

Barbie is quite possibly the most technologically savvy doll there is. Her Instagram is worth following, with a colorful feed and engaging posts. Barbie wants you to interact with her by answering questions and sharing stories on Instagram. She posts about celebrities like BTS and provides exciting videos geared to younger teen audiences. One of the most recent posts was the “We’re Taking Over” music video.

https://www.instagram.com/p/B4nS1kiFrjV/

The video features some of the most Insta-famous dancers from Dance Moms, Disney Channel, and other famous studios. The message is rooted in female empowerment, showing girls becoming president and other high profile leadership roles. While this video is too annoying for my 19-year-old senses to handle, it’s perfect for the age group they’re targeting. By using relatable influencers, a great message, and fun music, Barbie is bringing an exciting flavor to her Instagram profile, and you can watch the whole video via IGTV.

Barbie can also be found on the television screen. One day, I walked into my friends house and found her watching Barbie: Life in a Dreamhouse on Netflix. She said, “it’s kinda good.” My friend was not Barbie’s target audience, but there she was, interacting with the Barbie brand at eighteen. If someone searches “Barbie” on Netflix, he or she will find countless mini series and movies featuring the iconic doll. She doesn’t just dominate social media, she’s on your Netflix feed as well.

What’s the bottom line? Having a sixty-year-old brand plagued with controversy isn’t the end-all be-all. You can bounce back and assert yourself in the industry for years to come. It’s all about looking at your customers and determining exactly what will make the dollars flow into your pocket. Does a six-year-old care if Barbie partners with Ibtihaj Muhammad? No, but the mommy with the wallet most certainly will.

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