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#130 – Shopify’s AI Assistant, T-Commerce, & Puff Daddy

by | Jul 17, 2023 | Recent Newsletters

How much does it cost your company for you to read this newsletter each week? Would you say that the value you gain from keeping up with the latest e-commerce news outweighs the cost? Should we even be looking at the cost of your time through such a micro-lens?

This week I dive into Shopify's new Meeting cost calculator, which embeds into employee calendars and estimates the price tag of any meeting that has three or more people.

I also cover Shopify's new AI Assistant for merchants and t-commerce deal with Roku, Etsy's Make An Offer feature, and Prime Day results. 

Lastly, let's vote on this year's 2023 Outstanding Commercial!

All this and more in this week's 130th Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week 📈

Amazon and eBay have lost a collective 3 million daily mobile shoppers in the U.K. since the beginning of the year to Shein and Temu.

Users spend an average of 18 minutes per day in Temu's app, versus 8 minutes on Amazon, eBay, and Shein. – According to Ecommerce News

Share this week's stat on Twitter & LinkedIn.

1. Shopify's new AI Assistant

Shopify is launching an AI assistant called “Sidekick” to help merchants accomplish tasks on its platform.

Tobias Lütke revealed Sidekick in a video on his Twitter last week, along with a few screen grabs of the AI assistant in action running reports, predicting trends, and updating a Shopify theme. The assistant is embedded as a chat icon that looks like Robin (ie: Batman's assistant) within the Shopify admin area.

Lütke said in the video, “Every entrepreneur has tons of questions. Sidekick will have the answers that are specific to your business. It is built for the purpose of helping you with your entrepreneurial journey.”

In the demo video: 

  • Lütke asks why his snowboard sales are down, and Sidekick replies that it may be because it hasn't snowed as much lately, showing a graph to support its theory.
  • Per Lütke's request, the AI assistant then automatically discounts all his snowboards.
  • Lastly, Lütke asks Sidekick to add his surfboard product catalog to the homepage before finally changing the entire shop design to reflect surfboards, not snowboards, which it does in a flash.

If the actual AI assistant runs as seamlessly as what I saw in the video, it should be a pretty handy tool. However I'm curious where its capabilities will hit limits depending on the Shopify merchant's plan, theme, or app usage.

For example, some Shopify reports are only available to merchants on higher tier plans. Will Sidekick work within the limitations of a merchant's current plan to deliver reports, or try to upsell merchants to the Advanced or Plus pricing tiers? Or will Sidekick only be available to those higher tier plans?

Details like this about the AI Assistant, as well as information on how to get early access, will be revealed soon.

2. T-commerce with Shopify & Roku

Shopify and Roku are partnering up to let viewers buy products from their TV with one click of their remote.

After seeing an ad for a Shopify retailer, Roku viewers can press “OK” on their remote to learn more about the product and purchase it directly from their TV with pre-stored payment and shipping info.

It better be pre-stored! It takes me long enough to enter my password with a Roku remote. Can you imagine how long it'd take to enter my billing and shipping info?

Left, left, left, left, OK. Right, right, down, OK. Right, up, right, right, OK. 

Customers won't have to leave the Roku interface or visit a separate URL to purchase the product. However, the e-mail confirmation will come directly from the Shopify merchant after the transaction has been processed. 

In other words, Roku is merely facilitating the sale through Shopify's API, but the sale is actually taking place on the Shopify merchant's website. Roku isn't serving as a marketplace or 3rd party retailer in this scenario.

The new shopping feature is enabled via Roku Action Ads, which are ads that provide an action such as sending users a text, scanning a QR code, or making a purchase.

Three brands including True Classic, Olly, and Ergatta have signed on as initial partners.

History of this in the making: 

  • In June 2022, I reported an identical feature that Roku pilot tested with Walmart, which connected Roku's 61.3M subscribers (at the time) with Walmart's more than 120k products and allowed viewers to purchase items with their remotes while streaming on Roku devices. The launch must have gone well if Roku is now expanding the shopping feature with other platforms.
  • In Sep 2021, I reported that Roku launched an app in the Shopify Marketplace to allow merchants to create TV ad campaigns.
  • In February 2023, I reported that Roku and DoorDash entered into a multi-year partnership to give DoorDash businesses the ability to buy interactive shoppable ads and place click-to-order offers within the ad.

Through its proprietary TV and streaming interface, Roku is looking to capitalize on its now 71.6M users to not only serve as an advertising medium for brands, but also a shopping facilitator. News of the partnership caused Roku shares to jump 11% on Tuesday. 

Can t-commerce with Roku and Shopify be a runaway success? 

Maybe. Consumers are becoming more comfortable with one-click checkouts, and Roku's technology certainly makes it easy. 

However, Roku needs to be very careful about which products they allow to be advertised and who they allow to advertise.

They need to treat the medium like an exclusive marketplace (even though it's not technically one), not an advertising channel. Otherwise the first bad purchase someone makes or the first product that doesn't come as advertised, will sour the consumer to the medium in general.

A scorned customer won't differentiate one Roku advertiser from another. They will just think to avoid shopping on Roku in the future. 

3. Direct from Video Checkout

Speaking of video checkout, Roku isn't the only one looking to capitalize on the medium. Bold Commerce released a new tool that lets retailers enable checkout directly from a video or e-mail without having to visit a product page — however note that we're talking about video on web devices now (not on TVs). 

The new functionality uses API calls to integrate a shopping link into a pull-down menu while watching a video and offer checkout without ever leaving the video. The initial focus is on YouTube, but the company plans to expand into other video channels in the future — both live and pre-recorded.

Other solutions on the market offer similar functionality, but Bold Commerce CEO Peter Karpas says that the differentiator is the ability to personalize the checkout experience for each shopper, including integration of upsell, cross-sell, BNPL, and BOPIS.

The classic debate between product page shopping vs one-click checkout is whether the merchant values lower purchase abandonment or higher average order value.

In other words — do I want the shopper to purchase THIS ONE PRODUCT as quickly as possible? Or do I want to try to sell the shopper MORE ITEMS in the same transaction?

Bold Commerce is hoping to offer the best of both worlds by integrating those upselling features into their external widget.

It's funny to me how terrified some brands are of shoppers thinking too much before making a purchase.

The old retail sales cycle used to be, “Discover product, express interest, educate, purchase.”

Now it feels like brands are shooting for, “Discover product, BUY! SHUT UP! WE'VE ALREADY GOT YOUR PAYMENT AND SHIPPING INFO! CLICK, TOUCH, OR BREATH HEAVILY ON THIS BUTTON TO PURCHASE!”

At the same time, brands complain about about growing return rates and the high cost of returns on their business. 

As these new ONE-CLICK SHUT UP & BUY methods of purchase evolve, it'll be interesting to see case studies on whether a higher conversion rate on certain channels is dwarfed by a higher rate of returns. 

4. Etsy expands Make An Offer feature

Etsy is expanding its Make an Offer feature to handmade goods sold on its marketplace. 

The optional feature was first introduced earlier this year for vintage goods, and is now being expanded to handmade items. Although the company stresses that the feature is a “work in progress” and not yet available to all sellers.

Etsy listed four reasons why sellers might enable the feature: 

  1. Clear out stale inventory: Need some shelf space? Allowing offers on older items could help you create room for new inventory. 
  2. Encourage shoppers to buy in bulk: Review shoppers’ offers based on the quantity of your items that they’re purchasing.
  3. Make sales you might have missed: We’ve tested this tool with Vintage sellers, and they’ve seen that most accepted offers are purchased in under three hours. Allowing buyers to make offers could help you make the sale quickly!
  4. Test your pricing: Have a unique item that’s hard to price? Find your sweet spot with your shoppers while still setting your maximum discount.

However many Etsy sellers voiced their opposition to the Make an Offer feature on eCommerceBytes comments and Reddit, noting that they aren't interested in openly haggling over prices when selling their art or handmade goods on Etsy.

Sellers also noted that they are still waiting for promised features that would better accomplish Etsy's stated goals such as the ability to offer a specific dollar amount off instead of a percentage off when discounting items.

5. Sean Combs launches a marketplace

What y'all wanna do? Wanna be ballers? Shot-callers? Brawlers?

That's what Sean “Diddy” Combs is asking Black entrepreneurs with the launch of his new e-commerce platform Empower Global (EG). 

EG allows consumers to discover and buy products exclusively created and sold by Black entrepreneurs. 

The platform launched with over 70 brands including Silver & Riley, Actively Black, Scotch Porter, Coco & Breezy, Kultured Misfits, Gwen Beloti Jewelry, Buttah Skin, Marie Hunter Beauty, Pound Cake, B.M. Franklin & Co., Beauty Stat Cosmetics, Cecilia's House, Cise, Cool Creative Clothing, June 79, and Rebecca Allen.

Combs said in a press release, “My mission has always been to empower Black entrepreneurs and create more opportunities for them to access the resources, tools and support needed to build successful businesses. Empower Global will uplift Black entrepreneurs, keep dollars circulating in our community, and make buying Black a lifestyle.”

He added via an Instagram post, “Empower Global represents a solution to all of the things that have held our communities back. Let’s unite, brand by brand, company by company, person by person, customer by customer, and dollar by dollar.”

The platform was designed and built by TechSparq, a Black owned e-commerce design and development company, and supported by ChatDesk, a Black-owned tech company.

Empower Global was first announced by Combs in 2021 and unveiled to the public last week.

I respect the mission and have high hopes for the Empower Global marketplace. Combs is no stranger to fashion and retail, having launched the brand Sean Jean in 1998, which does over $525M in sales annually.

After all… P. Diddy and the fam, who you know do it better?

6. Shopify Meeting Cost Calculator

In January this year, I reported on Shopify's new controversial “no meetings” policy. Effective immediately, the company eliminated all recurring meetings involving more than two people to allow employees more time to work on other tasks.

Other rules included no events scheduled on Wednesday, and large meetings involving more than 50 people could only be held on Thursdays between 11am and 5pm EST, limited to one per week.

Shopify's new stance on meetings made headlines and inspired conversations throughout our industry with leadership teams and employees about their own meeting policies.

Now Shopify's meeting policies are back in the news with the company's latest stunt. 

Last week Shopify embedded a meeting cost calculator into employees' calendar apps that estimates the price tag of any meeting that has three or more people.

The calculator works by factoring in the average compensation across roles and departments, with the amount of people attending, and meeting length.

Shopify found that the average cost of a 30-minute meeting with three employees can run from $700 up to $1,600, and with executives can run up to $2,000 or more.

Shopify sent Fortune an example calendar invite for a one-hour meeting with seven people, including two C-suite execs, which showed an estimated meeting cost of $2,115.

Shopify COO Kaz Nejatian told Bloomberg that “no one at Shopify would expense a $500 dinner,” but “lots and lots of people spend way more than that in meetings without ever making a decision.” And if “time is money,” it should be saved.

Is the no meeting policy working?

Shopify CFO Jeff Hoffmeister shared that: 

  • At the start of 2023, Shopify canceled 12,000 calendar series and events.
  • The average time per person spent in meetings is down 14%.
  • Time spent in meetings on Wednesday is down 26% per person.

What's next? Timers on bathroom stalls that count the average cost per poop?

While I understand the reason for Shopify's new cost calculator and meeting policies, I can't help but wonder if the company is being penny wise and pound foolish by bringing so much attention to the cost of meetings? And do employees even care? 

Frankly, I've never met an employee who's thought to themselves, “How much will this cost my company?” — that's not really their job.

Could putting that type of micro cost-management responsibility on individual employees have an opposite desired effect on creativity and production if employees begin focusing too much on daily / hourly cost versus output? At what point does an employee NOT schedule a meeting that they should have in order to appease their bosses? “Look mommy, no meetings in August!”

Additionally, could that type of in-your-face cost analysis create resentment amongst employees? “I only got a 3% raise last year and they think I care about the cost of this meeting?”

There's a fine line between actively involving employees in company financials and abdicating the responsibility of cost optimization on every staff member. Is Shopify looking for that line? Or have they already crossed it?

Hit reply and let me know your thoughts. (Shopify employees who read this newsletter, your responses are always confidential.) 

7. Amazon Prime Day Results

Amazon revealed that July 11, the first day of its Prime Day sale, was the single largest sales day in its history.

As usual, Amazon didn't provide revenue numbers for the two day event, only noting that Prime Day shoppers saved more than $2.5B worldwide, surpassing previous Prime Days.

Did they though? How exactly are those savings calculated? 

Because I saw way too many posts like this on the Internet last week, showing items for sale on Amazon, where sellers raised their price 100% just to put the item on a “50% off” Prime Day Sale. 

So is that $2.5B savings estimate being calculated off the price of the item during Prime Day? Or off the average price of the item the rest of the year?

Regardless of the actual savings amount, which is an ambiguous and misleading number to put out that no-one can really refute, Adobe Analytics estimated that Prime Day this year helped push U.S. e-commerce up 6% YoY on July 11th and 6.4% on July 12th. Across both days, U.S. online sales rose 6.1% to $12.7B. 

More than half of Prime Day shoppers said they purchased items they'd been holding off on buying until they were on sale, according to research from Numerator, with many stocking up on everyday essential items this year instead of larger ticket luxury items.

Prime Day wasn't as big of a success this year across the Atlantic, where U.K. shoppers spent an estimated £581M the first day, up only 1.3% YoY. The £581M figure included £89.5M spent using BNPL, a jump of 20% on last year. Which could have something to do with what I shared in this week's Stat of the Week…

8. Emmy Nominations 2023

Emmy Nominations for this year's Outstanding Commercial have been announced — and Apple absolutely crushed it with four out of the seven nominations.

Below are all seven nominations: 

  1. Forever | The Farmer's Dog – celebrates the full, healthy, and happy lives the company wants everyone to experience with their dogs. 
  2. Quiet The Noise | Apple – an ad for Apple's AirPods Pro, which offer more active noise cancellation than previous generations. 
  3. Cost of Beauty | Dove – demonstrates the harm that social media has on the mental health of kids and teenagers to support legislative change. (Warning: tear jerker)
  4. The Greatest | Apple – showcases innovative accessibility features from Apple like door detection, sound recognition, and voice control, to demonstrate how inclusive the company is with their development.
  5. R.I.P. Leon | Apple – advertising the unsend and edit features of the iPhone 14 with a Lizard-sitting friend who sends bad news too soon.
  6. Call Me with Timothée Chalamet | Apple – a story about how Timothée Chalamet wants in on Apple TV+, which the company says has almost all the biggest stars in Hollywood. 
  7. The Singularity | Squarespace – the commercial with Adam Driver where he discovers that Squarespace is a website that makes websites. 

The Emmy's have recognized TV commercials in the category annually since 1997. The winner will be announced in September. 

Which commercial do you vote as the winner? Vote in my LinkedIn Poll.

9. Other e-commerce news of interest

Reddit is sunsetting its coins and awards features in September, which were offered as a premium way for users to award other users for posting valuable content and comments. In typical Reddit fashion, the company did not announce what would be replacing the coins and awards, other than to say that a new direction for awarding will be shared in the coming months. However, APK notes reveal that Reddit will be adding a tipping feature for U.S. users.


Dukaan, a Bangalore-based enterprise e-commerce platform, laid off 90% of its support staff and replaced with with an AI chatbot, while simultaneously launching a service to let other companies do the same. The company claims that their response time went from 1:45 to instant, and resolution time went from over 2 hours to 3 minutes. It would be objectively funny if the AI bot was simply marking open tickets as “resolved” after a few minutes, and no-one ever checked!


Federal prosecutors put some blame on Amazon's practice not to share with sellers the reason behind their account suspensions, as to what had led some consultants to bribe Amazon employees to obtain the internal annotations used to get clients reinstated. The defendant in the bribery case claimed that Amazon employees had been advertising internal annotations for sale in a “sort of black market.”


The Shopify Australian Retail Report revealed that 78% of Australian consumers prioritize value for money when shopping and are almost twice as likely to be stressed out about higher prices of groceries and essentials than they are about the cost of housing. 93% of Australians say their priorities have changed over the past 3 years.


Levi's long-awaited 575k square foot fulfillment center in Northern Kentucky is now open for business. The facility, which cost approximately $48M to upgrade, will create around 300 jobs and is expected to bring all of Levi's U.S. e-commerce business under its own roof.


Dealshare, a New Delhi-based e-commerce platform, appointed Saurabh Kishore as its Chief Technology Officer, where he will lead the company's technology initiatives with a focus on driving innovation and enhancing the company's infrastructure. Kishore brings over 20 years of experience with global and national brands and leading retail and e-commerce companies including Target, Tata Cliq, and IBO.


In 2022, Europe's top six e-commerce markets generated 72% of online spend in the region including the U.K. (28%), Germany (18%), France (10%), Italy (6%), Spain (5%), and the Netherlands (5%). While the U.K. and Netherlands have returned to their pre-pandemic growth trends, the other three countries are still growing above trend. 


Lululemon laid off 100 employees from its Lululemon Studio business, an online platform that offers expert-led fitness classes to streaming devices. As part of its strategy shift toward digital content, the company will be fully integrating the studio into Lululemon, with many employees offered ongoing roles in social media, talent acquisition, and content strategy. 


Madison Reed, a U.S.-based brand of hair care and hair color products, appointed Angela Jaskolski as their first chief revenue officer where she will lead the company's hair color bar business and e-commerce revenue operations. Jaskolski joins the brand as it continues to expand into omnichannel platforms and create wholesale partnerships with Ulta Beauty and Amazon.


GoLogiq, a U.S.-based provider of fintech and consumer data analytics, appointed company director Granger Whitelaw as their new CEO. Granger succeeds interim CEO Brent Suen who will remain chairman of the board. 


Amazon Stores CEO Doug Herrington wrote in a blog post last week that, “Launching Amazon Prime and independent sellers on Amazon were big bets that a lot of people didn’t understand at first. It’s the same thinking that we’re bringing to one of our latest big ideas, one that I’m incredibly excited about: Buy with Prime.” To further push the new sales channel, Amazon highlighted Buy with Prime deals through a blog post on their website last week.


JD.com unveiled a large language model for enterprise use, joining domestic peers like Alibaba in the race to develop generative AI applications. The service, called ChatRhino, will first roll out for JD's own use in e-commerce, logistics, and marketing, before extending to enterprise clients in the first half of 2024.


Nine of the top ten retailers in the U.S. have joined Meta's new Threads app including Macy's, Kroger, Nordstrom, Target, and Walmart, with the notable exception of Costco. Retailers are flocking towards Threads as a safe space to reach a younger audience after the exodus of advertisers from Twitter in the past 12 months.


Speaking of Threads, the social app topped 100M users last week and now boasts one-fifth the weekly active user base of Twitter worldwide and 86 times the weekly active user base of Truth Social, the largest Twitter rival in the U.S. That's impressive, but let's see how those numbers hold up in a few months after Threads is no longer the new shiny object in social media.


Meta updated its policies on cannabis-related products with a new title for the category and updated rules around how CBD advertisers need to conduct their promotions on the platform. Advertisers of certain CBD products will also no longer need specific permission to run ads. 


Sav, a UAE-based fintech app, launched its new Save Now, Buy Later feature, which aims to highlight the importance of disciplined savings and promote a savings-focused approach to big-ticket purchases rather than relying on credit. It's a bit silly to need a specific app for that, but I support whatever it takes to get consumers off debt. 


Amazon filed a lawsuit in the European General Court, claiming that it is being targeted because of its size outside the region. Under the EU's new Digital Services Act, Amazon is classified as one of 19 “very large online platforms” or VLOPS, which are now subject to tougher content rules for having over 45M users, but Amazon contests that over 70% of its profits came from North America last year and said, “we are not the largest retailer in any of the EU countries where we operate.”


A group of congressional Democrats reported that three large tax preparation firms sent “extraordinarily sensitive” information on tens of millions of taxpayers to Meta over the last two years to create targeted advertising to its own users. The report urges federal agencies to investigate H&R Block, TaxAct, and TaxSlayer over the companies' “shocking breach of taxpayer privacy”.


Dollar General rolled out a new cash rewards program that allows customers to earn cash back in their DG Wallets on eligible purchases. Customers can sign up for the new cash back program on their website or app, and then add available offers on the Deals page of their profile, which they can then redeem rewards for future in-store purchases.

I shopped at a Dollar General the other day and their discount program is annoying. First you have to download the app, clip a digital coupon, and scan each individual coupon at the register in order to get the discounted price shown on product tags in the store. I understand wanting customers to download the app, but this one-off coupon clipping system needs a revamp, and the new cashback program sounds just as cumbersome. I shop at Dollar General for their low prices, not so that I can trade my time for discounts. 


TikTok is experimenting with a new way to integrate shopping into the app via a Shop tab adjacent to the Following and For You tabs. The new Shop tab, which is side swipeable from the main screen, displays the home screen of TikTok Shop, which looks similar to the homepage of Amazon or Temu. They should experiment with displaying UGC following popular shopping hashtags instead, or content that showcases products in TikTok Shop. Maybe that's on the horizon.


Flipkart commenced a $700M one-time discretionary cash payout to employees, marking the single largest compensation of its kind in the Indian startup ecosystem. The company is compensating employees for the separation of PhonePe from the group, which devalued Flipkart's shares. 


Albertsons and Meta announced a partnership with mobile ad solutions provider Kargo to pilot interactive advertisements on Meta's platforms, offering deals at local stores that consumers can clip digitally. Albertsons intends to add similar capabilities for connected TVs to make its campaigns more effective on a local level. 

10. Seed rounds, IPOs, & acquisitions

Pantastic Apps, an e-commerce app developer that serves independent brands with tools to scale, acquired Refersion, an affiliate marketing app for Shopify, The acquisition expands Pantastic's ability to help indie e-commerce brands scale their businesses.


Dale Ventures, a Dubai-based venture capital and investment holding group, acquired Arcadier, a Singapore-based e-commerce platform that services enterprise brands, for an undisclosed amount. Through the acquisition, Dale Ventures aims to accelerate Arcadier's growth. 


Orderfaz, an Indonesian-based social selling platform that offers a browser plugin to streamline purchasing, raised an undisclosed amount from 1982 Ventures. The startup launched earlier this year and has since attracted 600+ signups. It will use the funds to hire talent and drive market expansion. 


Swiggy, a Bengaluru-headquartered food delivery giant, acquired LYNK, a retail logistics startup with a network of over 100k stores, for an undisclosed amount. The acquisition will help Swiggy expand into the retail distribution market, serving store operators.

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See you next Monday,

PAUL

Paul E. Drecksler
www.shopifreaks.com
[email protected]
LinkedIn | Reddit

PS: A scammer called my grandma and said he had all her passwords. She grabbed a pen and paper and said, “Thank God! What are they?”

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