Category: Pymnts

The Supreme Oreo And Other Astonishing Food Commerce

For those seeking streetwear-themed food, there is a cornucopia of options. Ground zero seems to have been Taco Bell and Forever 21’s 2017 team-up to combine fast food and fast fashion into a single entity – fast-food fashion. The initiative got a lot of attention, sold a lot of T-shirts and managed to become, if not exactly a trend, at least something of an inspiration to other brands.

Notable examples include Popeyes, which recently realized that their employee uniforms bore a striking resemblance to various fashion items that Beyonce’s Ivy Park label put out in collaboration with Adidas earlier this year. (Beyonce’s stuff sold out almost immediately.)

Luckily, Popeyes has some recent experience in how poorly customers handle sell-outs – in 2019, they started selling a fried chicken sandwich so delicious that people actually rioted when they couldn’t get them. Hoping to stop a similar wave of violence, we assume, they decided that for the good of the people, the only thing to do was to put their uniforms – and fashion items inspired by them – up for sale.

“Popeyes is offering fashion seekers who missed the boat the first time a chance to score something nearly identical,” the company said in a statement. “Enter a fast food fashion collection that features some of the brand’s most iconic maroon and orange uniform designs.”

The company also tweeted: “Love that look? It’s our uniform. Has been for a while. And now you can buy it.”

Not to be outdone, McDonald’s as of this week has thrown its hat into the ring, sidestepping straight fashion for accessories like a 14-karat-gold McDonald’s locket and a line of Quarter Pounder-scented candles for superfans.

“Because there’s no better smell than 100 percent fresh beef and a perfect combination of toppings,” according to a press release.

Clearly, when it comes to food-inspired clothing and accessory plays, the concept is somewhat old hat at this point.

Food inspired by clothing and accessories, on the other hand? As of this week, it seems to be the hot new trend.

In fact, if the reported numbers are accurate, consumers are shelling out tens of thousands of dollars to get their hands on the hottest dessert to hit the market since the discovery of chocolate.

And what is this wonderful dessert consumers are spending a Toyota Camry’s worth of money to enjoy?

Oreo cookies, of course.

Oreo Supremacy

Granted, it’s not just any Oreo cookie – one can still unlock the magic at their local grocery store for a few dollars. But those are just classic Oreos – black with a white creamy interior. Maybe they’re double-stuffed, maybe they are the Most Stuf Oreos – but they will still be standard-issue Oreos.

But this week, for a few brief hours at the Supreme store in Manhattan, consumers had a chance to purchase the Supreme Oreo – a Double Stuf Oreo in Supreme’s signature bright red color, with its logo printed in the center of each cookie. The packaging is also a red rectangle, iconic to the brand, with Supreme’s logo printed across the wrapper, along with Oreo’s signature.

The taste? According to early reports, it is pretty much identical to a regular Oreo.

Not that very many of these cookies are going to be eaten, we wager, since their price tag is climbing by the moment. If one happened to have made it to the front of the line and snagged a pack in-store, they would have paid $8 for three cookies. By comparison, a regular bag of Oreos has 39 cookies and costs about $4 on average. The cookies dropped along with the rest of Supreme’s seasonal collection on Wednesday (Feb. 19), and by mid-day, they were gone.

Gone from the shelves, anyway. They made it onto eBay, though that $8 price tag shot up to $500, $1,000, $4,000, $10,000, $14,000, $18,000 and – as of the writing of this story – around $23,000 on the online auction site. Which, as we noted, is roughly the price of a top-of-the-line Toyota Corolla. In fact, if you didn’t want a sunroof, the Corolla would actually be cheaper than the Oreos.

And that price is likely to go up – the auction it was pulled from doesn’t end until Tuesday of next week.

Explaining the Madness

Exclusive brands with limited product drops that generate absurd mark-ups online are far from a new phenomenon. In fact, for Supreme, a streetwear firm most famous for its ability to generate hype and get enthusiasts lining up outside their stores for days ahead of the release of a new collection, this is more or less standard operating procedure.

Resellers are in that early line-up – they snap up as much as they can (Supreme limits how much buyers can get on release days to slow down the resale market) and then head off to eBay and other auction sites to collect their 10,000 percent mark-up.

In the era of virality and social media promotion, after-market feeding frenzies for hotly anticipated, limited-release goods have become pretty common over the last three years. In 2016, eBay nearly melted down over the consumer madness that broke out over the release of the latest line of Yeezys, Kanye West’s sneaker brand. The most desired and rarest shoes went for around $20,000 – and paying $10,000 for a slightly less desirable model was considered average.

The obvious distinction is that clothes and shoes can be worn for a long time if one is careful. Three Oreos, on the other hand, will be fully consumed in under a minute – leaving one with only a $20,000 wrapper to prove they ever existed. Alternatively, one could keep the Oreos, which preserves the purchase but does make it fundamentally useless. After all, the point of Oreos is, you know, to eat them. A buyer who leaves them in the package will never so much as see them, let alone taste them.

But the Supreme Oreo, even with its aftermarket mark-up, is just the latest in a long and glorious series of extremely expensive dessert items. For example, one could travel to the Lindeth Howe Hotel in England and purchase the world’s most expensive chocolate pudding for $35,000. The dish’s ingredients include a two-carat diamond (not for eating), edible gold leaf, four flavors of Belgian chocolates, and gold and champagne caviar.

But if that seems a bit rich for your blood, there is also the Haute Chocolate Sunday from Serendipity 3 restaurant, priced at a much more reasonable $25,000. The sundae contains five grams of 23-carat edible gold, and is topped with the $250 La Madeline au Truffle. It also comes with a golden spoon, an 18-carat-gold bracelet with one carat of white diamonds, and ice cream served in a goblet with a gold crown.

And if that sounds good, but you would feel uncomfortable actually eating out of a crown with a gold spoon, here’s some good news: Krispy Kreme’s Luxe donut can be eaten with your hands. How is a luxury donut made? A lot of 24-carat-gold leaf, a few edible diamonds and Dom Perignon champagne jelly filling. Comparatively, this one is a bargain – it costs a measly $1,700 after tax, less than one-tenth the price of a Supreme Oreo.

And, of course, one might observe that most five-figure desserts come with a shiny piece of gold or diamond hardware that isn’t meant to be eaten – whereas all you get with the Supreme Oreo is a branded wrapper.

That’s a long way of saying that for Oreo, the move is brilliant – since it is not every day that a product that hasn’t changed its recipe for over 100 years manages to become the hottest commodity on eBay with just a little food coloring and a lot of hype.

But our advice to our readers this weekend?

Maybe stick with the original. We suspect that when the hype dies down, you just might find some bright-red Oreos for sale in a store near you (probably without the Supreme logo) that cost a whole lot less than a compact sedan.

The Supreme Oreo And Other Astonishing Food Commerce

For those seeking streetwear-themed food, there is a cornucopia of options. Ground zero seems to have been Taco Bell and Forever 21’s 2017 team-up to combine fast food and fast fashion into a single entity – fast-food fashion. The initiative got a lot of attention, sold a lot of T-shirts and managed to become, if not exactly a trend, at least something of an inspiration to other brands.

Notable examples include Popeyes, which recently realized that their employee uniforms bore a striking resemblance to various fashion items that Beyonce’s Ivy Park label put out in collaboration with Adidas earlier this year. (Beyonce’s stuff sold out almost immediately.)

Luckily, Popeyes has some recent experience in how poorly customers handle sell-outs – in 2019, they started selling a fried chicken sandwich so delicious that people actually rioted when they couldn’t get them. Hoping to stop a similar wave of violence, we assume, they decided that for the good of the people, the only thing to do was to put their uniforms – and fashion items inspired by them – up for sale.

“Popeyes is offering fashion seekers who missed the boat the first time a chance to score something nearly identical,” the company said in a statement. “Enter a fast food fashion collection that features some of the brand’s most iconic maroon and orange uniform designs.”

The company also tweeted: “Love that look? It’s our uniform. Has been for a while. And now you can buy it.”

Not to be outdone, McDonald’s as of this week has thrown its hat into the ring, sidestepping straight fashion for accessories like a 14-karat-gold McDonald’s locket and a line of Quarter Pounder-scented candles for superfans.

“Because there’s no better smell than 100 percent fresh beef and a perfect combination of toppings,” according to a press release.

Clearly, when it comes to food-inspired clothing and accessory plays, the concept is somewhat old hat at this point.

Food inspired by clothing and accessories, on the other hand? As of this week, it seems to be the hot new trend.

In fact, if the reported numbers are accurate, consumers are shelling out tens of thousands of dollars to get their hands on the hottest dessert to hit the market since the discovery of chocolate.

And what is this wonderful dessert consumers are spending a Toyota Camry’s worth of money to enjoy?

Oreo cookies, of course.

Oreo Supremacy

Granted, it’s not just any Oreo cookie – one can still unlock the magic at their local grocery store for a few dollars. But those are just classic Oreos – black with a white creamy interior. Maybe they’re double-stuffed, maybe they are the Most Stuf Oreos – but they will still be standard-issue Oreos.

But this week, for a few brief hours at the Supreme store in Manhattan, consumers had a chance to purchase the Supreme Oreo – a Double Stuf Oreo in Supreme’s signature bright red color, with its logo printed in the center of each cookie. The packaging is also a red rectangle, iconic to the brand, with Supreme’s logo printed across the wrapper, along with Oreo’s signature.

The taste? According to early reports, it is pretty much identical to a regular Oreo.

Not that very many of these cookies are going to be eaten, we wager, since their price tag is climbing by the moment. If one happened to have made it to the front of the line and snagged a pack in-store, they would have paid $8 for three cookies. By comparison, a regular bag of Oreos has 39 cookies and costs about $4 on average. The cookies dropped along with the rest of Supreme’s seasonal collection on Wednesday (Feb. 19), and by mid-day, they were gone.

Gone from the shelves, anyway. They made it onto eBay, though that $8 price tag shot up to $500, $1,000, $4,000, $10,000, $14,000, $18,000 and – as of the writing of this story – around $23,000 on the online auction site. Which, as we noted, is roughly the price of a top-of-the-line Toyota Corolla. In fact, if you didn’t want a sunroof, the Corolla would actually be cheaper than the Oreos.

And that price is likely to go up – the auction it was pulled from doesn’t end until Tuesday of next week.

Explaining the Madness

Exclusive brands with limited product drops that generate absurd mark-ups online are far from a new phenomenon. In fact, for Supreme, a streetwear firm most famous for its ability to generate hype and get enthusiasts lining up outside their stores for days ahead of the release of a new collection, this is more or less standard operating procedure.

Resellers are in that early line-up – they snap up as much as they can (Supreme limits how much buyers can get on release days to slow down the resale market) and then head off to eBay and other auction sites to collect their 10,000 percent mark-up.

In the era of virality and social media promotion, after-market feeding frenzies for hotly anticipated, limited-release goods have become pretty common over the last three years. In 2016, eBay nearly melted down over the consumer madness that broke out over the release of the latest line of Yeezys, Kanye West’s sneaker brand. The most desired and rarest shoes went for around $20,000 – and paying $10,000 for a slightly less desirable model was considered average.

The obvious distinction is that clothes and shoes can be worn for a long time if one is careful. Three Oreos, on the other hand, will be fully consumed in under a minute – leaving one with only a $20,000 wrapper to prove they ever existed. Alternatively, one could keep the Oreos, which preserves the purchase but does make it fundamentally useless. After all, the point of Oreos is, you know, to eat them. A buyer who leaves them in the package will never so much as see them, let alone taste them.

But the Supreme Oreo, even with its aftermarket mark-up, is just the latest in a long and glorious series of extremely expensive dessert items. For example, one could travel to the Lindeth Howe Hotel in England and purchase the world’s most expensive chocolate pudding for $35,000. The dish’s ingredients include a two-carat diamond (not for eating), edible gold leaf, four flavors of Belgian chocolates, and gold and champagne caviar.

But if that seems a bit rich for your blood, there is also the Haute Chocolate Sunday from Serendipity 3 restaurant, priced at a much more reasonable $25,000. The sundae contains five grams of 23-carat edible gold, and is topped with the $250 La Madeline au Truffle. It also comes with a golden spoon, an 18-carat-gold bracelet with one carat of white diamonds, and ice cream served in a goblet with a gold crown.

And if that sounds good, but you would feel uncomfortable actually eating out of a crown with a gold spoon, here’s some good news: Krispy Kreme’s Luxe donut can be eaten with your hands. How is a luxury donut made? A lot of 24-carat-gold leaf, a few edible diamonds and Dom Perignon champagne jelly filling. Comparatively, this one is a bargain – it costs a measly $1,700 after tax, less than one-tenth the price of a Supreme Oreo.

And, of course, one might observe that most five-figure desserts come with a shiny piece of gold or diamond hardware that isn’t meant to be eaten – whereas all you get with the Supreme Oreo is a branded wrapper.

That’s a long way of saying that for Oreo, the move is brilliant – since it is not every day that a product that hasn’t changed its recipe for over 100 years manages to become the hottest commodity on eBay with just a little food coloring and a lot of hype.

But our advice to our readers this weekend?

Maybe stick with the original. We suspect that when the hype dies down, you just might find some bright-red Oreos for sale in a store near you (probably without the Supreme logo) that cost a whole lot less than a compact sedan.

Rent-To-Own Companies Settle Antitrust Case With FTC

Rent-to-own (RTO) companies Rent-A-Center, Buddy’s and Aaron’s have all settled a case with the Federal Trade Commission (FTC) alleging they made reciprocal non-competition deals with each other that violated federal antitrust law and created an environment that limited choices for consumers, according to an FTC press release.

The complaints said from June 2015 to May 2018 “Aaron’s, Buddy’s, and Rent-A-Center each entered into anti-competitive reciprocal agreements with each other and other competitors. These agreements swapped customer contracts from rent-to-own, or RTO, stores in various local markets. An outcome was that one party to the agreement closed down stores and exited a local market where the other party continued to maintain a presence.”

The agreements, the release said, led to stores closing that probably wouldn’t have done so otherwise and lessened quality and service for consumers.

Customers who rented from stores had to travel to those particular stores to make payments, and closing a store would increase their travel time and costs.

In addition, the companies’ agreements meant that there were requirements to not compete in a specified territory for a period of three years.

“These agreements affected consumers who already had few options for furnishing a home on a limited budget,” said Ian Conner, director of the FTC’s Bureau of Competition. “The FTC’s orders get rid of the agreements, reopen affected markets to competition, and bar these companies from doing this again.”

The FTC settlement means the three RTO companies can’t enter into similar agreements in the future.

“The three RTO companies must also implement antitrust compliance programs, notify the commission in the event of certain changes in corporate governance, and grant the commission access to company facilities as needed to ensure compliance with the order,” the release stated. “Finally, due to prior board-level relationships between Aaron’s and Buddy’s, these firms are barred from having any of their representatives serve as a board member or officer of a competitor, and from allowing any competitor’s representative to serve on their boards.”

Rent-To-Own Companies Settle Antitrust Case With FTC

Rent-to-own (RTO) companies Rent-A-Center, Buddy’s and Aaron’s have all settled a case with the Federal Trade Commission (FTC) alleging they made reciprocal non-competition deals with each other that violated federal antitrust law and created an environment that limited choices for consumers, according to an FTC press release.

The complaints said from June 2015 to May 2018 “Aaron’s, Buddy’s, and Rent-A-Center each entered into anti-competitive reciprocal agreements with each other and other competitors. These agreements swapped customer contracts from rent-to-own, or RTO, stores in various local markets. An outcome was that one party to the agreement closed down stores and exited a local market where the other party continued to maintain a presence.”

The agreements, the release said, led to stores closing that probably wouldn’t have done so otherwise and lessened quality and service for consumers.

Customers who rented from stores had to travel to those particular stores to make payments, and closing a store would increase their travel time and costs.

In addition, the companies’ agreements meant that there were requirements to not compete in a specified territory for a period of three years.

“These agreements affected consumers who already had few options for furnishing a home on a limited budget,” said Ian Conner, director of the FTC’s Bureau of Competition. “The FTC’s orders get rid of the agreements, reopen affected markets to competition, and bar these companies from doing this again.”

The FTC settlement means the three RTO companies can’t enter into similar agreements in the future.

“The three RTO companies must also implement antitrust compliance programs, notify the commission in the event of certain changes in corporate governance, and grant the commission access to company facilities as needed to ensure compliance with the order,” the release stated. “Finally, due to prior board-level relationships between Aaron’s and Buddy’s, these firms are barred from having any of their representatives serve as a board member or officer of a competitor, and from allowing any competitor’s representative to serve on their boards.”

Lyft Buys Halo Cars In Advertising Play

Ride-hailing company Lyft has acquired Halo Cars, an advertising startup that displays ads on top of vehicles, according to a report from Axios.

The move illustrates the ride-hailing industry’s attempts to pull revenue from sources besides its core business, especially since both Lyft and Uber IPOs have underperformed.

Uber has been testing a similar tie-up with Cargo, an advertising startup in New York that shares ad revenue with the ride-hailing company. Cargo stopped doing its signature snack box endeavor to focus on cartop display advertising.

Halo Cars is still very small and operates in only a few cities. Lyft seems primarily interested in acquiring the team from the company. The company is expected to join Lyft’s media division.

Lyft’s active riders grew 23 percent year over year to reach a new high of 22.9 million in Q4, compared to around 18.6 million in the fourth quarter of 2018. Revenue per active rider was $44.40, compared to $36.02 in 2018.

Lyft Co-founder and CEO Logan Green said that product innovation was a “key driver of our growth,” and that “innovation is what powers our ability to deliver the right product to the right customer at the right time.”

The company has invested in its tech stacks to power the marketplace, which has made a real difference. The firm has also debuted the Lyft matching platform as well as new offerings like Shared Saver, which now accounts for about one-third of shared rides in markets where it has been introduced. Lyft also launched a new modes platform to enhance its infrastructure, which allows the company’s teams to develop and test new endeavors and modes with greater ease and speed, noted Green.

The CEO also highlighted that 2019 was its first full year with scooters, bikes and public transportation.

Lyft Buys Halo Cars In Advertising Play

Ride-hailing company Lyft has acquired Halo Cars, an advertising startup that displays ads on top of vehicles, according to a report from Axios.

The move illustrates the ride-hailing industry’s attempts to pull revenue from sources besides its core business, especially since both Lyft and Uber IPOs have underperformed.

Uber has been testing a similar tie-up with Cargo, an advertising startup in New York that shares ad revenue with the ride-hailing company. Cargo stopped doing its signature snack box endeavor to focus on cartop display advertising.

Halo Cars is still very small and operates in only a few cities. Lyft seems primarily interested in acquiring the team from the company. The company is expected to join Lyft’s media division.

Lyft’s active riders grew 23 percent year over year to reach a new high of 22.9 million in Q4, compared to around 18.6 million in the fourth quarter of 2018. Revenue per active rider was $44.40, compared to $36.02 in 2018.

Lyft Co-founder and CEO Logan Green said that product innovation was a “key driver of our growth,” and that “innovation is what powers our ability to deliver the right product to the right customer at the right time.”

The company has invested in its tech stacks to power the marketplace, which has made a real difference. The firm has also debuted the Lyft matching platform as well as new offerings like Shared Saver, which now accounts for about one-third of shared rides in markets where it has been introduced. Lyft also launched a new modes platform to enhance its infrastructure, which allows the company’s teams to develop and test new endeavors and modes with greater ease and speed, noted Green.

The CEO also highlighted that 2019 was its first full year with scooters, bikes and public transportation.

5G Network Rollout Delayed In China, Flights Canceled Due To Coronavirus

The coronavirus has far-reaching impacts that extend beyond health, with a wide range of economic effects in sectors ranging from transportation to telecom and retail. We have the latest news on the economic impact of the coronavirus from airlines canceling flights to the delay of the rollout of next-generation 5G networks and merchants reopening stores in China.

Airlines throughout the globe, with the inclusion of three United States carriers that service China, have stopped service to the mainland as well as Hong Kong due to the coronavirus. And airlines have canceled over 200,000 flights as the virus keeps spreading. Air France-KLM stopped China flights and forecasts demand reductions related to the coronavirus to reduce results by up to $217 million, while Qantas warned investors that the virus could probably reduce its earnings in the second hand of the year by $99.5 million.

And, in brick-and-mortar news, Uniqlo operator Fast Retailing has reportedly reopened roughly 100 retail locations in China as of last week. The combination of sometimes trendy products and affordable basics has been a large hit among the increasing middle class in China. But, with an indication that the disruption of the company’s supply chain was starting to affect business away from China, a few spring/summer Uniqlo U collection products have been postponed. 

On another note, Moscow is tapping into facial recognition to make sure that those who were told to stay at their houses or in hotels for coronavirus quarantine do so, Reuters reported. Moscow Mayor Sergei Sobyanin said approximately 2,500 individuals who have flown into the city from China have been made to follow a quarantine. He reportedly noted on his website that “compliance with the regime is constantly monitored, including with the help of facial recognition systems and other technical measures.”

The launch of 5G telecom networks has reportedly been delayed by government measures to stem the spread of the coronavirus, Reuters reported. Two of the top fiberoptic cable providers have Wuhan facilities and headquarters. (Wuhan is at the center of the outbreak.) In early February, President Xi Jinping said 5G investment could potentially mitigate the drop in consumer spending due to the virus. China, for its part, has turned 5G into a national priority, with the goal of having countrywide networks and services well ahead of other nations. 

And Coca-Cola is predicting that the coronavirus will impact its quarterly earnings by 1 to 2 cents, CNBC reported. The company still foresees meeting its full-year targets even with the hit to its financial results in Q1. China represents roughly 10 percent of its worldwide volume but less of its profit and sales. Coca-Cola foresees that 2020 organic revenue will rise by 5 percent, while adjusted earnings per share will increase to $2.25.

Verizon Communications is not going to the RSA cybersecurity conference because of fears related to the coronavirus, Reuters reported. International Business Machines Corp has also pulled out of the conference because of similar worries. AT&T Cybersecurity also won’t participate, which brings the total number of firms that have withdrawn to 14. The number includes seven from the U.S., six from China and one from Canada.

5G Network Rollout Delayed In China, Flights Canceled Due To Coronavirus

The coronavirus has far-reaching impacts that extend beyond health, with a wide range of economic effects in sectors ranging from transportation to telecom and retail. We have the latest news on the economic impact of the coronavirus from airlines canceling flights to the delay of the rollout of next-generation 5G networks and merchants reopening stores in China.

Airlines throughout the globe, with the inclusion of three United States carriers that service China, have stopped service to the mainland as well as Hong Kong due to the coronavirus. And airlines have canceled over 200,000 flights as the virus keeps spreading. Air France-KLM stopped China flights and forecasts demand reductions related to the coronavirus to reduce results by up to $217 million, while Qantas warned investors that the virus could probably reduce its earnings in the second hand of the year by $99.5 million.

And, in brick-and-mortar news, Uniqlo operator Fast Retailing has reportedly reopened roughly 100 retail locations in China as of last week. The combination of sometimes trendy products and affordable basics has been a large hit among the increasing middle class in China. But, with an indication that the disruption of the company’s supply chain was starting to affect business away from China, a few spring/summer Uniqlo U collection products have been postponed. 

On another note, Moscow is tapping into facial recognition to make sure that those who were told to stay at their houses or in hotels for coronavirus quarantine do so, Reuters reported. Moscow Mayor Sergei Sobyanin said approximately 2,500 individuals who have flown into the city from China have been made to follow a quarantine. He reportedly noted on his website that “compliance with the regime is constantly monitored, including with the help of facial recognition systems and other technical measures.”

The launch of 5G telecom networks has reportedly been delayed by government measures to stem the spread of the coronavirus, Reuters reported. Two of the top fiberoptic cable providers have Wuhan facilities and headquarters. (Wuhan is at the center of the outbreak.) In early February, President Xi Jinping said 5G investment could potentially mitigate the drop in consumer spending due to the virus. China, for its part, has turned 5G into a national priority, with the goal of having countrywide networks and services well ahead of other nations. 

And Coca-Cola is predicting that the coronavirus will impact its quarterly earnings by 1 to 2 cents, CNBC reported. The company still foresees meeting its full-year targets even with the hit to its financial results in Q1. China represents roughly 10 percent of its worldwide volume but less of its profit and sales. Coca-Cola foresees that 2020 organic revenue will rise by 5 percent, while adjusted earnings per share will increase to $2.25.

Verizon Communications is not going to the RSA cybersecurity conference because of fears related to the coronavirus, Reuters reported. International Business Machines Corp has also pulled out of the conference because of similar worries. AT&T Cybersecurity also won’t participate, which brings the total number of firms that have withdrawn to 14. The number includes seven from the U.S., six from China and one from Canada.

Fed’s Bullard Sees Coronavirus As Having ‘Short-Term’ Impact

Call the Coronavirus a short-term blip, perhaps, or a temporary shock.

But one that does not need policy moves by the Federal Reserve Bank.

In an interview with CNBC on Friday (Feb. 21), St. Louis Federal Reserve Bank President James Bullard said there remains a “high probability that the Coronavirus will blow over as other viruses have.”

He said the virus would prove to be a “temporary shock and everything will come back.” That refers in part to stock market volatility that saw markets down nearly a percent on Friday (as measured by the S&P 500 Index). Bullard signaled, too, that observers might not see the expected rate cut materialize.

He said that markets will have to price in the virus/recovery scenarios – and noted that “there’s a low probability that this could get much worse.” In the scenario that the virus impact proves temporary, the mindset is likely to return to the “on-hold scenario” that has the Fed staying the course on rates.

Bullard said during the interview that the U.S. economy is well-positioned for a “soft landing.” He noted that estimates of GDP growth for the first quarter of the current year are roughly 2 percent to 2.25 percent, and that even in the current environment, “we are not going to see a major impact on the U.S.”

Banks and a Changing Landscape

In reference to banks, Morgan Stanley said this week that it is buying E-Trade for $13 billion. Bullard said there should be competition in the space, and added, “I like them where they are – or smaller.” He said consolidation in the community banking segment is “3 to 4 percent a year, and it could accelerate.”

The conversation shifted to the Volcker Rule, which restricts banks from, among other things, proprietary trading. Generally speaking, with a nod to the concept of what a bank could “be” – how much trading it could undertake, for example, or what proprietary acquisitions it could make to add on to their businesses – Bullard said that “the cows are out of the barn on that. I do not think we are able to go back to anything that splits investment banking and commercial banking.”

Bullard pointed out the importance of vigilance in the banking sector, stating that “if you have plenty of them, you can let one fail and you’ll be okay.” He said that banking business models will continue to evolve to offset the impact of low interest rates on their margins.

When asked about risks within the financial realm, Bullard said, “I don’t see anything of the magnitude of the housing bubble. I do not see anything of the magnitude of the dot-com bubble.”

Opportunity Knocks With Door-To-Door Resurgence

Looks like retail sales are back on the street. With direct marketing hit by robocall abuse and the National Do Not Call Registry, direct-to-consumer (D2C) brands and other not-so-usual suspects are looking into and in some cases reinstating door-to-door sales.

And if the idea of an unsolicited doorbell chime (Ring customers take note) upsets you, you might find a convenient villain: the IRS. The agency announced this week it will be going door-to-door after the April 15 deadline to notify late-paying or non-paying citizens (most making north of $100K) that they need to pay up.

“The IRS is committed to fairness in the tax system, and we want to remind people across all income categories that they need to file their taxes,” said Paul Mamo, director of collection operations for the agency’s small business and self-employed division. “These visits focusing on high-income taxpayers will be taking place across the country. We want to ensure taxpayers know their options to get right with their taxes and avoid bigger issues later.”

While that won’t exactly crowd the neighborhood, there are more companies hitting the streets. AT&T was having such a tough time with customer acquisition last fall that it stepped up a small door-to-door sales unit.

An AT&T spokesman said the company made door-to-door sales part of its mix before the do-not-call list became effective. Last fall it tested the approach more aggressively. “If it’s something customers like, then we’ll look at its effectiveness,” he said. “We just started a month or two ago, and we’re now getting comments that will allow us to make an assessment.”

The Do Not Call Registry is not the only factor in play. Email is still ubiquitous but limited. An Adobe survey found that 42 percent of consumers feel “indifferent” when faced with their inbox. While email can still be effective, it could use an upgrade. Part of that may be solved through personal contact. And part of it be solved by integrating it with more modern tactics. For example, “social selling” or “direct selling” is preferred by a Washington, D.C. trade organization called the Direct Selling Association (DSA).

“I think companies are looking for new distribution channels for their products,” said the association’s Amy Robinson. “Direct selling has traditionally been undervalued by Wall Street, but many realize its strength. It’s a niche market, but $28.7 billion in sales last year make it nothing to scoff at.”

The DSA is putting its money on the line. It launched the first executive education course focused on direct selling last week in Winter Park, Florida. According to the association, it will promote the “successful integration of new and existing business executives within direct selling companies and delivers a thorough onboarding program to enhance retention, increase self-efficacy, promote company culture, facilitate role clarity, and expedite social integration.”

The iconic door-to-door brand is of course Avon. It was purchased at the beginning of the year by Brazil’s Natura &Co, which also owns retail brand The Body Shop. The firm said the combined company will integrate the Avon model into its other businesses. When seen together the Natura scale is impressive. It will have 200 million consumers globally and 3,000 stores. Between Avon and Natura it will have over 6.3 million consultants and representatives and revenues over $10 billion.

Door-to-door sales will not work for every company or product. But it is a compelling D2C tactic in a world where competing for customer attention is at a premium.

“When the circumstances are right, door-to-door sales can be a powerful means of acquiring customers and increasing revenues,” a Boston Consulting Group noted. “But door-to-door sales forces are often more difficult to manage than other sales channels, and they usually require a skill set that most companies lack today. If your customers contribute high value over their lifetime, however, and if your products or services benefit from some sort of one-on-one consultation or demonstration, door-to-door sales may be an opportunity you can’t afford to ignore.”