radical Insights.

Weekly Research and Commentary on the Future of Business and Technology.

The End of Retail as We Know It.

Jul 18, 2023

Under its new owner’s caring and skillful direction, Twitter is imploding. For quite some time, Facebook has been for old people. Instagram doesn’t seem to know what it’s about anymore. TikTok is getting banned left, right, and center. YouTube has become a distribution network for MrBeast alone. And now we have Threads.

Aside from its meteoric rise (100M users in a mere five days) – which, for the record, seemed to have slowed down – content and engagement on the platform seem to closely mimic what’s happening on Facebook. Which is to say – it’s not good. Given that Threads is built on the Instagram social graph and that Meta makes a lot of money through Instagram, it will be interesting to see how long Meta potentially wants to bleed money from Instagram into Threads. But that is a story for another day.

The real story for today is how all this, plus the impending implosion of search (see our recent Briefing on “Hello AI, Goodbye Search,” what all this will do to commerce (especially retail). Just last week, I spoke at NRF NEXUS, the leading industry event, where I sat down with Jason “Retailgeek” Goldberg, who shared the latest stats on retail, a $7.1 trillion dollar industry which grew 8.2% last year and a whopping 31% since the pre-pandemic 2019. Jason’s data shows that 61% of all purchases are digitally influenced, which is expected to rise to 70% soon.

Let this sink in for a moment and start connecting the dots. Data from one of our partners shows that the top 5% of Shopify stores generate 45% of their traffic through search. The top indie online merchants predominantly grew their market position through social and influencer marketing. And now – Search will give way to ChatGPT (and other AIs). Social is a mess that doesn’t seem to get much better anytime soon. Large retailers, like Amazon and Walmart, have tens to hundreds of millions of apps installed on phones – thus giving them a direct line to their consumers. Anybody else – not so much… It’s going to be a wild ride for a while while we figure out how the new world will work (and doesn’t). (via Pascal)