Last Wednesday I opened my Inbox to find an e-mail from Patrick Quinn at BigCommerce that read, “Please please please tell me that you're the Paul Drecksler who went to the wrong Airbnb that I read about.”
LOL – yes that was me. The story made international news and has been literally EVERYWHERE!
It was first covered by Channel 7 Miami. Then picked up by ABC World News Now, The Washington Post, Newsweek, CBC Radio, and countless others. Jimmy Fallen even made a joke about it in his opening monologue.
My now-famous Airbnb story was syndicated by local news stations all over the world from here to Australia. People I hadn't heard from in 20 years saw me on tv and reached out.
It's been a fun week! I'll be first to admit that I've been having a blast doing interviews with some of the biggest names in media. Plus there's an incredible surprise ending to this story.
I got the homeowner a gift as a gesture of my appreciation (you know, for not murdering me or calling the police after I accidentally intruded in his home and spent the night in bed).
If you'd like to see what I got him, check out the video I published today on Travel is Life entitled, AirBNB Hates Him For This One Simple Trick. (The video title is just a joke reference at all the clickbait titles that news stations have used to share this story over the past week.)
Anyway, on to more important news. In this week's 61st edition of the Shopifreaks E-commerce Newsletter, I report on the UK's new e-commerce rules, Amazon's dark pattern tactics, and Instacart's new Shoppable Recipes. I also talk about Google's Domain services coming out of beta and the launch of their Last Mile Fleet Solutions.
All this and more in this week's edition of Shopifreaks. Thanks for being a subscriber!
Stat of the Week
The online share of total spending worldwide fell to 12.2% in 2021 from 14.9% at the peak of the pandemic, still above pre-pandemic levels in some markets, but back to or below pre-COVID trend levels in the United States and other regions — according to a study conducted with Mastercard and Harvard Business School. (Retweet It)
1. Strong Customer Authentication (SCA) rules for e-commerce now active in UK
Strong customer authentication (SCA) rules for e-commerce have come into force in the UK last week following delays due to the COVID-19 pandemic. SCA were originally adopted by the Financial Conduct Authority in 219 to help protect consumers from fraud when shopping online, and after several delays, the final deadline to adhere to these rules was Mar 14, 2022.
With the new rules in place, UK shoppers will have to provide a combination of two forms of identification at checkout when making an online purchase including:
- Knowledge – something they know (such as a password or PIN)
- Possession – something they have (such as a mobile phone, card reader or other device evidenced by a one-time passcode)
- Inherence – something they are (such as a fingerprint)
This requirement applies to the millions of online and app-based transactions made every day.
SCA is designed to enhance the security of online shopping and reduce fraud in the UK, where UK residents and businesses reportedly have lost £2.5B from fraud and cybercrime in 2021.
Barclaycard Payments analyzed the impact of SCA checks on online shopping last month, after some platforms ramped up for e-commerce transactions ahead of the deadline. Their research demonstrated the importance of implementing SCA in a way that minimizes disruption to consumers. Their data revealed that 14% of shoppers had more of their payments declined, while 3 in 10 abandoned carts due to increased friction at checkout.
Rob Cameron, CEO of Barclaycard Payments, said, “The introduction of mandatory SCA is the most significant payments milestone since the rollout of Chip & Pin more than 16 years ago. While the new regulation is a positive step to keep customers’ data safe online, our research shows that shoppers are inclined to abandon transactions if it takes too long to check out, demonstrating how important it is for businesses to have sophisticated fraud checks in place.”
The new rules serve as the basis for a long-term approach to how the industry standardizes consumer data.
2. Google Domains is out of beta
Seven years after its launch, Google Domains is officially out of beta and ready to compete with GoDaddy, Namecheap, and other registrar giants. Customers in 26 countries can now use the full version of the service to register 300 TLDs.
Throughout the beta phase, Google offered domains starting from $12/year to US users for .com domains, and that price is still active on their website. Plus they are currently offering 20% off new domain registrations and transfers using the discount code DOMAINS20.
All the domains come with private registration, two-step verification, one-click domain name system security extensions, and the ability to create up to 100 email forwarding addresses linked to their domain.
I have a few clients who have used Google Domains while it's been in beta, and I've had no problems with it. However personally I wouldn't use it for a few reasons:
- Google already controls too much of my online presence. I can't have them also control my domain name registration, DNS, and subsequently my e-mail address. Imagine if my Google account got suspended because of something innocuous like a YouTube TOS violation, and it shut down access to my domain names too? No thank you…
- Google customer service leaves a lot to be desired. Google announced that they'll be offering 24/7 real human support now, and even advertise that front and center on the Google Domains website, but even so… Have you ever reached out to Google Support for any of their other services? Let's just say, 24/7 human support by Google isn't exactly a premium feature.
- Their domain registration fee doesn't make it worth the switch. While $12/year for a .com domain name is certainly a fair and competitive price, I currently get the same price at my registrar, so there's no financial incentive to switch. If I was looking for cheap domain registration and poor customer support, I'd switch to Cloudflare who charge $8.57/year. Cloudflare uses domain registration as a loss leader for their other services and don't markup their prices above wholesale.
The big benefit for Google to have you register your domains with them is that they now have first point of contact with your online presence development to sell you their Google Workspace products, hosted websites, e-mail, etc. Developing Google Domains seven years ago and now bringing it out of beta is a smart move for the company.
Not surprisingly, Google Domains is the first organic search result for the query “register domain names”.
3. Amazon doesn't care that it tricked you into Prime
Amazon Prime currently has over 200M subscribers worldwide as of last year, and internal documents show that it has been aware since 2017 of customer complaints that its UI design misleads people into signing up for the subscription.
“We have been deliberately confusing,” one insider who spoke with Business Insider said. “It's very un-Amazonian in terms of customer obsession.”
Amazon's design decisions – known as “dark patterns” – push customers into rapidly accelerating through misleading imagery and intentionally vague offers which automatically enroll them into a 30-day free trial of Amazon Prime, which later converts into a paid membership unless cancelled. Then when attempting to cancel it, users have to jump through a number of pages confirming and re-confirming and re-re-confirming their desire to end the subscription.
Business Insider's Eugene Kim said, “Amazon preaches customer satisfaction — but only when it makes sense financially. The company knew for years that customers complained about Prime's sign-up process, but decided not to change much because it would have led to fewer sign-ups and smaller membership revenue.”
Lina Khan, the FTC's chairperson, publicly issued general warnings about these dark patterns and difficult-to-cancel subscriptions, and Amazon corporate lawyers held private meetings with members of the Prime team as recently as 2021 in response to these inquiries.
VP of Amazon Prime said in a statement, “By design we make it clear and simple for customers to both sign up for or cancel their Prime membership.” — but that Amazon is continually listening to customer feedback and is looking for ways to improve the customer experience.
By reading this far in my newsletter, you are now subscribed to Amazon Prime. Oops!
4. Amazon Seller anti-trust suit thrown out by court
Speaking of Amazon, a big anti-trust lawsuit against the company was recently thrown out by a DC Court. The suit, filed last May by DC Attorney General Kar Racine on behalf of the District of Columbia, alleged that Amazon has too much control over how much outside vendors can charge for their products, which in turn, drives up prices and harms consumers.
The lawsuit targeted Amazon's ability to penalize third-party sellers on its platform for charging lower prices on their own websites. Many people don't know this, but Amazon at one point stated in their TOS that you had to offer their customers the best price on your products, including the price that brands charged on their own websites.
Amazon got rid of the contract provision in 2019 that expressly prohibited third-party sellers from charging lower prices outside of Amazon, but the lawsuit alleged that a similar provision essentially kept the restriction in place. Sellers whose products could be found for less outside Amazon could lose their Buy Box status (which can cost them a lot of revenue) or potentially their selling privileges.
On Friday, a DC Superior Court judge dismissed the case, and Racine feels they made the wrong decision, arguing that sellers who raised their prices on Amazon to offset the cut taken by the platform are forced to raise prices elsewhere or risk having their privileges stripped by Amazon, which is bad for consumers.
Essentially, Racine is arguing that Amazon's policies increase consumer cost by at least 15%, even off their platform, as sellers are forced to raise their prices so that they can afford to sell on Amazon.
5. Instacart unveils Shoppable Recipes
Last week I reported on Instacart's new in-store navigation and live phone support features, as part of their month-long roll out of new product features for shoppers that the company plans to unveil.
Today let's talk about the new Shoppable Recipes feature they unveiled, which offers new product integrations with TikTok and Hearst. Select food creators on TikTok can start using the Shoppable Recipes feature in their videos to link to their shopping lists and then receive payouts based on engagements and Instacart orders placed. The new feature includes a button that adds all of the required ingredients needed for a specific recipe to a user's Instacart cart.
Instacart says the launch marks its ambition to make every recipe on the internet “shoppable” and to unlock more ways for its retail partners to deepen their relationships with customers.
I've said it before, and I'll say it again… social media is becoming a giant QVC channel!
6. Klarna's 2021 Mobile Shopping Report
The UK-based BNPL firm, Klarna, released their 2021 Mobile Shopping Report, which surveyed more than 13k consumers across 13 countries. The report found that in the UK:
- 67% of people now shop via their mobile devices more often compared to two years ago, which is more than any other country
- Consumers across all generations increased their mobile shopping as a result of the pandemic, from Gen Z (77%) and Millennials (79%) to Gen X (68%) and Baby Boomers (56%)
- 62% of consumers are now using their mobile devices to research products while in-store
- 90% of consumers use their phones to compare prices (90%) and look for the best deals or price promotions (94%)
- 78% search for shopping inspiration
- 60% of people having between one to five shopping apps installed on their device, however, 35% feel overwhelmed by the number of apps available
- 63% would prefer to have a single app that incorporates all aspects of their shopping journey (LOL, that sounds terrible for an open and free market)
7. Google launches Last Mile Fleet Solution
Google has launched their Last Mile Fleet Solution, which helps businesses optimize their last mile delivery journey including capturing valid addresses, planning delivery routes, efficiently navigating drivers, tracking shipment progress, and analyzing fleet performance.
The new service builds on their existing mobility solution, On-Demand Rides & Deliveries, which is used by ride-hailing and on-demand delivery operators.
Last Mile Fleet Solution is intended to help companies decrease the amount of undelivered or missing packages, which are often due to a wrong address being entered or consumers not being home to receive them. The service will track shipments and allow for up-to-date arrival times so that consumers can be ready and available to receive their packages.
Last Mile Fleet Solution is now in public preview for companies that directly manage or own their delivery fleet. The new tool is NOT for small sellers, but for companies that run large delivery, fulfillment, and logistics operations. Paack Logistics, which serves large e-commerce retailers in Europe, is one of the service's early adopters.
8. Adobe expands their e-commerce ecosystem with new partners and developer tools
At Adobe Summit, the company announced a significant expansion of its partner ecosystem and new capabilities to their Adobe Experience Cloud.
Companies joining Adobe’s tech partner ecosystem include:
- Anaplan – financial and budgeting capabilities
- FedEx – free two-day shipping, easy returns, and seamless checkouts
- OneTrust – to simplify the ways users give consent and express their preferences
- PayPal – merchants can now accept popular payment methods build on PayPal's commerce platform
- Walmart – merchants can now offer buy online, pick up in-store experiences at their own storefront locations, as well as syndicate their products to the Walmart Marketplace
- The Weather Company – brands can now use real-time weather data to design digital experiences such as recommending umbrellas to customers on a rainy day
Adobe also announced new developer tools:
- Adobe App Builder for Commerce and Experience Manager – to build and deploy cloud-native web applications aimed at creating customized content, commerce and document experiences across Adobe applications
- Headless Commerce Capabilities – providing the flexibility to create custom user experiences and storefronts with Adobe’s technology
- Adobe PDF Services API integration with Workfront Fusion – access to APIs that enable the automation of approval and signature workflows,
- Adobe PDF Services Connector for Microsoft Power Automate – to build multi-step, dynamic workflows for complex documents involved in contracts
- Source and Destination Software Development Kits (SDKs) – to create integrations with Adobe Experience Platform and Adobe Real-Time CDP to expedite time-to-value for customers
9. Other e-commerce news of interest this week
- Recharge.com, a Netherlands-based payments fintech which specializes in digital prepaid gift cards, has launched its services in Australia. The company stated that there are 55M non-cash payment transactions worth $650B happening every day in Australia that they want a piece of.
- Ukrainian President, Volodymyr Zelenskyy, signed a month-old legislation to provide legal framework to buy and sell cryptocurrencies in the country. Crypto exchanges will be able to register with the government and operate in the country, and banks will be allowed to open accounts for cryptocurrency companies.
- BigCommerce partnered up with Cymbio, an e-commerce marketplace and dropship automation platform, to offer the new sales channel to their merchants.
- The California consumer who sued Shopify for its alleged surreptitious collection of shoppers’ financial data is resisting dismissal. The opposition was filed in response to Shopify's submitted motions to dismiss the complaint last month.
- Squarespace and the New York Knicks announced the winners of the fifth annual “Make It Awards”, which provides tri-state area entrepreneurs and creators that are dedicated to helping their communities with funds and exposure to elevate their businesses. Each winner receives a $30k grant, a one-year subscription to Squarespace, use of select marketing inventory, and a feature segment on MSG Networks.
10. This week in seed rounds, IPOs, & acquisitions….
- Cart.com, an e-commerce solutions provider, acquired DataFeedWatch, a data feed management solution provider, just a month after raising €217.2M in a funding round. DataFeedWatch customers will now gain access to Cart.com's software and e-commerce solutions, allowing the US-based platform to expand internationally.
- CommerceIQ, a platform that applies machine learning and automation across marketing, supply chain, and sales operations, raised $115M in a Series D round led by SoftBank Vision Fund 2, less than a year after its $60M Series C, which now brings the company's valuation to over $1B. The company will use the funding to accelerate its R&D and M&A activities as well as expand into Europe and Asia Pacific regions.
- Powered By People, a wholesale e-commerce platform based in Kenya, raised $5M in a round led by Susa Ventures and Golden Ventures. The company will use the funding to increase its transaction volumes by growing the number of small brands using its B2B marketplace to reach international buyers.
- Reliance Retail, an Indian retail company, is acquiring a majority stake of 89% in Clovia, a D2C brand serving millennial women, for $125M, helping Reliance Retail expand its footprints in the apparel and innerwear categories. Clovia aims to benefit from its acquirer's scale and retail expertise.
- ClearBank, a UK fintech that offers cloud-based financial rails for banks to offer real-time clearance on payment transactions, raised £175M from Apax Partners. The company will use the funding to take its services beyond its home market and move into new areas such a cryptocurrency exchanges.
- Kyash, a Tokyo-based fintech company that provides users with a digital wallet and mobile banking services, raised $41.2M in a Series D round with participation from Jack Dorsey's Block. The company plans to use the funds to increase product growth and their number of employees.
- Profishop, a German-based B2B marketplace that caters to business and industrial manufacturers, raised $35M from Tiger Global. Profishop is active in 13 markets and has grown 100-120% YoY since launching in 2010. The company will use the funding to expand its business and platform in Europe and elsewhere.
- Payrails, an operating system for payments that helps companies create, manage, and modify payment processes, raised $6.4M in a round led by Andreessen Horowitz to prepare for the official commercial launch later this year. The service isn't positioning itself as POS provider or payment facilitator, but rather a platform that will make it easier to integrate and work with those services via APIs.
- Rutter, a universal commerce API platform on a mission to enable new commerce experiences, raised $27M in a Series A round also led by Andreessen Horowitz, bringing their total funding to $29.5M. The company will use the new funding to scale out their engineering and go to market teams. — Is Andreessen Horowitz investing in EVERY commerce API platform? Between their multiple investments, there's bound to be a clear winner, or merger, or both.
- Loveseat, a marketplace for returned goods where furniture is auctioned off locally, raised $7M in a Series A round led by Bessemer Venture Partners. So far the company hasn't done much marketing, relying mostly on word of mouth. They plan to use the new funding to grow their leadership team and expand throughout Texas and other states.
- Sokowatch, a Kenya-based B2B retail and e-commerce platform that allows retailers to order products from suppliers via SMS or its mobile app for same-day delivery to their stores, raised $125M in a Series B found, valuing the company at $625M. The company is rebranding as Wasoko as it moves from an East African player to a pan-African one.
- Bazaar, a Pakistani B2B e-commerce platform that provides procurement, fulfillment, operating software, and supply chain products to merchants, raised $70M in a Series B round co-led by Dragoneer Investment Group and Tiger Global Management, bringing their total amount raised to more than $100M. Bazaar claims to serve 21 cities and towns across Pakistan and cover 30% of Pakistan's population. The new funds will be used to expand into more cities and launch new marketplace categories.
- Licious, a Bengaluru-based startup that sells fresh meat, seafood, and other fresh animal protein online, raised $150M in an extension round to their $52M Series F led by Amansa Capital, Kotak PE, and Axis Growth Avenues. The new round brings their total amount raised To $488M and serves as a precursor to their IPO.
- Aurajinn, an e-commerce app development firm, acquired Cynkio, a Shopify app that syncs tracking numbers with PayPal to mitigate payment holds, disputes, and chargebacks. This is the first acquisition made by Aurajinn, and they expect to purchase and relaunch at least one more Shopify app this year.
- Moonshot Brands, an e-commerce aggregator that focuses on acquiring and building long-term brands, raised $30M in equity in a round led by Anthemis, and $150M in a credit facility from Victory Park Capital, giving the company $180M in total funding. Moonshot currently has has nine brands and is positioned to grow to over $100M in trailing 12 months growth by end of 222.
- Amplience, a content management platform for retailers, raised $100M in a Series D round led by Farview Equity Partners and Sixth Street, bringing their total amount raised to $180M. The company will use the funds to expand into the US and globally and to support development of their new Dynamic Commerce Experience offering.
- ChannelEngine, a platform that helps retailers connect with and sell through more than 200 marketplaces, raised $50M in a round led y General Catalyst. The company will use the funding to continue expanding the number of marketplaces and retailers it works with and build additional features.
What'd I miss?
Shopifreaks is a community effort and I appreciate your contributions to help keep the rest of our readers in the know with the latest happenings in e-commerce. Whenever you have news to share, you can e-mail [email protected] or hit reply to any of my newsletters.
You can also mention @shopifreaks on Twitter or submit posts to r/Shopifreaks on Reddit, and I'll curate the best submissions each week for inclusion in the newsletter.
💖 Thanks for being a Shopifreak!
If you found this newsletter valuable, please share it with your friends and help us grow.
See you next Monday!
PAUL
Paul E. Drecksler
www.shopifreaks.com
[email protected]
PS: Never trust stairs. They're always up to something.
PPS: Don't forget to leave me a Google Review. Thanks!