#143 – Prime Day results, Carbon Emissions, & Tampon Taxes

by Shopifreaks | Oct 16, 2023 | Recent Newsletters

What's the earliest that a retailer can start running holiday promotions? The consensus seems to be — October (for now).

Customers have gotten used to holiday deals starting early, and some (around 24%) started shopping as early as September! (See story #2.)

This week I report on the results of Amazon's second Prime Day event of the year which happened last week.

I also cover Walmart's push into generative AI, Mozilla's attempt at tackling fake product reviews, carbon emissions, and tampon taxes.

All this and more in this week's 143rd Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week 📈

63% of Europe's €265B cross-border e-commerce market was generated by marketplaces, for a total of €167B. Amazon and eBay accounted for nearly half of that with a combined €78.3B in GMV. – According to Ecommerce News EU

Share this week's stat on X & LinkedIn.

1. October Prime Day results

Amazon may have gotten hit with a major lawsuit by the FTC two weeks ago, but that didn't stop the company from having a stellar October Prime Day event last week.

Amazon, who is notoriously ambiguous about their sales figures, only reported that this year's October Prime Day (the second Prime Day event they've ever held in October) “outpaced last year's” but fell short of July's Prime Day record-breaking $13B in sales.

The company also noted that customers ordered more than 150M items from third-party sellers, up from about 100M items in 2022.

Data firm Numerator surveyed 3,000 US shoppers for an early read on the Prime Day sale numbers, which revealed:

The average order value was $55.86, slightly lower than that of July.
The average household spent $108.86 during the two day sale.
48% of households bought two or more items.
6% of consumers placed more than five orders within the first 30 hours.
22% of items purchased were under $20.
17% of items purchased were under $100.
More than half checked competing retailers for better prices, indicating that consumers are getting much smarter at detecting false discounts (ie: retailers showing significant markdowns on inflated prices).
Marketplace software company CommerceIQ tracked a 4.5X increase in orders, compared to the daily average.

Forbes pointed out that the real winner in this year's Prime Day Event was Amazon's Buy With Prime program, which allows customers to place orders on brand's websites and still get Prime benefits like fast & free shipping.

Last year the brand iHealth, for example, sent traffic from their Prime Day promotional e-mail directly to their Amazon.com listings. This year, the company promoted both their Amazon store deals and Buy With Prime deals.

Toy brand OSMO did the same, but went a step further to educate their customers on how to use Buy With Prime on their website. (You and I are e-commerce nerds, so we get it. But the rest of the world needs a learning curve.)

Amazon wasn't the only retailer to have a momentous sales event last week…

Every year India's “festive season”, which begins with Ganesh Chaturthi (Sep 19), continues through Diwali (Nov 12), and ends with the New Year, is an exciting time for consumerism in the country.

Online retailers in India, including Amazon and Walmart-owned Flipkart, reported a surge in early sales this year and are looking forward to a potentially record breaking season.

RedSeer, a Bangalore-based firm that monitors over 100 platforms covering 90% of online sales, predicts that online shoppers will spend a record $11B during the month to mid-November, which would be nearly 20% more than last year.

Amazon and Flipkart have hired over 200k temporary workers and 300k new sellers to meet the demand.

2. When do consumers start holiday shopping?

A recent Shopify-Gallup survey (performed Sep 1-14) asked 1,761 US shoppers when they plan to start holiday shopping this year.

The results revealed that:

14% already started
10% planned to start that month in September
17% in October
39% in November
20% in December

It'd be interesting if Shopify followed up with those same survey takers after the holiday season and asked, “So you mentioned back in September that you planned on starting holiday shopping in October. When did you actually start holiday shopping?”

I bet that December percentage grows substantially when reporting when consumers actually shopped versus when they planned on shopping in September!

The survey also found that:

48% of young shoppers (ages 18-29) say they would definitely or probably start shopping earlier if retailers offered deals earlier.
80% of shoppers 65 and older said if retailers start their sales and promotions earlier they will not change when they start shopping.
37% of Gen Z shoppers plan to spend more than last year, nearly double the average across all age groups.
48% of young shoppers said they'll buy at least some gifts through social media, compared to one-third of all U.S. holiday shoppers.
23% of shoppers rank shopping with small and local businesses the top reason they choose one retailer over another.

When are you starting your holiday shopping this year? Or have you already begun? Hit reply and let me know.

3. Walmart isn't discounting AI

Walmart is continuing to dive deeper into generative AI throughout its company. Dan Berthiaume of Chain Store Age dove deep into recent features and enhancements, which I'll recap below.

#1) Walmart is now testing several generative AI-based search and shopping solutions with the hopes of:

enhancing its search experience to better understand context
enabling customers to search by specific use cases
generating more relevant results that allow customers to save time

For example, customers could search “Paw Patrol themed birthday party for 3 year old” instead of conducting multiple separate searches for Paw Patrol plates, streamers, and hats.

#2) Walmart is developing generative AI tools to assist customers with complex purchases such as:

selecting an age-appropriate cell phone compatible with their current wireless provider.
creating tools that highlight priority product features and condense reviews into concise summaries. (Amazon recently did something similar. See Story #5 from Edition 134.)

#3) New AI tools that integrate into its AR-based View In Your Home and Virtual Try-On features:

Customers can share their budget, theme and other preferences to receive personalized assistance in designing a room. (Walmart's like, “Here we've sold these same two floor lamps for the past decade. Pick one.”)

#4) Walmart is piloting hands-free voice shopping.

Building onto the text-to-shop option it released in Dec 2022, Walmart is testing a voice experience in its mobile app that allows customers to shop by speech.

#5) Walmart is also leveraging AI across its operations.

Walmart unveiled a plan for its connected and automated supply chain. It claims that over half of its fulfillment centers could be automated within three years.
Walmart utilizes applied AI to identify when an item purchased online can be fulfilled from one of its stores instead of a fulfillment center to reduce the number of miles driven and number of boxes used for shipping.

4. Firefox fights fake reviews

Mozilla is about to introduce a Review Checker feature in its Firefox web browser to help users identify fake reviews on e-commerce sites like Amazon, Flipkart, and Walmart.

The feature is powered by Fakespot, a startup that Mozilla acquired earlier this year.

Although Mozilla acquired the company and is integrating the service into its browser, Fakespot will still be available on other browsers via extensions.

Here's how it works:

Review Checker uses machine learning and AI (doesn't everyone?) to identify and eliminate unreliable reviews from e-commerce websites.
Users will be able to access the feature through a price tag icon in the browser's URL bar, which will bring up a sidebar with details about the product and a grade for the product's reviews.
The grading system is from A to F, with A representing the most trustworthy.
It'll also display an adjusted rating out of five stars with unreliable reviews removed.
The feature uses Oblivious HTTP, which prevents Mozilla from linking the user to the device they are using and the products they have viewed.

Mozilla has already started testing the feature in the US and is planning for a mass rollout on Nov 21 with Firefox 120 for desktop and Android.

Do you know what reviews aren't fake? Shopifreaks! If you've been getting value from this newsletter, please take a moment to leave me a Google Review.

5. 1-800 Got You Something Nice

1-800-Flowers.com introduced a new corporate gifting platform called SmartGift for Business to help customers manage corporate gifting programs, automate sends, and create a recipient feedback loop to measure success. The platform offers:

Gift Link – allows organizations to share gifts with any number of people simultaneously through integrations with Slack, Microsoft Teams, Google Meets, Zoom, Google Calendar, Gmail, Outlook, Webex, and LinkedIn
Customization Options – for tailoring messages to each recipient and preparing gift campaigns in advance. “THANK YOU NAME!”
Gift Personalization – to include messages, names, or logos on gifts.
Automation – the platform can connect to CRM and HR platforms to create instructions, such as sending a gift to every employee or client on their work anniversary or birthday
Gift Collections – allowing customers to select their preferred item from a variety of curated gift options
Delivery Preferences – enable recipients to choose where to receive their gifts

1-800-Flowers.com debuted a corporate gifting site in Nov 2020 and purchased the SmartGift platform in May 2023.

It seems nice, but at the same time, automating gift giving loses some of its charm. I'd be thrilled if a client took the time and effort to purchase a thoughtful gift for my birthday.

I'd be grateful, but less impressed, if they shoved my birthday and e-mail address into a database, and I got an automated e-mail telling me to choose my preferred item. I'd probably think the e-mail was spam and not even open it!

6. E-commerce Conferences 2024

Several major conferences have released the dates of their events for 2024, which Retail Dive did a roundup of, and I will recap below. Spoiler alert: most of them are Shoptalk. LOL.

eTail (Feb 26 – 29 in Palm Springs, CA) – launched in 1999, they now run nine conferences worldwide as the place where “top minds in retail meet, collaborate, and learn about what's disrupting the industry today.”
Shoptalk (Mar 17 – 20 in Las Vegas, NV) – connecting more than 10,000 executives, Shoptalk is “where retail technology and innovation intersect”. The event is known for its main stage spotlight talks and multi-track session options.
Shoptalk Europe (June 3 – 5 in Barcelona, Spain) – more than 3,500 attendees are expected to join the Europe event, which will also feature meetups onsite with over 20,000 meetings.
Shoptalk Fall (Oct 16 -18 in Chicago, IL) – for the first time the group is hosting a fall conference so “you won't have to wait another year to be part of the conversations that help you set the course of your business.”
Shoptalk Meetup for Women (TBD) – a virtual experience that brings together more than 1,000 women leaders across multiple retail categories for three days to develop potential partnerships.
Retail Innovation Conference & Expo (June 4 – 6, Chicago, IL) – featuring cutting-edge technology, speakers, and networking opportunities.
CommerceNext (TBD) – calls itself the largest global e-commerce events portfolio. It also hosts virtual and in-person events year round.

What other e-commerce events would you include on that list (including your own if you host one)? Hit reply to this e-mail or leave a comment on my LinkedIn post.

7. Carbon emissions matter

Amazon, Walmart, Apple, and other major retailers are facing growing demand from consumers, investors, and regulatory boards to reduce carbon emissions. And they are putting pressure on their suppliers and sellers to shape up or ship out!

Starting in 2024, Amazon will require suppliers to share their emissions data, set emissions goals, and report on their progress, joining Microsoft, Walmart, and Apple in saying that suppliers must step up decarbonization efforts.

Businesses typically track three levels of emissions:

Scope 1 come directly from operations.
Scope 2 are from purchased energy such as electricity.
Scope 3 come from indirect sources such as supplier emissions and emissions from customers using their products.

An analysis of major industries by the non-profit CDP found that, on average, scope 3 accounts for about 75% of all emissions.

What are companies doing?

Salesforce requires suppliers to disclose scope 1, 2, and 3 emissions, deliver products and services on a carbon-neutral basis, and fill out a supply scorecard each year.
AstraZeneca suppliers are expected to annually report emissions data to the CDP and set science-based goals.

Amazon doesn’t include suppliers in its scope 3 accounting, but will force suppliers to report emissions to them and set goals which emissions levels can then be tracked against.

Amazon wrote in a sustainability report, “We know that to further drive down emissions, we must ensure those in our supply chain make the operational changes necessary to decarbonize their businesses.”

But who's actually checking? Is Amazon (or anyone) confirming the information from the self-reported data? Or can companies simply write anything that sounds realistic and adheres to a retailer's guidelines?

Small and medium sized companies care, but can't keep up:

80% say reducing emissions is a high priority
63% say they don't have the right skills
43% say they lack the funds

Times are changing:

Ever since the Paris Agreement of 2015, the climate message towards global brands has centered around “cutting, slashing, reducing, and driving down” emissions, but now the word “remove” is entering the conversation.

Antti Vihavainen, chief executive of Puro.earth, explained to Reuters, “If you plant a forest, it captures CO2 but the storage is still in the biosphere, so it’s not locked away. If there's a wildfire or pests that destroy the forest, everything's back in the atmosphere. What we wanted to do is find processes and activities where the CO2 is locked away for certain, where the risk of reversal is very low.”

The difference between “cutting”, “reducing”, and “removing” carbon emissions further adds to the confusion around creating sustainable business practices, especially for small businesses that simply want to do their part, but don't know how.

8. Get your tampon tax refund

Eight companies have partnered together to bring awareness to and hopefully end the “tampon tax” — a tax on period products that still exists in 21 states.

The Tampon Tax Back Coalition is made up of August, The Honey Pot, Rael, Lola, Cora, Diva, Here We Flo, and Saalt, which are all women-owned companies that sell products like pads, tampons, period cups, and underwear.

If you purchase period products from any of these companies or from certain retailers that carry them, you can submit your receipts on tampontaxback.com within 10 days of purchase and receive a reimbursement for the tax you paid within 48 hours via Venmo.

There are some restrictions though:

You need a Venmo account
Amazon purchases do not qualify
If you live in one of seven states where retailers are prohibited from “absorbing” sales taxes on behalf of customers, you'll need to make your purchases from Target or Walmart rather than from the brand's website.

Why is this necessary?

Many states do not tax products considered to be medically necessary but do tax period products, coding them as nonessential, even though most reasonable people would agree that they are quite essential to women. The coalition aims to bring attention to this fact and abolish the tampon tax in remaining states.

I don't imagine that the eight companies will actually end up paying out that much money in refunds. Realistically, their higher net worth customers are less economically impacted by the sales tax and less likely to take the time to submit receipts online for a refund. But if their campaign is a success in any of the 21 states, the removal of tax on period products would benefit customers of all income levels, including lower-income customers who probably don't buy their product.

9. Other e-commerce news of interest

Ulta Beauty's UB Media network, which launched in May 2022 to offer its brand partners advertising to its Ultamate Rewards members, is expanding the reach of its retail network and providing more insight into ad performance on Meta platforms. By bringing data from Ultamate Rewards into Meta's measurement environment, Ulta can prove that purchases happened after seeing an ad on Facebook or Instagram. To which Apple commented, “But, but, but!

Best Buy will soon quit selling all physical media such as DVDs, Blue-rays, and 4K Ultra HD formats, following in the footsteps of Netflix, which recently ended its 25-year DVD delivery service. However it will continue to sell video games for the time being. When it comes to selling physical media, this leaves Walmart (with over 45% market share), Target, Amazon, and Redbox for rentals.

The same celebrities who previously shilled crypto and NFTs (including FTX) are now turning themselves into Facebook's AI chatbots including Tom Brady, Naomi Osaka, Snoop Dogg, Paris Hilton, Kendall Jenner, MrBeast, Charli D'AMelio, and LaurDIY. Futurism wrote, “The shameful ‘crypto to AI pipeline' is hitting a fever pitch, with stars ditching web3 in favor of the latest cash grab.”

Grocery e-commerce sales dropped 3.1% YoY in September to $7.5B, primarily due to a decline in order frequency during the month, according to Brick Meets Click and Mercatus. This marks the lowest order rate since the start of the pandemic.

Jeff Bezos bought a $79M Mediterranean home on the Biscayne Bay community known as “Billionaire Bunker” island, next to the $68M property he bought two months ago. The island has just 40 homes, all waterfront, as well as its own municipality including mayor, police force, private golf course, and docks where billionaires can anchor their yachts.

Ad buyers have discovered that large chunks of impressions (like up to 80%) spent on Google's Performance Max campaigns are ending up in less desirable places like on open web inventory and branded search terms. Google told Adweek that, “Performance Max optimizes for advertisers value based on their goals, not a specific percentage of inventory per channel.”

Over 1,000 Amazon workers at a warehouse in Coventry, England announced a four-day strike overlapping with Black Friday, as the latest escalation in their dispute over pay with the company. In response to a request for comment from Reuters, Amazon UK Country Manager John Boumphrey said the company offered competitive wages and benefits. At this point, Amazon just doesn't care. There's been an employee strike or walkout on Black Friday every year I can remember in recent history, and it's always resulted in business as usual for the company.

Shein named investor Marcelo Claure its group vice chairman, who formerly served as chairman of Shein Latin America where he oversaw the launch of Shein Marketplace in Brazil and the $150M initiative to localize Shein's manufacturing operations. Claure's role will “help accelerate strategic growth initiatives” across the company's international markets.

Alexandra Clark has returned to Shopify in a new role as Shopify's top communications executive after a leave of absence, replacing Erin Pelton who left the company a year ago. Clark previously served as VP of Strategic Initiatives, Chief of Staff to the CEO, and Director of Policy and Government Affairs at Shopify.

Walgreens appointed Tim Wentworth, who formerly served as CEO of the nation's largest pharmacy benefits management company, Express Scripts, as its new CEO beginning Oct 23. Walgreens board was intent on hiring an exec with deep health experience who could spearhead its ambitions of becoming a provider of health services beyond the pharmacy counter.

Cloudflare, Google, and Amazon were hit with the largest DDoS attack in history as a result of a newly uncovered zero-day HTTP/2 vulnerability. HTTP/2 speeds up page loading by allowing multiple simultaneous requests to a website over a single connection, which allowed the attackers to send hundreds of thousands of requests at once, overwhelming servers and taking them offline.

WooCommerce partnered with Veem, a global payments provider, to extend their B2B payment capabilities on the platform. The partnership allows businesses to integrate domestic and international payment collections into their checkout flow without incurring any interchange fees.

Last month I reported that eBay informed sellers that it will begin charging them for UPS and FedEx shipping labels at the time of printing instead of after delivery, like they have with USPS for quite some time. The company has since “paused the feature” (ie: never implemented), but forgot to inform sellers, who were confused that they were still receiving shipping charges weeks after purchasing labels.

Bpost, Belgian's postal company, is planning on charging online sellers an extra euro to send packages during the holiday season, which it says is to compensate for additional costs during the busy period. Small businesses are expected to be hit hardest by the change, as bigger online stores can negotiate deals with Bpost and other suppliers to lower prices.

Amazon Vine, a program that allows brands to provide products for review, is introducing new lower-priced tiers, including a free-tier that allows up to 2 units per parent ASIN to get up to 2 reviews for free. This is followed by the other new $75 tier that allows up to 10 units and 10 reviews.

Flexport laid off 20% of its workforce, around 600 employees, last week, marking the second time this year that the company has laid off 20% of its workforce. On the same day, CEO Ryan Petersen, who took the reins a month ago, overhauled his top management team, leaning on several veteran managers as well as a couple new hires from Amazon who have taken on expanded roles.

Shopify released its POS Terminal hardware, which connects to its countertop POS kit, in time for the holiday season. The device's buyer facing display guides customers from payment and PIN entry to receipt selection and e-mail capture.

X users are reporting a new ad format that can't be liked, shared, blocked, or reported. The ad type has no associated account to identify who the advertiser is and no “ad” label to identify that what they're seeing is an advertisement. Sounds super legal.

Meta is updating the capabilities of Reels to improve the performance of ads. 1) Collection ads, which consist of one large video or image alongside smaller images, is available on IG and being tested on FB. 2) Multi-destination Reels carousel ads allow brands to direct customers to multiple product pages. And 3) Swipe left functionality enables people to swipe to find out more about a product. (I thought left swipe meant I don't like it?)

Apple is opening its online store in Chile today, providing customers in the country with a way to purchase iPhones, Macs, iPads, and more directly from Apple. The site will also offer shopping assistance from Apple Specialist, a trade-in program for iPhones sales, free one-on-one online training sessions, build-to-order Mac options, and multiple payment options including financing.

Uber Eats introduced a multi-store ordering feature, which lets customers purchase food from two different merchants at the same time without having to pay additional delivery fees. I bet drivers love that. Twice the work for the same pay! Previously customers could only bundle items from convenience stores as a checkout upsell, but now bundling from another restaurant or store is built into the ordering process itself. In April 2022 I reported a similar feature by DoorDash.

Pitney Bowes extended its relationship with Ambi Robotics to automate middle-mile sorting tasks. The firm has deployed AmbiSort B-Series solution at U.S. coastal e-commerce hubs ahead of the 2023 peak holiday season to speed parcel sortation and improve productivity and accuracy. Last week I reported that the company is evaluating if it should sell off its global e-commerce business unit.

Klarna launched a new AI-driven shopping feature developed by OpenAI tech that allows customers to shop by taking a photo of products they like. The feature can identify more than 10M items including clothes, home decor, and electronics, and compare prices, retailers, and reviews. Google Lens and Pinterest Lens have offered similar features for quite some time.

Mobile users globally are expected to spend 50 billion hours this year within Android shopping apps, representing a 42% increase since 2020, according to findings from Data.ai. The apps with the most time spent include Shein, AliExpress, Temu, Wildberries, and Flipkart.

81% of marketers believe that user generated content resonates more with customers than either professionally shot photos or influencer content. A majority also agree that visual UGC minimizes costs compared to using professional photography or influencer content. Coincidentally I was just talking on LinkedIn about how I've historically used UGC on my travel brand.

10. Seed rounds, IPOs, & acquisitions

Block acquired HIFI, a platform that provides financial products for musicians. Block is also the majority stakeholder in the music streaming platform TIDAL, which it bought in March 2021 for $297M in cash and stock.

Blue Yonder, an Arizona-based supply chain solutions provider, agreed to acquire Doddle, a British first and last mile delivery company. The deal will allow Blue Yonder to expand into final mile, returns management, and reverse logistics solutions.

MarketLeap, a Luxembourg-based firm that helps brands sell on marketplaces across more than 30 countries, raised €1.5M in a round led by Notion Capital, Kima Ventures, and Motier Ventures, bringing its total amount raised to €2.6M. The funds will be used to accelerate the startups operating system's technical development, including adding new service offerings and facilitating expansion into the US while scaling UK operations.

Ergo, a Shopify app that gives e-commerce merchants an easy way to clear out inventory by allowing customers to negotiate the purchase price of items, raised $1.5M in a pre-seed funding round led by Anthemis and Wischoff Ventures. The company will use the funds to make additional hires and expand the product pipeline, which will include an app for stores on other platforms.

Lanch, a platform that teams up with influencers and creators to launch ad hoc food delivery brands, raised $6.9M in a Series A round led by Felix Capital and HV Capital. Lanch kicked off with 70 restaurants for a pizza brand called Happy Slice, and plans to ramp up to 100 for its Loco Chicken concept.

Freepik, a Spain-based platform that provides images, graphics, and other media for designers and creatives, acquired Talenthouse, the firm that owns EyeEm, a Berlin-based photo marketplace that was once thought of as a possible challenger for Instagram in Europe, for an undisclosed amount. The companies will integrate EyeEm's existing photo library of 160M images into Freepik's platform.

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See you next Monday,

PAUL

Paul E. Drecksler
www.shopifreaks.com
[email protected]
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PS: Why was the broom late for work? It over-swept.