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#125 – Who’s right? Amazon or Wall Street?

by | Jun 12, 2023 | Recent Newsletters

It was brought to my attention that last week's 124th Edition didn't make it to as many Inboxes as usual. Potentially due to the title of the edition, it landed in more Promotions tabs than usual. If you missed that edition, you can check out the web archive here.

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This week I've got stories for you about Wall Street analysts questioning Amazon's focus, tech companies looking to exploit a work visa program, and Meta encroaching hard on Twitter's territory. 

I also share stories about new generative AI tech from Salesforce, marketing automations and checkout improvements from Shopify, and Amazon BNPL partnerships.

All this and more in this week's 125th Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week 📈

55.6% of websites use English as their primary language, even though English speakers make up just under 5% of the global population. 

Chinese: 16.4% of population / 1.4% of domains

Spanish: 5.9% of population / 4.9% of domains

Arabic: 4.4% of population / 0.72% of domains

Hindi: 4.3% of population / 0.068% of domains

— According to W3Techs

Share this week's stat on Twitter & LinkedIn.

1. Wall Street analyst blasts Amazon's focus

A Wall Street analyst warned Andy Jassy that he needs to go back to the “day one” mentality that initially propelled Amazon's success and focus on its long-term strategy.

Bernstein’s Mark Shmulik has penned an open letter to executives at Amazon, which I'll recap below:

  • Although Amazon shares are up 50% YTD, it's still underperforming peers by 52%
  • Jassy has a scattershot approach to development which now includes advertising, health care, media and entertainment, AI, and satellite systems. 
  • Projects like Amazon Care are taking valuable attention away from projects which will materially strengthen the brand.
  • The company is “simply pursuing too many ideas, with weaker ideas taking away the oxygen, capital, and most importantly focus from the truly disruptive initiatives that ‘only Amazon can do.’”
  • Amazon has been trying for over a decade to build something in health care, but has made no noticeable strides.
  • Project Kuiper (satellite Internet) has “no discernible competitive advantages over operating competitors.”
  • Amazon needs to reassess its geographies and experimental new stores. Schmulik says that regions like Brazil, India, and Singapore are a case of throwing “good money after bad.”
  • Instead of “tinkering” with physical stores, Amazon needs to “make a call on physical groceries.”
  • Amazon needs to break out noncore areas in earnings calls and company communications.
  • Shmulik wants Amazon to focus on media and its Buy With Prime service saying, “Amazon clearly has a competitive advantage, particularly with Shopify throwing in the towel on a competing service, and falls in the category of something only Amazon can do. Allocate more resources here.”

Do you agree with Schmulik's criticism of the company? Or does Schmulik simply not have the foresight that Amazon has historically had in discovering markets before they emerge? Hit reply and let me know. 

2. Channels for WhatsApp

Maybe I'm old school, but I appreciate when apps have a clearly defined purpose. For example, TikTok is for watching shortform videos. YouTube for longform videos. Instagram for photos. WhatsApp for messages. Twitter for complaining to airlines.

However lately, especially since TikTok's rise and Twitter's fall, it feels like every app is trying to do everything — which dilutes their core value. 

The latest example of this trend is the recently announced Channels for WhatsApp — a new broadcast messaging functionality that allows users to join channels via invitation links and follow along with folks they follow via a new Updates tab. So, Facebook? (At least what Facebook used to be.)

  • Channel admins can send text, photos, videos, stickers, and polls.
  • There will be a searchable directory to find channels relating to hobbies, sports teams, and updates from local officials.
  • Channel invite links can also be sent in chats, e-mail, or posted online.
  • Channel admin phone numbers and profile photos won't be shown to followers.
  • Following a channel won't reveal your phone number to admins or other followers.
  • Channels history will only last for 30 days.
  • Admins can block screenshots and forwards from their channels.

Meta is actively going after Twitter's market share right now. This new Channels update is likely in response to Twitter becoming an unreliable platform for organizations to communicate important updates. Last month New York's Metropolitan Transportation Authority announced that it would no longer provide service information on Twitter because the “reliability of the platform can no longer be guaranteed.”

The MTA later returned to Twitter after Elon Musk restored free API access to the organization, however the damage to Twitter's reputation as a reliable partner for these types of broadcasts has been done. 

Between Meta's upcoming Twitter-clone, Project 92 (reportedly called Threads now), and now WhatsApp Channels, Meta is actively looking to become the home of all of Twitter's most popular use-cases.

The big question for WhatsApp Channels is — at what point does it go from organization updates to marketing messages? And at that point, is it simply a differently packaged version of IG and FB? Will the new CTA be, “Follow us on WhatsApp!”?

3. Tech companies want more H-1B visas

Google, Meta, Amazon, Microsoft, and Salesforce are lobbying the U.S. government to increase the number of temporary foreign workers allowed in the United States through the H-1B visa program, which allows U.S. employers to employ foreign workers in specialty occupations.

The companies claim that the current cap of 85,000 visas per year is insufficient to meet the demands of these tech firms. 

Wait a minute, I'm confused. In the past year:

  • Google laid off 12,000 employees.
  • Meta laid off 20,000 workers since November. 
  • Amazon cut 27,000 jobs in 2023.
  • Microsoft laid off 10,000 employees.
  • Salesforce laid off 8,000 workers.

The above layoffs add up to 77,000 tech workers!

And that's not counting the tens of thousands of layoffs from Twitter, Shopify, BigCommerce, Lyft, Redfin, Apple, Poshmark, Roku, and countless other tech companies.

So Google, Meta, Amazon, Microsoft, and Salesforce — if you need more workers, I've got lots of qualified folks I can connect you with!

Experts are rightfully concerned that these companies are trying to use H-1B visa holders to depress wages in the industry, as companies can pay foreign workers below the local median wage since the foreign workers' legal status in the country is tied to their employment.

In other words, they are more desperate to accept a position in order to remain in the U.S., which doesn't offer a very strong salary negotiation position. 

What are your thoughts? Should the U.S. government increase the cap on H-1B visas? Or is Big Tech trying to take advantage of the cost benefits of the global market within our borders? Hit reply and let me know. 

4. Salesforce launches more AI features

Salesforce stepped up its generative AI push with the launch of two new applications, Marketing GPT and Commerce GPT.

Marketing GPT is aimed at helping marketers generate personalized e-mails and create smarter marketing journeys. For example, it'll help help marketers to quickly create audience segments and improve targeting with natural language prompts and AI-powered recommendations, or enable users to auto-generate personalized e-mails to improve customer engagement. 

Commerce GPT is designed to help companies create more personalized shopping experiences and customized recommendations. For example, it can assist merchants by automatically filling in missing catalog data with auto-generated product descriptions tailored to specific buyers. It'll also power personalized conversations with shoppers to help them discover new products through natural language interactions. 

Liz Miller, VP and principal analyst of Constellation Research Inc, told SiliconANGLE, “The big opportunity here lies in how AI is being applied to data, and specifically in the audience and customer data segments. Marketers can literally ask about different segments and explore new opportunities that could be really important and profitable for businesses.”

I first reported on Salesforce's embarkment into AI this past March, with the launch of their Einstein GPT, which added ChatGPT-like features across the platform.

Other generative AI models are set to launch soon including Tableau GPT, which can generate visualizations based on natural language prompts, Flow GPT, which let users build no-code workflows that embed AI actions, and Apex GPT, which can scan for code vulnerabilities and suggest inline code for Apex, Salesforce's proprietary programming language.

5. Shopify introduces new Marketing Automations

Shopify introduced Shopify E-mail in Nov 2019, a native e-mail marketing feature that let merchants send e-mail broadcasts to customers that opted-in to their updates.

While it was great for stores that wanted to send simple e-mail broadcasts, Shopify E-mail initially lacked basic automations like the ability to send an automated welcome e-mail or product-specific follow-ups — features that you'd find standard at Klaviyo, Drip, or Aweber.

Several of those automations were later added to Shopify E-mail, and this week, Shopify introduced a few more:

  1. Welcome e-mail series (discount with reminder) – this template starts with an e-mail featuring a discount and follows with two e-mails designed to build relationships with new subscribers. Lastly if a customer hasn't made a purchase by the third e-mail, a fourth e-mail is sent with a reminder to use the discount.
  2. Welcome e-mail series (brand story with discount) – this template sends three e-mails that share your brand's story, and then a fourth e-mail with a discount if they haven't yet made a purchase.
  3. Thank you e-mail – this template sends an e-mail a day after a customer makes a purchase, along with a personalized message depending on whether it's their first purchase or second .

Shopify's complete list of automations (excluding the above three):

  • Abandoned checkout – Drive customers back to your store to complete their checkout.
  • Abandoned cart – Remind customers they left items in their shopping cart.
  • Abandoned product browse – Engage customers who viewed a product but didn't add anything to their cart.
  • Welcome new subscribers – Send new subscribers an e-mail with a discount welcoming them to your store.
  • First-purchase upsell – Drive repeat purchases with product offers after a customer's first purchase.
  • Customer winback – Reconnect iwth previous customers by offering them a one-time discount.

6. Amazon Pay + Affirm

Amazon added Affirm's BNPL payment method to its Amazon Pay checkout for U.S. shoppers. 

Merchants who offer Amazon Pay no longer have to integrate Affirm as a stand-alone payment option, and can instead simply add it to their existing Amazon Pay button.

I first reported on an Amazon + Affirm partnership in August 2021, back when Amazon Marketplace partnered with Affirm to offer BNPL payments to customers in the U.S., which later expanded to Canada.

Now the option has expanded to all merchant stores (off the Amazon Marketplace) who utilize Amazon Pay as a payment method. 

Two years ago I questioned whether Amazon was simply using Affirm as a means of testing the demand for BNPL on its platform, and whether it would later develop its own in-house BNPL offering.

However it seems that the company has opted to go further down the path of outsourcing its BNPL — a smart move in my opinion to let someone else manage that headache of offering credit to consumers who shouldn't be given credit. Amazon can reap the benefits of more transactions happening through Amazon Pay without the liability of taking on bad debt. 

7. Amazon also loves the environment

Last week I reported that Walmart announced its initiatives to reduce its use of plastic in its online business and reduce waste by replacing nearly all of its plastic mailers with paper mailers, creating perfect-sized built-on-demand boxes to produce less cardboard waste, and giving customers the option to opt-out of single-use plastic bags in online pick-up orders and request consolidation of multiple items into fewer boxes for online orders. 

This week Amazon announced that it is expanding its partnership with the Ellen MacArthur Foundation, a nonprofit that works with businesses and policymakers to develop and promote the idea of a circular economy. The collaboration will focus on certifications for products with circular attributes across its marketplaces including: 

  • Qualify sustainable products for inclusion into its Climate Pledge Friendly program
  • Progress towards its Climate Pledge, which commits to net-zero carbon emissions by 2040.
  • Working with reuse partners to develop a vision for scaling returnable packaging systems.

Approximately 2,000 Amazon employees staged a walkout last week to protest the company's return-to-office mandate. Part of the guise of the walkout was that the employees were protesting the environmental impact of having to drive into the office each day (suddenly lots of remote climate activists at the company). They criticized Amazon for not making enough progress towards its Climate Pledge. 

Amazon responded by saying that it HAS made progress in meeting its goals, including by putting thousands of electric delivery vehicles on the road, and by continuing to invest in both proven and new science-backed solutions for reducing carbon emissions. Amazon also said that it would reach its stated goal of powering 100% of its operations with renewable energy by 2030 five years early.

To which protestors replied, “Well, we just don't want to go back to the office!”

8. Shopify One Page Checkout

One-page checkout for Shopify and Shopify Plus has arrived. Brandon Amoroso, founder of Electriq, shared a screenshot on his LinkedIn after getting access with his personal demo store.

The existing Shopify checkout page takes shoppers through multiple pages to enter their personal, shipping and billing information, while the new one page update consolidates those steps into — well, one page. It's a feature that WooCommerce, BigCommerce, and other platforms have offered for many years. 

I first reported on Shopify's one-page checkout in February, when Shopify released its Winter '23 Edition of updates announcing that it'd offer: 

  • A faster, higher-converting checkout.
  • Fewer fields to enter make it faster for customers to complete their purchase.
  • Fewer page loads and less friction for customers.

Officially Shopify's one page checkout is still considered to be “Coming Soon”, however you can request early access via the form at the bottom of their Checkout page

9. Other e-commerce news of interest

Shopify completed the sale of the majority of its former Shopify Logistics business to Flexport. As part of the transaction, Shopify has taken a 13% share in the company. I first reported on the sale when it was announced in May.


Meta will soon be giving its users in EU a chance to decide if they wish to be tracked across its apps and websites, following a lengthy battle with Germany’s antitrust authority over its so-called ‘superprofiling’ of users, which the FCO views as an “exploitative abuse” of its market power. Users who want to turn off cross-site tracking will soon be able to do so with this new feature via the account center.


Walmart reclaimed its title as the biggest retail operation on the planet, after Amazon dropped 30 spots on Forbes' Global 2000 list, which ranks companies using a composite score of revenues, profits, assets and market value. It is now ranked the 36th largest company in the world, while Amazon ranks 23rd.


Amazon, however, still is the largest online retailer by a longshot, accounting for 48% of U.S. retail spend online compared to Walmart's less than 7%. Walmart is making strides though and increased its online market share from 5.7% to 6.7% in the past year.


Twitter will begin paying some users for advertisements served in their replies, beginning with an initial $5M block of payments. Only verified users will be eligible for payment and only ads that are served to other verified users will count.


Speaking of ads, Amazon is joining Netflix, Hulu, Max, and Peacock in offering an ad-supported tier for its Prime streaming service. Amazon is also doubling down on Freevee, its free ad-supported streaming TV service, by adding content from Prime Video such as “The Summer I Turned Pretty” and “A League of Their Own.”


DHL eCommerce Solutions relocated from its St. Louis facility to Kansas City, doubling in size at 124,700 square feet. The $18M investment is expected to process more volume and meet growing demand in the Midwest.


Boppy newborn loungers, which have been linked to at least 10 infant deaths, are still being widely sold on Facebook Marketplace nearly two years after they were recalled. Since the recall was announced, regulators have formally requested on average a thousand times a month that Meta take down the listings, but so far no luck. Meta says it is taking the issue seriously and working o nit.


A group of scammers stole roughly $1M worth of cryptocurrency within a few weeks after hacking eight twitter accounts belonging to significant crypto figures. The accounts were used to promote phishing attacks via tweets that remained online for several days at times.


Hokodo, a London-based BNPL provider, acquired a European payments license, which will allow the firm to offer a broader suite of payment solutions. The firm currently operates in six of Europe's largest markets and aims to continue expanding across the continent.


Victoria's Secret started selling its underwear, swimwear, and apparel on Amazon.com, with items available for free shipping through Amazon Prime. The company already sold its beauty products on Amazon, but has never before sold its garments.


A number of Etsy sellers have been unable to enter USPS tracking numbers, which can negatively impact their Star Seller eligibility and unqualify the sale for Etsy Purchase Protection. Sellers fear that Etsy will soon require them to use its internal shipping label program, rather than use third-party services like ShipStation, Shippo, and PirateShip.


Meta is rolling out its paid verification subscription for Facebook and Instagram to India, after it first released in the U.S., Australia, and New Zealand. The paid subscription offers enhanced account protection and account support, currently only available in English but Hindi is coming soon.


Meta's Oversight Board, which was formed as a check on Facebook and Instagram's content moderation decisions, received nearly 1.3M appeals to its content moderation decisions last year — of which they ignored the vast majority of them, only making binding decisions on 12 high-profile cases. Most appeals involved alleged violations of violence incitement, hate speech, sexual content, and bullying. 


Shopify is fighting back against patent trolls with a motion that calls on the US District Court to require the disclosure of third-party interests in a patent troll case against the company. Shopify's attorney explained that patent trolls quietly orchestrate hundreds of patent litigation cases every year with no accountability and that they are no longer willing to accept this as the status quo.


Stackline launched Universal Stores, a product-focused landing page tech that allows brands to maximize conversions by giving customers the option of purchasing products on their preferred retail site. The product landing pages drive purchases across Amazon, Target, Walmart, and D2C platforms like Shopify, while offering a consolidated conversion insight.


Binance may be forced to leave the U.S. market for good, following a complaint by the SEC against its exchange and its founder and CEO, Changpeng Zhao. The SEC said the case arises from the company’s “blatant disregard of the federal securities laws” and that Binance and Zhao have “enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”


aCommerce, a Thailand-based e-commerce enabler that provides clients with omnichannel retail and marketing solutions, laid off an undisclosed number of employees, citing a shifting business landscape as one of the factors behind the decision. The company said that the layoffs affected staff at the corporate and regional levels, but not the local market teams.


According to a PYMNTS study, online shoppers who used a buy button at checkout completed their purchases in roughly half the time it took those who checked out via regular methods — from over two minutes to roughly 68 seconds on average. However a troubling pattern was that 30% of online merchants surveyed required customers using buy buttons to provide additional personal information, which is almost three times as many as the year before.

10. Seed rounds, IPOs, & acquisitions

Bonside, a financing platform that provides growth financing through revenue for brick-and-mortar businesses, raised $4.35M in a round led by Floating Point. The company offers capital in exchange for a percentage of the business revenue until the business reaches a fixed cap, as opposed to giving up a percentage of the company as with venture capital.


GoKwik, an e-commerce enabler that helps D2C brands increase conversion rates and enhance GMV, acquired Tellephant, a chat commerce startup that helps companies integrate with WhatsApp, Google, Facebook, and Instagram, for an undisclosed amount. The acquisition will enable GoKwik to tape into the WhatsApp commerce arena and provide deeper solutions for its D2C clients.


BOND, an inspiration-driven shopping experience where creators connect with their audience in a more interactive way, raised $2M in a pre-seed round led by Nordstar. The company will use the funds for product development, hiring additional employees, and overall growth.


Wonnda, a Berlin-based product sourcing platform that aims to streamline the way brands and suppliers collaborate to bring new products to market, raised €1M in a pre-seed round. Currently Wonnda works with over 300 factories and 3,000 brands and B2B buyers, and the company plans to use the funds to expand its network of manufacturers.


Nocnoc, a startup that facilitates cross-border e-commerce between Latin American merchants and global sellers, raised $14M in a Series A round led by PayPal Ventures ,bringing its total amount raised to $22M. Merchants upload their product catalog to nocnoc's platform and then can start selling on Latin American marketplaces including Amazon, Mercado Libre, Americanas, and others, while the platform manages the product listings and creates marketing campaigns for the products. 


Haul247, a Nigerian end-to-end logistics platform that allows businesses to book trucks and warehouses across multiple African geolocations, raised $3M in a round led by Alitheia Capital. The company currently has over 1,000 trucks on its platform and about 151,000 square meters of warehouse space, and will use the investment to capture more market share.


Publicis Groupe, the third largest communications group globally, acquired Corra, a New York-based e-commerce digital agency that specializes in building digital storefronts for brands. Corra's 350 person workforce will become part of Publicis' digital transformation consultancy Publicis Sapient.


euShipments, a Bulgarian logistics company for online sellers, acquired Helpship, a Romanian e-commerce fulfillment provider. The acquisition will help euShipments strengthen its position in the Romanian market and offer new cross-border shipping services and faster transit times to outlying countries in Europe.


Snyk, a U.S.-based cybersecurity startup founded by Israeli entrepreneurs, is acquiringEnso Security, a Tel Aviv-based startup for an undisclosed amount estimated to be between $45 and $50M. The acquisition will help Snyk bolster its developer security platform for software applications


Basket, a mobile app and browser extension that lets users save products from any online retailer into one “basket” and then notifies the user if the price drops, raised an undisclosed amount from James Watt, founder of BrewDog. The raise comes after the company took part in Watt’s The Next Unicorn project, where he teamed up with Crowdcube to invest in UK startups that could become the next British unicorn.


Djust, a French startup that wants to build an exclusively B2B platform that connects with ERP systems and makes data actionable, raised $12M in a round led by NEA. The company will use the funds to grow its team of currently 45 workers, iterate on its product, and find new clients across Europe.

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.

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See you next Monday,

PAUL

Paul E. Drecksler
www.shopifreaks.com
[email protected]

PS: What does a bear use to eat? Its bear hands.

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