Introducing new Shopifreaks Verified Badges! For just $11.99/month ($14.99/mo on iOS), I'll send you a PNG image of a purple checkmark that you can display on your website to prove that you are who you say you are.
Okay, not really. But if everyone else is jumping on the paid verification bandwagon, why can't I?
This week I've got stories for you about Meta's new paid checkmark, Wix's generative AI feature, and Instacart joining Walmart and Amazon in the B2B Big Leagues.
I also cover the death of live shopping on Instagram, Amazon's 50% tax on sellers, and new EU expectations for Very Large Online Platforms.
All this and more in this week's 109th Edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“Are you going to get Meta Verified? ✅”
Last Weeks Poll Results: I asked if you were currently utilizing ChatGPT or other generative AI products within your business. 21.2% said that they are actively using AI in their business, while another 20% indicated that they've dabbled a little with the technology. The other 58.8% haven't touched it, which means there's still a lot of room for growth and adoption. [View Poll]
Stat of the Week 📈
The top 20 spenders on digital ads spent $3.02 million on TikTok ads between Jan. 1 and the Super Bowl Sunday, a 400% increase from the $54,307 brands spent in 2022.
It's also worth noting that 7 of the top 20 spending brands advertised on TikTok in 2023, compared to 4 last year, while only 9 brands advertised on Twitter, compared to 15 last year. – According to Sensor Tower
Share this week's stat on Twitter & LinkedIn.
1. Meta did it too
It's official… Meta hasn't had an original idea since 2004 (and even that is up for debate)!
Mark Zuckerberg is following in the footsteps of Elon Musk and launching a “Meta Verified” subscription service that will allow users to gain verified badges. Elon Musk called the move “inevitable”.
(So which Josh Swain will get the Verified Badge and get to keep the name?)
Two weeks ago I reported that code snippets were discovered within Instagram that contained words like “Paid”, “Blue”, and “Badge”, which caused some folks to correctly speculate that this news was on the horizon.
Meta's new subscription service lets users:
- Verify their account with a government ID that matches their name on Facebook
- Receive increased visibility and reach in some areas of the platform like search, comments, and recommendations
- Get a blue badge
- Get extra impersonation protection
- Get direct access to customer support
Meta also shared that it will be displaying follower count in more places (most likely within search results and recommended follows) “so people can distinguish which accounts are notable public figures among accounts that share the same name.” (Which is something that a checkmark used to do.)
Facebook and Instagram accounts must be enrolled separately in Meta Verified, so users that want a blue badge on both sites must pay at least $24/month. (So we're the same person enough to get combined messages but not to get a blue badge next to both profiles.) However Meta said it plans to eventually offer bundled subscriptions.
It'll cost $11.99/month for web users and $14.99/month for iOS, however, accounts that already have verified badges will not be charged — for now. This paid subscription is just for the rest of us non-verified plebeians who desperately seek social validation in the form of a blue checkmark. Businesses are currently not eligible to apply for Meta Verified.
Meta Verified will release in Australia and New Zealand this week and then launch in other countries soon.
Two weeks ago I shared my thoughts about paid verification being a bad idea, noting that monetizing the demand around blue checkmarks defeats the purpose of helping users determine which accounts are legitimate and which are not.
Social media companies need to remember that the verification of public figures and businesses is for the benefit of their users — so that they know they aren't being fooled by tweets / posts from illegitimate accounts. Charging for verification worsens the user experience, as not every business or creator can afford or will want to pay for the paid verification.
And I'm not saying that I don't think Meta and Twitter should offer paid subscriptions. On the contrary, I think subscription plans of some kind are a great idea to get social media companies less dependent on ad revenue, and there are certainly features we'd all be willing to pay for.
However verification shouldn't be part of that subscription. Again, verification is for everyone else, not the premium subscriber. Verifying that users are who they say they are is the bare minimum of what these social media platforms should offer their userbase.
PREDICTION: A counter culture will develop of influencers who actively and vocally don't get verified. Unverified will be the new cool.
Are you going to get Meta Verified? Take the Twitter Poll and let me know.
2. Wix's new AI Text Creator
Not to be outdone by Shopify's Shop Magic, Wix launched an AI Text Creator within the Wix Editor, allowing users to create anything from titles to full website copy.
While creating a website, users are prompted with questions, which by entering a few inputs, create a selection of titles, taglines, and paragraphs to choose from.
The tool uses OpenAI's Generative Pre-trained Transformer 3 (GPT-3) language model to produce human-like text. It'll be gradually rolling out to Wix users in English with plans to roll out more widely this year.
Last week I reported that Shopify debuted Shop Magic, its new AI-generated product descriptions, as part of its Winter '23 Edition feature release.
With platforms embracing generative AI, is it only a matter of time before all websites sound exactly the same?
It is possible that websites that use language generation capabilities may end up sounding similar to each other, especially if they do not customize their content. This could be due to the fact that language generation process follows a set of rules and patterns that are likely to be repeated across different texts.
To avoid this, websites can customize the generated content to reflect their unique brand voice and values. This customization can include incorporating specific keywords, incorporating their unique selling propositions, and other distinct features that set them apart from their competitors.
Those two paragraphs above were written by ChatGPT. And that's probably what your website will sound like too if you rely too much on it.
In other Wix news, the company laid off 370 employees in a second round of job cuts, most of them in the customer service department in the US.
Uh oh, is Wix going to start using their new AI Text Creator to respond to customer support inquiries? The timing of these two news stories are a bit coincidental…
3. BigCommerce partners with InfoTrax (Sponsored)
BigCommerce announced a new global partnership with InfoTrax Systems, a leading provider of commissions software and distributor tools for direct sales companies.
Direct sellers use tools such as InfoTrax FlexCloud to track orders and referrals for sales representatives and customers, known as genealogy tracking, in order to calculate commissions and distribute payments based on each client’s unique commission rules.
Because of the high cost of commissions, sellers have traditionally sacrificed commerce functionality to avoid additional expenses.
Historically, InfoTrax provided its clients with shopping cart technology built in-house, but the new InfoTrax Powered by BigCommerce solution will give thousands of direct selling customers access to more innovative and sophisticated commerce capabilities, including the ability to launch omnichannel sales strategies using Feedonomics.
Sachin Wadhawan, VP of tech partnerships at BigCommerce, said, “Together, BigCommerce and InfoTrax provide the modern platform direct sellers need to take their ecommerce capabilities to the next level. Through this partnership, direct sellers now have access to world-class digital storefronts integrated with the specialized functionality needed for them to succeed and grow.”
To learn more about this new partnership or request a demo, click here.
To learn more about how Powered by BigCommerce can help your business, click here.
4. Instacart Business & New Shopper Features
Instacart is looking to challenge Amazon and Walmart with the launch of Instacart Business, a B2B storefront that displays a selection of curated items like office supplies, cleaning products, snacks, and other items that cater to small businesses.
Last month I reported that Walmart launched Walmart Business, and Amazon has offered Amazon Business since 2015 — both platforms which basically offer the same thing as what Instacart is planning.
The move is designed to broaden Instacart's product offering beyond grocery deliveries at a time when the company's growth is flattening.
Instacart services many major retailers including Costco, Fairway, CVS, Petco, and others. However in October I reported that the company is facing more competition, including internally from their own partners, as retailers build out their own logistics operations, which often provide better value propositions to customers compared to Instacart’s model. It's important that they expand their horizon because their existing model is currently up for grabs.
In other Instacart news this week, the company introduced two new features designed to give shoppers more opportunities to earn.
- Queued Batches – give shoppers the option to accept another batch before completing the batch they are currently shopping. The new feature is designed to give shoppers the flexibility to shop on their own schedule and optimize their time whenever they do choose to shop.
- Multi-Store Add-On Orders – give shoppers the option to add on separate customer orders from nearby retailers, in addition to the one they're currently shopping. This way shoppers can finish two orders simultaneously, without having to drive back across town a second time.
5. Instagram kills live shopping
Starting in March, Instagram will no longer let creators tag products in livestreams, marking Meta's next big step away from live shopping.
In August I reported that Facebook would be shutting down its live shopping feature on Oct 1 (which it did) to focus instead on Reels. And last month Instagram revamped its navigation bar on their home feed to remove the shopping tab and replace it with a Reels tab.
However Instagram isn't killing off shopping altogether on its platform (for now). The company said, “You will still be able to set up and run your shop on Instagram as we continue to invest in shopping experiences for people and businesses across feed, stories, Reels, ads and more.”
Livestreaming is also not going anywhere for the time being. Just the ability to tag products is going away. Other live broadcasting features will remain including scheduling a broadcast, inviting guests to join, and conducting a live Q&A session.
This is a questionable move from Meta, given that so many of its competitors are leaning into live shopping.
- TikTok started testing its in-app shopping feature in the US in November.
- YouTube and Shopify teamed up to let creators sell products directly on the platform.
- Amazon's live shopping platform is still in full force.
Perhaps Meta knows something the rest of us don't. Or perhaps not.
6. Amazon is taking 50%
A new report by Marketplace Pulse revealed that Amazon sellers are paying half of their revenue to Amazon in fees, up from 40% five years ago.
No wonder 99% of Amazon sellers intend to sell on other marketplaces in 2023!
For the first time, Amazon's average cut of each sale surpassed 50% in 2022. This figure includes:
- Seller commission
- Fees for warehouse storage
- Packing and delivery
- Advertising on the marketplace
Now to be fair, every fee above except #1 is optional for sellers — meaning they don't have to utilize Amazon's storage and fulfillment services or advertise on the marketplace.
However given the numbers, it's obvious that Amazon has created an environment where those things aren't so optional if a seller would like to compete on its marketplaces.
Certainly you don't have to use FBA for storage and delivery, but don't you want to be able to offer fast and free Prime shipping? Some would argue that it's mandatory in order to convert sales on Amazon if your competitors are offering it.
(However it's also important to note that comparatively, Amazon offers a tremendous value with their storage and fulfillment services. I can't store / ship my products cheaper anywhere else!)
And obviously you don't have to take advantage of Amazon's many ways to advertise on their platform, but don't you want to reach Amazon's customers?
In November, Vox wrote about the “death of organic Amazon” and the Washington Post reported that the first page of Amazon results includes an average of nine sponsored listings, which is twice as many as Walmart displays and four times as many as Target. Both articles indicated what sellers already knew, which is that you've got to leverage ads to compete on Amazon marketplace.
Sellers have been paying Amazon more per transaction for six years in a row, according to Marketplace Pulse. Sellers have previously been able to absorb the increases because Amazon was growing rapidly, especially during the pandemic, but now that Amazon generated the slowest sales growth in its history, they might not be able to demand such hefty fees while simultaneously expecting the best prices on the web from their sellers.
7. Very Large Online Platforms
Very large online platforms (VLOPs) have until Friday at midnight to reveal how many Europeans use their services, as part of the rules under EU's new Digital Services Act (DSA).
A VLOP is considered a platform or search engine with over 45M EU users — such as TikTok, Twitter, Facebook, Instagram, YouTube, etc.
- TikTok said in a blog post it counted an average of 125M monthly active users between Aug 2022 and Jan 2023.
- Meta announced that there were approximately 255M average monthly active EU-based users on Facebook and 250M users on Instagram between June and Dec 2022.
- Twitter said it had almost 101M users on average in the last 45 days. (But you never know with Elon. The real number could be like 8 users.)
- YouTube counted over 401M users.
Other platforms that'll have to comply include LinkedIn (122M), Snapchat (96.8M), Google (332M), Wikipedia (151M), Bing (107M), and Shopifreaks (98M). Plus others which haven't yet disclosed their number of EU users including AliExpress, Amazon, and Pinterest.
Moving forward, VLOPs will need to comply with stricter requirements on limiting disinformation, taking down illegal content and protecting minors. They will also be audited by external companies to check they are doing enough to ensure their algorithms and platforms don’t pose major risks to society, and researchers will have access to some internal data.
If they don't comply, they'll have to pay up to 0.05% of their global annual turnover each year to the Commission to fund the DSA's enforcement.
Meanwhile, even farther West, Amazon, Google, Meta, Microsoft, and Apple are being accused of content censorship by the US House of Representatives. The House's chairman issued a letter that subpoenaed all the CEOs of the respective firms for details on how they go about moderating content online. Damned if they do, damned if they don't!
8. Amazon bypasses EU distributors
Amazon is looking to bypass EU distributors and source goods directly from brands, as part of the company's recent efforts to control costs.
By cutting ties with distributors and going directly to the source, Amazon says it will have greater control over costs and product selection.
When Amazon was a smaller company, it made sense for them to work with middlemen distributors, which gave them access to a wider range of products. However now Amazon has determined that these same distributors represent a significant cost to the company, and they've got to go.
Amazon will continue to source products from wholesalers and distributors if they have an exclusive distributor agreement with a product, however, experts predict that this applies to a very small group of brands.
Amazon will delay implementation of the program until April to give wholesalers and distributors a chance to prepare for the change.
While bypassing a middleman can oftentimes be a good thing, is this one of those times? Or simply another example of Amazon using its weight to get preferential pricing from brands?
At the same time Amazon is implementing these changes, the company says that it is also automating its relationship with vendors to be more efficient.
So for all other retailers who lack these same “efficiencies” and who don't have Amazon's clout to say “take it or leave it” when it comes to having a presence on their marketplace, they'll still be paying a markup on those same products through distributors — which means they won't be able to compete with Amazon on final price to consumers.
Brands could certainly say “no” to Amazon and tell the company to continue buying through their distributor, but historically who has said “no” to Amazon?
9. Other e-commerce news of interest
More US brands are testing TikTok's Shop feature including PacSun, Revolve, Willow Boutique, and KimChi Chic. Users who want to shop with these brands can tap on the shopping bag icon on their profiles to view their catalogs and complete checkout without leaving the app.
Amazon is demanding that the majority of its 300,000 corporate employees return to the office and spend at least three days a week there. In a memo to his 1.6M corporate employees, CEO Andy Jassy said that “it's easier to learn, model, practice, and strengthen our culture when we're in the office together.”
Affirm is raising interest rates on its BNPL loans. The company is having to convince their merchant clients to allow them to raise their rates through one-on-one meetings because their initial agreements did not include an automatic mechanism for dealing with rate increases by the Federal Reserve. So far most partners, including Shopify, have permitted the change.
Meta gave subpar performance reviews to around 10% of its workforce, or around 7,000 employees, spurring rumors of additional layoffs. In November, Meta laid off 13% of its workforce, or around 11,000 employees, and CEO Mark Zuckerberg has since declared 2023 as the “year of efficiency.”
Barnes & Noble is launching a $40/year membership program that offers 10% discounts, free shipping, a tote bag and bigger lattes to its members. The new membership program replaces an old one that cost $25/year and gave discounts for purchases inside physical stores only.
Meta is working on a new feature for Instagram that will bring Telegram-like channels to the platform, allowing users to subscribe to channels created by other users and receive updates in a dedicated feed. Telegram has had channels for several years, which have been popular among users who want to stay updated on specific topics. (What was I saying earlier about Meta not having an original idea since 2004?)
India central bank approved 32 entities, including Google, Amazon Pay, and RazorPay, to operate as online payment aggregators in the country, allowing them to onboard digital merchants and accept payments on their behalf. Submissions from 18 other entities, including PhonePe and Bhartipay, are still being evaluated.
Elon Musk allegedly forced his engineers to increase the visibility of his tweets by a factor of 1,000 after President Biden's Super Bowl tweet got more views and engagement than his, to which Musk responded by posting a forced to drink milk meme. Musk later called the claims bogus and said he would be taking legal action against the disgruntled former employee who leaked the info.
Google is rolling out pricing updates across its cloud portfolio including Flex Agreements to offer discounts and benefits without upfront spending, three new editions to its public cloud offering, and new pricing for its Google Workspace suite. Google will also upgrade BigQuery with an enhanced auto-scaling feature to help companies optimize their Google Cloud spending.
The UK government is one step closer to enacting BNPL regulation after the Treasury released draft legislation on Tuesday. Now the government invited stakeholders to provide feedback during an eight-week consultation period for the text, which would bring BNPL providers under the oversight of the Financial Conduct Authority (FCA).
Discord is expanding Stage Channels, its copycat of Clubhouse and Twitter Spaces that puts a spotlight on a small group of speakers broadcasting a conversation to a larger audience. The feature debuted almost two years ago as an audio-only feature, and now the platform is adding video feeds, screen sharing, and text chat to the mix.
Time magazine is launching an e-commerce section produced by staff using Taboola, a suggested-content advertising provider, through Taboola's new Turnkey Commerce division. Taboola's in-house team will produce content such product recommendation articles, how-to guides, and tutorials featuring products and services that can be bought through affiliate links, which will be placed organically for advertisers. Time editors will be able to independently determine if the content is helpful for users before publishing.
Yeji Jesse Lee, a healthcare reporter at Insider, used Amazon's new RxPass to get her prescriptions for just $5. The experience was cumbersome, took a long time, and she says she probably won't use it again.
Shopify is expanding its Shop Promise program to all eligible US merchants over the next few months. Companies that are eligible can soon take advantage of the Shop Promise badge, which indicates a product has been verified for delivery in five calendar days or less.
10. Seed rounds, IPOs, & acquisitions
Superplastics, the startup that creates synthetic TikTok and Instagram influencers, raised $20M in a round led by Amazon's Alexa Fund. The strategic investment will see Superplastic and its characters collaborating on an animated comedy series with Amazon Studios and working closer with the company to connect with younger consumers.
Jumba, a Kenyan B2B construction tech startup that enables construction materials retailers to restock and real estate developers to access supplies for projects, raised $4.5M in a round led by LocalGlobe. The company currently covers 60% of Kenya's 47 counties and will use the new funds to continue scaling its operations in the country.
Zopa, a British peer-to-peer lending company turn neobank, announced that it will acquire DivideBuy's POS technology and lending platform. This is Zopa's first acquisition, aimed to develop its BNPL strategy.
Sending Labs, a startup focused on decentralized communications protocols, raised $12.5M in seed funding from Insignia Venture Partners, MindWorks Capital, Signum Capital, and others, to launch a Web3 communication stack designed to rival Twitter. Currently in beta, the products aim to assist developers in building decentralized social applications and access an encrypted decentralized group chat platform.
Cube Asia, a Singapore-based online retail insights company that aims to provide granular insights for merchants to make more data-driven decisions for pricing, discounts, product assortment, and influencer management, raised $1.5M in a round led by Wavemaker Partners. The funds will be used to scale up technology, product, and data teams to enhance the company's data quality.
Descartes Systems Group Inc, a logistics and supply chain SaaS company, acquired GroundCloud, the creator of a cloud-hosted final-mile automation platform, for $138M. Through the acquisition, Descartes aims to improve its final-mile delivery capabilities.
Terraa, a Moroccan B2B food distribution platform that sources fresh food directly from farmers and delivers it to resellers, raised $1.5M in pre-seed funding in a round led by FoodLabs. The startup aims to bring changes to the fresh food supply chain in Morocco, which they describe as highly fragmented, still traditional, and dominated by intermediaries buying produce from farmers at low prices and selling for huge profits.
Smartrr, a Shopify app for powering subscriptions, raised $10M in a Series A round led by Canvas Ventures, bringing its total amount raised to $17.3M. The company will primarily use the funding towards product development and R&D. (Congrats Shannon!)
What'd I miss?
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See you next Monday,
Paul E. Drecksler
PS: Tough day in the markets. My ice-cream stock took a dip.