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

#108 – Winter ’23 Edition, botched Bard, & BNPL Collapse

by | Feb 13, 2023 | Recent Newsletters

Welcome to our 400+ new subscribers this week! I hope that you enjoy the newsletter and that it brings tremendous value to your e-commerce business or job.

And a big thank you to all our existing readers for sharing Shopifreaks with your colleagues and helping us grow. Don't forget to use your referral link at the bottom of this e-mail when sharing the newsletter so that you earn $10 towards our Rewards Partners for every subscriber you refer. 

In this week's edition of Shopifreaks, I cover Shopify's Winter '23 Edition announcing 100+ product updates, Roku and DoorDash's new TV ordering, and Google's botched Bard debut. 

I also share stories about BNPL firms collapsing, Apple subscription delays, and of course — Super Bowl Commercials!

All this and more in this week's 108th Edition of Shopifreaks. Thanks for subscribing and sharing!

Poll of the Week 🗳️

“Are you currently utilizing ChatGPT or other generative AI products within your business?”

🗳️ Take the Twitter poll.

Last Weeks Poll Results: Last week I asked if the FTC should move forward with its anti-trust lawsuit against Amazon this year. 78% of you said, “Yes, it's about time!” while the other 22% felt that the FTC should leave Amazon alone. [View Poll]

Stat of the Week 📈

625 of Twitter's top 1,000 advertisers stopped spending on the platform as of January, bringing monthly revenue down from $127M to just over $48M. – According to Pathmatics

Meanwhile Amazon's ad business grew 19% YoY to $11.6B in Q4, while Meta reported its third straight revenue drop, and Alphabet posted only a 1% revenue growth to $76B.

Share this week's stat on Twitter & LinkedIn.

1. Shopify Winter '23 Edition Recap

Shopify has been busy justifying their recent price increase with 100+ product updates and new features, as part of their Winter ‘23 Edition. 

In June 2022, I reported on Shopify's first semi-annual product sprint called Shopify Editions, where the company announced over 100 new tools and feature that they'd added in the previous six months. Now they're back at it again with a strategically timed Edition.

Here's a recap of what's new: 

  • Shopify Logistics – a newly coined division that will combine recent acquisitions, its own facilities, and a partnership with Flexport to offer a single service to handle seller logistics
  • Shop Minis – enabling developers to extend their Shopify app functionality to Shop app
  • Shop Cash campaigns – a new pay-per-sale customer acquisition channel for Shopify Plus merchants to offer special deals and offers to acquire new customers who've earned Shop Cash from using Shop Pay
  • Sign in with Shop – an easy way for customers to login to stores using facial or fingerprint passkeys tied to their Shop accounts
  • Live Video Shopping – the Shop app will now include a live-streamed video component for merchants, who can set up different channels for their customers to tune in to.
  • One Page Checkout – Shopify's Checkout will now default to a one-page experience
  • Checkout Editor – Shopify Plus merchants can now install apps to add functionality to checkout. (Hey, what about the rest of us non-Plus merchants who have been waiting years for checkout customization?)
  • Shop Promise – now automatically enabled on storefronts for merchants using the Shopify Fulfillment Network
  • Shop Magic – AI generated product descriptions written for you after entering a few details or keywords about your product
  • Improved Search Relevance – ensure popular products are highlighted within search and misspellings still return the right result
  • Meta Objects – create reusable custom content like a shoppable gallery, product highlights, cart upsells, and more.
  • Metafields – power dynamic content with metafields such as product specifications, size charts, downloadable documents, release dates, images, or part numbers
  • Sanity Integration – direct connection with Sanity content management system
  • Product Bundles – coming soon you can set up bundles with the new Shopify Bundles app or any bundles app built on Shopify Functions
  • New Discount Apps – offer more discount types and the ability to combine multiple discounts on a single order with apps built on Shopify Functions
  • Channel Specific Discounts – offer unique discounts across channels like Google, Facebook, and Instagram
  • Updated Subscription APIs – now developers can make temporary changes to subscription contracts without overwriting source data, reduce API calls when creating or editing contracts, and support local delivery and in-store pick-up for subscription orders
  • Tokengating – Shopify merchants can now set up their stores to dictate which tokenholders can and cannot gain access to exclusive NFT drops and benefits

The rest of the product updates and features Shopify highlighted in Winter '23 Edition you've already seen me cover during the past six months including Shopify Collabs, Markets Pro, B2B on Shopify, and others. You can take a look at the full list of product improvements and features here.

Has Shopify Editions turned into a bi-annual event where app makers frantically check to see if Shopify turned their app's functionality into a native feature?

Many of the new features listed above  — such as live streaming, metafields, and product bundles — were previously only offered to Shopify merchants via 3rd party apps. However now that those features have gone in-house, it's made those apps redundant. 

In March 2022, the CEO of Bolt blasted Shopify for “using app partners as their R&D engine. Anyone too successful gets cloned.”

He went on to say, “Shopify used their ecosystem to build a big business. Now they're eating the ecosystem that made them.”

Shopify’s app-based ecosystem offers big benefits to the platform and their merchants, but it’s a double edged sword because it creates a fiduciary and ethical responsibility to a community of developers that is at times at odds with the best interest of their bottom line and/or their merchants. An example of those times is when Shopify adds core features to its platform that were previously only available via 3rd party apps.

While Shopify Editions have become a welcome set of new features for merchants, it's also becoming a D-Day for app developers.

2. Roku and DoorDash launch shoppable restaurant ads

Roku and DoorDash announced a multi-year partnership to give DoorDash businesses in US, Canada, and Mexico the ability to buy interactive shoppable ads and place click-to-order offers within the ad.

The companies note that this is the first time a restaurant advertiser can partner with both a streaming company and food delivery platform to target, measure, and attribute TV streaming ads.

Once a viewer clicks on a TV ad offer, they are sent a text message or e-mail directing them to the DoorDash app to redeem the promotion.

While that sounds impressive (and it is pretty cool to be able to interact with offers on your TV) — between paying for the Roku ad and then the DoorDash fees, it also sounds like an expensive proposition for restaurants! 

Additionally, as part of the partnership, Roku users will six months of complimentary DashPass, a membership that offers $0 delivery fees on orders and other exclusive promotions.

This is not Roku's first foray into shoppable ads. In Sep 2021, I reported that Roku launched an app in the Shopify Marketplace to allow merchants to create TV ad campaigns. 

And in June 2022, I reported that Roku and Walmart teamed up to bring together Roku's 61.3M subscribers with Walmart's more than 120k products and allow viewers to purchase items with their remotes while streaming on Roku devices. The biggest difference between this and DoorDash deal is that Roku users can buy products directly on the screen instead of being redirected to Walmart.com.

3. BigCommerce and Bank of New Zealand Team Up (Sponsored)

BigCommerce and Bank of New Zealand announced a new integration partnership to help BNZ customers digitally transform their businesses to expand customer reach, drive more sales, and increase revenue.

Local businesses can sign up for a 15-day free trial to access BigCommerce's all-in-one e-commerce platform, where they can build, run, and manage innovative e-commerce shops that deliver seamless customer journey experiences at every stage of growth.

Benefits of the partnership include:

  • Innovative E-commerce – the ability to offer a differentiated commerce experience without compromising security, stability, or scalability.
  • Global Fraud Tools – BNZ customers can access Decision Manager, 3DS verification, and fraud monitoring, powered by Cybersource.
  • Customized Storefront Designs – fully customizable themes to create mobile-responsive sites that integrate with WordPress.
  • Enterprise-Grade Functionalities – over 70+ native discounts and promotions, built-in digital wallet integrations, drag-and-drop capabilities, custom product recommendations, headless commerce APIs, and more.
  • Cross-Channel Commerce – unify and manage multiple unique storefronts within the BigCommerce dashboard with Multi-Storefront, and sync your product catalog across Google Shopping, TikTok, Snap, Facebook, Instagram, and more.
  • Low Merchant Service Fees – BNZ and BigCommerce pricing for merchants of all sizes inclusive of gateways costs and fraud monitoring
  • 24/7 Customer Support – around-the-clock access to an expertly trained support team ready to solve problems via phone, email, or chat.

To sign up for a 15-day free trial and learn more about how BigCommerce and BNZ can benefit your business, click here.

4. Openpay is first BNPL provider to hit rock bottom

Australian-based Openpay has gone into receivership — which is a court-appointed tool designed to assist creditors with recovering funds in default and help them avoid bankruptcy. It has also laid off 80 of its 140 employees.

The restructuring company McGrathNicol is now working to sell assets, including the Openpay technology platform, which other BNPL firms have already expressed interest in acquiring.

McGrathNicol were called in after Openpay failed to get “funding amounts sought under a utilisation notice served under the company’s working capital facility with AH Meydan Pty Ltd”.

Openpay suspended trading last week, with shares dipping to $0.14 from its previous peak of $3.28 in Aug 2020. Other Australian BNPL players Zip and Sezzle also saw their shares trading lower after the fallout due to lack of confidence in the industry.

New Openpay transactions have been frozen, however existing users will still be charged for purchases that have already been made. This isn't a get out of jail free card for consumers with Openpay debt!

The news comes as a bit of a surprise. Just a week earlier, the company announced record quarterly revenue of $7.1M and a peak of 374k active customers. However despite the recent wins, Openpay had burned through its cash last year cash trying to break the American and UK markets, both of which it was forced to retreat from.

With rising interest rates and a wider economic downturn over the last year, is Openpay just the first of many BNPL dominoes to fall?

5. Banks vs Cloud Computing

The U.S. Treasury released a report that identifies the potential downsides of having three cloud services providers — Amazon, Google, and Microsoft — dominate the market. Those downsides include: 

  • Lack of transparency – the information shared by cloud service providers is often insufficient for banks to identify risks like software dependencies, cyber risks, and operational incidents.
  • Staff shortages – a shortage of personnel with cloud service expertise often causes user misconfiguration of cloud services.
  • Exposure to operational incidents – cloud services are vulnerable to operational incidents, and using separate providers for different applications adds additional costs.

The Treasury noted that concentration within a few cloud providers could expose financial services to physical or cyber risks. An attack on a single cloud provider could take down tens or hundreds of banks. 

Lastly, they identified how the dominance of three major players impacts banks' leverage in contract negotiations, particularly for smaller institutions who already lack bargaining power. 

The Treasury said that it will prioritize its focus on this issue, and if they assess that cloud services do not have appropriate resilience and security in place, will take appropriate action. However, a concern for consumers is that the cost of de-concentrating the market is going to result in higher operational costs for banks, which will find their way to consumers.

It's important to note that the core banking services market (ie: non-cloud) is also dominated by just three players – Fiserv, FIS, and Jack Henry – which collectively hold 75% market share.

6. Google botched its Bard debut, but that's not stopping China

Generative AI isn't so easy, as Google publicly learned this past week during its unofficial debut of Bard chatbot. 

The company posted an ad to Twitter showing off its natural-language AI model, except nobody bothered to fact check the ad!

It was quickly revealed that Bard displayed false information about the James Webb Space Telescope (JWST), claiming that the telescope took the very first pictures of a planet outside our own solar system. However, that honor actually belongs to the European Southern Observatory's Very Large Telescope (VLT) in 2004.

Google employees internally criticized CEO Sundar Pichai for the “rushed, botched” way that the company handled the announcement by posting memes to their internal message boards.

But that AI setback isn't stopping Chinese tech companies from launching their own versions of ChatGPT.

  • JD Group is utilizing its Yanxi AI platform to create an industrial chat software known as ChatJD. The company says that its application will include customer service, marketing copy and product summaries generation, livestream e-commerce, and financial analysis, and that it will correct ChatGPT's shortcomings in loyalty, credibility, and accuracy.
  • Baidu announced its plans in January to launch an AI chatbot service similar to ChatGPT this March as a standalone application before gradually merging it into its search engine.
  • Alibaba also said that it's currently working on a rival to ChatGPT that is being tested by employees. They did not offer any additional details about when the service will be launched or whether it would be part of Taobao.

So get ready for Battle of the Chat Bots 2023! Who will prevail?

(Don't forget to take this week's Twitter Poll and let us know if you're currently using ChatGPT or any other generative AI tools within your business.)

7. Apple delays hardware subscription

Apple is slowing down on its plans to launch a hardware subscription service. The iPhone subscription program was set to launch alongside the iPhone 13 in 2021 or the iPhone 14 in 2022, but suffered from “engineering and technical setbacks that have led to slow progress and missed deadlines.” It is, however, still in the works.

In the meantime, Apple is also reportedly looking at launching a service that will enable iPhone customers to finance their purchases using the Apple Card.

The difference between the two options is that the financing will simply split the cost of the phone across 12-24 months, whereas the hardware subscription would be a “yet-to-be-determined monthly fee that depends on which device the user chooses.”

I would imagine that this is Apple's way catering to different demographics of users with varying credit histories. The hardware subscription may also offer additional built-in benefits like warranties and insurance. (Completely speculative.) 

Bloomberg’s Mark Gurman reported that Apple Pay Later is expected to launch sometime by March or April, and that there's no word yet on an updated timeline for Apple Card Savings Account, iPhone subscription, or Apple Pay Monthly services.

In other Apple news… the company expanded its internal test of its upcoming BNPL service to its thousands of retail employees. I had reported last week that Apple was testing it among corporate employees. Looks like that went well!

And speaking of Apple employees… folks have been talking about how Apple has avoided the tech layoff wave that hit the industry:

  • Apple CEO Tim Cook voluntarily took a pay cut, with a target total compensation is $49M, down 40% from 2022.
  • Apple didn't hire as much as others during the pandemic, following the same hiring rate since 2016.
  • Apple spends less on freebies (like free lunches) like other big tech companies.
  • Over the last six years, Apple doubled its revenue per additional headcount to $2.51M.
  • Apple relies on contract workers versus employees more than other tech companies. 

8. E-commerce Super Bowl Commercials

Did you catch all the e-commerce and fintech Super Bowl commercials last night? If not, here's a recap of what you missed…

If you missed out on live tweeting about these commercials yesterday during the Super Bowl, it may have been because Twitter suffered another outage, just four days after a “massive outage”, both which left Twitter users unable to read and write tweets. 

The outage reportedly occurred because a Twitter employee “accidentally” deleted important data, and there was nobody left on the team responsible for fixing it after Musk's layoffs.

9. Other e-commerce news of interest

Fanatics, the sports e-commerce platform that recently raised $700M at a $31B valuation, is launching Fanatics Live later this year. The standalone livestream app and website will allow customers to buy, sell, and trade cards and collectibles through creator generated content and entertainment.

BeVigil, a security search engine for mobile apps, uncovered a critical security flaw in 21 apps, which were identified to have 22 hardcoded Shopify API keys, exposing personally identifiable information to potential threats. If an attacker gains access to the hardcoded key, they can use it to access sensitive data or perform actions on behalf of the program, even if they are not authorized to do so.

Shipt, a US delivery service owned by Target since 2017, announced LadderUp, a new accelerator program designed to support local small businesses that are looking to develop their e-commerce strategies. Merchants selected for the program will take part in an eight-week course about creating sustainable e-commerce businesses, marketing for e-commerce, and basic legal knowledge, including a course from Shopify.

Alibaba's Cainiao Network announced a new partnership with Deutsche Post DHL Group to build the largest network of delivery lockers in Poland, giving them a foothold into one of Europe's fastest growing e-commerce markets. The two companies will invest $64.75M to build parcel lockers across Poland, and DHL will also take an undisclosed stake in Cainiao's Polish subsidiary as part of the deal. 

Microsoft shut down its metaverse team, which was only established four months ago and had about 100 employees. The team was focused on building interfaces and features in industrial settings, specifically to build interfaces for operating control systems in electrical power plants and robotics and transportation networks. But were there legs?

PYMNTS research found that higher-income consumers favor digital wallets like Apple Pay, PayPal, and Google Pay, while BNPL is most popular among middle-income consumers for retail purchases. Which makes sense given that Apple Pay accounts for 44% of digital wallet market share and Apple users are higher income.

Amazon has been testing Condition descriptors for used books and media, but forgot to tell sellers, who were surprised to see items described as “perfect” instead of “like new” and “good” instead of “very good”. After several days of sellers pleading on forums for Amazon to stop, the original condition fields began reappearing, but indicated that they may continue testing different conditions.

India's Food Safety and Standards Authority is looking to enforce front-of-the-pack nutritional labeling to alert consumers about high fat, sugar, and salt foods. They will likely mandate online marketplaces to prominently display key health and nutritional alerts alongside the price for food items on their platforms.

PayPal is pausing work on its stablecoin as regulators increase scrutiny of cryptocurrencies including a key partner in the project, Paxos Trust Co, which is responsible for the issuance of Binance’s BUSD, the third largest stablecoin on the market. PayPal hoped to debut the stablecoin in the coming weeks, but will delay that work as it seeks to understand the changing regulatory landscape for cryptocurrencies. “And it's gone.”

Affirm is also sunsetting its cryptocurrency service, which it started in 2021 to let customers buy, sell, and hold cryptocurrencies. Both PayPal and Affirm (and many other fintechs) launched crypto initiatives in the late stages of the bull market, and are now feeling the pressure as Bitcoin and other crypto assets are down over 68% from their all time highs. 

Twitter began testing 4,000 character tweets called “long tweets” among Twitter Blue subscribers, which account for around 0.2% of users. Elon Musk has been hinting at plans to increase the tweet character limit for several months.

In other Twitter news, the company delayed plans to shutdown its free API access and announced plans to take away blue checkmarks from people who have not paid for them. 

Zilch, a London-based BNPL provider, formed a partnership with StepChange, to integrate its debt advice tools into its platform and help recognize and make referrals to debt advice more effectively. Zilch CEO Philip Belamant said, “This partnership ensures we provide our customers with the very best support if they do fall behind on repayments – all for free.” So putting a Band-Aid on the wound they severed?

Luna, Amazon's game streaming service, will lose over 50 games this month including classics like No More Heroes, Pong, and Missile Command. Amazon said that losing games is a normal thing for a platform and a way to keep their selection of games fresh. Or will they go the way of Google Stadia? A shut down which UK's Competition and Markets Authority are blaming on the merger between Microsoft and Activision Blizzard for making it harder for other cloud gaming services to offer a competitive game library.

Pipe, an alternative financing platform that was last privately valued by investors at $2B, announced Luke Voiles as their new CEO, who joins the company after working as the general manager of Square Banking at Block. The appointment comes months after the company's three co-founders stepped down from their posts, after allegations surfaced that Pipe made $80M in loans to crypto mining companies that got written off when the companies went out of business. 

Meta is likely to cut more jobs this year, causing some staff to do “zero work” because managers have not been able to plan their schedules. The company is also reportedly undergoing a process called “flattening”, in which managers will be asked to start coding, designing, and doing research again. It was also announced today that Meta's chief business officer Marne Levine is leaving the company, stepping down later this month.

In other layoff news… Alibaba Group is reducing its workforce by 11% at Daraz Group, eBay is laying off 500 employees, Amazon cut more than 300 jobs at Zappos, and Affirm laid off 19% of its workforce. 

10. Seed rounds, IPOs, & acquisitions

BeCommerce and SafeShops.be, two organizations that aim to increase consumer and customer confidence in online stores, announced a merger to better respond to the needs of online sellers. The new organization will continue to focus on boosting Belgian e-commerce

Replo, a low-code landing page creator for Shopify stores that targets mid-market e-commerce companies, raised $4.2M in a seed round led by Y Combinator, Infinity Ventures, and others. The company launched its platform in 2022, has over 1,000 brand and agencies using it, and will use the funds to make strategic hires in engineering and product development.

AnPac Bio-Medical Science Co., a US and China based company focused on early cancer screening and detection, entered into a definitive agreement to acquire Fresh2 Ecommerce Inc., a B2B e-commerce platform that connects Asian food suppliers and supermarkets in the US. Previously, cross-border businesses from Asia mainly sold product through Amazon, Shopify, and TikTok, however the company sees opportunity to develop Fresh2's platform and connect suppliers of Asian food with supermarket operators and provide direct access to suppliers' product information.

Amazon is in talks to acquire MX Player, one of India's most widely-used on-demand streaming services, from Times Internet, who acquired the service for $140M in 2018. The acquisition would help Amazon compete with YouTube in India, however, there are at least two other interested parties including Zee-Sony.

Breef, a platform that allows brands to manage and service marketing agency projects, raised $16M in a Series A round led by Greycroft, bringing its total amount raised to $21M. The company will use the funds to develop its product and double the size of its workforce to 60 people by 2024.

Jendaya, a London-based but Africa-focused platform that acts as a gateway for global luxury brands to the African continent and for consumers to discover African brands, raised £1M in pre-seed funding and is coming out of stealth. The platform has onboarded 70 brands via an invite-only pilot and direct relationships with multi-brand boutique partners, and plans to double that this year.

Tazapay, a Singapore-based fintech that combines both card and real-time payment methods as a full-stack service for international merchants, raised $16.9M in a Series A round led by Sequoia Capital Southeast Asia. Tazapay's API covers more than 170 markets for card payments and 85 markets for local payments collection, and the funding will be used to scale their business in Asia and expand to Middle East and Europe.

Meta completed its acquisition of Within Unlimited Inc., a virtual reality startup that makes the popular fitness app Supernatural for Oculus, at a $400M valuation. Last July, the FTC sued to block the transaction on antitrust grounds, but a few days ago a federal court sided with Meta in the case, ruling that the FTC provided insufficient evidence to establish a negative impact on market competition.

WeBuy, the Singapore-based group-buying app for groceries turn B2B imports and travel-ticketing platform, is seeking to raise between $10-$20M in equity and debt via its ongoing Series B round. The company is looking to scale its Indonesia business and introduce new services with the funds. 

What'd I miss?

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

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

💖 Thanks for being a Shopifreak!

If you found this newsletter valuable, please leave a review on Google and share the newsletter with your friends and colleagues to help us grow. (Don't forget to use your referral link!)

See you next Monday,

PAUL

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

PS: I met a man at the Super Bowl with an empty seat next to him. I asked him where his guest was? He told me that he bought the tickets several months ago for him and his wife, but his wife unfortunately passed. I give my condolences and asked him why none of his family members took the ticket? He said they were all at the funeral.

Loading...