Pandemic spending patterns, explained


July 6, 2020

We’re opening up our wallets again, but they could snap shut in a hurry.
July 6, 2020
The Hustle
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Hey, big spender

Consumer spending is up, but don’t call it a comeback

Accounting for ⅔ of US economic output, consumer spending is a big effing deal. 

The good news? Spending is up! 

The bad news? Our collective wallet’s gonna snap shut again as COVID cases rise in many states.

The data on our spending habits paints an interesting picture: Many of us seem ready to hunker down for the long haul. Social distancing is getting old, but without an end in sight, we’re looking for ways to improve our domestic lives.

Home is where the heart is

We’re staying put, and we’re splurging on around-the-house projects:

  • Home-improvement spending is up 40%.
  • Furniture sales are up 28%.

Many of us have grown more ambitious in the kitchen, but food-delivery spending via services like Grubhub and UberEats is up ~186% compared to pre-pandemic weekly averages.

At-home drinking is also up. One survey found that 44% won’t be back in the bars for a long time. Sales at wine and liquor stores, meanwhile, continue to show double-digit increases. 

Demand for aluminum cans is now so high that some beverages — like the underrated Fresca — have been pushed off the shelves.

But cabin fever is real, man

Spending on Airbnb and HomeAway bookings are up 6% compared with the same period last year, but people are still avoiding crowded spaces like airports and hotels.

Even if travel isn’t in the cards for everyone, we want to get out. Sales of sporting equipment shot up 48% compared to last year, for the week ending June 24. Good luck getting your butt on a bike.

Looking good

Virtual haircuts might be a viable substitute for the ol’ salad-bowl-and-snip, but salon sales leapt as soon as municipal authorities allowed them to reopen.

However, revenues haven’t returned to pre-pandemic levels, and salon reopenings have petered off since May. Capacity limits and additional clean-up time between clients have made business as usual a no-go.

But you know what? Beauty is in the eye of the beholder, and maybe now is the time to change our definition of style. Long live the pandemullet.

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Space Race

The UK government is taking a $500m stake in a bankrupt satellite company

Elon Musk has some unusual competition in the space race to improve the consumer internet.

The UK government is investing $500m and taking a 20% stake in OneWeb, a bankrupt company that wants to improve broadband connections using a constellation of low-altitude satellites. 

Your move, Elon

The deal puts the UK back in the race with Musk’s Starlink, which has launched 540 of its own internet satellites. Starlink’s goal is to expand connections in areas that are hard to reach with fiber-optic cables.

OneWeb has a lot of catching up to do. When it declared bankruptcy in March, it had launched just 74 of ~650 planned satellites.

Beyond beefing up your WiFi, there’s another reason why the UK may be getting into the satellite fight: Because of Brexit, it will no longer be involved in Galileo, the EU’s satellite navigation system.

Good news for GPS units, bad news for telescopes

Science called the revived OneWeb’s plan for a constellation of 42k satellites “the worst possible outcome for astronomers.”

Why might they be cursing the heavens? At an altitude of 1,200 kilometers, the satellite traffic threatens to make telescopic imagery blurrier than your worst selfies.

Another potential pitfall: Radio astronomers worry about chatter that could bleed onto essential frequencies — sorta like what happens when your neighbors in the apartment next door make too much noise.

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SPONSORED

The company disrupting the $36B vitamin industry

Katerina Schneider isn’t a typical Silicon Valley founder.

First of all, she’s a she. Plus, she’s a mother of three (who announced her most recent pregnancy on stage at HustleCon last December). And instead of an MBA, she has a degree in applied mathematics and economics from Brown. 

But after jumping from investment banking into the LA startup scene in 2008, she couldn’t go back. By 2013, she was a VC… and then she got pregnant.

And when this pregnant VC realized there were limited options for prenatal vitamins, she did something crazyShe started pitching.

Now, Ritual is revolutionizing vitamins

Katerina launched Ritual in 2016 with one product: a daily multivitamin. Since then, they’ve sold millions of vitamins, expanded to include products for both women and men, and raised more than $40M.

Why is it so successful? Because Ritual is a vitamin reimagined with*:

  • Clean, quality ingredients
  • A transparent supply chain
  • No shady additives, synthetic fillers, or artificial coloring
  • Delayed-release capsules for optimal absorption
  • Vegan-friendly, non-GMO, sugar-gluten-allergen-free ingredients

Find your Ritual. Readers of The Hustle get 10% off their first 3 months of Ritual with code HUSTLE10.

A healthy Ritual →
On Eggshells

Thanks to Chipotle, farmers’ markets are going virtual

Chipotle is in the grits business now. 

The burrito giant just launched an ecommerce platform for 4 of its major farm partners. On top of the usual Chipotle fare — meat, dairy, rice — you can now snag a bag of grits or popcorn. 

Chipotle paid to set up the virtual storefronts, and it will continue to cover the hosting fees for 2 years, but all profits are going to the farmers.

Why is Chipotle so ag-gressive about online produce sales? 

Disruptions to the supply chain mean its suppliers have plenty to offer but no place to sell.

While some small farms do sell items straight to consumers — think of those roadside apple stands — they don’t usually have the resources for a slick online shopping system.

The pandemic is goading farmers into ecommerce 

Over the last few months, companies like Steward and Agrellus have been trying to get farmers to try direct-to-consumer marketing. But Chipotle is the biggest player yet to throw its weight behind online farm stands.

Ecommerce isn’t the only new sales method of the COVID-19 era. In China, some potato purveyors are live-streaming their sales. 

Prefer not to see a human when shopping for your breakfast? Try a contactless egg vending machine.

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Small Business Stories

This startup is trying to master networking by video conference

Ashlee Ammons likes to say that she built Mixtroz via “the University of Google.” 

Ammons and her cofounder, Kerry Schrader — who also happens to be her mom — weren’t versed in the mechanics of starting a business. “Everything we learned about Mixtroz was via Google searches,” she says. 

They first hit on the idea for their business in 2014, when they realized that business networking was broken. It was too awkward, too unnatural. 

The solution: Mixtroz brings like-minded people together algorithmically. Download the app, enter your event code, answer a set of 10 questions, and the algorithm pairs users up into small groups. 

In 2018, the company topped $1m+ in pre-seed funding — making the duo one of only a few dozen Black women founders to reach that milestone. 

Then, this March, the pandemic made in-person networking events disappear overnight. So Ammons threw herself into remaking Mixtroz for the video-conference era. 

In just 45 days, Ammons and her team of contract engineers built their own video platform using open-source code. 

Within minutes, Mixtroz Virtual will take your 500-person event and split everyone into groups of 5. 

Then you’re sent into a private room. Customizable ice breakers make starting a conversation a little easier. 

It’s a lot more bearable than a giant meeting on Zoom.

  • Founders: Ashlee Ammons and Kerry Schrader
  • Employees: 2
  • Cost to launch: $200k
  • Funding methods: Friends/family contributions

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TRENDS

556,630,966 eyeballs

You often hear the saying, “people want to follow people, not companies”. We get that — if you’re Ke$ha, growing your social following is just a matter of dropping a new tune. But if you’re a company, don’t count yourself out. 

BeardBrand started their Youtube account in 2012. Since then, their videos have accrued 278,315,483 views, which is… um, 556,630,966 eyeballs. Throughout that time, their subscribers have grown to 1.6m. Which come to think of it, is impressively half of Kesha’s following for much less $. 

In this week’s Trends lecture, we’re bringing in the founder of BeardBrand, Eric Bandholz, to give us the deets on how to get paid by Google to bring awareness to your company. Sounds like a win-win, if you ask us.

Join us on Thursday 7/9, at 3pm ET (12pm PT).

Get paid to drive millions → Snippets

1️⃣  An iOS privacy feature caught LinkedIn, Reddit, and TikTok copying data from users’ clipboards.

2️⃣  It’s Warren Buffett’s first big pandemic-era purchase: Berkshire Hathaway is buying Dominion Energy’s natural gas assets in a $10B deal.

3️⃣  Neeva is the newest entrant into the world of subscription-based, ad-free search engines. 

4️⃣  An arts industry bailout: The UK government unveiled a ~$2B relief package to support theaters, music venues, museums, and other cultural institutions.

5️⃣  Shopping for lipstick? In South Korea, this AR mirror lets you try on makeup without taking off your mask. 

6️⃣  Sign of the times: The luxe British department chain Harrods just opened its first-ever outlet store.

7️⃣  For $20k, could you press your finger to your phone screen for 70 hours straight? These 4 people just did. 

8️⃣  Don’t call ‘em reruns: Network TV execs are digging into their archives to create new programming for the pandemic era. 

9️⃣  There’s a gender disparity in who gets motion sickness from VR headsets

🔟  Grab your chopsticks: A Japanese entrepreneur created an AI-powered app to ensure you’ll always get the highest quality tuna.

The Hustle Says

Check out the 18 finalists for the World’s Best Nature Photo 2020. Do we smell a new desktop background?

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*This is a sponsored post.

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