Question for you: How do we grow Shopifreaks in 2023?
There are a lot of brilliant minds reading this newsletter, and given that you're the most familiar with our industry and what I offer, I'd greatly appreciate your help and advice.
Last year I grew Shopifreaks readership by 375% — but that's just the beginning. In 2023 I want to 10x our readership so that I can continue to serve you with weekly news curations and insights.
So what can I do to grow? Is there room for a strategic partnership between our companies? Can I add value to your podcast or publication for cross-promo? Which events can I speak at? What advertising channels am I missing?
Please hit reply and let me know. Your ideas are invaluable to me and greatly appreciated.
PS: Today's my 38th birthday!
Intro
Remember crypto? Even though you may have stopped checking your digital wallet every day (too painful!), the industry is still moving and shaking — and it's getting closer and closer to mainstream e-commerce.
In this week's edition, I've got stories for you about MAJOR payment processors moving deeper into crypto and MAJOR retailers diving deeper into the metaverse. The two which go hand in hand.
I also cover Amazon's new supply chain management service, Klarna's push into the creator community, and holiday shopping week results.
All this and more in this week's 98th Edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“Will you be making a purchase in a metaverse in 2023?”
➡️ Click here to take the poll. ⬅️
Last Weeks Poll Results: Americans are split on whether Chinese marketplaces will give Amazon and Walmart a run for their money in 2023. 28.1% of respondents said YES, 43.8% voted NO, and 28.1% voted MAYBE. [View Poll]
Stat of the Week 📈
76% of consumers are extremely concerned about inflation, and 68% are very worried about a recession. – According to Xero
They also report that 58% are watching more for sales and discounts, 47% are spending more time looking for the best prices, & 39% are prioritizing price above all else.
Share this week's stat on Twitter & LinkedIn.
1. More holiday shopping week results
Last week I gave you some preliminary results from Black Friday. This week, I've curated reports from the entire holiday shopping week:
Total online sales reached $281B globally for the weekend, a 2% increase YoY, and $68B in the U.S., a 9% increase YoY, according to Salesforce.
BigCommerce reported that its merchants experienced another year of record sales during Cyber Week, hitting a 32% increase in GMV over 2021. Shoppers were also more active from Thanksgiving to Cyber Monday this year with total orders up 25%.
Amazon recorded its biggest ever Thanksgiving weekend this year. They did not provide a total sales figure, but noted shoppers generated more than $1B in sales for small businesses in the U.S.
Shopify announced a record-setting Black Friday Cyber Monday weekend with sales of $7.5B, a 19% increase from 2021. More than 52M consumers globally purchased from brands powered by Shopify this year, a 12% increase from 2021.
The National Retail Federation estimated that Black Friday, Small Business Saturday and Cyber Monday brought in a total of 166.3M shoppers, 8M more than last year.
Cyber Monday broke records this year, according to Search Engine Land, with almost $12B in US sales, while the whole month of November saw nearly $110B in online sales.
Adobe estimates online shoppers spent $11.3B on Cyber Monday, a 5.8% increase over 2021 when sales for the Monday after Thanksgiving were $10.7B.
The value of BNPL transactions increased 87% and the number of transactions rose 31%, according to ACI Worldwide.
Splitit found its shoppers spent 17% more than a typical week.
Mercado Livre recorded the best Black Friday in its history. Mercado Pago also recorded growth above the market on Black Friday with an increase of 38%.
Square reported $61M in total number of sales transactions on its platform, with more than 245k gift cards sold.
The cybersecurity firm CHEQ analyzed 1.6M visits to retailers’ websites and determined that about a fourth of Black Friday shoppers were likely fake, and that 1 in 5 of the 765k visits on Cyber Monday were likely from bot traffic. Too many companies trying to track sales!
What other figures were released? Share the links on our subreddit.
2. Amazon launches AWS Supply Chain
Amazon is adding a supply-chain management service to its web services division to offer companies tighter control of the flow of goods from factories to consumers.
Inventory managers, demand planners, and supply chain leaders can use the software to view machine learning-generated insights for potential inventory shortages or delays, and create watchlists to receive alerts to take action as risks appear.
From there, AWS Supply Chain will automatically provide recommendations such as to move inventory between locations based on factors like risk, distance, and sustainability impact.
AWS Supply Chain adds Amazon to a growing list of software suppliers in the space including Manhattan Associates, Blue Yonder, and Microsoft, which launched its own supply-chain management software platform earlier this month.
Chao-Ming Ying, CTO at New Horizon Soft, said that it was “inevitable Amazon would launch a supply chain software service… More recently, AWS launched a number of supply chain technology services applicable such as Amazon Forecast, Improving Forecast Accuracy with Machine Learning, Amazon Managed Blockchain, and Amazon IoT Core… So it’s not surprising that now Amazon is going a step further and launching a true supply chain software application.”
At AWS re:Invent in Las Vegas, Amazon also announced Eventbridge Pipes, an easier way to connect AWS services. Pipes allows developers to use a lambda function or API to manipulate the data inside the pipe before it reaches the consumer.
Amazon Retail Operating System
I believe that Amazon is working towards becoming a complete retail operating system to corner an even larger piece of the retail pie than it already dominates with its own marketplaces, logistics and web services.
Last year Amazon launched a POS system that can handle both online and offline transactions and link to other Amazon services including Prime membership, biometric payment solutions, and fulfillment services.
In April, Amazon launched Buy with Prime, an embeddable checkout that allows merchants to sell their products directly from their own websites, while still offering Prime shopping benefits like fast, free shipping, quick checkout with Amazon Pay, and free returns.
In May, Amazon opened Amazon Style, their first clothing store in Glendale, which demonstrates their new tech-heavy shopping experience including the ability for customers to scan an item's QR code, view product ratings, use their app to have additional items brought to their fitting rooms, and more.
And in August, Amazon partnered with mall stores including PacSun, GNC, Superdry, and Diesel to offer same-day Prime deliveries in Atlanta, Chicago, Dallas, Las Vegas, Miami, Phoenix, Scottsdale, Seattle, and Washington D.C.
AWS Supply Chain is another example of the company evolving from a marketplace and direct retailer into a retail facilitator that offers a full suite of technology to power a company's retail operations.
3. BigCommerce News (Sponsored)
As you read above in the holiday shopping week results, BigCommerce merchants had their best year ever during Cyber Week, hitting a 32% increase in GMV over 2021!
Also noteworthy is that BigCommerce achieved 100% uptime for the ninth year in a row during that period.
A few other interesting stats from BigCommerce's report:
- The most active part of the day for BigCommerce merchants was 10 a.m. CT on Black Friday and 12 p.m. CT on Cyber Monday.
- Saturday saw a 36% YoY increase on Sunday saw a 35% increase.
- Mobile orders shifted down this year from 42% last year to around 38% this year.
- The categories with the largest YoY growth were luggage (74%) fashion and apparel (66%), and travel (64%).
- BNPL usage increased 8% over last year in October, and 25% during Cyber Week.
In other news this week, BigCommerce announced an exclusive tech partner integration with StagingPro, a comprehensive staging and deployment suite that gives enterprise merchants and agency developers a collaborative, near-production level environment to easily test and deploy code to a BigCommerce store.
Purpose built for BigCommerce, StagingPro provides an easy-to-use staging environment for merchants, agencies and third-party developers to create one or more replica sandbox stores without the need to reproduce and duplicate work onto a production store.
4. Klarna Creators expands globally
In October, I reported that Klarna launched a Creator Platform as part of a number of product innovations branded under its Klarna Spotlight name.
The platform is designed to be a one-stop shop for retailers and creators to work together to automate everything from initial outreach, to partnerships, to tracking sales, and commissions.
Through the platform, creators have direct access to Klarna's largest retailers and hundreds of thousands of products that they can recommend to their followers. In turn, retailers on the platform can connect with Klarna's more than 500k creators and track their performance in real time.
Creator Platform initially launched in the U.S. and now PYMNTS reports that it is expanding to the U.K. and the rest of the company's 45 regions.
Earlier this year, Klarna announced that it wanted to ditch its association with its main product, BNPL, and move towards being known more for being a global retail bank and one-stop e-commerce shop. The creator platform is another step in that direction.
In other Klarna news, the company's co-founder and CEO, Sebastian Siemiatkowski, expects to post a profit in the second half of 2023. The company reported GMV of $60.2B, up 22% from the prior year's GMV of about $49B, but Q3 results still show a loss of $200M, nearly double the $106M it lost in Q3 2021.
5. Best YouTube Ads
YouTube published its annual list of the ads that performed best on its platform this year. It's like the Internet's very own Super Bowl!
There are definitely a few surprises on this list:
- Amazon’s Big Game Commercial: Mind Reader – 69M views
- Wei Ramadan 2022 Announcement – 65M views
- Welcome to CLAN CAPITAL! Clash of Clans New Update! – 52M views
- The new MacBook Air | Supercharged by M2 – 41M views
- Goal of the Century x BTS | Yet To Come – 40M views
- Feel the Rhythm of Korea with BTS – BUSAN BLUES – 102M views
- Harry Potter 20th Anniversary: Return to Hogwarts – 27M views
- All of Us Are Dead | Official Trailer | Netflix – 22M views
- Zé & Zê – Feita Pra Mim (Videoclipe Oficial) – 22M views
- Sally's Seashells (Extended) | Big Game Commercial 2022 – 21M views
Which one's your favorite? Which ad wasn't on the list that should've made it? Hit reply and let me know.
6. Stripe launches fiat-to-crypto onramp
Stripe launched their new fiat-to-crypto widget which makes it easier to make purchases on a blockchain without signing up to an exchange. The widget can be embedded in any crypto product so that users can enter their credit card info and acquire crypto that can be used in another web3 product.
Stripe isn’t the first company to come up with this product. MoonPay and Ramp are already available in many crypto wallets. However Stripe is the most well known fintech, and already integrated with 3.3M websites as their payment processor.
The widget is is currently only available to U.S. customers who are invited to test the product.
What's the point? Fiat-to-crypto onramp services make it easier to avoid centralized exchanges to make purchases on the blockchain. Without one, you'd have to go to an exchange like Coinbase or FTX (😂) and convert your USD to BTC or ETH, and then oftentimes trade that for another coin, which you then transfer to your wallet, which you can finally use to make purchases. Several steps involved and lots of transfer fees. It's so 2021!
Whereas with fiat-to-crypto onramps like Stripe, MoonPay, and Ramp, they act as the intermediary between paying with your credit card, converting your funds to crypto, and making a purchase.
So in other words, they make it a LOT easier to accept crypto payments on your website for your average consumer.
In March, I reported that Stripe was bringing back support for crypto businesses including exchange on-ramps, wallets, and NFT marketplaces. Stripe was was one of the first big fintech companies to embrace Bitcoin in 2014, but it stopped processing BTC transactions in April 2018 on account that crypto currency “became less helpful for moving funds”.
7. Faire may introduce ads
The wholesale marketplace Faire is exploring the idea of introducing ads to better monetize the sellers on its platform. Similar to how Amazon offers various ad placements for sellers on their marketplaces, which resulted in over $31B for the company in 2021, Faire could offer featured placement for products or sellers through search, related product suggestions, or display ads.
Faire has grown quickly, doubling in size last year to 600k stores and 85k brands. The platform makes money by taking a commission on transactions, charging shops 25% for new orders and 15% for reorders.
Now the company is preparing to build out its feature set, which could eventually include internal ads that would help surface brands to retailers. To oversee that effort, it has hired Ami Vora, a former Meta VP who oversaw the introduction of ads at Instagram, as its first chief product officer.
Max Rhodes, Faire cofounder and CEO, said, “I think we want to be really careful about the way that we do it.”
As they should! Already taking 15-25% of orders, how much margin do they think wholesalers have left to give?
8. Hiring & Layoffs
Unfortunately there are more major layoffs to report, but also some hiring unfreezes. Hopefully the former won't become a regular part of this newsletter.
- Lyst, the U.K. fashion e-commerce site that last year raised funding at a $700M valuation, is cutting its staff by 25%, or about 50 people, as part of a larger restructuring to conserve cash flow and move to profitability.
- Zilch, the U.K. based BNPL firm, is letting go of 10% of its workforce. A former employee said that the company has already let go of over 30 employees and more people are resigning because of “bad morale.”
- Carousell, the consumer to consumer e-commerce platform, has laid off 10% of its workforce, or about 110 employees, in an effort to reduce costs. After tripling its revenue in 2020, Carousell saw a more modest YoY growth of 21.8% to $49.5M in 2021, according to most recent financial statements.
- Business Today reports that Amazon is planning to layoff as many as 20,000 employees, which is twice as much as previously reported, eliminating about 6% of corporate staff and 1.3% of their overall workforce.
- However in an interview with Bloomberg, Mark Garman, SVP of sales and marketing for AWS, said he expected to begin adding staff starting next year, and denied any plans to reduce spending on new datacenters and infrastructure.
As a reminder for your friends in the industry who have been let go, check out the Seed rounds, IPOs, & acquisitions section of this newsletter (#10) each week. The number one place most companies plan on allocating their new funds is towards HIRING! Keeping up with seed rounds is a great way to stay in the know about new job openings.
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9. Other e-commerce news of interest
Forbes released their 30 Under 30 in Retail & E-commerce, highlighting entrepreneurs who are reinventing how we shop, on and offline. Names include Steven Vasilev, cofounder of RTFKT, JT Garwood and Jack Miller, co-founders of bttn, Samer Abu Farha, founder of Rare Munchiez, and Jina Chang, founder of Girls Crew.
Block is suing Bitcoin.com for using the trademarked word “Verse” for its native tokens, which raised $33.6M in a private sale earlier this year, and for not removing it despite repeated warnings. Jack Dorsey and Roger Ver, owner of Bitcoin.com, have been involved in personal disputes in the past, including in 2019 when Ver accused Dorsey of supporting lightning Network, citing his alleged romantic involvement with their CEO Elizabeth Stark.
Shopify says, “By March 2023, you'll be able to switch to Google Analytics 4 on Shopify.” Shopify was years behind other platforms with natively integrating GA4, but the integration is happening just in time, as Universal Analytics is set to sunset in July 2023.
The CEOs of Kroger and Albertsons say their $24.6B proposed merger will help them defend against Amazon, but Amazon commanded just 1.2% of grocery sales. Data suggests that a combined Kroger and Albertsons would be much larger by sales than Amazon the day the merger takes place.
Macy's is converting 1M square feet of its retail stores into fulfillment space as it gears up for holiday orders. The retailer is planning semi-automated distribution centers across 35 of its stores as “low-cost complements to our existing fulfillment network.”
Amazon is planning to invest $1B each year toward running its new Prime Video releases in movie theaters, hoping to release between 12 and 15 films annually. And in other production news, Mike Flanagan and The Haunting of Hill House executive producer Trevor Macy are moving to Amazon Studios as part of a new exclusive overall TV production deal under Intrepid Pictures.
Elon Musk claimed that Apple has “fully resumed” advertising on Twitter, which if true, is great for Twitter because Apple is their biggest advertiser. Amazon is also reportedly planning to return very soon, but said that it is waiting for Twitter to carry out some “security tweaks to the company’s ads platform.”
Le Collectionist, a luxury vacation rental platform that partners with owners of 1,800 properties across 30 destinations, raised $63M in a round led by Highland Europe. The funds will be used to expand its teams in Paris, the South of France, Barcelona, Ibiza, and Switzerland, as well as open new offices in London and NYC.
Two former Amazon employees pleaded guilty to fraud and stealing $10M from the company. Kayricha Wortham and Demetrius Hines exploited their positions at Amazon to enter fake vendors into Amazon's vendor system and then submitting invoices. They probably would've gotten away for it if not for their extravagant purchases like a $900k home, Lamborghini Urus, Dodge Durango, Tesla Model X, Porsche Panamera, and Kawasaki ZX636 motorbike!
Shein onboarded Jessica Liu, former co-president at Lazada, as its VP of global brand operations. Lui will be responsible for global brand partnerships as the company evolves from fashion into an all-encompassing e-commerce platform.
ChannelEngine, a Dutch marketplace integration platform serving over 8,100 brands selling on over 250 platforms, partnered with TikTok Shop to sync retailer's catalogs. TikTok has partnered with multiple e-commerce companies in hopes of attracting more users and merchants to sell on its platform.
Batteries Plus is bringing in Aaron Bundschuh as chief digital officer to help oversee a transformation of its e-commerce experience. After recently launching a new web platform, the company is now focusing on performance improvements such as reviewing individual site categories and creating omnichannel consistency.
Alibaba launched a new e-commerce platform called Miravia in Spain, in a move to grab a bigger share of the local mid-range to high-end consumer market in the country. The platform is operated independently and mainly features Spanish and other European brands from categories such as beauty, fashion, personal care, electronics, foodstuffs, infant products, and healthcare.
GoDaddy and ShipEngine partnered up to streamline shipping for merchants that operate GoDaddy online stores. With ShipEngine's API, store owners can create shipping labels from their GoDaddy accounts and get discounted rates from USPS and other carriers.
Flipkart, owned by Walmart, partnered with Polygon, the Ethereum-based blockchain platform, to setup a center of excellence that will work on research and development of Web3 and metaverse commerce use-cases in India including NFTs and virtual immersive stores. In October I reported that Flipkart launched their metaverse Flipverse, and earlier that month I reported on Walmart's entry into the metaverse through two new Roblox experiences: Walmart Land and Universe of Play — indicators that the company is making a global effort to be an early adopter of metaverse technology.
European parliamentarians reached an agreement on updated consumer credit rules to protect consumers from BNPL and other short-term high cost loans. The update will ensure improved assessment of the consumer's ability to repay, put caps on interest rates, and require that credit advertising always contain a clear and prominent warning that “borrowing money costs money.”
10. Seed rounds, IPOs, & acquisitions
Locus Robotics, a Robotics as a Service company, raised $117M in a Series F round led by Goldman Sachs Asset Management and G2 Venture Partners for its autonomous mobile robots that are used in fulfillment and distribution warehouses, bringing its total amount raised to $422M. Locus has more than 90 customers worldwide and in September 2022, the company reached its 1 billionth pick.
Saltbox, a coworking and warehouse space company, raised $35M in a Series B led by Cox Enterprises and Pendulum, bringing its total amount raised to $56M. The U.S. based company, which currently offers more than 10 co-warehousing facilities, wants to invest the funds in software to create a more seamless logistics ecosystem. Two weeks ago I reported on competitor ReadySpace's $20M round.
Igloo, a Singapore-based insurtech that focuses on underserved communities in Southeast Asia, raised $27M in a Series B extension led by InsuResilience Investment Fund II, bringing the round's total to $46M. Igloo develops insurance products and then partners with insurers who underwrite their policies, currently offering 15 products for gig workers, gamers, cars, and farmers in Vietnam.
TreeCard, a climate-conscious fintech that offers a wooden debit card and uses 80% of its profits to plant trees, raised $23M in a round led by Peter Thiel's Valar Ventures. The platform, which is still in beta, plans to use the funds for an official launch in 2023.
Buckzy Payments, Inc., a Canada-based real-time cross-border payments company, raised $14.5M in a Series A round led by Mistral Venture Partners and Uncorrelated Ventures. The company currently operates in over 80 countries and will use the funds to enter new geographic areas and expand its product offerings.
X1, a San Francisco-based fintech startup that offers consumers an income-based credit card, raised an additional $15M in their Series B round led by Soma Capital, bringing the round total to $40M. The company also announced the launch of a new investing platform that will allow its cardholders to buy stocks with their earned reward points.
Flash, an online shopping platform that that empowers consumers to be in control of their shopping and communication and unlock personalized experiences, raised $5.8M in a round led by Global Founders Capital, White Venture Capital, Zinal Growth, and others. The funds will be put towards product development, hiring, and global expansion.
OneRail, an Orlando-based startup that optimizes last-mile deliveries, raised $33M in a Series B round co-led by Piva Capital and Arsenal Growth Equity, bringing its total amount raised to $54.5M. The company's software processes over 1M deliveries per month from 10k destinations in 330 cities, and the funds will be put towards launching an extension for SMBs on Shopify in 2023.
Campari Group, an Italian beverage company, and Moët Hennessy, a French holding multinational corporation specializing in luxury goods, have jointly acquired the remaining stake in Tannico, an Italian e-commerce alcohol platform, claiming full ownership of the site. In 2020, Campari Group acquired a 49% share in Tannico for €23.4M, and now completed the transaction for an undisclosed amount.
Uncover Skincare, a Kenya-based beauty and skincare company, raised $1M in a round led by FirstCheck Africa, Samata Capital, Future Africa, and IgniteXL, bringing its total amount raised to $1.225M. Uncover uses African botanicals and outsources its manufacturing to Korean original design manufacturers. They will use the funds to scale operations in Kenya and expand to Nigeria.
Trafilea, an e-commerce platform that builds D2C brands with meaningful purposes, agreed to acquire The BodCon, a digital conference focusing on body positivity, for an undisclosed amount. Through the acquisition, the companies hope to amplify BodCon’s mission to promote body confidence and self-acceptance.
Badili, a Kenya-based smartphone re-commerce startup, raised $2.1M in a pre-seed funding round led by Venture Catalysts, V&R Africa, Grenfell holdings, and SOSV. The funds will be put towards scaling its operations within Africa and exploring new growth opportunities in West Africa, where it hopes to tap an increasing demand for affordable second-hand smartphones.
Tonik Financial, a digital bank serving Southeast Asia, has entered into an agreement with Tendo Payment Solutions, a payroll and financial services company, to acquire its Philippine business, operating under the brand name TendoPay. The acquisition is set to further cement Tonik's position in digital credit and lending in the Philippines.
Kapu, a social commerce startup that hopes to help lessen the burden of buying food for Kenyan consumers by enabling consumers to buy groceries at lower prices through online and offline channels, raised $8M in a round co-led by Giant Ventures and Firstminute Capital. By sourcing directly from manufacturers and producers, Kapu enables group bulk-buying of groceries and claims to help consumers save up 30% on fresh produce and packaged consumer goods.
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: Why did Tigger look into the toilet? He was looking for Pooh.