🌮 The Yelp economy

Wednesday, June 16, 2021 by Robinhood Snacks | Disclosures
_More daily views than daily new Shein items [Nick David/Stone via GettyImages]_

More daily views than daily new Shein items Nick David/Stone via GettyImages

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Hey Snackers,

You've heard of "revenge spending." New thing: revenge luxury spending. Lamborghini is almost sold out for the year, and Chanel's sales grew by double digits last quarter.

Stocks dipped yesterday on slowing retail sales. Speaking of...

1. Yelp's new data tells us about the reopening — but it’s really a window into the digital economy

Fewer scented candles... more candlelit dinners. Retail sales fell 1.3% last month, but it's not a bad sign for recovery. Spending is shifting from physical goods to "revenge experiences," as Americans swap TV menus for cocktail menus:

  • Down: Spending on furniture, electronics, and appliances fell — because we've already spent enough on our biodomes.
  • Up: Restaurant spending jumped 1.8%, and clothing sales jumped 3% (for all those date night fits). But restaurants are still struggling to fill job openings (#LaborShortage).

Hold my beer garden... Yelp's latest data blows those retail numbers out of the iced tap water. Last month, Yelp seated a record 3.7M diners in the US — up 48% from May 2019. Yelp bookings surged past pre-pandemic levels in almost every US state, minus NY.

  • In Texas and Florida, where Covid restrictions have been lifted longer, Yelp diners more than doubled last month compared to two years earlier.
  • In California, which lifted its mask mandate and restrictions yesterday, diners were already back to pre-Covid levels in May.
  • It could be that restaurants added more pandemic seating areas (hence: extra booking space). But we think something else is going on...

Yelp’s data confirms the digital transformation... The 2019 numbers and the 2021 numbers are apples and digital oranges. What these comparisons really reflect: the number of restaurants and diners that moved online. During the pandemic, restaurant owners flocked to tech platforms to secure takeout orders, set up digital menus, and add contactless payments. And it appears they're staying digital. This shift bodes well for restaurant tech providers like Yelp, OpenTable, Toast, Square, and Resy.


50 new fits... for 50 new TikTok vids. Amazon's feeling more like MySpace right now. After 152 days as the #1 ecomm app in the US, the 'Zon has lost the top spot to Shein. The Chinese online apparel retailer is a Gen Z favorite, thanks to low prices and a massive offering of on-trend clothing. Shein adopted the fast-fashion model pioneered by Forever 21, H&M, and Zara — then turbocharged it:

  • Quick fits: Shein spots a halter top that's trending on social. Two weeks later, it’s on Shein's virtual shelves for $10 less than the original. Shein added 5.2K new items yesterday alone.
  • Quick hits: TikTok and Insta influencers are key to its marketing, along with virtual concerts from celebs like Katy Perry and Lil Nas X.
  • Tight lips: Shein is still super secretive about its business, suppliers, factory conditions, and management.

We do know one thing... Shein is raking in the big bucks. Sales reportedly more than tripled to $10B last year — well above Zara's online sales. Shein's US success is partly thanks to a loophole: Trump's 2018 China tariffs only applied to packages over $800 (very rare for a Shein order). Then China effectively waived export taxes for D2C companies, adding more fuel to Shein's US growth.


Welcome to "real-time fashion"... In the TikTok era, trends change so fast it's hard to keep up. Fast fashion retailers are struggling as Zillenials opt for second-hand Levi's over H&M florals. By sharing app search data with suppliers, Shein can react to new trends almost instantly. If peacock patterns are trending on Monday, Shein can tell Chinese factories to have peacock crops/shorts/earrings ready for shipping by next Wednesday — much faster than even fast fashion. One big downside: real-time fashion could result in even more waste and enviro-harm.

What else we’re Snackin’
  • Friends: The US and the EU have agreed to suspend their epic trade dispute over government subsidies to plane-makers Boeing and Airbus.
  • Fail: AstraZeneca's antibody cocktail was only 33% effective at preventing symptomatic Covid-19 in a large-scale trial.
  • Foul: DraftKings shares tumbled after short seller Hindenburg Research alleged that the sports betting app has some shady gaming links.
  • Poddy: Spotify sealed an exclusive deal — reportedly worth $60M — to bring top podcast "Call Her Daddy" into its Gated Garden.
  • OK: Jack in the Box is partnering with Uber Eats and Jason Derulo on a virtual restaurant called "One in a Milli." So modern.
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