So interesting, Daniel! I hadn’t known about the influence of digital on auction houses. Two points stick out to me:
1. Sotheby’s has a very high end brand and reputation. I wonder if by partnering with eBay, they put some of that at risk. eBay has a slate of offerings, but many of their products are cheap or knockoff, and they aren’t seen as high end like Sotheby’s is. I’m glad to read that their initial online sales have been successful, but wonder how Sotheby’s can make sure that the eBay experience reaches their target audience and also is differentiated from “normal” eBay. It looks like the website they use does look a bit more upscale, but I would be interested in exploring this. Online platforms can make things more accessible and democratic, but in the world of high end art, I wonder how much this is truly the goal.
2. One place where Sotheby’s currently is differentiated is in their ability to authenticate art and assess the value for a new piece. I wonder how much this will still be relevant (not digital) for people who want to continue to appraise the value of their artwork. There is some level of subjectivity inherent in the process, and wonder if that can truly be digitized. Additionally, on the idea of “influencers” I wonder if some of the people at Sotheby’s help build excitement or momentum around specific artists, pieces, or time periods that makes some artwork more trendy and popular than others. In a digital world, will there be people who are intimately familiar with the pieces who can help shape our collective taste for artwork in the same way? And if not, what does that mean for art?
Great essay, Ben, and very interesting to me given that I grew up in Michigan surrounded by the impact of the American auto industry. Your point around where cars are made and sourced is good, and so complex. You mention the cost of manufacturing outside of the United States or Mexico, and the need to diversify where cars are sold, which I agree with. As income rises across the globe (https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG) , more households may be able to afford cars. However, given trends around urbanization (http://www.un.org/en/development/desa/news/population/world-urbanization-prospects-2014.html), we may also see trends in which fewer people (young people in particular) are buying cars because they live in highly populated, dense areas that have other forms of transportation.
The issue of optics is another things I would raise. I remember reading and being surprised to see that Toyota is actually a very US centric company when it comes to producing their cars (https://www.usatoday.com/story/money/cars/2016/06/29/survey-top-made–usa-cars-toyota-honda/86510052/). Despite that, Toyota is still seen as a foreign car brand and the overall perception in some areas where “American made” is valued is very negative towards Toyota. I think Ford, as they diversify their manufacturing and sales, should be cognizant of the goodwill that comes in the US from being an American brand and be cautious in where they choose to locate and any sort of press that comes if they do move factories. Although many are used to cars being made in Mexico, I wonder if switching over to making more cars in China could lead to a reputational risk for such an iconic brand.
Super interesting read! I was reading into other instances where there have been large currency fluctuations, and came across an article in the Guardian that says Unilever raising prices by 15.5% in Latin America after currency devaluation only led to at 5% drop in sales . It’s interesting to them consider how much of the feud with Unilever was justified and how much may have been Unilever taking advantage of a bad situation.
The questions you raised around dairy, etc. are going to be hard for the UK to deal with moving forward. Will there be a movement in the UK to source more dairy from local farms? If so, Tesco may want to play a role in setting up the capabilities to do so in exchange for having priority over production on specific farms. This could potentially help mitigate the impact of a price increase on dairy products in the store. As you mentioned, with UK citizens increasingly nervous and price sensitive, huge price hikes may not be feasible for consumers and therefore Tesco could gain a significant competitive advantage by finding ways to source products so that things like dairy remain affordable at Tesco, and consumers are likely to shop there vs. at competitors.
Lawren, great essay! Really interesting and a topic that I’ve thought about a lot given my interest in retail. I agree with Grant’s point above that it’s difficult to know how much Reformation has a superior product that justifies the cost and that really attracts customers. Is the sustainability piece of reformation enough? I think an interesting comparison will be with Everlane. They just launched a line of jeans and did a lot of press about how clean and sustainable their factory is (https://www.everlane.com/denim-factory). Reformation seems to have a similar story and a similar aesthetic in their clothing, so I’ll be interested to see what happens with both companies.
To your questions around adopting a single industry standard – I think that absolutely needs to happen. Given how remote and unclear the supply chain of clothing is to the average consumer, people who are looking for “ethical” clothing are often stuck either trusting the PR of a corporation or doing extensive research. Particularly for consumers who are looking for more upscale/trendy clothing, the options can be limited! I wonder how Reformation can lead the way in trying to adopt industry norms around what is “ethical” or “sustainable” as more of a wide-ranging rating system. I would guess there would be significant pushback against an industry-wide standard, but do believe it’s important and wonder if Reformation would have the ability to lead the way.
Gregorio, this is great! I agree with your question about what role CyT should take for the whole supply chain. This is an interesting situation – CyT is obviously so impacted by climate change, but also the agricultural industry, to your point, is part of the problem, particularly as it pertains to water. I think wine is a particularly interesting industry to consider because the land is so important and changes in the soil or the water could make a huge difference in the taste and quality of the wine, which could upend the business model. So, while there is a big incentive to use the same amount of water to keep the quality and taste the same, by doing so, CyT may have problems down the road. I agree that they need to get a coalition of people on board to truly make broad change, and wonder how easy this would be to do in the wine industry in Chile. Are there already good centralized partnerships? How much leverage does CyT have among wineries and suppliers?
I also think your point around shareholders pushing for profitability is important. I agree that is a large risk. Right now, CyT can continue what they are doing and may be very profitable, but in 15 years the entire business could collapse if the soil is irreparably harmed. I wonder who in the company will be thinking about this long-term and how much leeway management has to make sure that shareholders see the importance of being sustainable now for long-term operations. Again, if CyT is able to act as a leader and coalition-builder in the industry, that could also potentially help to make sure that shareholders see the value of being sustainable today, even if it cuts into profits in the short term.