More Consumer Clues In Target, Walmart Earnings This Week: 2024 a Mystery
We've had two good recent earnings in Amazon and Shopify recently, which are good for eCommerce overall heading into the holidays. Overall, though, there is no "rising tide" lifting or sinking all boats. Most companies have their own stories. Amazon buoyed by Advertising and Cloud. Shopify's accelerated growth in Europe and POS.
On the downside, UPS was still recovering from both Teamsters contract parcel diversion and weaker y/y shipment numbers from its customers.
Looking forward to this week, Walmart has the "right place right time" momentum of gaining share due to customers trading down, and accelerating marketplace adoption fueling advertising and fulfillment.
Target is weighed down by a number of categories that are not performing well: home, electronics, etc. Expect discounting to be high at Target this season.
The best analogy for 2024 at the moment is the shrug emoji 🤷♀️ We are past the point of profitability and economic trends affecting many company's restructuring decisions, but just that means those who are still out there making adjustments are in more dire circumstances than the "early adopters". In other words, I don't expect better news. Maersk, Carta, BigCommerce, Faire, Salsify show you even relatively well-funded companies have issues and low margin for error. Shopify cut 20% of its workforce in May, and has signaled that AI is likely to flatten out its support hiring going forward.
On the SaaS side, you have some out there predicting a startup extinction event, and in large part I think it's happening. The VCs who took flyers on companies during the pandemic don't have unlimited capital, and many are loath to take chances on companies that can't attract another lead investor.
In this environment, I would encourage all SaaS founders with less than 16 months of runway to be almost continually fundraising. The reason?
Just because many VCs and investors are looking for perfection right now, doesn't mean they all have the same definition. Give yourself time and runway to fight another day.
