Changing the Way Luxury Is Sold

Today’s Highlights: Interesting days for commercial brokers. Expect more gig workers to be classified as employees. And meet Rob Dyrdek, founder of the Dyrdek Machine business incubator.

MARKETING

Video tours on YouTube are changing the way luxury homes are sold: “In some ways, real-estate YouTubers like [Enes] Yilmazer are providing today’s answer to the MTV Cribs phenomenon of the early 2000s, offering the masses a rare glimpse at how the 0.1 percent really live. But rather than getting a peak through the eyes of a movie star or a suave celebrity real-estate agent, like on shows such as Bravo’s ‘Million Dollar Listing,’ they’re seeing these houses through the eyes of a regular guy just like them. Two years ago, Mr. Yilmazer and his longtime friend Michael Ayers started the channel with just a handheld camera, filming any house a high-end real-estate agent would let them into, he said. Now, as they grow more sophisticated with their production, YouTubers like Mr. Yilmazer are shaking up how high-end real estate is sold in cities like Los Angeles, New York and Miami.”

• “They are making YouTube, the Google-owned video website, an increasingly important marketing channel for even the most privacy-obsessed home sellers and their real-estate agents.”

• “The success of these real-estate channels has led to a rush of new copycat channels, some of which merge real-estate content with videos about designer cars, watches and get-rich schemes.”

• “It’s also spurred a boom in the number of agents trying to create their own video content, which can be hit or miss.” READ MORE

Amazon’s share of the digital ad market has cracked 10 percent and is expected to keep rising: “Amazon’s ‘Other’ unit, which is primarily made up of advertising but also includes sales related to other service offerings, grew revenue 77 percent year over year to more than $6.9 billion, the company reported on Thursday. That’s almost seven times as much revenue as Twitter, which generates substantially all of its revenue through advertising and reported first-quarter earnings the same day. That growth has sped up dramatically from the 44 percent year-over-year growth rate Amazon posted in the first quarter of 2020.”

• “Amazon CFO Brian Olsavsky said on the company’s earnings call that traffic to the site has been one large driver of the strength in its ads business. But he said ad relevancy and new ad products are also helping.”

• “‘We’re using new deep learning models to show more relevant sponsored products, we continue to improve the relevancy of the ads being shown on the product detail pages and we’ve seen rapid adoption of the video creative format for sponsored brands, among other things.’” READ MORE

THE 21 HATS CONVERSATION

Meet Rob Dyrdek, high school dropout, professional skateboarder, reality TV star, entrepreneur, and founder of the Dyrdek Machine, what he calls a venture creation studio. Rob looks for Do-Or-Diers, startup entrepreneurs that he guides through his method, offering capital and expertise, to create real businesses. Since its founding in 2016, the Dyrdek Machine has created 14 brands with five exits totaling $450 million. Join our webinar conversation Tuesday at 3 ET to hear how he does it. Bring your own questions.

GOVERNMENT SUPPORT

Registration opens today for the Restaurant Revitalization Fund: “The SBA’s long-awaited Restaurant Revitalization Fund finally opens for registration this morning, with applications being accepted starting on Monday.  Restaurants, bars, breweries, wineries, caterers, food trucks/stands, bakeries, distilleries, and inns are all eligible entities if they receive at least 33 percent of gross receipts from the onsite sale of food and beverage to the public. To determine how much you are eligible for, you take your 2019 gross receipts and subtract your 2020 gross receipts and your PPP loan amounts to determine your funding amounts. PPP, EIDL, and state/local grants do not count towards gross receipts.” READ MORE

COMMERCIAL REAL ESTATE

These are interesting days for commercial brokers: “The people who profit off corporate America’s use of offices are trying to coax corporate America back to the office. Having refined their sales pitches to play up air filtration systems, flexible lease terms and swing space — ‘as you think about who’s going to be coming back in, or if you’ll need that large boardroom,’  as Ms. Fair put it — brokers are back in their own workplaces in force, acknowledging that some things have changed while also seeking to prove to their clients, and themselves, that the office will soon return to something close to what it was.”

• “‘We opened our offices as soon as we were allowed across the country,’ said David Lipson, a vice chairman for Savills, a global brokerage firm. ‘If you’re in the office real-estate business, should you be comfortable getting too comfortable working from home?’” READ MORE

HUMAN RESOURCES

Marty Walsh, U.S. labor secretary, signaled a major change in policy toward gig workers: “Shares of Uber fell as much as 8 percent while Lyft dived as much as 12 percent. Doordash fell nearly 9 percent and Grubhub was down 3.3 percent. Walsh's work at the Department of Labor is expected to have a major impact on U.S. workplace laws and regulations, including vigorous enforcement of occupational safety and health rules, overtime payments and proper administration of employee benefit plans.”

• “As many as 55 million people in the United States were gig workers—or 34 percent of the workforce—in 2017, according to the International Labor Organization, and the total was projected to rise to 43 percent in 2020.”

• “Walsh also spoke about the risks that result from not having gig companies paying unemployment insurance for such workers - a scenario that has played out during the pandemic, leaving the U.S. government to foot the bill.” READ MORE

MANUFACTURING

The global chip shortage is worsening for automakers: “Global automakers who had expected the semiconductor supply crisis to subside in the spring are now warning that chips will remain scarce for months while a second-half recovery is fraught with uncertainty. The main causes of the worsening shortage are the widespread chip manufacturing disruption in Texas from the severe weather in February and a fire at Japan’s Renesas Semiconductor Manufacturing Co. Ltd. on March 19 that halted production, ripping a hole in the global supply. That has left car makers searching for chips needed for on-board electronics, safety systems such as automatic braking, and infotainment consoles.”

• “In the U.S., Ford said Wednesday it expects the chip shortage to cut $2.5 billion from adjusted pretax profit this year, the high range of the $1 billion-to-$2.5-billion estimate it provided in February.”

• “The company said the lack of semiconductors will force it to cut second-quarter production in half, but it expects the situation to improve after June.” READ MORE

REOPENING

In the U.S., the recovery is profoundly unequal across sectors: “Americans’ spending on durable goods — cars and furniture and other goods meant to last a long time — rose at a stunning 41.4 percent annual rate in the first three months of the year. Enjoy your Pelotons and Big Green Eggs, everybody. The central reality of the economy in 2021 is that it’s profoundly unequal across sectors, unbalanced in ways that have enormous long-term implications for businesses and workers. The economy is recovering rapidly, and is on track to reach the levels of overall G.D.P. that would have been expected before anyone had heard of Covid-19. But that masks some extreme shifts in composition of what the United States is producing. That matters both for the businesses on the losing end of those shifts and for their workers, who may need to find their way into the growing sectors.”

• “Spending on transportation services remains 23 percent below its pre-pandemic trend, recreation services 31 percent, and restaurants and hotels 19 percent.”

• “Those three sectors alone represent $430 billion in ‘missing’ economic activity — largely equivalent, it’s worth noting, to the combined shift of economic activity toward durable goods and residential real estate.” READ MORE

Europe's economy is sliding back into recession: “Europe’s economy shrank 0.6 percent in the first three months of the year as slow vaccine rollouts and extended lockdowns delayed a hoped-for recovery - and underlined how the region is lagging other major economies in rebounding from the coronavirus pandemic. The fall in output for the 19 countries that use the euro currency was smaller than the 1% contraction expected by economists but still far short of the rebound underway in the United States and China, two other pillars of the global economy.” READ MORE

THE 21 HATS PODCAST

Episode 59: I’ve Had a Love-Hate Relationship With PR: This week’s conversation with Paul Downs, Jay Goltz, and William Vanderbloemen was supposed to be about how the pandemic has affected sales strategies—and for a while it was. But it seemed Paul, Jay, and William really wanted to talk public relations. They talked about how to get PR and how to assess the results. They compared the merits of public relations to those of advertising. And they discussed whether you need to hire a firm or whether you can do it yourself. One concern all three shared is the cost. This is how Jay put it: “You hire an accountant, you're going to get some accounting. You hire a lawyer, they’ll do some legal work. PR's one of the few things you can pay money for and get absolutely nothing.”

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If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren