The Internet’s #1 Rated E-commerce News Curation

#69 – Shopify Audiences, Amazon kills Selz, & Alexa Cashback

by | May 16, 2022 | Recent Newsletters

What if I told you that you had 60 days to rebuild your store on a different e-commerce platform? Could you pull it off?

Would you allow your competitors to build a look-alike audience based on your customers if you could do the same to theirs?

If Alexa made it easier for you to redeem cash-back offers, would that affect your shopping behavior?

Why would Amazon and Walmart join the open network that India is launching to defeat them?

All this and more in this week's 69th Edition of the Shopifreaks newsletter. Thanks for being a subscriber. 

Stat of the Week

51% of Indian consumers look for country of origin on products before shopping online, up from 37% in 2020. — According to Business Standard. –> [RETWEET IT

Do YOU look at country of origin on products before making a purchase?

Take the Twitter poll:

1. Shopify Audiences

Shopify has unveiled a new tool called Shopify Audiences, aimed at making it easier for merchants to find customers in a post-iOS 14 world. Ever since Apple's privacy changes, it's been difficult for individual brands to collect conversion data to improve their ad spend, but now Shopify hopes to use its collective prowess to help with that effort. 

Shopify Audiences lets brands choose products in their catalogs that they want to put in front of shoppers that are more likely to make a purchase, and then using machine learning, the Audiences tool creates a lookalike audience for that product that can then be deployed on advertising platforms.

Currently Audiences is available on Facebook and Instagram, but will soon expand to TikTok, Snap, Pinterest, Microsoft Advertising and Criteo.

However before you go opening your Shopify Dashboard looking for this new Audiences tool, you should note that it's only available to Shopify Plus members. Shopify has actually been beta testing Audiences with select merchants since 2021 and are now rolling it out to all Plus merchants. 

One big question you might be asking right now is, “Where does the customer data come from?” 

In different words, is Shopify using shopping behavior data from ALL of its merchants to create an Audience that benefits a select few (particularly their highest paying merchants on Shopify Plus)?

Kaz Nejatian, VP of product at Shopify, said, “Broadly speaking, the algorithm looks at buyer behavior in a privacy aware way and product information. Shopify Audiences leverages our unique perspective on purchase intent from supporting merchants and their buyers. Shopify Audiences will only use the data of merchants who opt in, and those merchants are able to opt out at any time within their Shopify admin.”

That answer leaves a lot to be desired in terms of data transparency. It makes me question which data points are “opt-innable” versus fair game for the company to use. For example, maybe directly identifiable information like customer e-mail and phone number are off the table, but what about broad demographic info like customer location, age group, product category, AOV, etc? That data also has significant value when collected in mass. 

Audiences feels a bit like a double-edged sword. On one hand, by opting in to have my store's data included in Audiences, I'm potentially helping competitors create lookalike audiences of my customers. On the other hand, I'd be doing the same with their customers.

To be fair though, this is essentially the basis of Facebook's advertising model. At least with Shopify, it'd be opt-in. 

Although there are some questions that still need answering about Audiences, and the product will inevitably need some fine tuning, I do feel that it's an inevitable and necessary way for Shopify to help their merchants compete against Amazon and the growing internal marketplaces of the social networks themselves.

What are your thoughts? Hit reply to this e-mail and let me know. 

2. Amazon is shutting down Selz

In January 2021, Amazon acquired the Sydney-based e-commerce platform, Selz, to compete against Shopify.

Sixteen months later, the company announced that they are shutting it down in order to focus on their new Buy with Prime service, which I reported on a few weeks ago. 

The company will give a 60-day notice to merchants on the platform and waive monthly and annual service fees. Amazon also said Selz employees would now be working with merchants that transitioned to Buy with Prime.

The move is understandable. There's no reason to operate a separately branded e-commerce platform when Buy with Prime fits better into their model. Plus, it takes Amazon out of the low-margin high-customer support business of hosting and developing an entire e-commerce platform and further towards the merchant processing and fulfillment end of the business which they excel at. 

There's little reason to run a direct Shopify competitor given the amount of headless commerce options out there today. Not to mention the fact that Amazon AWS already hosts more than half of those headless SaaS products, so they're getting a piece of the pie no matter what. 

However the timeframe is rough. 60 days notice is NOT a sufficient amount of time for a store to transition to a new platform — especially small businesses which typically outsource their IT and web development needs.

Thanks for waiving the monthly fee, but it's a drop in the hat compared to what it takes to redevelop an e-commerce website on a new platform. If I were a Selz merchant, I'd be pissed. Lawsuit pissed? It wouldn't surprise me.

To mitigate the uproar, it'd behoove Amazon to extend the deadline until March 2023 to allow Selz merchants to complete their 2022 back to school and holiday shopping seasons without having to rush-switch to a new platform. Nine months to plan and redeploy to a new e-commerce platform is not too much to ask from the world's largest e-commerce company. 

3. Advertising is what matters most for e-commerce

Two weeks ago I reported on WPP launching their own e-commerce platform, which I think is a brilliant way to keep their clients within their own ecosystem.

E-commerce tech has become a commodity, but advertising is a much more coveted element of the business — and every company wants a piece of it (as further indicated by Shopify Audiences). Which makes sense, as the margins are much higher. Gross margins for ads sold on a retailer's own website are at least 70%, versus retail margins of 19% to 38%.

Plus the industry is growing at record pace. Boston Consulting Group has estimated that e-commerce advertising will grow to $100B by 2026, representing 25% of total digital-media spending.

Even Apple is doubling down on its advertising leg. The company’s only source of advertising, App Store Search Ads, saw 238% growth in 2021, to reach $3.7B, and is projected to reach $5.5B by the end of 2022.

Recently Business Insider identified 10 firms that are helping retailers build ad businesses. I'll summarize their findings below. 

  • CitrusAds – powers on-site ads like sponsored ads and banner ads sold by retailers like Lowe's, Gopuff, and Target
  • Criteo – recently shifted towards retail media as the death of third-party cookies hurt its business
  • Google – making a play to help retailers develop their own ad businesses via its demand-side platform for retailers to sell ads on publishers' websites.
  • Inmar Intelligence – recently hiring ad and media talent and rolling out digital-advertising tools for retailers, with a focus on grocers.
  • Instacart – currently pitching its tech to help grocers establish their own ad businesses
  • Kevel – sells API software that companies use to sell ads on websites and apps.
  • Microsoft – acquired PromoteIQ in 2019, which helps retailers run advertising businesses and identify where to place ads on their websites.
  • Quotient – formerly, rolled out digital advertising tools like sponsored search, display, and programmatic ads.
  • Swiftly – pitches advertising to legacy retailers as part of larger packages that include loyalty programs, pickup and delivery services, and retail analytics.
  • The Trade Desk – developing a demand-side platform to help advertisers target campaigns using Walmart's data on shoppers.

4. If you're already beating them, join them?

India's largest e-commerce marketplaces including Flipkart, Reliance Retail, and Amazon are in talks to join the country's new Open Network for Digital Commerce (ONDC), which I reported on its soft launch two weeks ago.

ONDC is being pitched as a solution to break the dominance of large e-commerce firms like Walmart and Amazon within their borders. So why then, would those same companies join the network that's being built to oppose them?

Well, why wouldn't they?

Joining ONDC hedges their bets. If the open network is actually successful at taking market share from the giants, then joining the networks themselves allows them to salvage at least some of that market share. 

There's also a possibility that ONDC is a giant flop. If so, Amazon, Walmart, and Reliance Retail get to gesture their willingness to cooperate with India's open network intentions without any actual consequence. 

Thampy Koshy, CEO of ONDC, said, “The existing large etailers work with a captive set of users. With an open network, ONDC will enable all the buyers in the network to be discoverable to all the sellers. Therefore, existing platforms (too) will have an incentive to be part of ONDC.”

Right now ONDC is wide open territory, and being first to join the platform could also prove to have long term benefits. After all, open networks still have market leaders. Joining ONDC is a no-lose bet for the e-commerce giants. 

5. Alexa cash-back rewards

“Alexa, tell me a joke.”

“Okay, but first scan your most recent receipt.”

Amazon has rolled out a new cashback offer designed to boost consumers' use of its Shopping Lists feature.

Alexa Shopping List Savings puts rebate offers from brands and manufacturers directly into consumers' hands through the Alexa app. The offers will be displayed in the Alexa Shopping List section within the app and then can be used across retail stores nationwide to help customers save money.

To use the feature, customers first select offers of interest and activate them within the app. Then they visit their local grocery store, drug store, or chain store to buy the product. After completing the purchase, the customer claims their rebate by submitting a photo of the store receipt that shows the store's name, location, date, time of purchase, product price, and total. Customers also have to scan the barcode on the product itself to complete the process.

From there, Amazon will send the rebate to the customer via their Amazon Gift Card account.

It's a WIN for brands and manufacturers because get the benefit of a product sale that they otherwise may not have received. And if they subsequently earn customer loyalty, they don't necessarily care where the customer buys the product (whether from their local grocer or from Amazon).

But it's a big LOSE for local grocery stores, drug stores, and chain stores, because it puts customer shopping data and cashback directly into Amazon's pocket. For example, if I purchased a new skin cream from Walgreens and love it, where do you think I'll be ordering the next bottle from? Walgreens, or Amazon, which I now have a gift card to, whose pricing algorithm puts the product on sale just for me, and who remind me that it's time to reup? 

Another brilliant move by Amazon to control consumer shopping behavior and data online / offline and within their network and outside of their network. 

6. Klarna virtual shopping (and other moves)

The BNPL platform (that's actively trying to separate itself from being just a BNPL provider), has introduced virtual shopping tools for retailers to stream and video-chat with online customers.

The feature allows sales associates to work from home while connecting with online shoppers through video, as a way to recreate the customer service typically found in an in-person shopping experience.

Has Klarna shopped in stores in the past decade? LOL. Perhaps a better way to replicate a modern day in-store shopping experience would be to livestream a sales associate who ignores you while you're on the website! 

Sales associates would work for a specific store from home, and would have a set of the store's most popular items at their home for the purpose of answering specific questions, suggesting products, and sending pictures and examples of the products.

The new live shopping feature comes after Klarna's acquisition of the social shopping platform, Hero, in July 2021.

In other Klarna news this week, the company introduced a flexible work policy which gives their employees the option to work remotely within their country of employment –or state/province in the US and Canada– as well as from the office if they choose.

Klarna also announced that they will start reporting its customer data to credit agencies, advising them who pays on time and who falls behind on their debt. This decision coming after much scrutiny and pressure from regulatory agencies on BNPL providers to clean up their act. 

7. IKEA: From meatballs to e-commerce

IKEA announced that it plans to spend €3B through 2023 to modify their new and existing stores so that they can double up as e-commerce distribution centers.

In other words, less focus on meatballs and more attention to e-commerce! 

About one third of that money is earmarked for London, which will serve as a test-bed for new store formats and logistics set-ups.

Tolga Oncu, retail manager at the group which owns most IKEA stores worldwide, told Reuters, “We feel we have a catch-up to do on the back-end of our operation (and) we have realised that by including stores in our last mile and fulfilment design network we can create a win-win situation.” 

Converting local stores into partial fulfillment centers will equate to faster and cheaper deliveries, with lower emissions, than shipping from just a few logistics centers.

While this investment would have been labeled “brilliant and revolutionary” in 2015, I would label the move, “duh!” in 2022. I'm actually surprised to learn that this ISN'T how IKEA has been operating their stores for years! It seems incredibly obvious, especially for a furniture provider who deals with heavy / bulky shipments and who already operates stores that look like warehouses. 

However no time like the present to play catch-up to the new world of streamlined logistics, and mad respect for IKEA for calling their “catch-up” what it is instead of trying to spin the news. 

8. Other e-commerce news of interest this week

  • WordPress can now accept DOGE payments via a new WooCommerce plugin called “Easy Dogecoin Gateway”. Exciting stuff, but they could not have picked a worse week in recent crypto history to launch this plugin!
  • Affirm has extended its multi-year partnership with Shopify in the United States. The company raised its full-year revenue forecast to between $1.33B and $1.34B (from $1.29B to $1.31B) and narrowed its loss to $0.19 a share (from $1.23 a share).
  • Shein's growth has slowed to 60% last year from 250% growth in 2020. What do analysts expect? 250% growth YoY forever? I'm not a fan of their ultra fast fashion model in terms of its environmental impact, but objectively Shein is still crushing it.
  • Elon Musk has put his $44B Twitter acquisition on hold while he waits for data on the number of fake accounts on the platform, which the company said was around 5%. News of the takeover being put on temporary hold prompted the share price to tumble by 17.7% to $37.10 in premarket trading. I hope we all get to be privy to the actual amount of fake accounts on the platform once the information is discovered.
  • Alibaba laid off around 40% of its stuff in Russia as the ongoing Ukraine crisis continues to disrupt its cross-border business. Tribune reached out to Alibaba for comment, but the person in charge of PR had been laid off. 
  • Square has launched a number of new developer tools, including Cash App Pay for developers, which extends the benefits of their checkout experience to Square's developer and partner ecosystem via new APIs. The company also announced Bookings API and Checkout API to allow developers to manage bookings, search availability of staff members, send automated text and email reminders, and more.
  • Coupang, South Korea's largest e-commerce company, is emulating Amazon by raising membership fees for its 9M subscribers to improve its earnings. The fee increase will result in 225.7B won ($176M) in additional yearly revenue.
  • WordPress and WooCommerce market share is shrinking, while the market shares of Wix, Squarespace, Adobe, and Webflow are growing. Yoast thinks WordPress, for the first time in a decade, is being “out-innovated” as competitors improve their SEO and page speed practices. 
  • Agoda is now offering interest-free credit card installments for travel with Visa, becoming the first online travel agency in the Asia Pacific region to offer BNPL payment options. Yay! We can finish paying for this summer's vacation months after taking it. 
  • Visa also rolled out Visa Ready, their new BNPL installments program, which enables fintechs and issuers to integrate their BNPL solutions. Is it a good move for Visa to enter BNPL, or should they simply wait it out?
  •, who also own Tinder and OKCupid, is suing Google, claiming that they illegally built a monopoly on in-app purchases by requiring companies to use Google Play Billing for in-app purchases, which charges the developer up to 30% in fees. Does that mean there's another lawsuit around the corner against Apple for doing the same thing? Google defense: “We're not a monopoly. You can go to Apple.” Apple's defense: “We're not a monopoly. Go to Google.”

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

  • Byrd, a Berlin-based fulfillment logistics company that serves seven countries in Europe, raised $56M in a Series C round led by Cambridge Capital. The company provides e-commerce customers with “virtual” warehousing, which means not actually owning the warehouses, but by taking colocation space in other's warehouses, along with a suite of logistics software.
  • Agora Brands, a new e-commerce aggregator based in Toronto and New York, raised $83.5M in a round led by Maverix Private Equity. The startup is targeting profitable companies with between $1M and $20M in revenue.
  • Shopflo, a New Delhi-based checkout platform for D2C brands, raised $2.6M in a round led by Tiger Global and TQ Ventures. The startup is currently pre-product and pre-revenue. Are they planning to join ONDC?
  • Mylerz, a Cairo-based e-commerce fulfillment startup, raised $9.6M in a round led by Lorax Capital Partners. The company will use the funding to expand across Egypt over the next three months.
  • GoKwik, an e-commerce enablement platform that helps e-commerce businesses increase profitability, raised $35M in a Series B round led by Think Investments and RTP Global. The company will use the funding to work on tech solutions for large marketplaces and hire new talent across its tech, product, and data science teams.
  •, a UK-based online furniture retailer, acquired Trouva, a lifestyle marketplace that sells products from over 700 independent boutiques and brands. The acquisition will allow to accelerate their growth strategy by expanding their curated product range and territory. 
  • ESW, an Irish-based e-commerce company formerly known as eShopWorld, agreed to acquire Scalefast, a Los Angeles-based end-to-end e-commerce solutions provider. The acquisition will help ESW extend its capability by giving it access to new e-commerce markets, as well as speed up the ability for its retailers and brands to get their online stores to market.
  •, an open banking account-to-account payments platform, raised $40M in a Series C round co-led by Cota Capital and TempoCap. The company plans to use the capital to expand within the European market.
  • Zoom, the video chat service we all got tired of using during the pandemic, acquired Solvvy, a digital customer service solution that concentrates on conversational AI. The acquisition gives Zoom more automation and intelligence and the ability to clear routine questions without having to speak to a person.
  • Body404, a Chinese platform that helps cosmopolitan designers crafting high-quality garments and accessories reach Western customers, raised $50M in a Series pre-A round led by BAI Capital. The funds will allow the startup to expand beyond its current team of 100 employees across China and the US.
  • Deserve, a customizable credit card platform that helps organizations quickly and securely launch credit card products in the cloud, raised $250M in credit facility from Goldman Sachs, Cross River, and Waterfall Asset Management. The company will use the funds to roll out new credit card offerings including subscription management programs, BNPL, home equity, and SME card programs.
  • Tidio, a platform that offers a one-stop shop for companies corresponding with customers across different communication channels, rasied $25M in a Series B round led by PeakSpan Capital, bringing its total amount raised to $26.8M. Tidio has been cash-flow positive and seen 7.7x revenue growth for the last three years. It is used by more than 510M users and 3% of merchants on Shopify.
  • Nexi, an Italian fintech company that previously acquired Nets and SIA to create a $12.5B European payments gateway, acquired Orderbird, a German startup that provides POS products for restaurants and hospitality businesses with 14k active clients, for an undisclosed amount. Orderbird will continue to operate as its own brand, becoming a central part of Nexi's push into the SMB segment. 
  •, announced its plans to acquire Ubble, a French startup that operates a remote identity verification service, for an undisclosed amount. The deal, which is set to close later this year, will provide customers with in-house identify verification services.
  • BVNK, a startup that offers banking and payments built on crypto, raised $40M in a Series A round led by Tiger Global, at a $340M post-money valuation. So far BVNK has attracted around 120 customers and currently processes over $2B in annualized payments volume. 
  • Zeal, a Tokyo-based startup that lets businesses communicate with their customers via its chat application, raised $27.2M in equity and $11.6M in debt in its Series E round led by JIC Venture Growth Investments, bringing its total amount raised to $41.4M at an undisclosed valuation. Zeal currently services more than 400 enterprises, including Toyota dealerships Shiseido, and NTT Docomo, and the company has grown at a compound annual growth rate of 139% in revenue since 2017. 
  • Topship, a Nigerian shipping and logistics firm, raised $2.5M in a round led by Flexport. The company wants to create the easiest way for African businesses to export and import parcels and cargo to their customers, suppliers and distributors worldwide.
  • Nexite, a company that has developed a radio-powered tagging system and data platform, raised $67M in a Series C round, bringing its total amount raised to $100M. Nexite's solution is the only tech in the market that doesn't require a battery to be able to transmit substantial data at long range. The company will use the data for R&D and to roll out services to its first customers.
  • Carousell, a Singapore-based e-commerce platform, has announced its plans to acquire Reflash, a re-commerce retailer, for an undisclosed amount. The acquisition is part of Carousell's effort to increase its influence in the re-commerce market after previously acquiring Ox Street in 2021.
  • Paddle, a billing backend for SaaS products, raised $200M in a Series D round led by KKR, bringing its total amount raised to $293M. Paddle works with more than 3,000 software customers in 200 markets.
  • Cashew, a BNPL firm in the United Arab Emirates, raised $10M in debt and equity financing from Mashreqbank, a local lender, to help it expand. The company is looking to get 5,000 merchants and 500k users by the end of the year and 10x their transaction volume, which current sits at $1M.

What'd I miss?

Shopifreaks is a community effort and I appreciate your contributions to help keep the rest of our readers in the know with the latest happenings in e-commerce. Whenever you have news to share, you can e-mail [email protected] or hit reply to any of my newsletters.

You can also mention @shopifreaks on Twitter or submit posts to r/Shopifreaks on Reddit, and I'll curate the best submissions each week for inclusion in the newsletter. 

💖 Thanks for being a Shopifreak!

If you found this newsletter valuable, please share it with your colleagues and help us grow.

See you next Monday!


Paul E. Drecksler
[email protected]

PS: How many tickles does it take to make an octopus laugh? … Ten tickles.

PPS: Don't forget to show me some love on Google and Product Hunt. Thanks!