1) Nike expands its Amazon program, but calls for “better presentation” and data-sharing

Why it’s interesting

  • Nike’s relationship with Amazon is probably the most closely watched brand partnership with the Seattle-based behemoth so far. A big focus is on how much Nike can push Amazon to honor its commitment to letting Nike be the exclusive seller of its products online.

Why it matters

  • As Nike slims down its stocklists from 30,000 to just 40, Amazon will become an increasingly important sales channel. The comment from CEO Mark Parker call for seems like a clear message to Amazon: it needs to keep improving the brand building tools it provides to sellers as well as its data sharing practices. While few other companies have had luck lobbying Amazon, Nike might have enough staying power to pull it off.

2) Niche brands are cutting into big CPG companies’ market share

Why it’s interesting

  • In the past three years, over $17 billion in sales has evaporated from the 10 largest U.S. packaged-food companies, according to Bloomberg. Large CPG companies are scrambling to figure out how to reverse the revenue slides.

Why it matters

  • The explosion of direct-to-consumer and digitally-native brands is well known, but their effects—whether they are stealing market share from big brands, growing the overall pie, or both—have been unclear. This is possibly one of the clearest stats that sales are shifting toward smaller and more health-conscious brands. Having a slow speed-to-market and a heritage brand is turning from an asset to a liability.

  • Some CPG companies are trying new things—for example, raising prices to see if it shifts consumer perception, and buying up other fast-growing companies. However, it remains to be seen if these acquisitions will drive actual innovation or just add revenue to the balance sheet, rather than spinning up new concepts in-house and changing internal cultures.

3) Equinox invests in Rumble, a year-old boxing gym, and calls it the “next big thing”

Why it’s interesting

  • Equinox has been quick to diversify beyond its eponymous gym, buying SoulCycle for $177 million in 2011, where revenue between 2012-2014 more than tripled under its guidance. There’s a good chance it will continue upping its stake with Rumble if it likes the results it sees.

Why it matters

  • Offline experiences are only growing as a consumer spending category, and a company like Equinox is well poised to capitalize on this trend given its high-end brand and far-and-wide presence. Equinox itself is owned by Related, one of the largest real estate companies in the US, which is benefitting from Equinox’s desire to acquire and invest in other companies that can increase the value and utilization of its real estate. As vacancies rise because of traditional retail bankruptcies, it will be interesting to see if companies like Equinox continue being acquisitive as a way to drive additional revenue for investors.

  • Additionally, Rumble’s success points to the preference for curated experiences, where trained professionals guide individuals through their routines. It would be interesting to know how successful Equinox’s own classes are compared to people who workout on their own, and if class-only studios like SoulCycle and Rumble are better poised to take advantage of this shift than normal gyms. Peloton’s ascent also has to be top-of-mind.

4) Private equity’s mixed relationship with fashion

Why it’s interesting

  • Private equity is evolving its approach to the fashion industry to address years of unsatisfactory results—particularly the concern that many investments have not provided the return on investment that their investors hoped. L Catterton, which LVMH has a significant stake in, has been the most active of the bunch.

Why it matters

  • One of the existential questions for most venture-backed consumer brands is who is going to buy them and give investors their returns? It’s clear that Walmart is actively acquiring brands, but there aren’t a lot of other exit opportunities out there.

  • The main reason private equity has been quiet on these new brands is that many of them don’t have the cash flow or profitability to make the PE model work, which often requires taking out debt to finance growth and using cash flow to pay it back. This should force more brands to focus on both overall and unit profitability, but there is not much evidence that they are getting the message.

5) Apple sees record product delays under CEO Tim Cook

Why it’s interesting

  • As COO, Tim Cook was known as the operational maven behind Apple’s ascent. But now as CEO, product delays are rising under his watch, according to The Wall Street Journal. It found that Steve Jobs waited longer to release products until they were ready to ship, while Cook is announcing them earlier and they are shipping later.

Why it matters

  • Apple makes some of the most complicated electronics in the world. As a result, it is relying less and less on suppliers and bringing more expertise and design in house. This push toward vertical integration mirrors Tesla’s operational strategy in scaling electric car production, finding that most delays come from the pressure it puts on suppliers. In response, Tesla is also moving more creation and production in house.

  • This raises a range of questions about the speed of innovation and what it takes for companies to compete in rapidly evolving markets. Will more companies be forced to be vertical if they want to truly innovate? For some product categories, it looks unavoidable.