Hello to everyone at NRF 2023! From your LinkedIn posts, it looks like you're having a great time. I'm looking forward to reading the news that comes out of that show. I'll try to join you next year.
Doc is going on seven months pregnant, so we're sticking close to home for the next few months. Although we did have the pleasure of hosting some friends in Ecuador this weekend and showing them around the jungle!
This week I've got a jam-packed edition for you about Amazon and Walmart increasing their market share in the “retail operating system” space.
I also share stories about Amazon's new return-shipping policy for sellers, Automattic's new-ish ad network, and Apple's soon-to-be local ad network (despite what they say).
All this and more in this week's 104th Edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“Are you more likely to make a purchase if the store offers BNPL as a payment option?”
Last Weeks Poll Results: Last week, inspired by the news about Shopify's recent “no meetings” policy, I asked what percentage of your work meetings are pointless / useless?
A majority (47.6%) voted that “almost all their meetings are useless”, while 10.7% felt very confident about their meetings and voted that “all were useful”.
The rest of the votes were split between 16.1% responding that “up to 25% of meetings are useless” and 27.5% responding that “up to 50% of meetings are useless”.
So while your company may not go as extreme as Shopify and say no to ALL meetings, results show there are probably at least a few time waster meetings that could be cleaned up. [View Poll]
Stat of the Week 📈
Uber’s average US ridehail fare per trip jumped by 30% from the beginning of 2018 to Q3 2019, and then by another 41% between Q3 2019 and Q3 2022 – for a total of 83% over the entire 45-month period.
This is equivalent to an annual price increase of 17.5% per year, exceeding the CPI gain of 4.5% per year over the same period.
-According to Second Measure & YipitData
Share this week's stat on Twitter & LinkedIn.
1. Buy with Prime goes nationwide
Amazon is expanding its Buy with Prime services to most online merchants nationwide by the end of the month.
If you're out of the loop — Buy with Prime allows Amazon merchants to sell their products directly from their own websites, while still offering Prime shopping benefits like fast, free shipping, quick checkout with Amazon Pay, and free returns.
In other words, it's like shopping on Amazon, but on another website. The requirement being, of course, that those websites have to fulfill their products through Amazon FBA — which makes sense because how else would Amazon be able to guarantee those shopping benefits if they weren't fulfilling the products?
Stores that utilize the service will display a Buy with Prime Badge, which includes a Prime logo and delivery promise on product listings.
Amazon first began offering the service in April last year, but it was invitation-only. Now it'll be available to most US retailers by Jan 31st.
Concurrent with Amazon's announcement, BigCommerce released their new Buy with Prime app, making it the first e-commerce platform to offer a direct integration with the service. (More on that in story #3.)
Quick backstory…. In September 2022, Shopify took heat for dissuading their merchants from using Buy with Prime by displaying a warning to them that doing so removes Shopify's ability to protect against fraudulent orders, which could lead to stolen customer data. But really, it came down to monetizing the checkout.
Shopify’s Terms of Service state that the checkout must happen on Shopify because that's where a huge portion of their revenue derives from. So while merchants can use checkout integrations like PayPal, Affirm, Amazon Pay, Facebook Pay, etc, those are all part of Shopify’s payments platform, which means those payment methods had to agree to Shopify’s Partnership Program Agreement ($$$) and API terms.
Unlike Shopify, BigCommerce doesn't charge transaction fees on sales or offer a competing service (like Shopify does with Shop Promise), so it has no incentive to keep the checkout / payments in-house. Therefore it's a no-brainer to allow partners like Amazon or Bolt to integrate with their platform and allow merchants to work with whatever checkout provider(s) they prefer.
So while technically Buy with Prime has already worked with BigCommerce since last year, merchants have previously had to integrate the checkout code into their backend. Whereas now BigCommerce's new app turns the process into a one-click codeless integration.
Amazon said that Buy with Prime boosted shopper conversion by 25% on average, citing its own data.
Citing my own data, Shopifreaks makes you 310% smarter at e-commerce than your peers.
2. Walmart offers logistics to Salesforce merchants
Walmart announced a partnership with Salesforce that will make Walmart's Store Assist fulfillment-as-a-service and GoLocal deliver-as-a-service offerings available to Salesforce merchants.
Both applications will be made available through the Salesforce AppExchange in April, but pricing hasn't been announced yet.
Store Assist helps retailers optimize in-store fulfillment by enabling a direct hand-off to customers or delivery drivers.
GoLocal gives retailers access to its white-label service for local delivery, which was used to complete more than 3M deliveries last year. Walmart launched GoLocal in 2021 and has signed on customers, including Home Depot and Chico's.
The services were built by Walmart Commerce Technologies, a business unit launched in mid-2021 to sell the technology they themselves use internally to other retailers.
Walmart and Amazon are competing hard in the space that I call the retail operating system market.
Last year Amazon:
- Opened its first Amazon Style clothing store in Glendale to test its new dressing room and shopping tech.
- Opened its first-ever Whole Foods store in Washington D.C. that uses Just Walk Out technology.
- Released their Buy with Prime feature, which you've read enough about already today.
- Began testing a program that involved Flex drivers making deliveries from mall retailers.
- Released a new featured called Virtual Try-On for Shoes.
- Announced Store Analytics, a data tracking that logs shoppers' habits and feeds the data back to brands to provide insights on their promotions.
- Gave merchants in the US and UK free software for managing orders on and off its platform.
- Announced new advertising capabilities for brands that don't sell on its marketplaces.
- Added a supply-chain management service to its web services division to offer companies tighter control of the flow of goods from factories to consumers.
- Began developing a multimodal identification (MMID) to replace the barcode.
Meanwhile Walmart last year:
- Brought the virtual clothing try-on tech it bought from Zeekit to Walmart.com and its mobile app.
- Struck a partnership with Omnicom to allow agencies to execute cross-screen planning against Walmart audiences.
- Made its InHome delivery service available to Walmart Plus subscribers for an extra $7/mo or $40/yr.
- Kicked off a deal with the EV company Canoo to purchase 4,500 of its last-mile delivery vehicles.
- Unveiled a virtual try-on option called “Be Your Own Model” that uses AR and AI to give customers a realistic simulation of what clothing will look like on them.
- Revamped their affiliate program.
- Launched a Text To Shop feature for iOS and Android phones that allows customers to text the retailer and shop via SMS with their Walmart account.
- Made their drone delivery service available in 22 markets.
Although it's offering more and more of its tech to other retailers, Walmart said that it is being mindful about not giving away its secret sauce.
Global Chief Technology Officer Suresh Kumar said, “We are actually very deliberate in terms of choosing the kinds of technologies that we want to offer to other businesses.”
In other Walmart news, the company announced the opening of a new store in Pennsylvania, with interactive technology to improve customer experience that combines both online and in-person payment transactions.
Upgrades include a new touch-and-go form of payment, pick-up options for online orders, express delivery, and mock bedrooms where shoppers can physically put together products to see how they would look in their homes.
3. BigCommerce News (Sponsored)
As I began to share with you in the first story, BigCommerce is the first e-commerce service provider to release a self-service integration into Buy with Prime, which enables merchants to easily enable Buy with Prime on their storefronts with no coding required.
Sharon Gee, VP of revenue growth and general manager of omnichannel at BigCommerce, said, “With BigCommerce and Amazon’s Buy with Prime, merchants can now reach new high-intent shoppers, drive higher conversions by directly offering the Prime delivery promise on their storefront and remarket to these new shoppers to drive higher customer lifetime value. This integration is the first of its kind and is a game changer for Omnichannel merchant and partner growth.”
With the Buy with Prime app for BigCommerce, merchants can:
- Attract and convert shoppers with the Buy with Prime badge.
- Offer shoppers an easy checkout experience.
- Delight shoppers with fast, free shipping.
- Retain shoppers with post-purchase peace of mind.
- Easily onboard with no-code and guided flows.
- Centralize ecommerce management by managing their Buy with Prime product catalogs within the BigCommerce Control Portal.
- Build direct relationships with shoppers by receiving shopper order information including their email address.
The Buy with Prime for BigCommerce app will be available in Q1 2023 to all BigCommerce merchants in the US.
In other BigCommerce news, the company announced the launch of its Omnichannel Certified Partner (OCP) Program, an enterprise-focused initiative designed to give partners new ways to generate revenue by helping merchants on leading ecommerce platforms to achieve omnichannel success.
Armed with numerous tools, services and exclusive channel partner programs, partners can educate and guide merchants on how to strategically expand into new channels that can drive more traffic with higher shopper intent, improve ROAS and generate more GMV.
Over 100 partners have joined the program and are among the first to capitalize on the benefits for their merchants.
4. Amazon Return-Shipping Fees
As of Jan 14th, Amazon sellers are now responsible for paying for overage costs on returns of seller-fulfilled items (but not FBA).
According to the new policy, if a shipping carrier assesses a correction charge on a customer return (for example, if the seller returns the item in a larger box), sellers must now pay for it. Amazon had previously been absorbing any difference in costs.
Amazon offers several ways to return purchases, of which they made up a hefty portion of the $279B worth of online returns in 2022:
- UPS Store – no packaging or printing labels required
- UPS Access Points such as CVS stores, banks, grocery stores, and other locations.
- Amazon Hub Lockers for items smaller than 18 x 12 x 14 in
- Ship it yourself and pay for shipping
- Drop off at a Whole Foods, Kohl's, or Amazon Store – no packaging or box required
- Schedule UPS Pickup – pack it yourself but UPS brings the label for $7.99
Returns are a big hassle, but also a big business. One of my 2023 Predictions is that Walmart launch a Happy Returns competitor to compete with PayPal and Amazon in the in-person returns space.
5. Automattic's new-ish ad network
Everyone's entering the ad business — as they should!
I think it's a win-win-win when platforms launch new ad networks. It opens up new channels for merchants to find customers, builds a new revenue stream for the platforms, and it creates more competition in the online ad industry, which could ultimately bring down the cost of ads (hopefully).
Automattic is the latest to dive deeper into the ad arena with its ad network, Blaze.
Blaze was originally introduced in April 2022 as a network exclusively for Tumblr users to place ads on other Tumblr pages, and now it's being open to display ads on free WordPress.com website. The service starts at $5/month.
The interface will allow advertisers to select an audience with minimal options, and the ads can contain an image and a snippet. For the moment, Blaze only offers advertising payment for impressions, not clicks, and the service is exclusively for promoting WordPress websites.
Publishers on WordPress.com will be able to use the WordPress dashboard to get started choosing pages to advertise, and those using WordPress CMS can access Blaze through the Jetpack plugin.
6. Apple Business Connect launches
Speaking of ads… Apple Maps is now allowing business owners to update and manage their own information on the platform, including key details like hours of operation, location, photos, logos, special offers, promotions, and more. So basically Google Business Listings.
The company is launching a new portal called Apple Business Connect, which lets businesses manage their presence across Apple's 1.5B devices from a single dashboard.
Apple Maps first launched in 2012 as a competitor to Google Maps, and for years relied on a simplified system called Apple Business Register to update listings with correct information. It also leveraged third-party data from Fourquare, Yelp, Tripadvisor, and other partners for curating ratings and reviews. In comparison, Google has allowed businesses to update their own info since 2005.
Apple says it won't remove its integrations with Yelp, but the new system will allow businesses to augment their listings with details they may lack.
First business owners will have to verify their business, then they'll be able to update their contact info, hours of operation, add logos, categorize their business, and fill in the blanks on a “Good to Know” section which includes info like “good for kids” or “free Wifi”. The business can also move their location pin if their location is off.
Apple will also be working with partners like Walmart to enhance their business place cards. For example, customers who visit Walmart's card will be able to access Walmart's text to shop feature by tapping on a “message us” button.
These enhanced place cards will appear in other places outside of Apple Maps like Siri Spotlight, Apple Wallet, Safari and more.
Apple says that it has no immediate plans to monetize the system (such as with ads to elevate listings), but come on… It doesn't take a genius to realize that local ads are on their radar. Do you think Apple destroyed Facebook's ads business for nothing?!
7. Let's talk credit
Zilch, a UK BNPL firm, is beginning to share data on customers' balances and repayments with credit rating agencies. The move may result in a restriction on borrowing if a consumer falls behind on payments.
The tightening of its lending rules comes as BNPL companies brace themselves for regulation from UK's Financial Conduct Authority, which is expected to restrict lending later this year and require credit checks among other regulation.
Zilch historically has done a soft credit check on customers, and then performed its own lending assessment to set an affordability limit, which would not impact a consumer's credit rating.
Two weeks ago I reported that Sezzle began offering customers in Canada the option to build their Equifax credit profile through their BNPL purchases and subsequent on-time payments.
In other credit news, Experian launched a new CreditLock feature to help protect users against identify fraud.
The feature allows customers to lock their Experian Credit Reports using a toggle switch in the app or online. By using the system, certain high-risk credit applications like loans, mortgages, or credit cards, will be blocked by a “locked” report. If the consumer actually wants to make a genuine application for credit, they can unlock the report instantly.
The system can also alert users about any new credit searches in their name and inform them if it has stopped any fraudulent applications on their behalf, which would not negatively impact their credit.
It's great to see users finally have more control of their credit scores, which have a huge impact on our finances but have historically been a metric that's been done to us instead of for us.
8. Smart Store Analytics
Microsoft launched a preview of a new cloud service called Smart Store Analytics in collaboration with AiFi. The service tracks shoppers and detects which products are taken off the shelves using AI-powered surveillance.
The technology is comparable to Amazon's Just Walk Out, which I reported on last year when Whole Foods opened its first-ever store in Washington D.C. using the tech.
Once installed, the service pulls data from the AiFi platform to deliver insights that let managers better adjust store layouts and inventory. It also shows how much customers shop and interact with products, displays foot traffic as a heat map, and tracks how much money each customer spends on average. Microsoft and AiFi promise that the service DOES NOT use facial recognition or biometrics and only relies on a virtual avatar of customers it creates as they enter retail stores. (And that avatar was created, how?)
Microsoft chose to partner with AiFi over rivals like Sensei, Standard Cognition, Zippin, Grabango, and Trigo partly because of the company's market share. AiFi claims to be the world's largest provider of autonomous shopping solutions.
As for reasons for the partnership, AiFi CEO Steve Carlin also said in a press release, “Our platform is way more flexible than a lot of our competition because we don’t have to touch the shelves at all. You can take a space that already exists and retrofit it. And you can move the shelves. You can’t do that with weight sensors, which require digging a trench in the floor, running cable to the shelf and electrifying the shelf. And once you’ve done that, that shelf isn’t moving.”
9. Other e-commerce news of interest
A new Amazon Prime Lite subscription is set to launch in India for Rs999 (~$12.40), which will be mobile-only, contain ads, and exclude HD content, Prime Music, gaming and free e-books. The price is official on Amazon's website and mobile app, but the exact launch date has not been released.
Amazon drivers, although hesitant at first to change, are loving their Rivian vans. Drivers reportedly are appreciating the van's non-slip step at the back, heated steering wheel, large windshield, embedded tablet, lightbar, hand cart for heavy packages, and extra space for standing and walking in the cargo area. The Rivian vans have 100 more cubic feet than the Sprinter and double the cargo space of the Ford Transit vans.
AliExpress, in collaboration with Splitit, started allowing shoppers in Europe to pay for purchases in installments using their credit cards. The service, called “Pay After Delivery”, will first be rolled out in Germany, Spain, and France and could expand into other international markets if a success.
The US Supreme Court has agreed to hear an appeal from a former USPS mail carrier and evangelical Christian, who was reprimanded for refusing to deliver Amazon parcels on Sundays. Lower courts dismissed his claim that USPS violated the Civil Rights Act of 1964 for not accommodating his religion, ruling that doing so would cause “undue hardship” to the business.
In other USPS news, postage fees and fees for renting a P.O. box are going up next week across the board, as promised in Nov 2022.
A glitch at Affirm caused dozens of customers to receive multiple charges to their bank accounts for payments due on BNPL loans, with some citing up to five duplicate bank-account withdrawals. Affirm resolved the problem within 24 hours and promised that any pending duplicate charges will be corrected on users' bank transaction history within seven business days. That must've been a scary bank notification for users!
Google Cloud unveiled its newest AI technology to help retailers improve in-store inventory shelf-checking, online shopping, personalized search, and product recommendations. The system, called Browse AI, uses a customer's behavior on an e-commerce site, such as clicks, cart contents, and purchases, to determine the shopper's tastes and preferences.
The US National Labor Relations Board squashed Amazon's attempt to overturn the first-ever successful union formed in Staten Island last year. Amazon claimed the election was unfair due to “inappropriate and undue influence” from the ALU and NLRB, but the results were upheld last week.
Rent the Runway, a subscription-based online rental service for black-tie events and office wear, is now selling secondhand designer goods on Amazon from more than 35 high-end apparel brands. The partnership introduces a new revenue stream for Rent the Runway, which has struggled during the pandemic and permanently closed its five brick-and-mortar stores in Aug 2020.
Amazon announced plans to shut three of its 30-plus UK warehouses and seven small delivery sites, affecting more than 1,300 jobs. Workers from some of the warehouses will be offered roles at other locations, which unfortunately aren't nearby.
Andy Jassy said several times, “We are about 1% of the world's retail business segment”, which is raising the question why a company so big wants you to think it's so small? Some think it's to avoid antitrust probes. When asked, an Amazon spokesperson said the company wasn't framing its size through the lens of global retail to look small.
The Simon Wiesenthal Center, an international Jewish human-rights organization, is calling for Amazon to remove Nazi-related content from its marketplace. Amazon has since removed several of the items, but there are still similar items listed for sale on the site according to Gizmodo.
JPMorgan Chase is suing the founder of Frank, a fintech startup it acquired for $175M, for allegedly lying about its scale and success by creating an enormous list of fake users to entice the bank to buy it. The lawsuit claims that its CEO Charlie Javice pitched JP Morgan in 2021 on the lie that it had more than 4M users, but in actuality had fewer than 300k customer accounts at that time.
WooCommerce 7.3 was released with new Products block in beta, which allows users to filter products by certain criteria, and is intended to replace all of WooCommerce's current product blocks. The new version also introduces commerce-adjacent patterns for building store pages, a multichannel marketing experience in beta, Pinterest and Codisto extensions, a new warning banner when the tax settings have a conflict, and an improved UI for creating product attributes and uploading product images.
SheerID, a digital verification engine that instantly verifies eligible consumers for exclusive segmented offers, teamed up with commercetools to bring their services to the headless platform. In Aug 2022, I reported on BigCommerce's partnership with SheerID.
About You, a German fashion platform, is introducing a minimum order value for free shipping across all its markets this year, but did not yet reveal what that will be. The platform launched in Germany in 2014 and advertised with free shipping from the start, but has since to turn a profit.
10. Seed rounds, IPOs, & acquisitions
Locad, an e-commerce logistics startup that syncs inventory across multiple sales channels and orchestrates end-to-end order fulfilment for B2C and B2B orders through its network of warehouses and shipping partners, raised $11M in a Series A round led by Reefknot Investments. The company will use the funds to expand its platform across Asia Pacific
T2, the project name for a new Twitter rival in the works by Gabor Cselle, raised $1.1M from angel investors including Bradley Horowitz, Rich Miner, Katherine Maher, and 14 others. The company has launched an early-stage closed alpha and will use the funds to continue hiring in a range of roles including CTO and development positions.
actyv.ai, a Singapore-based provider of an AI-powered enterprise SaaS platform that partners with over 20 financial institutions to enable embedded BNPL, raised $12M in a Pre-Series A round led by 1Digi Ventures. The company will use the funds to accelerate its global expansion, product enhancement, portfolio growth and acquisition.
Inbenta, a software provider that makes AI tools like chatbots, knowledge management, and search which work in over 35 languages, raised $40M in a round led by Tritium Partners, bringing its total amount raised to $60M. The company, which launched in 2011, works with more than 250 global brands, and will use the funds to continue building its product base and expand into new markets.
Jetstream, a Ghanaian cross-border logistics platform that helps African B2B importers and exporters with freight forwarding, raised $13M in equity and debt in a Pre-Series A round, just 18 months after raising $3M. The new investment will allow the company to expand into new countries and continue to develop its platform.
NLX, a conversational AI startup that offers automated and frictionless multimodal self-service tools for brands and retailers, raised $4.6M in a round led by IAG Capital Partners, bringing its total amount raised to $9.6M. Since the last raise, the company launched Showroom, a live, personalized, multimodal conversational experience with AWS and increased its customer base, and it will use the fresh funds to continue growing its product.
Nuvei, a Montreal-based payment processing provider, signed a deal to acquire Paya Holdings, its Atlanta-based rival, for $1.3B in an all-cash transaction. Nuvei will finance the transaction with cash on hand and $600M in new debt, and says that the acquisition will grow its market share in segments where Paya has a more established presence.
WPP, the largest advertising company in the world based out of Britain, acquired Fēnom Digital, a NY-based digital transformation agency that specializes in delivering enterprise commerce, order management systems, supply chain marketing, and customer solutions to retailers in North America. The announcement follows other recent Wunderman Thompson acquisitions in the commerce space including Diff and Newcraft.
VonWood, a Dutch trading platform for wood that connects buyers and sellers of lumber online, raised €2.7M from Peak, Dutch Founders Fund, Keen, and other investors. The company was founded in May 2022, offers over 50,000 types of wood, and ships across Europe.
Loop Returns, a Columbus startup that handles returns and exchanges for Shopify merchants, raised $50M towards a $60M offering, according to a regulatory filing. The company declined to comment, which is common when rounds remain open.
What'd I miss?
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See you next Monday,
PAUL
Paul E. Drecksler
www.shopifreaks.com
[email protected]
PS: Why don't people play poker in the jungle? There are too many lions and cheetahs.