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This week I've got stories for you about Shopify diving deeper into enterprise, Disney characters entering your homes (at least their voices), and AI permanently entering the chat in 2023.
I also cover BigCommerce's new integration with Microsoft Ads, Shopify's solution to meeting fatigue, and Walmart's solution to theft.
All this and more in this week's 103rd Edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“What percentage of your work meetings are pointless / useless?”
Last Weeks Poll Results: Last week I asked if Amazon would still command MOST of U.S. online sales in 5 years (currently 56.7%) or if competitors will bring them back to 2014 levels (28.1%).
40.9% of you predict that Amazon will grow bigger, while 26.1% think it will remain the same size. 23.9% think Amazon's market share will drop below 40%, and 9.1% predict it'll drop below 30%. [View Poll]
Stat of the Week 📈
Walmart made over 6,000 drone deliveries in 2022. The retailer now operates drone delivery in 7 states via 36 drone delivery hubs. – According to Walmart
1. Commerce Components by Shopify
Shopify is going after the enterprise e-commerce market even harder with the launch of their new offering, Commerce Components.
The new service will allow retailers to access specific Shopify components such as their checkout and APIs, and integrate with their preferred CRMs, 3PLs, and other back-office services, without having to utilize Shopify's entire platform to power their stores.
Wasn't there already Shopify Plus for enterprise clients?
Yes, Shopify Plus has been around since 2014 and has historically catered to higher volume stores that demanded additional features above and beyond what the standard Shopify plans offered such as:
- Advanced access to liquid code
- Customized checkout (without the use of app)
- Enhanced API capabilities
- Access to exclusive apps and integrations.
Shopify is now positioning Commerce Components as a step above Plus for large, global retailers with a GMV of $500M and upwards.
Arpan Podduturi, VP for Product at Shopify, told Modern Retail that Commerce Components will give businesses “access to only the components of Shopify that they need, with the ability to leave behind what they don’t. It’s optimized for retailers who prefer to use individual components of Shopify in an à la carte way — integrating those components with the rest of their commerce stack.”
So what's the difference between Shopify Plus and Commerce Components?
- About 9-figures! LOL, but in terms of features…
- Unlimited API calls versus limits on Shopify Plus
- Ability to integrate individual Shopify components with the rest of their commerce stack, as opposed to requiring merchants to utilize Shopify's single platform to manage their business like on Shopify Basic and Shopify Plus
- Retailers also receive access to a dedicated account team, priority 24/7/365 specialized support, and a network of agency partners and system integrators.
Rick Watson said on LinkedIn, “If they were smart, they would just say they introduced “Checkout as a Service.”
Although Commerce Components is offering a little more than just checkout, he definitely summed it up nicely.
Shopify's offering is getting complicated
If Shopify were to re-launch today with all their existing features, would they still tier them into Basic, Shopify, Advanced, Shopify Plus, and Commerce Components? There's got to be a better way.
To be frank, some of the lower tier plans feel like they're being left behind in regards to what most e-commerce developers would consider to be basic features. It's almost as if Shopify Plus needs to be cut down the middle — with half its features going to basic Shopify plans and the other half pushed toward Commerce Components.
Or alternatively, transition into offering Shopify Plus features a-la-carte to their own merchants. For example, do I really need to pay $2000 a month to customize my checkout as a Shopify merchant when I don't need the account manager or exclusive apps? Limitations like that have been a bone of contention for store owners with Shopify for many years.
Earlier this year, Shopify launched Shopify Taxes as an add-on service, and I asked, “Does this set the stage for new incremental fees within Shopify? Will every new feature upgrade come with new transaction fees on top of it?”
On one hand, it can make merchants feel like they're being nickel-and-dimed for every feature they need. But on the other hand, I'd love to see a more flexible way for Shopify merchants to grow within their ecosystem without having to jump from $19 to $49 to $299 to $2000 per month.
If Shopify merchants could subscribe to Plus features a-la-carte like Enterprise clients can now do on the new Commerce Components, I think that Shopify would see a huge increase to their subscription revenue, and merchants would be able to better incrementally grow within their ecosystem.
2. “Hey Disney” comes to your home
You: “Hey Disney, what's the weather outside?”
Olaf (Snowman from Frozen): “It's cold outside!”
You: “That's not really helpful, Olaf! I'm obviously asking what the temperature is?”
Olaf: “Is it me, or does it smell like carrot in here?”
Last year, Amazon and Disney announced plans to develop a custom voice assistant to combine Alexa's abilities with Disney character voices.
Dubbed “Hey Disney!”, the voice assistant was the first non-Alexa assistant to become available on Echo devices at select Disney Resort hotels, allowing visitors to ask for things like park hours, directions to the park or where to eat, or make guest service requests at the hotel, like ordering extra towels or room service.
Now, Amazon is showing off their new Disney voice assistant at the Consumer Electronics Show in Las Vegas, and soon customers will be able to purchase the Disney Magical Companion voice assistant for their own homes.
The new assistant is packed with Disney features like jokes, interactive trivia, greetings from favorite Disney characters, and access to soundscapes inspired by Disney films. The feature will be available for $5 monthly via Amazon, under the Alexa Skills list.
The voice assistant was built using Amazon’s Alexa Custom Assistant solution, and Amazon helped develop many of the customizations for this big time client, who could help bring the voice assistant program mainstream into consumers' homes.
Aaron Rubenson, the VP of Alexa said, “Disney is the master storyteller, and its stories are so powerful for so many people. Now people can keep talking to a character, they can continue with the storyline when they go back to their room at the end of the day or when they go home after the vacation is over. It’s just gratifying to imagine that we’re a part of literally bringing that magic home.”
Or is it that consumers may be more willing to spend money with Moana and Raya than Alexa? Time will tell.
Personally, I'm most looking forward to interacting with The Hulk in my home, and I hope that his voice becomes available in the future!
Disney and Amazon said that they will make the Disney Magical Companion available to US customers later this year, but they did not give an exact launch date.
3. BigCommerce releases Microsoft Ads & Listings (Sponsored)
This morning BigCommerce announced a collaboration with Microsoft Advertising, allowing merchants to directly integrate their stores with the Microsoft Advertising Network and reach millions of potential customers.
As an introductory promotion, eligible BigCommerce merchants in the US who are verified Bing Places for Business account holders will receive $500 in free advertising credits by Microsoft after spending $250.
Sharon Gee, VP of revenue growth and general manager of omnichannel at BigCommerce. said, “Seamless partner app integrations like Microsoft Ads and Listings uplevel the value and opportunities that we can deliver to our merchants all over the world. Furthermore, strategic relationships with global businesses like Microsoft Advertising also underscores the value that we can deliver to our agency and technology partners as part of the Omnichannel Certified Partner (OCP) Program.”
With Microsoft Ads and Listings, merchants can:
- Synchronize product catalogs directly to the new Microsoft Merchant Center
- Create shopping campaigns to promote product catalogs and track campaign performance
- Broaden their audience reach through new channels
- Drive more traffic with enhanced shopping experiences.
- Monitor and optimize ad performance in real time.
Microsoft Ads and Listings on BigCommerce is currently available in the US, UK and ANZ, and will expand into new markets through 2023.
4. Customer Communication & AI in 2023
Eli Israelov, CEO and cofounder of CommBox, an omnichannel messaging platform, predicts that deep integration with AI is on the horizon for major companies this year.
In a piece on Forbes, he outlines the future of AI, which I'll recap below.
The current state of customer communications:
- Customer wait times have tripled.
- Customer communication agents are not only in short supply but are suffering from burnout. Turnover has soared from around 50% to as much as 300%.
- 95% of enterprises said they're either currently using AI or plan to implement it in their contact centers during the coming year.
- Only 1.6% of call center interactions are currently automated.
- That number is predicted to climb to 10% by 2026.
The use of chatbots supervised by humans:
- Currently through chatbots, e-commerce customers are able to track orders and obtain tech support.
- 74% of people prefer to use bots (LOL, who the heck are those people?).
- The average U.S. mobile consumer user spends four and a half hours per day on their phones.
- 95% of those who receive SMS texts respond within a few minutes.
- US consumers prefer to interact with brands via messaging.
- A major call center in the Philippines reported that giving agents AI tools improved their job satisfaction by 69%.
What's next for businesses:
- Businesses will need an executive or department in charge of automation.
- Companies will need to adapt their customer service to meet the shifting expectations of consumers.
How is your company currently leveraging AI with your customer communications? And what are your plans in that area for this year? Hit reply and let me know.
5. FedEx gets bulky
FedEx expanded its FedEx Freight Direct e-commerce solution to include a solution for returns of big and bulky items for residences and businesses.
The solution removes the need to print a label and provides flexible two-hour pickup windows.
FedEx is currently offering three return service levels:
- Basic Pickup – from a ground-level door or garage, no appointment required, and delivery confirmation via photo capture.
- Basic by Appointment Pickup – from a ground-level door or garage, with a two-hour appointment window, and photo capture.
- Standard Pickup – through-the-door from the first ground-level room in a home or business with a two-hour appointment window.
FedEx Freight Direct covers almost 100% of the US population for ‘Basic Pickup’ and ‘Basic by Appointment Pickup’ and 90% of the contiguous US population for ‘Standard Pickup’.
How do FedEx drivers feel about this?
I was recently reading a discussion about how delivery drivers have gone from package deliverers to movers. Should FedEx and Amazon drivers be responsible for delivering furniture and oversized household items? Or is that job better left to movers and specialty delivery companies?
While it makes sense for FedEx to offer delivery and return services for big and bulky items in-house, the added responsibility and strain on drivers should not be ignored in the conversation.
6. Shopify's new “no meetings” policy
Shopify is in the news this week for encouraging their employees to “SAY NO TO MEETINGS!”
Two years after Shopify embraced remote working, employees are now being told that Shopify is eliminating all recurring meetings involving more than two people to allow employees more time to work on other tasks.
Kaz Nejatian, VP and COO at Shopify, sent an internal email to staff detailing new communication standards for employees and encouraging employees to decline or remove themselves from meetings.
The changes, which are effective immediately, will also see no events scheduled on Wednesday, while large meetings involving more than 50 people can only be held on Thursdays between 11am and 5pm EST, limited to one per week.
A company spokesperson told Fortune that the changes to Shopify's operating structure will eliminate 10,000 company events, which is the equivalent to more than 76,500 hours of meetings.
According to a 2022 study from Otter.ai, as much as one-third of all meetings may be completely unnecessary. The report also indicated that cutting pointless meetings at companies with more than 100 employees could save firms more than $2M a year, and up to $100M a year for companies with over 5,000 employees.
One of my favorite quotes from Naval is, “Ruthlessly cut meetings: If someone wants a meeting, see if they will do a call instead. If they want to call, see if they will email instead. If they want to email, see if they will text instead. And you probably should ignore most text messages—unless they’re true emergencies.”
While I'm not as extreme as Naval, I do attempt to curb meetings to a minimum and make sure that the ones that do make it to my calendar don't interrupt my work flow. For example, I only schedule meetings on certain days of the week during a particular window, leaving dedicated interrupted time for content creation and development during the week. And when people request a meeting or “quick chat”, I typically write back and ask them to share some more info about what they'd like to discuss. Many never write back.
What are your policies on meetings? How do you ensure that meetings don't interrupt your company's productivity? Hit reply and let me know.
Also take our Twitter poll this week and let us what percentage of your work meetings prove to be pointless.
7. Amazon ramping up for Chinese sellers
Amazon is ramping up its efforts to help Chinese merchants sell “high-quality and innovative products” to the world (as opposed to… ) by improving its logistics and supply chain services and scaling up its localization services for sellers.
Cindy Tai, Amazon VP and head of Amazon Global Selling Asia, said, “Chinese sellers have shown strong resilience amid global economic uncertainties and the Covid-19 pandemic” and emphasized that cross-border e-commerce is playing a substantially vital role in stabilizing China’s foreign trade.
According to the latest data from Amazon, Chinese sellers have sold billions of products through Amazon's 18 overseas marketplaces this year, and the number of Chinese sellers increased by more than 20% YoY, with their sales revenue achieving double-digit growth.
Amazon will look to further provide Chinese sellers with logistics, inventory, and supply chain solutions, as well as upgrade big data analytics tools for sellers to help them improve their cross-border e-commerce.
One of my 2023 Predictions was that Chinese marketplaces give Amazon and Walmart a run for their money this year. Chinese marketplaces like Temu and ByteDance are actively penetrating the US market. So it's important for Amazon's future as market leader that they continue to attract those Chinese sellers to their marketplace, who may be finding better margins and easier onboarding closer to home.
8. India's evolving e-commerce market
If you've read Shopifreaks long enough, you know that I'm intrigued by what's happening with our industry in India. For better or worse in regards to their policies and projects, I respect the country's desire to not have foreign commerce giants take over the space within their borders and create the type of monopolies they've seen take shape in the US and other countries.
Up until recently, e-commerce in India has been dominated by Amazon and Walmart-owned Flipkart, but last year the two giants saw growling competition from other conglomerates like JioMart and Tata digital and startups like Nykaa, Meesho, Udaan, and DealShare.
ET Retail offered an overview of India's current e-commerce market, which I'll recap below:
- Last year the country launched Open Network for Digital Commerce (ONDC), a platform designed to even the playing field for small businesses to compete with the goliaths online.
- Flipkart had the highest GMV last year at $5.7B in sales.
- Amazon retained its second place position with 26% market share, but Meesho overtook Amazon with the second-highest number of orders during the festive season.
- Meesho claimed that its orders grew 135% YoY from both tier 2 and price-conscious tier 1 consumers.
- Shopsy reported that the online shopper base in India is estimated to increase to almost 450M by 2027.
- Jiomart launched during the pandemic and has since expanded from their grocery-led focus to offer more consumer goods.
- Tata's fashion and luxury e-commerce marketplace strengthened its position.
- Nykaa, which began as a beauty marketplace, expanded to become a key player in Indian e-commerce.
- Etsy is now expanding its presence in the country.
- B2B startups emerged as one of the fastest growing segments of the online retail marketplace, projected to reach a GMV of $100B by 2030.
- The B2B e-commerce market in India is still less than 1% of the $1 trillion addressable market
This year I look forward to seeing how widely adopted ONDC becomes in the country, and how effective it truly will be at democratizing India's e-commerce industry.
9. Other e-commerce news of interest
Matthew Berk, CEO and co-founder of Bean Box, says that companies that depend on recurring payments need to rethink their business model in 2023 or else they'll be facing a harsh reality as economic challenges continue. “I think in 2023, you’re going to find that direct-to-consumer companies that do not also sell under other modes — say a la carte or gift-based — are going to have a hard time maintaining subscription revenue.”
Rampant shoplifting has forced Walmart stores to begin locking up products, which can only be accessed by an employee, who are historically difficult to find in Walmart. Customers are venting their frustrating on social media about being treated as if “we're all thieves.” Data shows a 15% to 25% drop in sales for locked up items.
Morphe, the Los Angeles-based makeup brand, is closing all of its 18 stores in the US to focus on e-commerce. The company was considering filing for Chapter 11 bankruptcy in October, sources told Women's Wear Daily. The hashtag #justiceformorpheemployees is trending on TikTok.
Major e-commerce companies are laying off more staff including Attentive (15% of its 1300 employees), Stitch Fix (20%), Everlane (17%), Salesforce (10%), Amazon (18k employees).
The Irish Data Protection Commission fined Meta $414M for violating EU Privacy Laws. Meta is going to appeal the decision, believing that its approach to protecting data respects the privacy of its users.
Prince Harry’s new memoir is already a top seller on Amazon and Barnes & Noble, and it hasn't even come out yet. The memoir, Spare, will be available in stores on Jan 10th.
A former Zulily employee stole over $300k from the site after being inspired by the movie Office Space. Ermenildo Valdez Castro is accused of manipulating product prices and altering the company’s code to divert shipping fees from the business to his personal account.
Wait it gets even funnier… Castro admitted to diverting the shipping fees, but said that the money was gone because he invested the stolen funds in the stock market, particularly GameStop.
A new website called Comprehensive.io is aggregating pay data from careers pages of tech employers like Amazon, Google, Reddit, Netflix, and more. This became possible after recent pay transparency laws were passed which cover tech hubs like NYC and Silicon Valley, requiring companies to list their salary ranges.
Humm, an Australian-based BNPL company, decided to scale back on its expansion in the U.K. due to worsening market conditions, following in the footsteps of Zip and Openpay. The company will maintain a presence in Ireland, as it has reported success in that country.
Amazon reached an agreement with several lenders for an $8B unsecured loan. The company did not specify where the money will be allocated, only saying that over the past few months they've used “different financing options to support capital expenditures, debt repayments, acquisitions, and working capital needs.”
10. Seed rounds, IPOs, & acquisitions
Relationship, a firm that offers retailers a suite of online customer engagement tools, acquired Stor.Ai, an Israel-based firm that provides regional grocers with e-commerce fulfillment services. The combined entity will blend the two company's analytics, personalization, and fulfillment technology and operate under the Stor.ai name.
Alibaba Group is planning to invest $1B into a logistics hub at Istanbul Airport and a data center near Ankara, the country's capital. Alibaba has been looking to invest in Europe and the Middle East and see's Turkey as a very strong production base.
EvoCommerce, a D2C retailer that sells health, beauty, and wellness products including BounceBack, an anti-hangover solution, raised $2M in a pre-series A round from GSR Ventures, East Ventures, and 33 Capital. The company will use the funds to fuel its global expansion plans, develop its e-commerce and online channels, and scale its manufacturing and R&D capabilities for new product categories.
GammaRey, a NY-based blockchain fintech firm that focuses on consumer digital wallets and developer software, signed a merger agreement with GoLogiq, a US-based financial e-commerce and consumer data analytics company that focuses on customers in Southeast Asia. The companies hope that the merger helps them focus on the high growth market of wealth management for Gen Z and Millennials.
Money View, an Indian online credit platform that offers instant personal loans, BNPL, and personal financial management solutions, raised $75M in an ongoing Series E round led by Apis Partners, at a $900M valuation. The company plans to hire more team members for the purpose of expanding its product portfolio to include digital bank accounts, insurance, and wealth management solutions.
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.
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See you next Monday,
Paul E. Drecksler
PS: Did you hear that Marvel is going to put advertisements on the Hulk? After all, he is a giant banner!