I hope you had a wonderful Thanksgiving last week (if you celebrate). I'm down in Ecuador right now where the holiday isn't celebrated, so I took the day to visit Immigration and work on some visa related tasks. However I still made sure to eat a great meal with family down here and share some things I'm thankful for.
This week I was concerned that it'd be a short edition. Sometimes news is sparse during holiday weeks. However my concerns were unwarranted, as a lot went down in our industry last week!
This week's edition covers:
- Shopify's “global” stunt
- Black Friday weekend results from multiple sources
- An update on the OpenAI drama
- Amazon's biggest worker strike ever
- Walmart's new method to improve last mile efficiency
- Koh's refocus back to brick-and-mortar
- Customers' top pet peeves when online holiday shopping
- Amazon's widening gap between UPS and FedEx
All this and more in this week's 149th Edition of Shopifreaks. Thanks for subscribing and sharing.
PS: Are you enjoying Shopifreaks? Please take a moment and write a review on Google. Thanks!
Stat of the Week 📈
A record $9.8 billion was spent on Black Friday this year in the U.S., up 7.5% YoY. Electronics was the major growth driver this year, with online sales up 152% versus average daily sales for October. — According to Adobe Analytics
1. Shopify goes global for BFCM
Shopify merchants set a Black Friday record this year with a combined $4.1B in sales, a 22% increase in sales over last year.
Rather than just tell you this year how well sales were going, Shopify wanted to show you in the biggest way possible.
The company launched a Black Friday Cyber Monday (BFCM) Live Globe which displayed a real-time visualization of purchases made through Shopify-powered merchants worldwide.
Not only can you see and interact with the virtual globe on their website, Shopify went a step further this year in collaboration with Sphere Entertainment Co. in Las Vegas to project their visualization on the 875,000 sq ft Sphere building in Las Vegas, the largest spherical building in the world. Here are some photos and a video of the Sphere in action.
I absolutely love globes. It's my go to gift for friends who get married because I believe that every family home should have a globe. I also regularly visit “the largest globe” in various countries around the world. So this stunt resonated with me. It was spectacular!
More than just a big representation of data though, the online version of the globe is interactive, displaying a real-time live ticker of sales per minute, unique shoppers, orders per minute, and carbon removed. (How about “carbon added”? LOL)
You can also enter a city name to get a more granular look at the metrics above. For example, I entered my hometown Asheville, NC and got the following data:
- $83 sales per minute. (This number changes live. It was around $564 earlier this morning when I checked and will be different if you looked now.)
- $3,521 is the highest single order in Asheville for an air guitar.
- Asheville is buying 2 items per minute.
- Asheville has shipped to 10 countries so far this weekend.
- 18,295km is the distance record for how far a package was sent from Asheville.
- $72 is the average order size in Asheville.
Great promo this year, Shopify. Although there's not much you can do with each individual slice of real-time data visible on the globe, it was an epic representation of how global our economy has become, and a great demonstration of AI and real-time data in action.
2. Black Friday Weekend Results
You read in the Stat of the Week that according to Adobe Analytics, a record $9.8B was spent on Black Friday this year in the U.S., up 7.5% YoY.
Here are some other publicly available stats from the weekend:
- Consumers spent $5.6B on Thanksgiving Day, up 5.5% YoY.
- The use of BNPL rose 72% from the week before Thanksgiving.
- A total of $79M in sales came from BNPL, up 47% from last year.
- Mastercard reported that e-commerce sales increased 8.5% YoY, while in-store sales increased 1.1% YoY over the weekend.
- The major growth driver of Black Friday online sales was electronics, up 152% vs. average daily sales for October. Smart watches, TVs and audio equipment were the top items being purchased.
- Adobe says that consumer spend was driven by new demand rather than higher prices, with e-commerce outlets dropping prices consecutively for 14 months, down 6% YoY.
- Mobile is expected to overtake desktop for the first time this holiday season, with 51.2% of spend online taking place on phones.
- Salesforce estimates that 17% of all gifts will come from the resale market this year.
- Deloitte reports that spending across the entire holiday season will average $1,347, down 11% from last year, with shoppers making fewer splurges and more thoughtful purchases.
- Adobe Analytics predicts that Cyber Monday (today) will generate $12B in sales, up 6.1% YoY — but we will see!
Shopify specific stats from the weekend:
- Shopify merchants set a Black Friday record with a combined $4.1 billion in sales, up 22% YoY.
- Hottest product categories: clothing, personal care, and jewelry.
- Average cart price: $110.71 ($110.08 on a constant currency basis).
- Top selling countries: U.S., U.K., and Canada.
- Top selling cities: Los Angeles, New York, and London.
- 15% of total orders were made across borders.
- 33% YoY increase in global sales made on Shopify POS.
BigCommerce specific stats from the weekend:
- GMV increased 14%, total orders increased 5%, and AOV increased 8% YoY on Thanksgiving Day
- GMV increased 6%, total orders increased 5%, and AOV increased 1% YoY on Black Friday
For those of you who run e-commerce stores or manage stores for clients, how was your weekend so far? Do your numbers match up with the above trends? Hit reply and let me know.
3. An update to the OpenAI drama
Last week I reported (story #1) on the firing of OpenAI's CEO Sam Altman and the drama that ensued thereafter. Read that post if you're behind the times on what went down.
My updates ended last Monday with Microsoft hiring Altman and co-founder and former OpenAI President Greg Brockman, as well as several other team members to spearhead Microsoft's “new advanced AI research team.”
That news was followed by 600+ OpenAI employees signing an open letter threatening to leave the company unless the board resigned and reinstated Sam Altman as CEO and Greg Brockman as President.
Here's what went down since:
- On Wednesday, it was reported that Sam Altman is returning to OpenAI as its CEO. He will replace CEO Emmett Shear (former Twitch CEO) who served for a few days.
- It was rumored that Shear, at one point, threatened to resign unless the board could provide documentation or evidence of wrongdoing to support Altman's firing.
- The company also said that it's revising its board (who fired Altman) which will now include: Bret Taylor (former co-CEO of Salesforce), Larry Summers (former U.S. Treasury Secretary), and Adam D’Angelo (Quora CEO and current director).
- That board is believed to be transitory. The Verge reported that people familiar with the negotiations say that the main job of this small initial board is to vet and appoint an expanded board of up to nine people that will reset the governance of OpenAI (which may include Altman himself).
- Brockman confirmed in a tweet that he’ll be “returning to OpenAI,” but didn't specify if it'd be as President. In a series of tweets that followed, he was unequivocally back to work at the company.
- It was revealed that ahead of Altman’s four days in exile, several staff researchers wrote a letter to the board of directors warning of a powerful AI discovery that they said could threaten humanity. The sources cited the letter as one reason by the board for firing Altman, with other reasons including concerns over commercializing advances before understanding the consequences.
- It's important to note that no-one's seen that letter, however, OpenAI acknowledged in an internal message to staffers a project called Q*, which is supposedly a breakthrough in the company's search for artificial general intelligence (AGI). OpenAI defines AGI as autonomous systems that surpass humans in most economically valuable tasks.
- Still no-one has real answers as to why Altman was fired in the first place. One theory is that Sutskever, who represents OpenAI's research side, and Altman were divided on whether the startup was prioritizing making money over responsibly developing AI.
- Elon Musk, who played a big role in persuading Ilya Sutskever to join OpenAI as chief scientist in 2015, is curious what Sutskever saw.
- Marc Andreessen posted to X on Thursday, “Seriously though — what did Ilya see?” To which Musk replied a few hours later, “Yeah! Something scared Ilya enough to want to fire Sam. What was it?”
- Musk also wrote on X, “Given the risk and power of advanced AI, the public should be informed of why the board felt they had to take such drastic action.”
What's next in this thrilling saga? Potentially the end of humanity! Or maybe just the end of 50% of all jobs, according to theories about the Q* project. Or business as usual and this whole Q* thing is overhyped. What do you predict? Hit reply and let me know.
4. The largest Amazon strike ever
Amazon workers across 30 countries entered into demonstrations on Black Friday under the banner “Make Amazon Pay” — and no, that's not an advertisement for their payment service.
The widespread protests are a call for improved wages and better working conditions at Amazon, primarily within fulfillment centers.
Here's what went down on Black Friday:
- 2,000 employees in Germany staged strikes at six fulfillment centers.
- Of those Germany workers, 500 walked out at a Rheinberg warehouse, constituting nearly 40% of the workforce, while 250 walked out in Leipzig, or roughly 20% of the staff.
- 200 workers protested at Amazon’s Coventry warehouse in England.
- In Italy, 60% of employees at the Castel San Giovanni warehouses went on strike.
- In Spain, the CCOO union called for a one-hour strike among Amazon warehouse and delivery workers today on Cyber Monday.
- France witnessed protests organized by anti-globalization group Attac, who barricaded Amazon lockers across the country in response to Black Friday being a “celebration of excess consumption.”
The holiday protests are billed as the largest Amazon strike ever, with more than 80 labor and climate organizations supporting the protests and strike efforts at facilities worldwide.
Amazon pushed back on the claims promoted by protesters, saying the “vast majority of these allegations are false or misinformed.”
Amazon spokesperson Mary Kate Paradis said in a statement to The Hill, “The fact is Amazon has created millions of good jobs, while helping create and support hundreds of thousands of small businesses around the world. We offer great pay and benefits for our employees, with great career opportunities, and provide a modern and safe working environment for all.”
5. Walmart introduces Parcel Stations
In the past decade, Walmart has evolved over 4,000 of their 4,700 stores in the U.S. into online fulfillment centers and delivery hubs, supported by their last-mile delivery network.
Now Walmart is taking things a step further by adding parcel stations to their stores, which the company describes as like a “mini post office that receives and delivers packages.”
Here's how it'll work:
- Customers place orders online for next-day delivery.
- Walmart fulfillment centers transport the items to store parcel stations.
- The items are then delivered to customers' homes through independent contractors on Walmart's Spark Driver platform or third-party carriers.
The stations are designed to build density into the last-mile delivery process, lowering the costs Walmart incurs to reach end customers.
In other words, the stations help consolidate packages for delivery so that drivers can deliver more packages per stop or per route, making for a more efficient use of vehicles and drivers.
Another way that Walmart is increasing delivery density is by delivering for other retailers through its Walmart GoLocal program.
The better density will improve e-commerce margins, which Walmart needs to compete with Amazon online.
Walmart plans to have over 40 parcel stations in stores by the end of the year, with many already operating now in time for the holiday season.
6. Kohl's says e-commerce is bringing it down
Kohl's is making changes to its strategy after a dismal Q3, which include a shift in focus back to its brick-and-mortar stores.
CEO Tom Kingsbury, who replaced Michelle Gass as CEO just under a year ago, said the retailer's efforts online have been undermining its performance.
Kingsbury said, “The digital business is really what’s bringing us down. I’m confident about the fact that we are doing well in stores.”
- While overall comps were down more than 5% in Q3, store comps only fell 1% and were up slightly year to date.
- Online sales at Kohl's is 32%, with a compound annual growth rate of 8% over the last five years.
32% of sales happening online is nothing to sneeze at, but even so, the company wants to re-focus on its brick-and-mortar.
Which isn't necessarily a bad idea as brick-and-mortar constitutes the bulk of its sales, but the question is — do they have the funds to do so?
GlobalData Managing Director Neil Saunders said, “While Kohl’s does not have the capital to spend billions on refurbishments, it needs to inject at least some money into making improvements.”
In comparison to Walmart and Target, he said, “Kohl’s is falling further behind and is simply not providing customers with a modern and engaging store experience. This is losing it customers and market share.”
Koh's isn't the only retailer to shift its focus (or deliberately keep its focus) on brick-and-mortar stores.
In October, I reported (story #8) that HomeGoods shut down its online store to focus on their brick-and-mortar stores, with new store openings on the way.
And in May, I shared (story #1) why Trader Joe's has chosen to exclusively focus on its brick-and-mortar business. The company believes that e-commerce would disrupt its focus on value, and that it would have trouble replicating online the “treasure hunt” in-store shopping experience it offers customers.
7. Shoppers' top pet peeves
In a recent survey by Contentsquare, consumers ranked their top frustrations with online holiday shopping.
Here's why customers aren't completing their purchases:
- Slow website loading times (20%)
- Excessive pop-ups (19%)
- Item unavailability (19%)
- No quick-purchase checkout options such as Apple Pay or PayPal (17%)
- Poor search results (9%)
- Sites not configured for mobile (9%)
- Promotion didn’t work correctly (8%)
I'll add to that list of frustrations — too many e-mails! One of my favorite WordPress theme makers sent me 20 promotional e-mails over the past 12 days (so far). There is a such thing as e-mail fatigue ladies and gentlemen!
I do understand that brands want to get their promotions in front of our eyes, but there's a line they can cross where sending too many e-mails negatively impacts the brand in the eyes of their customers. A lot of brands crossed that line this year.
Black Friday / Cyber Monday isn't about squeezing as many sales from your customers as possible at all costs. It's about rewarding your longtime customers with deals, bringing new customers into your ecosystem with promotions, and strengthening your brand with all your customers. Having customers unsubscribe from your promotional e-mails because you BLEW UP their Inbox isn't too good for LTV I hear.
Contentsquare's survey also found:
- 67% of shoppers will spend the same or more time holiday shopping this year than last.
- 80% of shoppers indicated that they will do at least half of their holiday shopping online this year.
- 36% of respondents used social media for gift inspiration, with 13% purchasing directly from social channels.
- 56% have recommended websites based on a previous positive experience.
- 10% have discouraged others from using websites based on negative experiences.
8. Amazon widening gap between UPS and FedEx
Amazon delivered more packages in 2022 than UPS, after having already eclipsed FedEx in 2022. Now it's on track to widen the gap this year.
- Before Thanksgiving this year, Amazon had already delivered more than 4.8B packages in the U.S.
- Amazon predicts that it will deliver around 5.9B by the end of the year.
- Last year Amazon shipped 5.2 billion packages.
- These figures include only packages that Amazon shipped from beginning to end, and not ones that they handed off to the postal service for final delivery.
FedEx and UPS have said in recent years they weren’t in a race for volume and were instead focused on delivering more profitable parcels, which sounds like something a scorned ex-partner would say.
FedEx told WSJ that it is focused on the e-commerce beyond Amazon.
“Our strategy is to democratize e-commerce,” a spokesperson from FedEx said, adding that the company has
picked up Amazon's scraps taken market share in segments of the U.S. domestic package market this year.
UPS on the other hand has leaned into higher-margin parcels from other segments including healthcare and smaller businesses. (Hey, quit squeezing small businesses!)
While Amazon has surpassed both companies on residential delivery, it has yet to replicate their global coverage or two-way coverage. Brian Ossenbeck, an analyst at JP Morgan said, “Amazon is very good at the one-way network, delivering goods at faster speeds but it doesn't have the same level of pick-up and delivery coverage.”
That of course could change. In August, I reported (story #2) that Amazon is restarting its shipping service for external deliveries that competes directly with FedEx and UPS.
Amazon Shipping began in 2018, but was paused in early 2020 at the start of the pandemic because the company was flooded with its own orders that it could barely keep up with during lockdown.
Amazon Shipping is now available in the U.S. for both packages sold on Amazon's website and items from other marketplaces and selling channels.
9. Other e-commerce news of interest
Last week I reported (story #4) that Media Matters published a report revealing that despite X's claims that brands are safe from having their ads next to toxic content, they've found ads for Apple, Bravo, IBM and other major advertisers next to posts that tout Hitler and his Nazi party on the platform (with a LOT of screenshots to back their claim). Musk said last week that he planned on filing a “thermonuclear lawsuit” against the publisher and “ALL those who colluded in this fraudulent attack on our company” — which he followed through with on Monday.
TikTok is turning to GoTo to revive its e-commerce business in Indonesia. The two firms are working on a plan that would see TikTok invest in GoTo's online shopping arm Tokopedia to form a joint venture that would allow TikTok to revitalize its online shopping business in the country.
Etsy launched a filter that identified and pulled off any items on its platform that are also on Temu. Etsy's goal is to suppress visibility on items that are not handmade, which is the platform's bread and butter. However sellers have reported that some of their handmade items that had been copied and appeared for sale on Temu were removed from their Etsy stores as well.
Link Financial Technologies, a U.S.-based open banking platform, partnered with Bold Commerce to bring Pay by Bank to merchants, which can reduce payment processing fees, credit card fraud, and churn. There has been an uptick in pay by bank activity in fintech in recent months, with J.P. Morgan and Adyen both announcing plans to offer the new payment method.
Weibo, WeChat, Douyin, Zhihu, Xiaohongshu, Kuaishou, and other major social platforms in China are now requiring “Big Vs” (verified influencers with large followings) to reveal their real names to the public. Experts believe that the real-name rule is designed to limit the influence of key opinion leaders who wield a lot of power on the Chinese internet.
Jack Dorsey said that Block will no longer do performance reviews or performance-improvement plans, which he feels is a waste of time. Instead the company will give workers a rating of “exceeds, meets, or falls below” expectations. Business Insider noted that earlier this month they reported that Dorsey warned of upcoming job cuts at Block, of which the performance changes might be related.
Shein has become the largest fast-fashion retailer in the U.S., comprising 28% of fast fashion sales. The company's revenue grew more than 40% to $24B between January and September from a year earlier, surpassing H&M, Zara, Forever 21, and Fashion nova.
16M consumers in the U.K. are still unaware that you can get into debt using BNPL services, according to research from Creditspring. Half of younger people also did not know that BNPL can add extra costs or late fees if payments are missed.
The FCA authorized Klarna to provide regulated payment and credit services in the U.K. The news comes several weeks after reports that Klarna is establishing a new UK-registered holding company to position it more favorably for a potential billion-dollar IPO.
eMarketer determined that 31.5% of shoppers immediately purchased an item after discovering it in-store, compared to only 19.1% on retail websites and 10.4% on brand sites. Brick-and-mortar stores are most important to grocery discovery, where 50.8% of shoppers purchased a product after discovering it while shopping in-store.
Coca-Cola joined India's ONDC network through SellerApp, which will provide order management and inventory tracking. The company also launched its own marketplace on the ONDC platform called “Coke Shop” (not to be confused).
10. Seed rounds, IPOs, & acquisitions
Mozaic (previously Jammbers), a platform that helps split payments amongst different collaborators on projects, raised $20M from Volition Capital in a Series A round, bringing its total amount raised to $27M. Initially the company decided to focus on the B2B aspects of music, but decided to pivot to creating a collaborative payments product using its experience in music project management.
Deep Sky, a Montreat-based carbon-capture startup, raised $57.5M CAD in a Series A round co-led by Brightspark Ventures and Whitecap Venture Partners, bringing their total amount raised to $75M CAD. The company hopes to be the first “gigaton-scale” carbon removal company that removes billions of tons of carbon from the atmosphere and stores it underground permanently.
SeeChange, a U.K.-based developer of a real-time AI recognition system that uses video sensors built across the entire retail supply chain and applies advanced AI models to analyze events to improve efficiency, raised $10M in a round led by Triple Point Capital. The funds will be used to expand the company's commercial deployment and build up the commercial product and support teams.
Thanks for being a Shopifreak!
If you found this newsletter valuable, please leave a review on Google and share the newsletter with your friends and colleagues to help us grow.
See you next Monday,
PS: What kind of music scares scissors? Rock music.