1) In Walmart and Amazon’s food wars, Instacart may be the collateral damage.

What happened

  • Walmart continues to rev up its grocery operations at home and abroad. This week, the company announced that it will merge its grocery chain Asda with Sainsbury’s in the UK.
  • But as Walmart expands the grocery category in the U.S., it isn’t partnering with Instacart, the country’s fastest growing grocery delivery company. Instead, Walmart wants shoppers to order food from its site and app, using Instacart purely for delivery. Instacart wants to users to be able to buy food and beverages on its own app and cover delivery.

Why it matters

  • Walmart is the largest grocer in the U.S. According to the latest data, it captures about 15% of the overall market and 9% of the online grocery market, second only to Amazon’s 18% online share. Walmart’s efforts to improve its grocery services are also paying off.
  • Instacart could help activate Walmart’s growth in the sector—its national presence is much broader compared to grocery delivery competitors, which mostly operate in urban areas. But after working to establish itself as a standalone company that partners with grocers, all of whom list their items on Instacart’s app, Instacart understandably wants to obtain the most traffic possible, as well as collect service and delivery fees from the orders it fulfills.
  • Instacart works with a number of grocery stores, but it is increasingly falling victim to the Walmart-Amazon war. In March 2018, Amazon began ramping up its Prime Now delivery service from Whole Foods, despite its five-year contract with Instacart (Instacart still lists Whole Foods as a partner on its site). Now Walmart seems to be following suit. Walmart struck a deal with Instacart in February 2018 to provide same-day delivery from Sam’s Club in three cities. But it also plans to provide in-store grocery pickup in 2,200 Walmart stores by the end of 2018 and wants to keep the delivery service housed within its own infrastructure, using companies like Uber and Postmates to fulfill the orders. The question now is whether Instacart will hold up without Walmart and Amazon as future partners, especially after its February 2018 fundraise, which values Instacart at $4.2 billion and means it will have to keep expanding.

2) Meghan Markle takes influencer marketing offline, but still comes out on top.

What happened

  • Though actress Meghan Markle has deleted her social media accounts since her engagement to Prince Harry, she remains a powerful celebrity influencer offline. An Everlane tote she carried to the Invictus Games in Toronto garnered a waitlist of more than 20,000 and the years she’s spent shooting television in Toronto have fueled the rise of many Canadian brands on the global stage.

Why it matters

  • Markle’s prominence without social media speaks to the power of her celebrity, which overrides the need for direct access to consumers. Celebrity-driven marketing and celebrity brands have grown recently to a great extent, particularly thanks to Instagram and YouTube. But with Markle, decentralized or indirect dialogue with consumers is enough to skyrocket a brand’s online traffic or sell out of a product worn by the actress-turned-royal.
  • While other women in powerful positions—think Michelle Obama, Brigitte Macron and Jackie Kennedy—have had a similar effect on consumer goods, a fascination with the enduring British monarchy will keep Markle in the public eye for much longer than other celebrities who can fade over time. Markle, like her fashion tastes, is less likely to fall out of favor and can use her influence to create real impact with the brands she wears. Now it’s just a question of how she’ll use her brand endorsements—simply as fashion choices or to promote an agenda.

3) Brookfield Ventures, the new investment arm of Brookfield Asset Management, will invest in tech-driven startups that could revamp its own retail real estate.

What happened

  • Brookfield Asset Management, an international real estate company, plans to invest $200 to $300 million via Brookfield Ventures over the next three years. Most funds will be funneled to tech-driven startups that fall under the real estate, infrastructure, power and private equity categories.
  • This week, Brookfield Ventures invested $15 million in BuildingConnected, a management and networking site for owners, general contractors and subcontractors.

Why it matters

  • Brookfield is one of many real estate companies to invest in startups, from Lennar Corp to Simon Property Group Inc. However, Brookfield, which owns a large swath of commercial property, solidifies the changing nature of retail real estate and the role of startups in infusing these spaces with new technology and cross-industry expertise. With this venture capital arm, Brookfield has a chance to improve the properties of the mall company GGP Inc., which Brookfield Property Partners LP recently bought a 66% stake in. Brookfield Ventures mentioned that it is already interested in investing in a startup for electric car-charging in shopping center parking lots, which would improve the mall experience upon arrival and departure, as other tech-driven companies like b8ta attempt to rejuvenate the in-store experience. Like LVMH’s recently launched luxury startup accelerator, the investment arm could work to bring Brookfield Ventures into the digital era.

4) Kering’s revenue growth points to its ability to adapt to a changing luxury industry.

What happened

  • Kering, the luxury conglomerate that owns Yves Saint Laurent and Gucci, among other companies, saw its Q1 2018 revenue increase 36.8%—Gucci’s revenue alone rose 48.7%. In the same quarter, Gucci’s online sales more than doubled.

Why it matters

  • Kering’s continued growth is indebted to Gucci, which has reversed course since 2015, thanks in large part to its improved relationship with a younger customer base. In the first three quarters of 2017, 55% of Gucci’s sales went to shoppers under 35 years old. Much of this shift is attributed to Gucci’s new creative director and chief executive, both of whom joined in 2015. (Other companies have followed suit, notably Louis Vuitton, which brought on streetwear designer Virgil Abloh as creative director in March 2018.)
  • In the luxury industry, much of which remains reluctant to embrace ecommerce, Gucci’s success shows that those that go online can reap large gains. These improvements have also allowed Kering to focus on luxury at a time when other companies are rejecting it. A decade ago, 17% of the company’s sales were luxury and in 2017, that percent rose to 70%, with no signs of stopping. In January 2018, the company announced it would spin off its shares of Puma to shareholders, making the German company independent, and in April 2018, it announced it would sell Volcom, a skatewear brand. Despite Kering’s rebuff of Puma and Volcom, if it manages to stay abreast of non-luxury trends and the potential role they could play in the luxury industry, the company will have the potential to expand its customer base to new demographics, much like Louis Vuitton is attempting now with Abloh.