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#121 – Amazon will pay you $10 to pick up your own package

by | May 15, 2023 | Recent Newsletters

What incentive would it take to get you to pick up your e-commerce purchases at a nearby store instead of wait for home delivery?

Which is better for small businesses — headless or full body e-commerce?

Have you ever wanted to buy a t-shirt or other real-world item while in the middle of playing a video game?

Is the BNPL-model all that it was cracked up to be? If so, why are BNPL firms moving into traditional lending?

All this and more in this week's 121st Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week 📈

In 2022, 47.4% of Internet traffic came from bots, a 5.1% increase YoY. Human traffic, at 52.6%, decreased to its lowest level in eight years. — According to Imperva's Bad Bot Report

Share this week's stat on Twitter & LinkedIn.

1. Amazon is offering $10 to pick up your own orders

Amazon is offering some Prime customers $10 to pick up their purchases of $25 or more at a nearby Kohl's, Whole Foods, or Amazon Fresh store, rather than have it shipped to their home. I could not find any information about whether that $10 is in the form of a cash rebate or Amazon credit, but I'd imagine the latter. 

Amazon said the promotion is not a cost-cutting measure and that it's specifically for customers who have never used Amazon Pickup or have not used that service in the last 12 months.

Shipping consultant Dean Maciuba, who received the offer, said that increasing use of Amazon pickup location would help the company bypass costly residential package drop-offs and is, “a huge opportunity for Amazon to reduce the cost of delivery.” — but it certainly doesn't take a shipping consultant to see that.

Last month I reported that Amazon began charging a $1 fee on return drop-offs to UPS stores if there is an alternative like a Whole Foods, Amazon Fresh, or Kohl’s location within the same distance (where you're still able to drop off returns for free).

I mentioned in that edition that while everyone is so focused on Amazon cost-cutting, analysts are neglecting the fact that bringing customers into the door of one of those stores can equate to revenue for Amazon, whereas they have no revenue upside to deliver to the customer's door or send them to a UPS location for returns.

I'd bet that a statistically relevant portion of customers end up buying something when they enter a Whole Foods or Amazon Fresh to return an item they bought online. And why not? Their cookies are delicious!

Would you take Amazon up on their offer for $10 to pick-up your own items? What if they offered same-day or next-day pick-up at Whole Foods, but two day delivery to your home? And if cashback or enhanced delivery speed doesn't change your tune, what incentive would get you to pick-up your own items versus wait for home delivery? Hit reply and let me know. 

2. Wix introduces headless

Wix introduced Wix Headless, a solution that allows developers to integrate the platform's business solutions using APIs and SDK, marking the first time the company is opening its backend to work outside the Wix platform and a strategic shift by Wix to cater to professional web developers and larger businesses who need more customization and flexibility.

Developers can now integrate many of Wix's products including e-commerce, bookings, CMS, and events from any tech stack. The APIs are synchronized and ready to use with Wix’s additional solutions, such as contacts and checkout.

Netlify is the first platform to partner with Wix and more are on the way. 

My first question when I read about Wix Headless was — why? 

Last week in Story #2, I recapped notable Wix milestones over the past year, including many of the new services they've brought in-house through integrations. 

For example, Wix brought Stripe, Semrush, HotelRunner, and most recently Square and Shippo into their ecosystem via integrations and white labeled services.

I've been impressed with Wix because instead of competing with Shopify with an expansive selection of apps and integrations, Wix has been selectively making deeper native integrations into their platform, and the outcome has been a powerful suite of tools for merchants.

In my opinion, the strongest differentiators Wix offers is simplicity and serving as a one-stop-shop for business owners. Are professional developers really going to use Wix Headless to utilize the company's business solutions, or will they simply continue to use their favorite existing solutions for checkout, bookings, CMS, and events?

Personally I don't think that any of those Wix services above are standout or best in the industry. The advantage has always been that merchants get access to all of them through one dashboard and simple pricing.

If I were bypassing simplicity and picking and choosing my own checkout, bookings, CMS, and events services to go with my headless solution, would I pick Wix for any of them?

That'll be the big question which will determine whether Wix Headless is a success or a flop. 

While Shopify is looking to go enterprise and B2B, if I were Wix, I'd lean in even harder towards serving SMBs and let the rest of the world duke it out in the headless and enterprise arenas. (It's not going well for many of them.)

What are your thoughts on Wix Headless? Great strategic move or is Wix veering from their “main quest” as Shopify would say? Hit reply and let me know. 

3. BigCommerce Partners with Oracle NetSuite (Sponsored)

BigCommerce announced a partnership with Oracle NetSuite, offering a new integration that connects merchants with NetSuite's business system to help streamline and automate their financial, inventory, and order management processes.

Sachin Wadhawan, VP of tech partnerships at BigCommerce, said, “For our customers and prospects that need a business system to better help run their business, this partnership helps strengthen their tech stack and provides a foundation for growth. Our commitment is to provide a modern, composable ecommerce platform that tightly integrates with NetSuite for complete business visibility.”

The new NetSuite-provided integration builds upon the existing NetSuite Connector, which allows merchants to connect to NetSuite with e-commerce storefronts, POS systems, online marketplaces, and third-party logistics providers.

Guido Haarmans, group VP, SuiteCloud Developer Network and Partner Programs, Oracle NetSuite, said, “Merchants need flexible, scalable systems to keep up with shifting consumer demands and economic conditions. NetSuite is the industry-leading Cloud ERP, and BigCommerce is an industry-leading ecommerce platform. By joining forces, we can offer customers a centralized business system that connects their ecommerce platform to key business data including financials and inventory to optimize operational processes and grow online sales.”

Leveraging NetSuite’s integration with BigCommerce, UPLIFT Desk has been able to improve operational efficiencies and accuracy when fulfilling both single and high-volume orders.

Bryce Bowerman, COO at UPLIFT Desk noted, “At one point the team had to enter orders manually with lots of time-consuming verification steps. Now, we can enter orders directly into BigCommerce and the data then transfers into our ERP, which enables all order data to originate from the same place.”

Learn more about how UPLIFT Desk leverages BigCommerce’s integration with NetSuite to grow its business.

4. Introducing: Amazon Anywhere

No, I'm not talking about Buy with Prime! Although “Amazon Anywhere” would've been a cooler name, and there is overlap between the two services.

The new Amazon Anywhere service allows consumers to buy real-world physical products in gaming, mobile, web, and AR applications without leaving the virtual experience. (Sorry NFTs!)

Steve Downer, vice president of consumer electronics at Amazon said, “We’re creating a new landscape for shoppable entertainment and digital experiences while continuing to meet our customers where they are, with the products they love.”

Amazon Anywhere debuted on May 9th within Peridot, an AR game feature virtual pets from Niantic, the developer of Pokemon Go.

You can checkout a video of how it works, where a shopper links their Amazon account to the game and purchases a t-shirt, which is delivered from an Amazon warehouse.

Creators can also get in on the action by curating items to sell within their game or app from Amazon Marketplace.

Absolutely brilliant way to expand the Amazon brand into third-party games, apps, and services. It also offers an untapped way for games or apps to extend their shopping experiences beyond digital currencies or in-game items, without having to handle the fulfillment and logistics.

I imagine that it won't be long before a game offers a t-shirt or physical item that becomes part of the actual game play, especially with AR games. 

5. ByteDance delays TikTok Shopping in US

ByteDance postponed the launch of its shopping platform on TikTok in the US due to concerns about the app's future, lack of interest from merchants, and lack of live-streaming e-commerce adoption in the U.S.

The company was planning to release the platform for all sellers in early spring, but it has now been delayed until June at the earliest.

TikTok had difficulty attracting more sellers to open storefronts on its platform after a preliminary test launch with a small group of select merchants last year.

TikTok has 150M monthly active users in the US, but its parent company ByteDance has yet to turn a profit. The company recorded operating losses of more than $7B in 2021 and has since been restructuring to improve efficiency since Beijing tightened oversight of China's Internet sector.

ByteDance currently relies on China for more than 80% of its revenue, but competition has stifled the growth of its biggest earning apps, Jinri Toutiao, and Douyin.

TikTok remains ByteDance's primary attraction outside of China, and its best shot at tapping into the U.S. e-commerce market. 

6. Affirm realizes that BNPL is terrible

Affirm is working to shift more of its volume to loans offered at interest rates up to 36% (that's ridiculous), while simultaneously experimenting with offering merchant-subsidized lower-interest loans under 10%.

As part of the shift, the company formed a partnership with FICO, which is developing an approach for reporting its consumer loan activity to credit reporting agencies.

In recent months, Affirm has shifted away from its interest-free installment loans to loans with longer terms that charge interest. At the end of Q1, about 70% of Affirm's loans were interest-bearing while the remainder were pay-in-four interest-free loans. 

In February I reported that Affirm was going around having one-on-one meetings with merchant clients seeking permission to raise their rates because their initial agreements did not include an automatic mechanism for dealing with rate increases by the Federal Reserve.

Earliest this year, Affirm also sunset its cryptocurrency service, laid off around 20% of its staff, exited the Australian market, and lost their exclusivity with Amazon.

During the most recent quarter, Affirm reported an operating loss of $310M, a 26% steeper loss than Q1 2022, despite GMS rising by 18% to $4.6B.

7. Meta's new AI tools for advertisers

Meta announced the release of its new AI Sandbox, a testing ground for brands to apply generative AI to text and images in campaigns that appear in feeds and videos on Facebook and Instagram. The new generative AI tools can suggest colors and patterns, ad text, and promotional images that can help products standout.

Recently the EU fined Meta around $414M for its approach to targeted advertising, and now the company is trying to supplement some of the data it's no longer able to use about customers with AI generated predictions.

Nicola Mendelsohn, head of the Meta’s Global Business Group, said, “We’re doing more with less data.”

Meta did not say how many advertisers were currently applying generative AI to their campaigns, but announced plans to roll out to more advertisers in July.

Meta has not yet determined how it will disclose when AI is used in ads, to address concerns that AI generated content can be deceptive and depict scenes and people that don't exist. But then again, that's pretty much the state of social advertising now, minus the AI.

Meta also announced that it is expanding its Ads on Reels payout model, which rewards Facebook and Instagram creators based on the performance of their Reels. The payouts will be determined by the number of plays a Reel gets, though Meta noted it may look at other factors moving forward.

8. Amazon to bring ChatGPT-style search to its marketplace

Amazon is planning to bring ChatGPT-style product search to its marketplace, in an attempt to rival efforts by Microsoft and Google to weave generative artificial intelligence into their search engines.

A recent job posting seeking a senior software development engineer said that the company is “reimagining Amazon Search with an interactive conversational experience” designed to help users find answers to questions, compare products, and receive personalized suggestions.

Another posted job would be part of “a new AI-first initiative to re-architect and reinvent the way we do search through the use of extremely large scale next-generation deep learning techniques.”

Google announced a similar experimental AI tool called Search Generative Experience (SGE) that attempts to make online shopping easier for complex purchases. The tool claims to do the shopping research for you, summarizing insights to give shoppers the most accurate product details, prices, and deals.

Amazon’s search experience has been criticized in recent years for its increased share of ads and sponsored content. A conflict of interest for Amazon, Google, and Microsoft, is that leveraging AI to deliver streamlined results to users inherently bypasses their crowded monetized search result pages.

The advantage Amazon has over the other two is that it makes money either way — whether a user clicks on ads and/or when they make a purchase. Whereas Google and Bing are mostly monetized through ad clicks. 

However I'm confident that all three will find a way to pervert AI results with advertisements if these types of results are to go mainstream. 

9. Other e-commerce news of interest

WooCommerce 7.7.0 released this week with Multichannel Marketing now out of beta, which allows users to connect additional sales channels like Google, Amazon, and eBay and manage inventory across storefronts. The new version also introduced expanded styling options for Product SKU, Price, and Image, new product reviews blocks, more customization options for the Add to Cart button, expanded Mini Cart block options, and a new option to upgrade from the old classic template. 

Best Buy is changing its membership program, just two years after launching its TotalTech membership which originally cost $199.99/year. The new “My Best Buy Total” membership will offer cheaper service tiers to attract more customers, starting with a free membership tier. Did they hire the same consultants who blundered their last membership program for this one too?

commercetools launched a new checkout solution that can be integrated with their Composable Commerce APIs. The solution is pre-integrated with payment services providers Worldpay and Adyen, with more integrations coming soon.

The Indian government expanded ONDC operations into 236 cities in the country while adding more than 36,000 merchants. The platform aims to penetrate 25% of India's consumer purchases during the next two years, from around 8% now.

Zendesk partnered with WhatsApp and Shopify to give businesses the ability to offer customers a buying experience without ever leaving the conversation. Zendesk's new conversational commerce allows merchants to incorporate product catalogs, checkout processes, and promotions into their customer experience journey.

Five major e-commerce firms in India including Amazon, Flipkart, Meesho, Snapdeal, and Shopclues delisted a combined 13,118 items after receiving notice to stop the sale of car seat belt alarm stopper clips. The sale of these clips was brought to the attention of the CCPA for compromising the life and safety of consumers.

Salesforce introduced Hybrid Storefronts, which offers businesses the ability to combine templated and customizable headless approaches to e-commerce site development. The solution offers a mix between their two products — one being a fully templated solution and the other a fully custom solution — so that merchants can pick and choose which pages on their site to make composable.

Amazon has a new generative AI technology called Burnham that could make its Astro home robot a whole lot smarter, according to leaked documents. Burnham adds a layer intelligence and a conversational spoken interface to a smart home robot so that it can understand the context of busy households and respond appropriately.

Canon and Amazon have teamed up to take down a group of counterfeiters selling fake Canon camera batteries and chargers on Amazon's marketplace. Amazon's Counterfeit Crimes Unit (CCU) used advanced machine learning techniques to confirm that the products in question were counterfeit, and then immediately shut down the 29 selling accounts. Now both companies are filing a lawsuit against the sellers. 

Elon Musk named Linda Yaccarino the new CEO of Twitter, who will begin in six weeks, while Musk transitions into the roles of executive chair and chief technology officer, overseeing product, software & sysops. In her first Tweet after the announcement, Yaccarino wrote, “Thank you Elon Musk! I've long been inspired by your vision to create a brighter future. I'm excited to help bring this vision to Twitter and transform this business together.”

Rokt launched a payments solution called Rokt Payments Marketplace that is integrated into a merchant's payment page and presents shoppers with credit card offers that offer instant rewards like, “Get $50 off this purchase by getting this credit card.” Rokt claims that the marketplace “creates an opportunity for payment providers at a critical moment in the checkout process, when consumers are highly engaged and about to purchase.”

The Facebook Messenger app will no longer be available on Apple Watches at the end of the month, ending the ability to reply to messages on the wrist. Facebook said, “Give us the ability to track conversions again, and we'll bring back Messenger for your watch!” Kidding, but not kidding. Although Meta hasn't made an official statement, it's rumored that the reason for discontinuing the integration is that when users don't open the iOS Messenger App, they are not served ads, which in turn causes Facebook to lose money, and they aren't willing to give up any more money to Apple. CEO Xu Lei stepped down after year one year in the position, after the company announced it had swung to profit in Q1. Lei will be replaced by Sandy Ran Xu, the current CFO.

Etsy launched a new site-wide wedding registry, joining competitors like Amazon, Macy's, and Pottery Barn in the wedding registry arena. Gift selections on the registry can get very specific, with options to include detailed personalization requests, a feature that sets them apart from competitors.

Meta struck a deal with Stripe to enable in-stream payments across WhatsApp in Singapore. Through a single chat thread, businesses will now be able to conduct direct payments without having to visit a website or open another application.

Kasada, a provider of solutions against advanced bot attacks, and Signifyd, a fraud management firm, entered into a strategic partnership to protect consumers against various types of e-commerce fraud. The two companies will work together to deliver a solution that helps stop automated online fraud before it takes place while safeguarding consumers from other instances of abuse and fraud.

10. Seed rounds, IPOs, & acquisitions

Klaviyo submitted paperwork on Friday with U.S. regulators for an IPO, according to inside sources. Terms of the IPO have not yet been set, but the company, which was valued at $9.5B in its last financing round in 2021, is rumored to be looking to raise at least $750M in the listing.

Petal, a credit card and fintech company that pioneered the use of automated cash flow underwriting in consumer credit, raised $35M in a round led by Valar Ventures, and spun off Prism Data, its B2B-focused data infrastructure and analytics subsidiary. The new funds will be split between Petal, which will serve consumers, and Prism Data, which will serve financial institutions and businesses.

8fig, a Texas-based continuous funding and management platform for e-commerce businesses, raised $140M in a Series B round led by Koch Disruptive Technologies, bringing its total amount raised to $196.5M. The funds, which are a mix of equity and debt, will go towards funding e-commerce SMBs and growing the company.

Tough Commerce (formerly known as Brokrete Inc), a platform that enables complex industries like construction to create industry-specific workflows to digitize their operations, raised $2M CAD in a round led by board chair and investor, Ronald Richardson, bringing its total amount raised to $7.8M CAD. The platform is fully operational and used by construction suppliers throughout Canada, the U.S., and Australia.

Diagram Ventures, a Montréal-based venture capital fund that launches tech companies in the financial services, insurance, and health industries, launched its latest venture fund with a first close of $100M CAD. The new fund will invest in around 20 companies from pre-seed through Series A stages, with a majority of the capital going towards startups that Diagram co-creates.

The Volte, an Australian-based peer-to-peer luxury clothing rental agency, raised $4M in a Series A round from eBay Ventures and Better Labs. The funds will be used to grow their team and expand their technological capabilities with a goal of returning to profitability.

AnyMind Group, a Singapore-based commerce enablement company, acquired Digital Distribusi Indonesia (DDI), an Indonesia-based e-distributor and e-commerce enabler, marking the company's eighth global acquisition. The deal will combine AnyMind's technology for end-to-end commerce with DDI's local operation team and customer network.

1WorldSync, a provider of omnichannel product content solutions, acquired atrify, a subsidiary of Europe's largest GS1 certified product content technology. The companies were originally one company before being split and acquired by separate entities, and are now being reunited.

Everseen, a software that uses uses ceiling-mounted cameras and computer vision to help prevent theft at self-checkout counters, raised €65M in a Series A round led by Crosspoint Capital Partners, bringing its total amount raised to €90M. The company says that its algorithms can detect and track objects of interest, analyze how they interact, and recognize actions of interest performed by shoppers and sales associates.

Zamp, a tax compliance platform that calculates and aggregates sales tax across multiple sales channels for merchants, raised $4M in a round led by Valor Equity Partners, Soma Capital, Day One Ventures, and others. The company will use the funds to develop and automate its solution, make hires, and prepare to support customers selling internationally.