The Internet’s #1 Rated E-commerce News Curation

#157 – Circle Search, Shein’s copycat bag, and Temu’s record breaking ad spend

by | Jan 22, 2024 | Recent Newsletters

My apologies again about the broken links in last week’s edition. I’ve since migrated off of Mailerlite and am currently sending you this newsletter from MailChimp. You can read more about the hellacious week I had migrating e-mail services three times on my LinkedIn post.

If you’ve got a second, hit reply and let me know how this e-mail came through on your end. (ie: displays properly, links work, images look good, etc) I just want to make sure I work out any issues with this new Mailchimp template early on across all browsers and e-mail platforms.

In last week’s edition, I introduced OpenStore as our third official News Partner! But since none of the links worked, I wanted to take a moment and share their offering with you again.

OpenStore offers Shopify merchants two choices — they'll either buy your store or run your business for a year.

  • If you're looking to sell, start by submitting your store info, and then receive an offer in as little as two weeks. Working with OpenStore is one of the simplest and most hassle-free ways to sell a Shopify store. Long before OpenStore was a sponsor, they were one of the first places I’d recommend Shopify store owners go if looking to exit.
  • If you’re looking to step away from operations, OpenStore's experts can run your Shopify business for 12 months through their Drive program. They'll handle your marketing, advertising, fulfillment, inventory management, customer service, and every other aspect of running your business, while you receive a guaranteed payment each month. After the year is over, you can continue with OpenStore Drive, sell your business, or take back all operations yourself.

Give OpenStore a shout today if either of those options interest you. Even if you’re on the fence about selling, it never hurts to receive an offer.

And now onto your regularly scheduled content…

In this week's edition I cover:

  • Google’s new circle-based search
  • Uber dumping $1.1B down the drain
  • Amazon’s new AI shopping assistant
  • ShipBob’s State of Ecommerce Fulfillment report
  • The lawsuit against Shein for copying bags
  • Wayfair’s employees apparently not working hard enough
  • Temu’s record breaking ad spend
  • A new $1,000/month subscription to a luxury marketplace
  • Months long package delivery delays at USPS
  • Amazon Alexa’s paid subscription plan

All this and more in this week's 157th Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week 📈

Nine U.S. states were responsible for 52% of e-commerce orders in 2023. Those states include California, Texas, Florida, New York, Illinois, Pennsylvania, North Carolina, Georgia and Washington. – According to ShipBob

This list almost identically coincides with the Top 9 Most Populated U.S. States, except for Ohio (which is missing from the list above), and Washington (which is the 13th most populated state).

Share this week's stat on X & LinkedIn.

1. Google’s new Circle to Search

Google is launching a new easy way to search on Android phones called Circle to Search, which is exactly what it sounds like.

You circle something on your phone screen, tap a button, and Google provides a page of search results about the thing you circled.

In their blog post announcement, Google gave the example of circling a pair of sunglasses in a creator's video to quickly find similar, shoppable options from retailers across the web.

The feature is similar to Google Lens, the app that searches the web based on images, which most Android phones have offered for quite some time. However, Circle to Search integrates that capability with the rest of your phone. Meaning instead of having to open up the Google app, you can use Circle to Search anywhere on your device and while using any app.

How It Works: Simply long-press the home button if you're using three-button navigation, or the navigation handle if you're using gesture navigation, and the feature will appear on top of whatever app you're using.

Circle to Search is launching on Samsung’s new Galaxy S24 series, as well as Google’s Pixel 8 and 8 Pro, before it comes to other “select, premium” Android phones. (So probably not my Samsung Galaxy 10+ anytime soon.)

Google says that the Circle to Search is an update to its new multisearch feature, which lets you modify visual searches with descriptive text. For example, with multisearch you can:

  • Take a picture of a pair of white shoes, and then add the word “red” to see similar shoes in that color.
  • Take a picture of a plant and ask, “How often should I water this?”
  • Take a picture of a pink Stanley cup and ask, “Why are these so popular?”
  • Upload a picture of your friend’s mom and add, “OnlyFans”.

Unlike Circle to Search, which is only available on select phones, the upgraded multisearch is now available on the Google app for any Android or iOS device in the U.S.

2. Uber shuts down Drizly

Uber is shutting down Drizly, the alcohol delivery service it bought three years ago for $1.1B.

The company will instead exclusively offer alcohol delivery through Uber Eats, where it aims to provide a one-stop-shop for consumers to get food, drink, and alcohol.

Drizly was a strange / ill-fitting acquisition for Uber in that it doesn’t actually hire or contract its own drivers or deliver anything as a service. Instead, the platform provided backend tech that let local liquor stores offer their own deliveries.

So why did Uber buy Drizly in the first place as opposed to just compete against them with a more robust full service alcohol delivery service built into Uber Eats?

It wouldn’t have been that difficult. Even after the acquisition, Drizly only has around 1M downloads on Google Play, versus Uber Eats’ 100M downloads, and most of Drizly’s users overlap.

Perhaps the acquisition was always planned as a “buy them to squash them” move, and Uber simply waited three years as to not appear anti-competitive.

Or perhaps Uber valued speed-to-market and was willing to pay a premium to connect with Drizly’s alcohol stores and compliance connections across 1,600 cities in 33 U.S. states.

Or perhaps it was just poor executive decisions at a time when capital was cheap.

One Redditor says:

“Drizly achieved the difficult task of technological integration to an incredibly big network of liquor stores who connected their LIVE inventory from the stores POS platforms to the Drizly platform. Basically giving our customers a great shopping experience by browsing the stores isles online, knowing that those products were in stock and available. Let’s talk about DoorDash. To this day the DoorDash platform still does not have the ability to connect to my POS platform. DoorDash has nothing more then a list of items we carry, but as any liquor store will tell you, inventory levels change by the minute.'“

He went on to say:

“So what Uber achieved by buying drizly was a fully integrated platform with retailers which aside from the booming business model they got the ability to ‘data mine’ our inventory and sell that info to wholesalers and suppliers. Shortly after buying drizly we were interconnected to the Uber eats platform. At this point the writing was on the wall. They began transitioning the Drizly customers over to the massive uber eats platform.”

Still feels like an expensive API integration to me. Either way, adios Drizly, and hello button within the Uber Eats app that says “Alcohol.”

3. Amazon releases AI shopping assistant

Last week in Edition 156, I covered a ton of new AI shopping features from Google, Walmart, and Amazon. This week I’ve got another big one from Amazon.

Amazon is testing a new AI feature on its Android and iOS apps that can answer a user's questions about a specific product in a natural-sounding way.

The “Looking for specific info?” section on product pages, which previously searched in reviews and customer questions, is now AI powered for some users and responds to search queries with AI generated answers.

Customers can ask questions like:

  • Is this shirt good for running?
  • Is this shirt made from a thick material?
  • Does it fit someone 6‘7” tall?
  • Is this a good bike for a 5-mile commute with hills?
  • Can you make up a joke with this shirt?

The AI Assistant will respond with ChatGPT-like answers using information from the product description, reviews, and customer questions. Or, depending on the question and how related it is to the product, it’ll just spit out info like a traditional generative AI search tool.

The AI Assistant is currently limited to one product. If asked, the assistant refuses to compare products or find alternatives. It will also not perform any actions like adding products to the shopping cart or provide information like price history. However those features are on the horizon.

Amazon is playing catch-up with its AI features. Last week I reported (story #4) on Amazon’s four new AI features that help customers find clothing that fits. In August, I reported (story #5) on Amazon's AI powered review summaries, which analyzes reviews and automatically creates a summary that consists of a single paragraph.

What about Alexa?

Amazon has historically struggled with its Alexa division, including up to as recently as last week. (See section #9 below for a story about “Alexa Plus”.)

When Alexa launched in 2014, it started a wave of hundreds of manufacturers embedding voice technology into their products. Publications at the time called it the “computer of the future,” but it's since lost some of its luster.

Amazon team leaders wrote in an internal document several years ago, “We want to make money when people use our devices, not when they buy our devices.” However not as many people ended up using the devices to buy products as they'd hoped.

People mostly used Alexa for simple hands free tasks like starting and stopping music or asking about the weather. By 2018 the company was on pace to lose about $10B from Alexa enabled devices, froze hiring for the team in 2019, and by 2020 Jeff Bezos' interest in Alexa, his once pet project, began waning.

In my humble opinion, everything AI-powered at Amazon should be “Alexa.” Rather than some faceless / nameless AI assistant powering this section of the product page, the headline should read, “Looking for specific info? Ask Alexa!”

Alexa should follow me around the entire Amazon ecosystem as my personal assistant and gateway to shopping, customer service, and product comparison on Amazon. “Alexa’s got your back.”

Alexa has a relationship with customer. An AI Assistant is just more ChatGPT and talking to robots. If Alexa is actually going to take off an Amazon, they need to go all in. Otherwise she’ll continue to be just a dumb robot that lives in my Echo.

4. The 2024 State of Ecommerce Fulfillment

ShipBob released its third annual State of Ecommerce Fulfillment report, based on its proprietary data across thousands of customers, as well as survey submissions from over 500 e-commerce executives.

The report showcases 70+ data points about how the e-commerce and fulfillment industries performed in 2023 and what brands are prioritizing in 2024.

A few highlights from the report include:

  • 83% of e-commerce brands saw growth in 2023.
  • 52% of all e-commerce orders in the U.S. were in 9 states in 2023. (See our Stat of the Week for more info on this one.)
  • 48% of brands already sell on 3 or more sales channels.
  • 64% of brands will add at least one new sales channel in 2024.
  • TikTok Shop is a new top sales channel for 2024, making it into the top 4 sales channels that brands are focusing on growing this year.
  • 21% of brands plan to start physically fulfilling orders in new countries in 2024.
  • 46% of brands leverage some form of customization for their orders (branded packaging, inserts, etc.).
  • 27% of brands always offer site-wide free shipping for domestic orders.

You can download the full report here.

5. Uniqlo sues Shein for copying its bag

Uniqlo, a Japanese clothing retailer known for designing simple basics-inspired fashion that lasts for multiple trend cycles, is suing Shein, its fast fashion rival, for allegedly copying its Round Mini Shoulder Bag.

Uniqlo is demanding that Shein stop selling its copycat bag, as well as seeking damages of 160M yen (or $1.1M) in its lawsuit, which claims that Shein's product was a copyright violation of inferior quality that undermined customer confidence in the Uniqlo brand.

Shein responded by saying, “Wait, you can get sued for copying other brands??? That’s kind of our whole thing.” LOL

Uniqlo's bag comes with inner pockets and is billed as durable and water-resistant, costing 1,500 yen in Japan and $19.90 in the U.S. It comes in various colors including light blue and violet. Shein’s version (which is currently removed from its website) sells for less than $8.00.

Uniqlo's bag has been a huge hit online, with TikTokkers showing off how many items they can fit in it, which is how it became dubbed the “Mary Poppins” bag.

Below we’ve got Uniqlo’s bag on the left vs Shein’s bag on the right.

What do you think? Copycat or just a similar bag? Hit reply and let me know.

6. Wayfair lays off 1,650 employees

Last month, Wayfair’s CEO Niraj Shah came under fire for his holiday message encouraging employees to work harder. Shah’s memo read:

“Working long hours, being responsive, blending work and life, is not anything to shy away from. There is not a lot of history of laziness being rewarded with success.”

He ended the memo by saying:

“Together we can win much faster than we are winning now if we all row in this direction together. Let's be aggressive, pragmatic, frugal, agile, customer oriented, and smart.”

However apparently when Shah said “together,” he was only referring to “some” of his staff, because last week Wayfair laid off 1,650 employees, which represent about 19% of its corporate team and 13% of its global workforce.

The move is expected to give the Wayfair more than $280M in annualized cost savings, of which about $150M will come from cash compensation savings.

However, in the short term, the restructuring will likely cost the company close to $80M in severance and benefits costs.

Wayfair admits that it “went overboard” with hiring during the height of the pandemic, when the company's sales doubled to $18B from $9B when people were spending more on their homes.

However reality quickly settled in as sales normalized ($12B in 2022 and 2023), and Wayfair has since been backpedaling on its hiring. In August 2022, the company laid off 870 employees, followed by 1,750 more layoffs in January 2023.

7. Temu’s ad spend jumped 1,000%

Temu's ad spend jumped 1,000% YoY in 2023, according to a new study by MediaRadar. The study found that:

  • 76% of Temu's ad spend went to social media.
  • 13% was spent on digital display ads.
  • Temu is funneling more money into TV and plans to run an ad during the Super Bowl for the second year in a row.
  • From September through December 2023, Temu spent more than $517M in national advertising.
  • Goldman Sachs analysts estimate Temu spent about $1.2B on Meta in 2023.
  • Meta calculated Temu ran 8,900 ads on its platforms last January.
  • Temu is also crushing paid search. A search for the phrase “Lego toy” returns more Google Shopping results for Temu than it does for Lego.
  • On TikTok, the hashtag #Temu has racked up 11B views.
  • Temu has worked with more than 10,000 influencers to date.
  • Temu is ranked first in “clothing and accessories” ad visibility in the United Kingdom over the past 28 days — higher than Amazon, eBay, Asos, Shein and Nike.
  • GWS Magnify estimates Temu had 82.4M active shoppers using its app in September, up from 4.6M a year prior.
  • Web searches for “Temu” are up 788% worldwide over the past 12 months, according to Google Trends.
  • In October, 20% of U.S. adults told the market researcher CivicScience that they had used Temu, double the number from March.

MediaRadar expects to see a “similar ad spend investment” from Temu in 2024, and says that their strategy will likely focus on social and high-profile events.

Mike Ryan, head of e-commerce insights at Smec, told Modern Retail, “To me, it is imaginable — but unproven — that they are the largest advertiser in history.”

8. Luxury e-commerce store to charge $1,000 subscription to shop its collection

A new luxury goods e-commerce startup called Long Story Short wants to charge $1,000/month for the privilege of shopping its curated collection.

Founder Joseph Einhorn believes he understands this sliver of the market and why many online luxury retailers have failed.

EInhorn, who is best known for his 2010s e-commerce site The Fancy, which was positioned as an upscale shoppable Pinterest rival, says high net-worth individuals demand more in terms of privacy and security, and that's what his new platform aims to provide.

After customers apply for acceptance to the platform and begin paying the $1,000/month fee, they can then shop from the site's 50k hand-selected luxury products from categories including home décor, luxury apparel, art, cards, jewelry, watches, gadgets, and more.

Or they can they can request the Long Story Short team to procure items on their behalf.

From there, the Long Story Short team will manage the transaction on the customer's behalf, negotiate with vendors and sellers, acquire the item, inspect and verify the item for authenticity, and then ship it to the buyer.

This process allows customers' transactions to remain anonymous to the seller, which is something that high net-worth individuals desire due to the security risks involved with having their name, address, or phone number compromised.

Einhorn also argues that subscribing to his platform makes sense for anyone already spending thousands of dollars a month on luxury goods because of the savings it delivers by eliminating marketplace fees and establishing direct relationships with vendors and sellers.

He told TechCrunch, “It’s not lost upon me that this is a provocative concept.”

Einhorn recognizes that thanks to its subscription price, LSS doesn’t need a large user base to break even or succeed. Even as little as 100 customers, “would be plenty,” he said.

What do you think of Long Story Short’s model? Does it have a chance? Hit reply and let me know your thoughts.

9. Other e-commerce news of interest

Online sellers are being impacted by a months-long problem at a USPS processing facility in Texas that is causing delays of local deliveries. The problem got so bad that members have Congress have been getting involved, requesting that the facility set up a customer service team to address questions from the public about the delays. The postal service said that the delays were a result of the USPS Delivering for America plan, which is trying to modernize the postal system, but causing some issues along the way.

Remember the Wealth Assistants Scam I reported on (story #2) in December? Quick reminder of what happened — the company offered to run Amazon stores for would-be entrepreneurs in exchange for an upfront investment of at least $35k and a share of the gross income, but then promptly shut down, leaving clients with nothing. The company has now filed a lawsuit claiming Thread Bank froze its accounts without explanation in October and is still holdings its funds. The company filed a similar lawsuit against Bank of America in January 2023, claiming that accounts with more than $3.78M had been closed without explanation, which was settled in December 2023.

commercetools unveiled a resource called commercetools Foundry, which aims to help B2C retailers unlock the advantage of composable commerce more efficiently. The resource offers guides, architecture recommendations, project management tips, and Store Launchpads, which help retailers get started with sample data. Remember when stuff like that was just called “Product Documentation”? LOL. Now companies want a cookie for teaching people how to use their products.

eBay is now forcing sellers into generating return-shipping labels through FedEx, following its announcement last May that the platform was transitioning from USPS to FedEx for return labels. This is causing problems for buyers who don't have convenient FedEx dropoff locations and would prefer to use USPS, which offers free at-home pickup of packages.

Yottaa publicly released its newest innovation, Cache Experience, which enables online brands to offer “instant” shopping experiences through the platform's page prefetch technology. The feature is designed to improve the performance of e-commerce sites by preloading pages before they are requested by a shopper by anticipating what they might be interested in based on past sessions and other predictive data.

Pretty Links, the WordPress plugin for cloaking and managing outbound links, launched PrettyPay, a feature that lets websites create branded checkout links for selling across multiple channels. The links function similarly to buy now buttons and direct users to a checkout page hosted with Stripe.

Great new feature guys! I can see how PrettyPay will come in handy for WordPress users who require basic payment options without requiring a full e-commerce setup like Woo. I’ve been using Pretty Links since 2013 and love the plugin. All of my News Partner links above are cloaked with Pretty Links so that I can track outbound clicks and easily swap out landing pages for my sponsors.

Order volume increased by 65% YoY for third-party Amazon sellers and Shopify volume increased 19%, according to findings from Extensiv's Q4 2023 Market Insights research. All other marketplaces analyzed by Extensiv remained flat for the year, but up for the quarter.

New data indicates that TikTok’s growth has started to slow. In 2022, TikTok’s monthly active users grew an average of 12% YoY per quarter, but this figure fell to 3% in 2023. Some are blaming TikTok pushing e-commerce on its platform for ruining the experience. That, or it’s simply running out of Gen Z users to onboard in order to sustain 12% YoY growth forever.

Katie Couric and Sean Summers, CMO at Mercado Libre, explored the future of e-commerce in Latin America in the latest episode of Future Ready by Google. Summers discussed Mercado Libre's strategy of creating a 90% common platform that works across countries, while tailor-making the last 10% of the solution for each country depending on their stage of development.

Ford Motor Company launched a joint e-commerce venture with its Ford and Lincoln dealers called The Shop (very creative), an online shopping experience designed to assist dealers in navigating the retail automotive business. More specifically, The Shop offers dealers a centralized platform featuring vetted vendors with pre-negotiated prices for essential products and services.

Shopify released a new app called Shopify Forms to help merchants capture customer info on their store. The free app integrates with Discounts, Shopify E-mail, marketing automations, segementation, and other Shopify features.

A Canadian man who says he's been falsely charged with orchestrating a complex e-commerce scam is seeking to clear his name. Last year Timothy Barker purchased items for his company from a seller on Amazon, who in turn purchased and shipped the items from Walmart with a stolen credit card. Barker was arrested for “participating” in the scam and later lost his job, even though the charges were subsequently dropped when investigators, late to the party, figured out what actually went on. Apparently Barker’s Amazon receipts, which shows that he paid for the products with his own credit card, wasn’t enough to immediately prove his innocence.

Amazon is working on a new paid subscription plan for its Alexa voice assistant called Alexa Plus (cool another “plus” subscription) that is intended to offer more conversational and personalized AI technology, but the change is causing internal conflict and may lead to a delay in its launch. The team has been testing a voice technology called “Remarkable Alexa”, but the quality of its answers is falling short of expectations, often sharing inaccurate information, and insiders are debating whether it’s ready for launch and if Amazon should charge an additional subscription fee for it.

Amazon laid off 30 employees from its Buy with Prime unit, which accounts for about 5% of the team. However Amazon says that Buy with Prime remains “a top priority for Amazon” and that it plans to continue investing significant resources into the program. Last week I reported (story #8) that Amazon made layoffs to its Twitch, Prime Video, MGM Studios, and Audible divisions.

Drinks, a digital commerce platform for the alcohol market that allows retailers to maintain compliance to regulatory rules, named Matt Wolf as its CFO. Wolf previously served as the CFO of Roadster Inc and ChartHop Inc.

Amazon is rolling out a new Fire TV feature called AI Art, currently available in public preview, that can create AI images based on voice prompts. After creating the images, users can save them as Fire TV backgrounds or to Amazon Photos libraries. Wow, that seems completely unnecessary.

FedEx Express will begin handling pickups and deliveries for FedEx Ground in Hawaii starting later this year as their parent company continues to seek ways to slash redundancies and reduce costs in its operating units. For those of you confused about the distinction between the two worlds — FedEx Express delivers time-sensitive packages via its own employees and aircraft fleet, while Ground delivers less urgent packages in the U.S. and Canada via independent contractors who employ their own drivers. Is this the beginning of the two worlds merging nationwide?

Algolia, an AI search platform for e-commerce retailers, launched an AI-enhanced data-driven Merchandising Studio that eliminates the need for stores to manually merchandise their category and product landing pages. The new studio delivers improved data and visibility functionality, revenue analytics features, and an unlimited events retention feature that allows retailers to look back at data events from an unlimited amount of years.

A Ukranian hacker was arrested for masterminding a cryptojacking scheme that earned him over $2M in cryptocurrency profits. Authorities say the hacker illegally accessed over 1,500 cloud server accounts beginning in 2021 by brute forcing account passwords, and then utilized admin privileges to mine cryptocurrency using more than 1M virtual machines.

Tulip, a cloud-based retail solutions provider, launched a payment system called Tulip Pay, which is powered by Stripe and allows retailers to offer multiple payment options including in-store, curbside, BOPIS, ROPIS, and BORIS transactions. Tulip Pay helps retailers accept more than 100 different payment methods and provides an easy integration with their POS system.

10. Seed rounds, IPOs, & acquisitions

Flexport raised $260M on an uncapped convertible note from Shopify, after burning through hundreds of millions of dollars last year. The move comes after Flexport acquired Shopify's logistic arm last year, expanding the company into e-commerce fulfillment and last-mile delivery. As part of the deal, Shopify received 13% equity in Flexport and a seat on the board.

Shein is seeking Beijing's approval to go public in the U.S., as China now requires all domestic companies to get approval before an overseas filing. However the plan is already facing roadblocks in the U.S. after a bipartisan group of lawmakers called on the SEC to block the IPO until Shein verifies it does not use forced labor.

Billink, a Netherlands-based BNPL platform used by 3M shoppers, raised €29.5M from the German Varengold Bank. The company will use the funds to expand its offering to larger merchant clients and enter the German market.

Pomelo, an Argentinian payments infrastructure startup that offers fintechs a way to launch virtual accounts and issue prepaid debit cards and credit cards, raised $40M in a Series B round led by Kaszek, bringing its total amount raised to $103M. The company launched in 2021 and went live with its first customer in January 2022, and since then has onboarded over 100 corporate clients including banks, and tech startups.

Detected, a London-based fintech company that aims to “reinvent the traditional approach to business, customer, and merchant onboarding” (whatever that means), raised €2.2M from Thomson Reuters Ventures, Love Ventures, and other investors. The company will use the funds to deepen its relationships with enterprise clients and expand its network of payments businesses.

eComplete, the e-commerce growth partner and investor founded by former THG execs Paul Gedman and Andy Duckworth, acquired a majority stake in Give Me Cosmetics, a social-first beauty brand that specializes in hair, body, skincare, and beauty accessories. The acquisition will support Give Me Cosmetics' next chapter of growth through leveraging eComplete's e-commerce infrastructure.

BuyEazzy, an India-based e-commerce platform for beauty products, raised $4.25M in a Series A round led by Info Edge Ventures. The funds will support the company's expansion, team building, and product enhancement efforts.

Buxton, an omnichannel retail analytics company that focuses on intent data, behavioral data, psychographic data, and movement patterns, acquired Elevar, an analytics and tracking platform built for Shopify brands, for an undisclosed amount. Buxton believes that the complementary combination of the two platforms will better serve their customers, while providing Buxton a direct path to Shopify merchants.

Shamba Pride, a Kenya-based agtech platform that aims to enhance last-mile distribution for farmers and tackle price exploitation through its merchant network, raised $3.7M in a pre-Series A round from EDFI AgriFI and Seedstars Africa Ventures, which includes $1.7M in equity and the remainder in debt. The company so far has built a network of 2,700 merchants extending across 24 counties in Kenya, and now plans to scale further into the country to cover more retailres and regions.

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See you next Monday,


Paul E. Drecksler

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PS: I was prescribed orthopaedic shoes. At first I didn’t think they were working, but now I stand corrected.