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Wow, quite the week in Big Tech! Facebook lost billions in market cap in one day, and most of it ended up in Amazon the day after — setting gain / loss records in both directions — and Amazon raised their Prime subscription price by $20/year. But you've already read all about that. How could you have missed it? So I've got other news for you this week. 

In this week's 55th Edition of the Shopifreaks E-commerce Newsletter, I've got stories about new Shopify patents, augmented reality technology going mainstream, marketplaces attempting to cleanup their act, and an update on Block's acquisition of Afterpay. 

I also go on a rant about customers' blind loyalty to Amazon, despite their higher prices on many items. All this and more in this week's Shopifreaks newsletter. 

Thanks for being a subscriber and for sharing my newsletter to help me grow. 

PS: I just arrived back in Ecuador a few days ago (my second home) after 6 long months away. It's nice to be back! I'll be in Quito for a week to take care of some visa matters and then back home to the jungle (Tena, Ecuador). If you find yourself in Ecuador this year, give me a shout!


Stat of the Week

41 cents of every dollar spent online in the USA passes through Amazon's hands — according to eMarketer data. If Shopify merchants were one retailer, it would be the third-largest in the U.S. (Retweet It)


1. Shopify was granted a patent for body-measuring tech

Shopify was granted a patent for technology that makes it easier to take body measurements and determine a customer's correct sizes for clothing. This type of technology is currently being utilized by various companies, including Amazon's ‘Made For You' feature, numerous Shopify apps, and platforms like TrueFit and Sizer. 

The patent involves different methods for collecting users' measurement data including opening an app on a mobile phone, computer, smart mirror, or other device and using it to capture images and video clips.

How exactly is that different from what other body-measure tech companies are doing? I'm not sure, but the filing said, “During image capture, the image available or captured by the camera may be displayed to the user as the images are captured. The displayed images may be augmented with additional virtual objects or elements which are not physically present. Virtual objects may be displayed on the screen, which may guide the user, provide additional information, or provide entertainment during the image capture.”

The filing also describes how body measurements could be taken using a phone's built-in sensors. The patent was filed in Nov 2019 and granted to Shopify in January 2021. It reflects Shopify's long-term interest in using virtual and AR technology to help merchants sell products online.

Shopify has been filing more patent applications over the past two years as it seeks to protect its intellectual property. However on the flip side of the coin, last May, I reported that Shopify joined the Open Invention Network (OIN) as part of their commitment to “patent non-aggression” in core Linux and adjacent open source software. OIN is funded by Google, IBM, and 3,400 other community members who cross-license Linux System patents to one another on a royalty-free basis.

Amazon is not part of the Open Invention Network and holds approximately 24,355 patents compared to Shopify’s approximately 56 patents, up from 45 in May 2021.


2. Shoppers are finally realizing that Amazon doesn't offer the best prices

For years I've been telling my Amazon-addicted friends that their blind platform loyalty and addiction to Prime delivery is costing them a lot of money each year — but my words often fall on deaf ears. 

See, what happened was, Amazon built a reputation decades ago for having better prices than competitors — but in 2022 their reputation precedes them. Amazon initially formed this reputation back when shoppers were comparing their online prices to brick-and-mortar retail stores or smaller online retailers.

However nowadays, marketplaces like Walmart, Target, and even smaller retailers regularly beat Amazon on price. Brands themselves are also able offer their same products for less money on their own websites because they don't have to pay Amazon's 15% seller fee. Plus, due to logistic and fulfillment improvements across the industry, other retailers are able to deliver items just as fast (or almost as fast) as Amazon. 

I became savvy to Amazon's oftentimes higher prices many years ago. First, when I learned about how they use tracking cookies to dynamically change product prices for customers based on their location, browsing history, and purchase history, resulting in less price conscious shoppers paying higher prices.

Later I learned about the retail arbitrage industry, which is where Amazon sellers purchase products from discount retailers such as Roses, Dollar General, Walmart, Family Dollar, etc, and then sell them on Amazon for a higher price. Amazon shoppers either willingly or unknowingly pay that higher price for the convenience of shopping on their platform, even though they could purchase the same product for less money directly from those discount retailers. Strange, right?

All that being said, I was glad to see this article on Inc.com by Kelly Main that brings light to Amazon's price disparities. The author, like many Amazon shoppers, was blindly loyal to Amazon, but the company's recent Prime subscription price increase made her re-evaluate her shopping habits and look elsewhere for the products she uses. Here are two examples of what she discovered: 

  • She could save $65/year on shampoo alone. A bottle of Pert Plus on Amazon was costing her $8.30/each, but at Walmart it's $2.88.
  • A two-pack of Bounty Select-A-Size paper towel cost over $16 on Amazon, but just $4.92 at Walmart.

I remember when Amazon came out with their press-to-order Dash buttons (which were discontinued in 2019). Do you remember those little devices that automatically re-ordered Tide detergent and other household items with a click of a button? 

My first thought when I read about them was, “Ah great, so Amazon can charge me whatever price they want to automatically re-order an item versus me taking 30 seconds to find the best price online myself and saving money.” 

The Dash buttons were actually deemed illegal in Germany due to insufficient information about the price of the product being given at the time of purchase. 

It's refreshing to see consumers starting to realize that there's a world of online retailers other than Amazon. It comes at a perfect time in the industry as other retailers and fulfillment companies are catching up in service to the online shopping climate that Amazon created. 


3. Wish.com becomes invite only for new merchants

Wish, the e-commerce marketplace known for its attention-grabbing Facebook ads, products that look nothing like their listings, and incredibly long delivery times, has introduced an invite only process for selecting merchants in an attempt to improve its product quality.

New merchants will need to take part in a multi-step qualification process involving filling out a short questionnaire and awaiting review from Wish's team who will look at factors such as product categories, channel partnerships, and e-commerce performance history. 

Mauricio Monico, Wish's Vice President of Product for Merchants and Logistics, said. “The addition of an ‘invite-only’ sign-up experience will go a long way as we focus on partnering with higher-quality merchants. It’s just one of many features we will be rolling out this year to improve the user experience on Wish.”

The new sign-up process will not affect merchants already using the platform — which feels like a mistake. If there's an issue with product quality that needs to be addressed (which there is), it starts with cleansing their existing product database of duds. Otherwise it's like pouring freshwater into a polluted lake. 


4. Over 46% of China's retail sales take place online

eMarketer created a Top 10 List of countries with the highest e-commerce share of total retail sales. In other words, in which countries do the most retail sales happen online percentage-wise?

China ranked in first place by a landslide with 46.3% of retail sales taking place online, or in dollar amounts, around $3 trillion in online sales. Think about that for a second… Almost every other retail purchase happens online in China! That's some incredible e-commerce penetration. 

I asked my friend Jon Santangelo, an American who's been living in China for the past 10 years, most recently Shenzhen and Guangzhou, if he found that statistic to be true in his experience.

Jon said, “It's absolutely true. China's e-commerce industry is arguably more advanced than the West's. Since many Internet users never had a credit card, they used Alipay or WeChat Pay to buy things online, which helped the industry explode over the last 5-7 years. I buy all my imported groceries online via a WeChat mini program. It's freaking amazing considering that I used to have to plan hour long trips to the import grocery store to get the same foods.”

In second and third place on the list was the UK and South Korea, where e-commerce orders make up 36.3% and 32.2% of retail purchases, respectively. However dollar-wise they don't hold a torch to China. Those percentages equate to around $246B in e-commerce sales in the UK and $143B in South Korea. 

Here's the full list: 

  1. China 46.3%
  2. UK 36.3%
  3. South Korea 32.2%
  4. Denmark 20.2%
  5. Indonesia 20.2%
  6. Norway 19.4%
  7. US 16.1%
  8. Finland 14.6%
  9. Sweden 14.1%
  10. Canada 13.6%

5. Pinterest adds AR feature for home décor

Pinterest is introducing a new augmented reality tool for home furniture that allows shoppers to see how the items would look in their homes before they buy. The tool will initially work with 20,000 products from retailers including West Elm, Crate & Barrel, and Wayfair. The AR feature will be available directly on pins, alongside product details.

According to Pinterest, people use the platform as a way to discover products they might want to buy. They recommend that retailers think about the long game, given that users are coming to Pinterest to research products months before they're ready to make a purchase.

Pinterest isn't necessarily late to the party, but they're not early either. Retailers like IKEA have offered similar features that allow customers to see how 3-D scaled models of its furniture would look in their homes  since 2017, and other retailers have been hopping on the bandwagon since then. The number of U.S. consumers who use AR at least once a month is estimated to grow to 101M this year, up from 93M in 2021. 


6. An update on Block's acquisition of Afterpay

Block has officially completed their $29B acquisition of Afterpay that it initially entered in August 2021, and is now launching its first integration of the BNPL service to Square merchants. As of Feb 1st, Square sellers in the U.S. and Australia can try Afterpay for no extra cost until May 10th. During the promotional period, Afterpay transactions are processed at sellers’ standard e-commerce processing rates.

Square sellers can access Afterpay from their Square Online dashboard and opt-in to receive early access to Afterpay now, with automatic enablement rolling out to eligible merchants over the following weeks.

Alyssa Henry, head of Square, said, “We’re thrilled to offer Afterpay to Square sellers on day one. This is truly just the beginning of what we’ll be able to offer sellers, and their buyers, through this acquisition. Our mission is to help sellers never miss a sale, operate more efficiently, better manage cash flow, and improve growth, retention, and acquisition of buyers. Afterpay helps us further this mission. It will also help bring more businesses of all sizes into the Square ecosystem.”

As I reported last week, Afterpay is also partnering with brick-and-mortar retailers to bring BNPL payment options in-store. They're ready to make some money from this $29B acquisition!


7. Bold Commerce rolls out headless checkout on WooCommerce

Bold Commerce is now offering a headless checkout experience to replace WooCommerce's native checkout, enabling bands to fully customize their checkout process.

The company says that its checkout experience can replace 20-30 WooCommerce plugins with a single integration, including offering one-click checkout to customers, and will improve conversion rates and increase checkout load speed by up to 400%.

Yvan Boisjoli, CEO of Bold Commerce, said, “Most brands haven’t been able to overcome the obstacles that plague their conversions on traditional shopping sites. It can be difficult for them to imagine selling successfully on other digital channels that weren’t originally intended for commerce. Yet, this is the direction the industry–and shoppers–are heading in. Enterprise brands using WordPress with WooCommerce can now achieve both of these things simultaneously.”

One year ago I reported that Bold Commerce had raised $35 million in new funding to expand beyond Shopify into competing platforms including BigCommerce and WooCommerce, and now we're seeing those plans come to fruition. 


8. Other e-commerce news of interest this week

  • Shopify hired Walter Kuhn, an Apple lobbyist, to work on intellectual property issues, including stopping the sale of counterfeit goods on their platform. 
  • Seven members of the US House of Representatives are probing Amazon for its continued sale of a food preservative reportedly used to aid suicides, after 10 people died by suicide using the compound after purchasing it on Amazon in the past two years.
  • Amazon unveiled a new ‘Buy Black' virtual storefront for Black History Month that includes filters to let customers buy from Black-owned businesses.
  • Wix introduced subdirectories to help multilingual sites improve their SEO ranking for each of their languages. 
  • Amazon and Nike are reportedly considering purchasing Peloton.

9. This week in seed rounds & acquisitions….

  • Blyp, an AI-driven data analytics platform for e-commerce companies, raised $4M in a seed round led by World Trade Ventures, Silvertech Ventures, Eyal Waldman, Dovi Frances, Rafi Gidron and Boaz Schwartz. The company will use the funding to scale its U.S. operations and add new functionality to its platform.
  • Elastic Path, a headless commerce platform for building customized e-commerce systems, raised $60M from BlackRock Investment Corp and Sageview Capital, bringing its total funding to date to $120M. The company will use the funding for continued growth.
  • Win Brands Group, an brand aggregator, raised $40M in a round led by Orangewood Partners. The company will use the funding to grow their omnichannel platform and portfolio of brands, as well as finance the acquisition of Love Your Melon, an outdoor lifestyle brand.
  • Wayflyer, an Irish revenue-based financing and growth platform for e-commerce merchants, raised $150M in a Series B round co-led by DST Global and QED Investors, at a $1.6B valuation. The company will use the funding for global expansion to the US, Europe, and Asia.
  • Grupin, an Indonesia-based social commerce app, raised $3M in a funding round led by Sequoia Capital India's Surge. The company will use the funding to expand their sourcing reach and grow their team.
  • Melonn, a fulfillment company serving small e-commerce companies in Mexico and Colombia, raised $20M in a Series A round led by QED Investors, bringing its total amount raised to $24M. The company will use the funding to grow their tech and product teams to strengthen the platform and develop adjacent products including embedded fintech.
  • Amitruck, a Kenyan-based logistics platform, raised $4M in a round led by Better Tomorrow Ventures, bringing their total funds raised to $5M. The company will use the funding to expand into Uganda and Tanzania.
  • Retailo, a Saudi Arabia-based startup digitizing the region's retail supply chains, raised $36M in a Series A round led by Graphene Ventures, bringing their total amount raised to $45M. The company will use the funds to expand into new geographies, verticals, and products.
  • nfinite, a 3D visualization platform for e-commerce merchandise, raised $15M in a Series A round led by US Venture Partners. The company will use the funding to accelerate development of their platform and to scale their operations in North America.
  • RenoRun, a Canadian startup which sources and delivers building materials to construction firms, raised $142M in a Series B round led by Tiger Global and Sozo Ventures LLC. The company will use the funding to expand into the U.S.
  • Channable, an e-commerce feed management and PPC automation platform for e-commerce merchants, raised $62M in a Series B round led by Partech. The company will use the funding to fuel its global expansion into North America, accelerate their R&D efforts, and build their sales and marketing teams.
  • Veed, a London-based online video editing platform, raised $35M from Sequoia. The company will use the funding to help amplify its growth.
  • Bold, a Colombia-based payment services provider serving micro and SMB merchants, raised $55M in a Series B round led by Tiger Global Management, bringing their total raised to $65M. The company will use the funding to scale faster, launch new and complementary services, and build their teams.
  • Farfetch, a luxury fashion marketplace, will acquire Violet Grey, a beauty e-commerce company, for an undisclosed amount. Following completion of the acquisition, Violet Grey's founder will become the Global Advisor for Beauty on the Farfetch marketplace and Co-founder of NGG Beauty, where she will work to incubate and accelerate new brands.
  • Colruyt Group is taking a more than 40% interest in Smartmat, the company behind Rayon, an online supermarket, for the purpose of strengthening its online food offering. The companies have been working together since 2019 and feel that the investment is the next logical step.
  • Wonderment, a Boston-based software company that provides order tracking technology for Shopify merchants, raised $6M in a round led by CRV. The company will use the funding to strengthen its platform and expand their team.
  • UpScalio, a venture commerce firm that finances e-commerce brands, invested an undisclosed amount in Truphe, an India-based home and gardening brand. The company hopes to use the acquired brand to capture a large chunk of the $900M industry in India.
  • Cart.com, an e-commerce platform, raised $240M in a Series B-1 round led by Legacy Knight Capital Partners. The company will use the funding to roll out its e-commerce platform for online brands internationally.
  • Keo World, a BNPL fintech for businesses, raised a seven-year debt facility of up to $500M from Hayfin Capital Management LLP. The company will use this investment to expand the purchasing power of their SMB businesses via its Workeo program.
  • Swiftline, a software company that provides e-commerce businesses with a suite of products and services, purchased Yardline, a capital-as-a-service provider for sellers, from Thrasio for an undisclosed amount.
  • Loadsmart, a freight technology company that automates logistics processes, raised $200M in a Series D round led by SoftBank Latin America Fund, valuing the company at $1.3B. The company will use the funds to expand its service offerings.
  • Whatnot, a livestream shopping platform, acquired Pastel Labs, a visual website feedback tool, and hired Ludo Antonov, the former head of Growth and Product Engineer for Lyft, as their VP and head of Engineering.
  • RudderStack, a platform that helps businesses build their customer data platforms, raised $56M in a Series B round led by Insight Partners, bringing their total amount raised to $82M. The company will use the new funding to build out product features and expand its go-to-market operation.

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. 

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See you next Monday!

PAUL

Paul E. Drecksler
www.shopifreaks.com
[email protected]

PS: Did you know that I write this newsletter in the shower each week? That's why I've always got a clean joke for you at the end. 

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