🍋 Retail Goes Self-Service

Author

Short Squeez
January 28, 2022

Together With

“In the startup world, you’re either a genius or an idiot. You’re never just an ordinary guy trying to get through the day” — Marc Andreesen

Good morning and Happy Friday! Looks like Robinhood stock is going to zero (lmao). The company released disastrous earnings, daily active users were down and gave a bleak revenue forecast for Q1'22. Stock was down 13% in after hours. On the 1 year anniversary of halting trading of meme stocks, Robinhood will open at its all time low today, down 84% from its all-time high on Aug '21 (what goes around...). US economy had its strongest year in decades and GDP grew at a 6.9% (nice) annualized rate in Q4 beating the 5.5% estimate.

If you want to become a more efficient modeler, check out today's sponsor, Daloopa, which allows you to update earnings models with 1-click.

1. Story of the Day: Retail Goes Self-Service

Retail is joining the autonomous movement and human workers in stores are being replaced with technology. While the internet will have you believe everyone is shopping online, 72% of retail sales are actually still expected to take place in brick and mortar stores in 2024.

So what changes are happening?

Trends like "buy online, pick up instore" have company: "reserve online, pick up instore." Amazon Go is normalizing cashier-less checkout because it’s becoming increasingly hard to find workers. In-store help is expected to shift to QR codes and smart tags, filled with product info and promotions. Zliide is a company that is revolutionizing retail with its technology. Zliide’s digital fob attaches to a garment on a rack instore, where you can try on the item. Through the app, you can see price, videos, and product information. If you like it, you can check out on the spot through Apple Pay. The fob unlocks and you can drop it off later. If you decide you want to buy the shirt after you leave the store, Zliide will help you buy it online and have it delivered.

Zliide’s system is already being used in H&M Group’s Weekday stores in Denmark. Another trend gripping retail is social commerce or buying stuff through social platforms like Instagram, TikTok, and Facebook. “It’s word of mouth on steroids," says Sandie Hawkins, TikTok’s GM of North America Solutions. According to an estimate, the market for social commerce is expected to grow to a whopping $605 billion by 2027.

Short Squeez Takeaway: Seems like the general trend in everything is less and less human interaction. Even people who want more in-store help will not have to rely on the phones for information. On the other hand, many people would rather do their own research and buy what they want to buy rather than being “sold” stuff by a salesperson.   

Source: Axios, HBR

2. Markets Rundown

Stocks had another down day as investors weighted Fed's plans for several interest-rate hikes this year and tighter financial conditions. Nasdaq is on-track for its worst month since Oct '08.

Movers & Shakers

  • (+) Service Now ($NOW) +9% beating earnings and Piper Sandler upgrading the stock.

  • (+) Netflix ($NFLX) +8% after Bill Ackman revealed that he purchased more than 3.1 million shares of the company.

  • (–) Tesla ($TSLA) -12% despite beating earnings but warned about supply chain issues and announced no new models in '22, which disappointed some analysts.

3. Top Reads

  • Private equity firms think the best investment is . . . themselves (II)

  • Apple to rival Square by turning iPhones into payment terminals (BB)

  • A probabilistic view of private equity returns (CAIA)

  • Will Hollywood’s streaming ambition lead to big gaming buys? (HR)

  • AT&T CEO suggests Netflix’s price hike is great news for HBO Max (Verge)

  • How YouTube became unstoppable (Protocol)

  • Beware—trolls are out to spoil tomorrow’s Wordle for you (AT)

  • Personal finance is a hit on TikTok (Economist)

  • SoftBank COO leaves after clashing with Masayoshi Son over pay (BB)

A Message from Daloopa: Let AI Do Your Financial Modeling

Here's a dirty secret: part of being a finance professional (investment banker, private equity / hedge fund investor) consists of being one of the world's best-paid data-entry professionals. It's a pain—and a rite of passage—to build a financial model by painstakingly transcribing information from 10-Qs, 10-Ks, presentations, and transcripts. Or, at least, it was: Daloopa uses machine learning and human validation to automatically parse financial statements and other disclosures, creating a continuously-updated, detailed, and accurate model.

If you've ever fired up Excel at 8pm and realized you'll be doing CTRL C Alt-Tab Alt ESV until well past midnight, you owe it to yourself to check this out.

4. Book of the Day: New Power: How Anyone Can Persuade, Mobilize, and Succeed in Our Chaotic, Connected Age

In this indispensable guide to navigating the twenty-first century, two visionary thinkers reveal how “new power” is reshaping politics, business, and life to be more open, participatory, and peer-driven. Here, Jeremy Heimans and Henry Timms reveal a new and compelling lens on the biggest stories of our age—from the out-of-nowhere victory of Donald Trump to the rise of mega-platforms like Facebook.

They show the strength of new power—movements like #MeToo; platforms like Airbnb and Lyft; organizations like TED and Lego—as well as its dark side. They contrast it to “old power,” the foundations of which are coming under assault in an age of ubiquitous participation.

The battle between old and new power is determining who governs us, how we work, and even how we think and feel. This groundbreaking book provides a new way to understand the world—and the tools we all need to thrive in it.

“The most common way people give up their power is by thinking they don't have any.”

5. Short Squeez Picks

  • Brave Wallet is a secure crypto wallet built natively in a web3 browser. No extensions required. Store, manage & grow your portfolio, get NFT & multi-chain support, and more

  • Day in the life of Lex Friedman

  • Ten facts colleges don’t want you to know about admissions

6. Daily Visual: Fast Food Inflation

Source: Axios

7. Daily Acumen: Build A Museum Not A Warehouse

We spend the first half of our lives adding things, and the second half subtracting most of them.

Investing follows life, and this is also what a lot of investors end up doing. They create crowded warehouses of portfolios in the initial years of their investment careers, realize most of their choices were mistakes, and then they start subtracting vigorously.

Lest you lose out on the positive compounding timeframe, you will do yourself a world of good by respecting and practicing this lesson – of saying no to most things, of not adding a lot of unwanted stocks to your portfolios – early.

In other words, be a curator of stocks, not a warehouse manager.

8. Crypto Corner

9. Memes of the Day

Join the conversation

or to participate.