#182 – Etsy’s reawakening, Wix checkout customization, and Amazon’s penalty for selling on Target

by Shopifreaks | Jul 15, 2024 | Recent Newsletters

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And now back to our regularly scheduled content…

In this week's edition I cover:

Etsy's policy updates on “handmade” and “vintage” labels
Wix's new customizable checkout
Hackers attacking Squarespace and Shopify
Amazon penalizing sellers for offering Target Circle deals
Indiegogo launching an e-commerce platform
Chinese sellers struggling to survive
Amazon pushing order pick-up
E-commerce executive shakeups
Rufus going mainstream
eBay's new advertising dashboard
Ikea dice “Hola! ¿Cómo estás?”
Marc Andreessen sending an AI bot $50k

All this and more in this week's 182nd Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week

40% of U.S. households are expected to shop on Amazon's Prime Day this week. More than half of Prime Day 2024 shoppers will likely be comparing prices on other retailers but still buying on Amazon. — According to a survey by Numerator

1. Etsy's going back to its roots… kind of

Etsy is attempting to go back to its roots and reclaim its original mission to support artisans and crafters, while still providing a sales platform for non-handmade goods. The best of both worlds? Or ultimately the worst of one world?

The company posted a policy update on Tuesday, noting that in place of its “handmade” and “vintage” labels, it will instead be categorizing products as:

Made by a seller
Designed by a seller
Sourced by a seller
Handpicked by a seller

Etsy wrote in its update:

“We recognize that, in today’s world, makers almost always use tools to bring their creativity to life. Sculptors and painters use chisels and paintbrushes; furniture makers use power tools; and many artists today use digital tools, such as computer-aided and 3D-printing techniques, print-on-demand tools, and, most recently, GenAI tools to bring human ideas into visual form. The common thread that weaves through all of the creative goods allowed on Etsy is human imagination and involvement. We are, and will remain, the marketplace for original items from real people.”

Etsy CEO Josh Silverman said, “Behind every item you buy on Etsy is a real person with a real human touch. That is a differentiator for Etsy.”

In addition to the product category updates:

Etsy launched a new marketing campaign that'll feature Etsy sellers and their products in TV commercials, billboards, and social-media content in the U.S. and U.K. I think this is a brilliant way to humanize the buying experience on the platform — shopping with a real artisan as opposed to shopping with a fictitious private label brand name on Amazon.
Etsy is bringing back Etsy Up, it's flagship virtual seller conference, on September 10th where sellers can join to gather inspiration, find insightful tips, and connect with other sellers. You can RSVP free here.
Etsy Design Awards will kick off July 16th, honoring the work of Etsy sellers across multiple categories. E-mails will be sent out this week with details on how to submit your entry.

To me, the recent updates feel like a happy middle-ground between serving their original mission of empowering artisans and crafters, while allowing sellers to leverage modern tools and technology to scale their businesses.

Otherwise, what's the alternative? Etsy back pedaling on its decision to allow non-handmade goods, kicking off existing sellers, and saying to future handmade sellers — “You've grown your business too big to the point that you can no longer hand make the products that your customers love, so now you can't sell on Etsy anymore.”?

PYMNTS isn't as sold as me on the changes though. They wrote:

“Yet, the question remains whether these changes, which come with concerted marketing efforts, demonstrate a desire to push back on the changes that have taken the company further from its vintage and handmade origins or whether they may instead make it easier for sellers to diverge further from this artisan ethos.”

“For instance, the acceptance of 3D-printed sculptures as “made by” a seller, or AI-generated content as “designed by” a seller, raises questions about the authenticity Etsy is promoting. The language Silverman uses, stating that “the common thread” across products permitted on Etsy’s marketplace is “human imagination and involvement” is vague enough to allow for considerable divergence from the platform’s purported emphasis on artisanship.”

What are your thoughts? Is it a positive move for Etsy to find middle ground between selling handmade products and artisan designed products on its platform? Or is this acceptance of non-handmade products moving Etsy in the wrong direction? Hit reply and let me know or join the convo on my LinkedIn post.

2. Wix now allows merchants to customize checkout

Wix added the ability for merchants to customize their checkout forms, providing a more tailored experience for customers.

Merchants can now:

Add custom fields to checkout.
Customize the layout of the fields.
Adjust field settings like descriptions, mandatory status, and personally identifiable information requirements.
Control the visibility of the custom fields via conditional rules.
Add and customize related headers, texts, and links.
Preview the checkout form before saving their changes.
Data entered in the custom fields are reflected in the platform’s email, thank you page and business manager orders page.

A few examples of what's possible with a customized checkout:

Ask if this is a business purchase, and if yes, reveal additional fields such as purchase order number.
Allow the customer to indicate that the purchase is a gift and optionally request gift wrapping and to not have a receipt included.
Opt-in customers to your marketing e-mail and SMS lists.
Add your site policies that need to be accepted before checkout can commence.
Adding announcements such as shipping delays to the top of your checkout page.
Adding fields for product personalization.

The introduction of these new checkout capabilities comes a week after Wix added new features (story #5) for developers to build apps more efficiently within its ecosystem.

How does this compare to Shopify?

Shopify merchants used to be very limited as to what they could do with customizing checkout. If I remember correctly, you had to be on Shopify Plus back in the day to gain access to your checkout.liquid file and add scripts or make other customizations, and there was no checkout API access.

Then in June 2022, Shopify launched “checkout UI extensions” which allows developers to create Shopify Apps that add elements to Shopify Checkout like product offers, custom fields, custom content, loyalty programs, etc. And last month, Shopify acquired Checkout Blocks, a company offering a no-code solution that lets Shopify merchants customize their checkout.

So it seems like Wix and Shopify are finally catching up to what merchants have been telling them for years — we need to customize checkout!

With Wix's new solution, the ability to customize checkout is baked into the platform. Whereas with Shopify, it's an app-based add-on.

3. E-commerce is under attack!

More than 200 cryptocurrency domains registered with Squarespace have been identified at risk after the company was found to be under a massive DNS hijacking attack. By hijacking DNS functionality, hackers can redirect users to malicious websites or gain unauthorized remote access to an organization’s servers and steal sensitive data.

The attack began Thursday with two websites of blockchain projects — Compound and Celer Networks — and then later researchers found that it impacted around 220 others. The incident is being blamed on the recent migration of 10M domains from Google Domains to Squarespace after the acquisition deal last September.

Bobby Ong, co-founder and COO of CoinGeico, wrote, “Google sold their domain business to Squarespace a few months ago, and the forced migration of domains to Squarespace removed 2FA, causing all these domains to be vulnerable and several have been hijacked.”

@SquarespaceHelp posted on Friday on X: “We are currently investigating an issue with the Domains Reseller API being unavailable for new registrations and domain management.” Later that day, they posted that the incident had been revolved.

Meanwhile across the Canadian border, Shopify had nearly 174,000 customers' info leaked on a web hacking forum last week.

Shopify denies that its servers were hacked and gave the following statement:

“Shopify systems have not experienced a security incident. The data loss reported was caused by a third-party app. The app developer intends to notify affected customers.”

Shopify declined to confirm the number of customers impacted or what the particular third-party app is that got hacked. That'd be a nice thing to know for the users of that app, don't you think?

The data leak was made by a hacker with the pseudonym 888 on July 3rd, who claimed to have 173,873 sets of user information including their Shopify ID, first name, last name, e-mail, mobile number, trader count, total spent, e-mail subscription, and SMS subscription.

The same hacker has posted dozens of leaked data sets in 2024 alone, including ones from Credit Suisse, Assurified, Heineken, and Accenture.

4. Amazon sellers penalized for offering deals during Target Circle Week

Certain Amazon sellers lost their Buy Box status ahead of Prime Day after the company's algorithms found their items being sold for less on Target's website during its Target Circle Week promo, which ended July 13th.

Here are a couple examples from the CNBC report:

Brandon Fishman sells vitamin-infused coffee on Target and Amazon. Last week, Amazon detected his VitaCup coffee available for $13.43 on Target's website, about $1.50 cheaper than his listing on Amazon.com, so they removed Fishman's listing from the Buy Box and gave the position to a reseller of his coffee, even though Fishman is the registered brand owner.
Mason Arnold sells his Sunwink herbal tonics and powders on both marketplaces and also lost the buy box to resellers when Target changed his sale price on the listing.

The problem for Fishman, Arnold, and other sellers resulted from a change in how Target promoted deals for Circle Week. In the past, Target would show the percentage discount off the regular price, while leaving the listed price the same. However this year, Target showed the item's actual sale price after the discount, which meant it was re-indexed by Amazon's pricing algorithms.

Amazon's Buy Box practices are at the center of a lawsuit filed in September by the FTC that accuses Amazon of using an “anti-discounting strategy” and a “massive web-crawling apparatus that constantly tracks online prices” to stifle competition.

However despite the scrutiny, Amazon defended its actions. David Zapolsky, Amazon's general counsel, wrote, “Just like any store owner who wouldn't want to promote a bad deal to their customers, we don't highlight or promote offers that are not competitively priced.”

Sellers took their concerns to Target, which then adjusted the Circle Week discounts on some listings to say “See price in cart” in order to skirt Amazon's pricing algorithms.

The only way for affected sellers to regain their Buy Box position after the Target debacle was to lower their prices on Amazon.com. For example, Sunwink cut the price of one of its products from $23 to $19, which caused sales to pick back up, but at a detrimental impact to the brand's profit margin.

5. Indiegogo launches e-commerce for crowdfunded products

Indiegogo launched a new e-commerce offering called IndieShop, which allows users to purchase products developed via crowdfunding. The platform is now live on the Indiegogo site, after launching in Beta in May, and currently features 40+ products.

Becky Center, CEO of Indiegogo, wrote in a statement:

“Over the past 16 years, Indiegogo has helped nearly a million entrepreneurs and companies build their brands, create go-to-market strategies, engage with their communities and extend audience reach globally. Since I took the helm at Indiegogo two years ago, my goal has been to not only remain the best-in-class crowdfunding platform but to also expand our support of the innovator’s journey beyond the traditional 30- to 60-day crowdfunding campaign cycle.”

Almost a decade ago, Indiegogo launched its InDemand offering, which allows creators to sell their products as pre-orders after crowdfunding is complete and manage customers using the site’s platform. This allows creators to continue driving revenue through the platform after they hit their goal and while the product is in production.

The difference between InDemand and Indieshop is that with Indieshop, the products are in-stock and ready-to-ship. Now Indiegogo can take aspiring brands through the entire sales cycle from crowdfunding to pre-orders to selling live once the product is ready.

I love it! Prior to Indieshop, the company was losing its creators once their products went live, having to then go to Shopify, Amazon, and other marketplaces to sell their in-stock products to the public.

Certainly creators will still want to capitalize on those other channels as well, but Indieshop now provides an easy transition into post-production sales, as well as creates a new revenue opportunity for Indiegogo to connect its backers with ready-to-ship products that spawned from its crowdfunding platform.

Alongside Indieshop, the company also launched new services including:

Customer Insights – for innovators prepping their crowdfunding request
Pay-Over-Time – for backers to support projects in installments
Pre-Launch Reservations – allows a campaign to offer a guaranteed discount to the backers that put down a small fee before the campaign’s launch
Cart Volume Discounts – encourages backers to add more to their cart to receive discounts
Perk Gifting – to easily order perks as gifts for friends and family

Indiegogo also shared in its press release that it plans to soon announce a partnership to bring “the most successful crowdfunding projects to physical locations” and that it's lowering its platform fees from 5% to 4% for new crowdfunding campaigns through 2024.

6. China's price wars is leaving sellers strapped

Chinese e-commerce vendors are struggling for survival as sales growth slows and price pressure rises due to shopping platforms competing with aggressive policies to attract customers, as reported by Reuters.

Lu Zhenwang, a Shanghai-based e-commerce operator who sells items for small vendors, said, “The good times for e-commerce are over. This year there is fierce competition and I don't think a lot of sellers will survive another three years.”

Lu said the operating environment is poor because the rise in e-commerce sales has created what is known in Chinese as the “neijuan” effect — working harder for smaller returns. He told Reuters, “There is no growth in sales, because there are no new customers and the average income of people is not rising like 10 years ago. There is only competition, between platforms, between sellers. This is the new normal for the e-commerce industry in China.”

Davy Huang, a business development director at Azoya, said that consumers are increasingly returning impulse buys, making life tougher for smaller retailers who do not have sufficient working capital to bear the cost. He added, “But I think return rates are just a fraction of the challenges these businesses are facing. They also face high traffic acquisition costs and high costs to collaborate with influencers and livestreamers.”

The Reuters article focused on sellers getting squeezed, but it's not any better for manufacturers either right now in China.

Between Temu's aggressive price negotiations with manufacturers, and Shein's allegedly requiring factories to sign loyalty oaths promising they won't sell to competitors — the ones left in the wake of these pricing and exclusivity wars are the manufacturers.

Giving the buying power and reach of China's major e-commerce players — like Alibaba, JD.com, Pinduoduo, ByteDance, and Shein — manufacturers are left with a choice: Do I want to make a little bit of money selling my products at rock bottom prices or not sell anything at all? The latter, which could mean shutting down their factories.

As the major players grow bigger and competition amongst them intensifies, driving down prices across the board, there are becoming less and less buyers and platforms for factories in China to sell their wares. Eventually, something will have to give.

7. Amazon is pushing order pick-up this year during Prime Day events

This year at its upcoming Prime Day sales event, Amazon promotions will be pointing shoppers toward collecting packages from its network of lockers and other pick-up points like Whole Foods stores.

A spokesperson told Business Insider, “Amazon wants customers to choose the delivery option that is most convenient for them,” and that the company offers “tens of thousands of package pick-up locations” in the U.S.

For customers, pick-up points are convenient and oftentimes more secure, especially for those that have previously experienced porch theft.

For Amazon, it's less expensive for the company to deliver multiple customer orders to one location, as opposed to making individual drops across the city at each customer's home. Plus, porch piracy costs the company money too.

Amazon spent $89.5B on shipping in 2023, an increase of nearly 7% over 2022, according to its annual filing with the SEC. Even shaving 2-3 points off that number means billions of dollars in savings for the company.

In Amazon's press release announcing this year's Prime Day event, the company boasted that customers have the “added convenience of being able to choose how and where those items arrive—whether at home, work, or places you frequent with Amazon’s network of thousands of package pick-up locations.”

Will the push towards pick-up pay off for Amazon? We will find out in next year's SEC filing!

8. E-commerce executive shake ups this week

There were so many new executive hires to report on this week in our industry, that I had to dedicate an entire section to them!

commercetools appointed Andrew Burton as its new CEO, effective July 8th. Burton succeeds Dirk Hoerig, co-founder and CEO of commercetools, who will remain on the board and transition to the role of Chief Innovation Officer. Burton joins commercetools from Rapid7 where he served as President and COO, growing the company from $150M ARR to over $800M.

Bold Commerce named Steven Guevarra as CFO, succeeding Stuart Henrickson, who left the company, and Brandon Briggs as head of sales and agency partnership, a new position. Bold said in a statement that Guevarra brings “more than two decades of financial experience and expertise scaling high-growth technology companies” and that Briggs, an e-commerce and technology veteran, will assist in the company's effort to build strategic partnerships.

Global-e Online promoted Tomer Gold as EVP, Head of the Channels and SMB Division, and Siddharth Jain as EVP, Technology. Gold formerly held the position of VP of Corporate Development at Global-e, while Jain is ascending from his role as Senior VP of Engineering within the company.

Elk Home appointed Anna Lee Schlueter as its new Director of E-commerce, charged with driving advancements in the company's online presence. Schlueter has served as VP and Director of Operations for the past 15 years at Jaben Holdings.

Guitar Center appointed Adolfo Rodriguez as VP, Chief Technology & Information Officer, effective July 9th. Rodriguez is responsible for the end-to-end technology vision and execution of the company and will report directly to CEO Gabe Dalporto. He most recently served at Advance Auto Parts, where he spearheaded technological advancements across the company's e-commerce, brick-and-mortar stores, and supply chain.

Hasbro Inc named Dan Rawson as global play lead for Dungeons & Dragons and D&D Beyond, its fan platform, where he will be responsible for all D2C and e-commerce operations. Rawson previously led e-commerce and SaaS businesses at Amazon and Microsoft. Hasbro named Stephanie Beal as its new chief supply chain officer. Beal has been with the company since 2022 and recently led a systems transformation to digitize planning processes across the enterprise. Hasbro also appointed Dan Shull as chief digital information officer, a newly created IT strategy position. Shull comes from REI where hew as CTO and previously held executive positions at Signet, Nike, and Borders.

9. Other e-commerce news of interest

Amazon's AI shopping assistant, Rufus, is now available to all U.S. customers, just in time for the company's annual Prime Day event this week. Amazon first revealed Rufus in February, but until now, it has only been accessible to a limited number of users in the app. The assistant is trained on Amazon's product catalog, customer reviews, community Q&As, and information across the web. And this is just a rumor, but I heard that Rufus is secretly in love with Alexa.

eBay launched a new dashboard for its eBay Advertising, which the company described as a “reimagined and redesigned advertising experience.” The new version has a revamped Seller Hub Marketing tab and a new Advertising tab that provides sellers with a holistic view of all campaigns so that they can make quick adjustments, as well as a section with recommendations of the day which leverage ebay.ai to uncover trends and automatically build campaigns for your listings.

Carvana introduced a new feature that highlights electric vehicles that qualify for the Clean Vehicle Tax Credit within the search results and lets legible customers apply for up to $4,000 in savings from the credit at checkout. Instead of waiting for a lower tax bill next year, customers can now get up to $4,000 savings up front, which automatically flow through to eligible customers' financing terms.

Ikea U.S. is trying to better serve the needs of its Spanish-speaking shoppers by launching a Spanish-language platform. In addition to the new online shopping experience, Spanish-speaking customers can also receive support before, during, and after their purchase with a Spanish-speaking associate when calling the support phone line. I'm kind of surprised a company that large didn't already have Spanish-language service for years now.

Costco is hiking its annual membership fees in the U.S. and Canada by $5, and raising the cost of its higher-tier membership by $10, marking the first increase since 2017. That's an increase to $65 from $60 for regular annual memberships and from $120 to $130 for “Executive Membership.” Rest assured though, the hotdog + coke combo will still sell for $1.50.

Shein logistics software is in beta testing with select supply chain customers, and cybersecurity firms are concerned over the potential for a company with close ties to China to spy on the supply chain as it grows its global logistics footprint. Dewardric McNeal, senior policy analyst at Longview Global, said, “Given the intricate nature of the U.S. and global supply chains, the potential for espionage or data gathering is a significant risk. Shein’s software could provide unprecedented access to sensitive supply chain data, which the Chinese government could seize under its laws. This exposure poses a direct threat to U.S. supply chain integrity, making it vulnerable to exploitation and manipulation.” Meanwhile Shein's like, “We don't need your secrets. We're already better at this than you.”

Walmart is offering half off Walmart+ memberships until July 18th, which funny enough, overlaps with Amazon's Prime Day on July 16th and 17th. What are the odds? Walmart+ offers free shipping with no order minimum, free grocery delivery from your local store with a minimum order of $35, savings on fuel, video streaming with Paramount+, free tire repair and road hazard warranty, returns from home, and other perks. Not bad for $49! However note that unlike Amazon Prime memberships, you can't give access to your Walmart+ to other members of your household. They'd all have to login to the same account, which has your payment info tied to it. I learned that the hard way last night when I bought a year of Walmart+, thinking I could add my parents and have them share the membership perks via their own Walmart accounts.

More than 3,000 Amazon associates at Amazon's Coventry warehouse in England voted in a historic trade union recognition ballot that could allow U.K. employees to bargain collectively for rights and pay for the first time. If the collective vote supports recognition, the GMB would be given the right to represent them in negotiations over pay and conditions in what would be the first instance of Amazon recognizing a union in the U.K.

A US judge ruled against the FTC in a challenge to its ruling banning noncompete agreements, citing the FTC's lack of “substantive” rulemaking authority. The preliminary ruling blocks enforcement of the noncompete ban against the plaintiff and other groups that were involved in the case, and signals that the FTC cannot enforce the rule.

OpenAI whistleblowers filed a complaint with the SEC, calling for an investigation into the company for allegedly requiring restrictive NDAs. The whistleblowers claim that OpenAI issued overly restrictive employment, severance, and non-disclosure agreements to its employees, which could lead to penalties against workers who raised concerns about OpenAI to federal authorities.

Marc Andreessen sent $50k in Bitcoin to an AI bot on X called the Truth Terminal, which operates semi-autonomously, with its human handler only approving its Twitter posts and deciding who it gets to interact with. After a chat with Andreessen where the investor proposed a grant, the bot created a plan of upgrades which included a personal CPU, AI model tweaks, and even a billboard. Andreessen agreed to the plan and proceeded with a $50k one-time grant.

Amazon introduced App Studio at its AWS Summit last week, a new gen AI-powered platform that allows professionals to build apps using natural language descriptions and prompts. Users can specify the app's function and the data sources it should pull from, and App Studio will produce an app that would have otherwise taken the developer days. In a demo, Amazon demonstrated how App Studio can take a request for an invoice tracking app and lay out suggestions for how it should work, which the developer can approve before creating the actual app.

WhatsApp Business is reducing rates for utility messages and raising rates for marketing messages, effective Aug 4th and Oct 4th respectively. Over the last year, users have complained about the number of WhatsApp messages increasing over the platform, resulting in spam, so the company started testing restrictions on marketing messages sent to users in India, which it now expanded globally, hoping that the restrictions and increased cost will help reduce the Spam.

Mastercard and Nuvei teamed up to hep consumers in Europe convert digital assets into fiat currency via debit, credit, and prepaid cards. The off-ramping solutions lets consumers convert supported crypto currencies into fiat currency, which they can then transfer to Mastercards without the need to go through third-party exchanges.

Amazon says it reached its goal of matching all of the electricity consumed by its operations with 100% renewable energy in 2023 — seven years ahead of schedule — — making it the largest corporate purchaser of renewable energy in the world for four years running. The company is exploring new carbon-free energy sources in efforts to meet its Climate Pledge commitment of net-zero carbon by 2040.

The EU declared that X breached its guidelines under the Digital Services Act, following an investigation into the company's advertising transparency, availability of data, and risk management. X was informed of these preliminary findings on Friday, which found three primary breaches of the DSA including its use of the Blue Check mark to receive verified status, its inability to search its advertising system, and for prohibiting researchers from independently accessing its public data.

TikTok ad spend is tapering off since March when the U.S. introduced the selloff bill that would require the company to divest the app to American ownership or be banned from the country next year. It's still growing, just slower. Ad spend was up 19% in March, 11% in April, but only 6% in May. Target reduced its spend by 30%, DoorDash by 25%, Bayer by 20%, and Procter & Gamble by 10%.

Amazon Pay India is introducing new payment methods this year including UPI, credit cards, and wallets, rather than just specializing in a single segment. The company says it sees opportunities in penetrating offline payments and smaller towns, where currently 65% of the transactions done by consumers in tier two and three cities were digital versus 75% in larger cities.

10. Seed rounds, IPOs, & acquisitions

Helium, an AI platform that integrates advanced product and visitor intelligence into e-commerce platforms, raised Rs 4.5 crore (~$540k) in a pre-seed round led by Merak Ventures. The new funding will be used to expand its team and further develop its product offering, with the aim to collaborate with top e-commerce brands in the North American market.

Flip, a social commerce platform that enhances shopping with user-generated videos, acquired Curated, a marketplace that connects consumers with verified experts for personalized advice on high-value purchases, for $330M in stock, with Curated's CEO joining Flip as COO. The acquisition is projected to more than double last year's combined revenues

TBC, Uzbekistan's only mobile-exclusive bank, raised $38.2M in a round led by its owner TBC Bank Group with participation from European Bank for Reconstruction and Development and World Bank's International Finance Corporation. The bank plans to use the funds to expand its local presence in the country and introduce new financial products to its portfolio.

Nala, an international money transfer app that facilitates payments between the EU, US, and Africa, raised $40M in a Series A round led by Acrew Capital, bringing its total amount raised to $50M since 2022. The funds will be used to extend the company's reach beyond Africa, enhance its infrastructure, and expand its B2B platform Rafiki.

DealCart, a Pakistani social commerce platform enabling consumers to access essential goods in the country, raised $3M in a round led by Shorooq Partners and Sturgeon Capital. The company will use the funds to extend its mission of providing affordable essential goods to Pakistan's low and middle-income consumers.