What: Benedict Evans' reflections on how tech redefines retail.

Why it is important: There are two ways to see the technology impact on retail: some companies are adapting to the possibilities now offered (LVMH), while some others, such as Shein, are literally building their business model around these possibilities, just like Walmart was something new entirely created by the generalization of cars.

Benedict Evans illustrates in this week's newsletter the thesis he developed to IADS CEOs during the General Assembly: tech is not a destination per se, but a tool, and it helps disrupt and transform retail in the same way than cars transformed retail in the mid 20st century, creating more fortunes in retail than in the car industry itself.

For him, while LVMH is all about producing high quality items (by controlling production) and controlling their perception (by controlling distribution), understanding how luxury works on smartphone is still a work in progress. Shein might illustrate, in the fast fashion market, how the use of mobile phones and putting them at the centre of the business model looks like, in the same way than Skype which disrupted telecoms by using internet in a new way.

Evans also wonders what it means for a retailer to go viral (such as Shein, or TikTok) and if the future absolutely involves opening shops? This question creates two possibilities for the future: one where only huge brands can survive thanks to their scaling effect and ability to directly reach customers where they are (i.e. cracking the code of the mobile phone business) and one where a myriad of smaller brands can coexist and survive, precisely because in retail boutiques remain the norm, thus limiting the impact of the global brands (a thesis defended by Doug Stephens).

As he explained during the General Assembly, Shein might be an iteration of what the Walmart of these days looks like, by adapting to new paradigms and available ways to talk to customers.

What's the link between Skype, Shein and LVMH