#78 – DM me to purchase, Amazon Prime Day results, & TV shopping on Love Island

by Shopifreaks | Jul 19, 2022 | Recent Newsletters

If big corporations have it their way, you'll be able to buy products EVERYWHERE — while watching TV, browsing social media, and even in your DMs!

This week's 78th Edition of the Shopifreaks E-commerce Newsletter shares some new upcoming ways to make purchases, recaps Amazon's Prime Day results, covers another round of tech layoffs, highlights upcoming USPS changes, and more.

It's such a big edition this week that I'm going to keep the intro short and dive right in…

PS: I received a surge of new subscribers this past week. Welcome new readers! I noticed that many of the subscribers were from the same organizations, which means that readers are sharing the newsletter within their team e-mails and Slack channels. Word-of-mouth has been the number one way that Shopifreaks has grown in readership. Thank you for that.

Stat of the Week

69% of UK consumers are happy to pay to return unwanted fashion purchases, as long the money was used to subsidize environmentally friendly return options. — According to ReBound

Corporations are glad to hear that because more and more are adding return fees. Whether or not they will use the fees to subsidize environmentally friendly return options is a different story though…

Companies should tread lightly w/ return fees and make sure that the consumers see the value.

Share this week's stat on Twitter & LinkedIn

1. Zip & Sezzle merger is zilch

The acquisition of Sezzle, a US BNPL firm, by Zip, an Australian rival BNPL firm, has been called off. Unlike Twitter and Musk, the breakup was mutual, both companies said.

The merger was announced earlier this year with Zip looking to boost its global expansion, specifically in the US market. (Zip owns another BNPL firm in the US called Quadpay.) And even as recently as June 22, the company said its shareholders would vote on acquiring Sezzle by the end of the year.

However, it looks like it was a quick vote because Zip called the deal off, announcing to the Australian Securities Exchange that “current macroeconomic and market conditions” are the reason behind terminating the deal.

Are you sure it wasn't because of Apple entering the space? Well, I guess that counts as market conditions…

As part of the agreement to breakoff the merger, Zip will pay Sezzle $11M to cover their costs.

Around the same time, Zip also announced that it's closing Pocketbook, the money management app that it bought for A$7.5M in 2016, in order to focus on their core business, and that it's looking to exit from UK, just a year after arriving in the country with their BNPL services. And if they can't find a buyer for that division, they might just shut down.

The reality is, these companies are hurting and want to distance themselves from BNPL — not grow their market share in the space.

Who would've guessed that an industry that skirts consumer protection laws, survives only in an economic environment with access to cheap money, and has practically no barrier of entry would come to a crashing halt? As history will recount, in the world of BNPL, there were a lot of Blockbusters.

2. DM me to purchase

Instagram is launching a new Payments in Chat feature that lets users purchase products from small businesses and track orders via direct messages.

Users start by sending a direct message to businesses they're interested in buying from. Once a buyer has decided to make a purchase, the seller can create a request for payment, and from there, within the same chat thread, they can pay, track their order, and ask follow-up questions.

Instagram says that their users often chat with businesses via DM before making a purchase, and now they will be able to pay directly within the same thread.

The launch comes a month after the company renamed Facebook Pay to Meta Pay, which will be facilitate the DM transactions.

Meta is getting serious about e-commerce, as they should. Last week I reported that TikTok have put its plans on hold to roll out its new e-commerce Shop marketplace to Europe and US, which creates an opportunity for Meta to get an early lead.

The opportunity for Meta to dominate the social commerce space is theirs to lose.

3. How was Prime Day?

Last week Amazon hosted Prime Day in the U.S. and in more than 15 other countries worldwide during July 13-15… but with 9.6% inflation, were consumers excited about spending?

Amazon is historically secretive about its Prime Day numbers, but they did offer the following info:

They said it was the “best ever” and that consumers worldwide spent $1.7B
The company claimed to sell more than 300M items and “more devices than any other Prime Day,” but they did not disclose revenue figures.
They partnered with TikTok creators like Joe and Frank Mele, Porsha Williams from “The Real Housewives of Atlanta”, Chrishell Stause from “Selling Sunset”, and others, to generate more than 100M views, but didn't specify how many sales.

Since Amazon doesn't reveal their Prime numbers, here's what experts estimated:

A report from The Information said that videos from top influencers failed to fetch more than 4,000 live viewers — which Amazon said was a bug in their system that stopped tracking views after 3,700.
Analysts estimated that Amazon sold gross merchandise between $12.09B to $12.59B during Prime Day
A report by Salesforce noted that global sales for retailers selling goods on their own sites grew by 8% YoY during Prime Day
Adobe Digital Economy Index said that total U.S. online spend across online retailers touched $11.9B
Numerator published a study which said that average order size was up from $44.75 last year to $52.26 on Prime Day and that 65% of shoppers spent the same or more as last year

4. Amazon proposes concessions in Europe to end anti-trust case

Amazon is attempting to end a three-year investigation by antitrust regulators in the EU by offering to make a series of changes to its business practices. The company has been under investigation on claims that it improperly uses its dominance in e-commerce to box out competitors and gathers nonpublic data about independent merchants to inform its own product offerings. I regularly write about those alleged practices in this newsletter.

Amazon, looking to end the drawn out investigation, proposed concessions including:

Giving more visibility to listings from multiple sellers for a given product so that customers have choice. including displaying two different “Buy Boxes” to give more visibility to product listings from different sellers when they are selling the same item at different prices or delivery speeds.
Prohibiting the use of non-public data from Amazon sellers to boost its own retail business, including its private-label brands like Amazon Basics.
Recode learned that Amazon leaders have also internally discussed making a more drastic move: abandoning its private-label business altogether. Amazon's private-label brands include Amazon Basics (household items), Amazon Essentials (clothing), Presto (paper goods), Happy Belly (food), Goodthreads (fashion).

The WSJ reported last week that Amazon has started drastically reducing the number of items it sells under its own brands. Amazon has previously said that its private-label brands account for a low-single-digit percentage of overall product sales in its online stores, but that they are a significant source of profit for their retail business, in part because they don't have to spend on advertising like an outside brand does. In comparison, in-house brands at competing retailers like Walmart, Costco, and Target account for a much larger percentage of total sales.

While it's unclear what lawmakers and regulators will do next, Amazon's proposed concessions seem to fall in line with their goals.

5. More layoffs in the commerce and tech industries

Fabric, a NY-based micro-fulfillment company focused on robotics tech for last-mile operations (ie: not Fabric the headless commerce platform), announced its intentions to move in the direction of being a platform rather than a service, and in doing so laid off 40% of its 300-person staff.

Dukan.pk, a Pakistan-based mobile-centric e-commerce platform, laid off 25% of its workforce across the globe due to VC funding drying up.

Seven weeks after the crypto exchange Gemini cut approximately 10% of its workforce, the company made a second round of layoffs.

The newsletter platform Substack is laying off 14% of its staff as part of its efforts to conserve cash amid an industrywide funding crunch.

Twitter laid off 30% of its talent acquisition team as the company deals with increasing business pressures, but later said that it wasn't planning on many additional layoffs.

Microsoft made layoffs to its consulting and consumer and partner solutions teams, but says that it plans to end the year with an increased headcount.

Meta is preparing for layoffs and plans to reduce the amount of engineers it was going to hire by at least 30% this year.

The EV automaker Rivian plans to layoff 5% of its employees, however, not manufacturing jobs, but positions in the company in areas that have “grown too quickly.” This news coming just weeks after Tesla fired hundreds of employees.

OpenSea cut 20% of its workforce and Coinbase laid off 1,100 employees and rescinded job offers from others.

Despite all the layoffs and cutbacks in the industry, not all fintech companies are worried about investment capital tightening up or becoming profitable. The U.K. digital bank Monzo Bank said it's targeting growth rather than immediate profit during a turbulent time for the fintech industry, after nearly doubling annual revenue while widening losses. Monzo is still hiring and aims to build out its BNPL service while expanding in the U.S. Hmm… should you tell them or should I?

6. Pay with food stamps on Shopify

The payments processor Forage added the ability to its app for Shopify merchants to accept Supplemental Nutrition Assistance Program (SNAP) online, making it Shopify's first SNAP Electronic Benefits Transfer (EBT) payment gateway.

Forage is now guiding various Shopify customers through the process of getting government approval to accept SNAP. Their payment and PIN technologies help simplify the process for Shopify retailers, who can meet most of the compliance requirements including producing compliant receipts, split tender, and calculating the proper EBT amount to charge.

The first merchants are expected to go live with online acceptance of SNAP EBT in the next few weeks.

While 1 in 8 Americans receive government assistance to purchase groceries, only 250k brick-and-mortar locations accept SNAP benefits via EBT in-store, and only a fraction have been approved for accepting EBT online.

I love the idea of online companies like Forage, eGrowcery, Instacart, and Rosie (to name a few) working to make it easier for groceries to accept EBT online because it would make it easier for low-income consumers (who often work two jobs and don't have the luxury of childcare) to shop for groceries — as long as they don't add so many fees that the service becomes unusable for those who need it most.

7. “Love Island” will let you buy products you see on your TV (almost)

NBCUniversal is launching a new reality series called “Love Island USA” that will offer clothing, home décor, cosmetics, and haircare products for sale in the show. Viewers will be able to scan a QR code that pops up on the screen and will be led to articles on E! Online that allow them to learn more about the products and buy them.

NBCUniversal has been working for a while on its ShoppableTV technology, which gives TV viewers the chance to shop while they watch. The tech was first brought to Telemundo.

The result is a new form of product placement that doesn't bring just ad revenue to the table, but allows for trackable transactions.

“Love Island” is scheduled to debut tomorrow, July 19th.

Last month I reported that Walmart and Roku teamed up to connect Roku’s 61.3M subscribers with Walmart’s more than 120k products and allow viewers to purchase items with their remotes while streaming on Roku devices.

Other platforms such as Amazon, Instagram, Facebook, and Google have dabbled in mixing live streaming with commerce, but so far T-commerce, as it’s called, (ie: shopping content from your TV) has never really taken off.

If these companies have it their way though, adoption may just be a matter of time.

8. USPS is ending 30-year discount postage program

On Oct 1, Postmaster General Louis DeJoy is ending a 30-year-old postage reselling program that allowed small businesses to send packages at sharply discounted postage rates.

Created in 1992, the postage reselling program was designed to give discounts to smaller mailers that could not qualify for the bigger discounts offered to large-scale mailers like Amazon and eBay.

Terminating the reseller program will impact a number of postage reseller companies, including Stamps.com and Pitney Bowes. However large online marketplaces like Amazon, eBay, Etsy, etc that offer Commercial Base Pricing, which is not going away, will be unaffected by the changes.

David Partenheimer, a USPS spokesman, said, “The Postal Service undertook an evaluation of its reseller program and has determined that the program as currently structured is not resulting in the customer benefits and efficiencies that were originally envisioned, has caused difficulties in monitoring compliance with pricing and other terms, and should be discontinued.”

In other USPS news, the new rate hike, which ups first-class mail prices by 6.5%, took affect yesterday. This will likely not be the last increase from USPS in the near future. DeJoy said Americans should get used to “uncomfortable” postage rate increases in coming years as the US Postal Service seeks to become self-sufficient.

9. Other e-commerce news of interest this week

BigCommerce announced registration for its annual Make it Big 2022 Conference, which will be held virtually September 13-14. Keynote speakers include Whole Foods Market Co-Founder John Mackey, Author Seth Godin (I love his books!), Rent the Runway Co-Founder Jenny Fleiss, and Founder and CEO of GDR Creative Intelligence, Kate Ancketill. Registration is free and will stream daily on-demand at 9am CST.
Amazon plans to hire 4,000 workers in Britain this year, including at fulfillment centers in Wakefield and Knowsley, taking its permanent workforce to 75,000.
Linkpop, the link-in-bio service Shopify launched in March, added new features including the ability to upload background image, apply unique styles to buttons and links, and embed music and videos to showcase products better.
In other link-in-bio news, Linktree launched a mobile app for users to edit their Linktree profiles. Previously, users had to login to their dashboard via mobile web browsers.
eBay announced its upcoming eBay Open seller conference on Facebook and got blasted in the comments by hundreds of sellers who said they were leaving the platform due to slow sales, high fees, and eBay's mistreatment of sellers.
Shopify cancelled internships and job offers for people who were to begin working this fall. For Canadian universities that offer co-ops, completion of an internship are mandatory, so students who picked Shopify for their co-ops in the fall term will now need to make alternative plans, which is difficult this late into the year.
StackCommerce named Don Leblanc as their new CEO, following TPG's Integrated Media securing a majority stake in the company and subsequent acquisitions of BrandCycle and The Fascination. Leblanc's executive experience at VistaPrint, SimpliSafe, and Staples will lead the company through its expansion of end-to-end commerce and content services.
Doyin, China's version of TikTok that's owned by ByteDance, is testing a new feature to compete with Alibaba in the food delivery market. Some restaurants in China now include an option on their Douyin accounts for users to order food with delivery, however the restaurant must provide their own delivery staff or use drivers from another service. In other words, it's a button, not a service.
Amazon announced a revamped Dash Cart with new conveniences and tech upgrades for shoppers including the ability to carry more groceries and the ability for shoppers to wheel the cart to their cars using the touchscreen. The new carts will be test run in Westford, Massachusetts and will expand to additional Whole Foods and Amazon Fresh stores across the US in the coming months.
Walmart kicked off a deal with the EV company Canoo last week to purchase 4,500 of its last-mile delivery vehicles with one big caveat — the company can't sell any cars to Amazon! Walmart is going old school with their negotiations. Canoo, which feared it may run out of money to stay in business, took the deal with Walmart despite the restrictions.
Shopify used Apple's RoomPlan API to clear a room before filling it with furniture via Apple AR. With an empty room, shoppers can swipe through furniture sets and visualize them in the space without actually having to clear the room. (Watch the video in that link! It's awesome.)
Walmart held the grand opening of its more than 1.8M square-foot e-commerce fulfillment center in Shippensburg, PA. The facility is still actively hiring talent with the aim of hiring up to 600 local full-time associates by the end of the year.

10. This week in seed rounds, IPOs, & acquisitions….

Kontent.ai, a Czech Republic-based headless CMS provider, raised $40M from Expedition Growth Capital. The platform will use the funds to spin off into its own company, formerly a unit within Kentico. With the new funding, the company plans to ramp up operations in Europe, open offices in New York and Olomouc, and hire 90% employees this year.
Deuna, a Latin American e-commerce platform that enables merchants to accept payments through multiple providers, raised $37M one year after launch. The firm will use the funds to grow their team and expand operations in Brazil, Latin America's biggest e-commerce market.
Okendo, a customer marketing platform, raised $26M in a Series A round led by Base10 Partners, bringing its total amount raised to $33.5M. The company started as a Shopify app called VidTitan that helped merchants collect video testimonials and reviews and later evolved into Okendo. The new funding will help the company accelerate its go-to-market and product development and further expand into North America.
Medusa, a one-year-old e-commerce startup from Denmark that offers an open source alternative to Shopify and WooCommerce aimed at the JavaScript developer community, raised $8M in a round co-led by LocalGlobe and Dawn Capital, bringing its total amount raised to $9M. In less than a year, the platform has grown a community of over 2,000 developers, has been used on over 10,000 projects, and has been used to sell more than $100M in GMV.
Wheelocity, an India-based supply chain startup that handles fresh food supplies for quick commerce platforms, raised $12M in a Series A round led by Lightspeed India Partners. The company currently operates in more than 12 cities and plans to use the funds to expand its team across product, technology, and operations over the next six months.
WPP, a British advertising company, acquired Corebiz, a Brazilian e-commerce agency, for an undisclosed amount. One major appeal to the deal was Corebiz's specialism in implementing VTEX, a cloud-based e-commerce and retail software platform that allows retailers to create and manage online retail environments, which Corebix claims to be the largest VTEX implementation partner in the world. In May, I reported that WPP launched their own e-commerce platform.
Zazuu, a UK-based and Africa-focused fintech that offers customers various remittance options, raised $2M in a new round. Sub-Saharan Africa remains the most expensive region to send and receive money, coasting an average of 8% in fees compared to a global average of 6%. By aggregating platforms, Zazuu hopes to increase transparency around rates and fees and ultimately help create a better payment solution for the region.
Provus Inc, a startup that uses AI to help enterprise clients improve their quoting process, raised $12M in a Series A round led by Norwest Venture Partners, bringing its total amount raised to $13.2M. The company will use the funds to strengthen its product and engineering teams and scale up sales and marketing.
Kitabeli, an Indonesian startup that offers a distribution network and D2C social commerce app, raised $20M in a round led by Glade Brook Capital Partners, just sixteen months after it's $10M Series A round. The funding will be used to add new product categories and expand into smaller Tier 2 and Tier 3 cities, which the company says make up a $100B market.
Supermoji, an NFT financing platform that offers payment options like BNPL, raised $6M in a round led by BH Digital, DRW Venture Capital, Intersection Growth Partners, and Neuberger Berman. The funds will be used to create data analytics, user-friendly crypto infrastructures, and financing solutions.
Klarna, the Sweden-based fintech known for its BNPL service, raised $800M at a $6.7B valuation. This round cuts Klarna's valuating by 85%, from $45.6B a year ago, however the company put a positive spin on the numbers, comparing their valuation today to its valuation in 2018.
Wonder Robotics, a startup that specializes in the autonomous flight and landing of commercial drones, raised $4M in a round led by Elron Ventures. The company believes that its tech is ideal for commercial package delivery and will use the funds to scale up operation and marketing efforts, while developing technology for additional applications.
Patchworks, a retail integration platform that connects e-commerce storefronts, ERPs, CRMs, and fulfilment solutions, raised £1.5M from Gresham House Ventures, following an investment of £3.3M in August 2021. Founded in 2014, the company has more than 200 customers and plans to use the funds to continue its expansion into Europe.
HIVERY, a provider of AI-driven retail assortment strategy simulation and optimization solutions, raised $30M in a Series B round led by Tiger Global. The company will use the funds to increase their headcount and expand beyond the U.S.
Stockagile, a Barcelona-based firm that offers a cloud-based platform for inventory and sales management across all sales channels, raised €2.5M in a round led by Nauta Capital, 4Founders Capital, Angels, and Zone2Boost. It will use the funds to enhance the platform's offering, as well as launch a new sales and marketing strategy.
Circ, a fashion company that has developed a technology that returns clothes to the raw materials from which they were made, raised over $30M in a Series B round led by Bill Gate's Breakthrough Energy Ventures. The company will use the funds to secure suppliers, purchasers, and major financial stakeholders to “establish a much cleaner fashion future”. Not specifically e-commerce related, but I thought it was an interesting company and wanted to include!

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PAUL

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

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