Hi Shopifreaks
I've got two things to report this week before we get started:
1) I've switched from MailChimp to EmailOctopus to send this newsletter, which should help resolve the deliverability issues I was experiencing. This is the first week that I'm sending an edition from EmailOctopus, so please let me know if everything looks right on your end. Hopefully this will be the last time I have to switch EMS for a while!
2) What do you think of my new What's Next series? So far I've published interviews with:
- Kevin Hanna of Polls Platform who saw a behavior that wasn't getting enough attention and turned it into a way for Shopify stores to grow virally.
- Tony Zara of Waterbucket App which helps merchants drive more conversions from their product ads by displaying the BNPL price in the images.
- Janak Agrawal of Adapt AI who built a human-sounding voice assistant to automate inbound support requests for e-commerce brands.
- Daniel Sodkiewicz of GeekSeller who helps merchants manage orders, inventory, & catalogs across multiple marketplaces like Amazon and eBay.
My goal with this series is to give startup founders an outlet to share what's next at their companies and help my readers discover new e-commerce tech that could benefit their businesses. Hit reply and let me know what you think about the interview series so far.
And now onto your regularly scheduled content…
In this week's edition I cover:
- Stripe's insane payment volume
- YouTube's new shopping features
- Wix launches a donation platform
- eBay wants to help you stay fashionable
- TikTok is launching a photo app called Notes
- Google and Meta make moves with their chips
- Twitter and WooCommerce botched domain changes
- Amazon is less self-preferential now
- Swiggy's horrific health insurance policy
- Marketplaces want more videos!
All this and more in this week's 169th Edition of Shopifreaks. Thanks for subscribing and sharing!
Stat of the Week
Stripe surpassed $1 trillion in total payment volume last year. This insanely large number represents approximately 1% of the entire world's GDP.
1. YouTube launches new shopping features
YouTube introduced several new shopping features to serve merchants and affiliates who create videos on their platform. These new features will help YouTube catch up to TikTok when it comes to offering a streamlined storefront and affiliate program within the platform.
Here's what's new:
- Shopping Collections – a new way for creators to curate products from their own store and/or other brands. Creators can pick a selection of products to turn into a collection which appears in their product list, Store tab, and video description. At launch, creators can only make collections on their phones via the Studio App, but the feature is coming to desktop soon.
- New Affiliate Hub – built-in to the YouTube app so creators can find shopping partners to run product promotions with. Creators must be based in the U.S. and have over 15,000 subscribers to be eligible for the affiliate program.
- Tag Products Across Multiple Videos – this builds off a feature that's been available to affiliate shopping creators since last year. Now Shopping creators can tag their own products and merch across their entire video library.
- Fourthwall shop – added to YouTube's list of integrated platforms.
Aditya Dhanrajani, director of product management, said, “We know that people come to YouTube every day to connect with the things and creators they love, so we hope these new YouTube Shopping features make that journey even easier for creators and viewers.”
YouTube offered three examples of creators who are currently using Shopping Collections — LongHairPrettyNails (her own products), Sydney Morgan (Walmart & Sephora affiliate), and Johnny Ross (Sephora affiliate).
The UI of the Shopping Collections could use some work — it's a bit bland. The stores have no personality. My suggestion to fix that is YouTube should allow creators to replace the default product photo with their own photography within the Shopping Collection. Since most creators are recommending products they showcase in their own videos, the store would look a lot more personalized if the product photos were the original photography of the creator, or of the creator using, holding, or wearing the product. It'd spruce up the storefronts a lot, and probably lead to more click-thrus and conversions.
2. Wix launches a donations feature for fundraising
Wix launched a new funding raising solution called Wix Donations to help non-profits and individuals run donation campaigns easily through their Wix websites. Now users will no longer need to employ third-party services to handle one-time or recurring donations.
Wix Donations allows users to:
Create donation pages using Wix's website builder.
Manage multiple campaigns.
Collect one-time or recurring donations through Wix's selection of available payment providers and digital wallets.
Track the success of campaigns with real-time analytics.
Promote their campaigns with Wix's built-in SEO, social media and email marketing tools.
Expand fundraising potential through Wix's other built-in services such as Events, Blogs, and eCommerce.
The move will put Wix in direct competition with sites like Funraise, OneCause, GiveButter, GoFundMe, and countless other donation enablement platforms. Wix's big advantage is that it's not just a donations platform. It also brings its other marketing tools into the equation for non-profits.
While the donations system might not be as robust as needed for a large non-profit organization running complex campaigns, it could certainly get the job done for a non-profit that was already using Wix as its website builder or for an individual or business who wants to run a one-off donation campaign to support a cause.
🔥 Partner News
Flowspace launched a new podcast called Stories from the Shelf, which shares behind-the-scenes stories about how brands scale across retail and e-commerce. The first episode featured Aaron Alpeter, founder of supply chain consulting firm IZBA, who shared what it takes for brands to expand from DTC to retail and other insights. The second episode, published today, features Shelley Lin, a 30-year supply chain veteran, who discusses how visibility enabled her to stand up a returns model at ShoeDazzle and improve inventory management and revenue projections for Levi's.
3. eBay adds an AI-powered “Shop the Look” feature
Two weeks ago I reported (story #7) that Google Google began rolling out a feature that gives shoppers more personalized shopping results. Users can now rate different products in order to get style recommendations when shopping for apparel, shoes and accessories.
Well, eBay apparently isn't leaving shopping recommendations solely in the hands of Google fashionistas, because it also wants to help you dress better through the launch of its new generative AI-powered feature called “Shop The Look.”
The feature suggests a carousel of images and ideas, based on your shopping history, to introduce other fashion items that may complement your current wardrobe. Shop the Look includes interactive hotspots that reveal similar items and outfit inspirations when tapped. The shopping results include both pre-owned and new items that match the user's personal style.
Shop The Look will appear to eBay shoppers who have viewed at least 10 fashion items over the past 180 days and will display on the eBay homepage and the fashion landing page.
Shop The Look is initially available on iOS in the U.S. and U.K., with support for Android coming later this year. eBay says it plans to explore expanding the feature to other categories over time and will continue adding more personalization elements to it throughout the year.
The feature is powered by eBay.ai and was developed in collaboration with the company’s Responsible AI team and RAI Principles. Just curious, is the Responsible AI team as “responsible” as OpenAI is “open”?
4. Looks like it'll be called TikTok Notes
TikTok's upcoming Instagram competitor app for sharing photos will likely be named TikTok Notes for some reason — a name that sounds more like a Google Keep competitor than an Instagram killer.
Wait, TikTok is launching an Instagram competitor? If you're behind on the times, here's a quick backstory…
It was reported last month by TechCrunch that ByteDance is creating an Instagram competitor, according to code found in the TikTok app which contained references and icons to a new app named TikTok Photos. According to the description in the APK version 33.8.4, the app could cater to “like-minded people who enjoy photos posts.”
TechCrunch later found slightly different verbiage in the newer 33.8.5 version which read, “Whether you’re a world traveler, food blogger, or simply enjoy sharing what’s going on in your life, TikTok Photos is our all-new photo-sharing platform dedicated to helping creators like you reach other like-minded people.”
TikTok confirmed at the time that the app was in development.
Flash forward a month… TikTok users have been getting pop-up notifications over the past few days about a new TikTok Notes app to share photos. The notification says that TikTok is soon launching a “new app for photo posts” called TikTok Notes, and that users' existing photo posts will be shared on the app unless they opt-out.
A TikTok spokesperson told TechCrunch, “As part of our continued commitment to innovating the TikTok experience, we’re exploring ways to empower our community to create and share their creativity with photos and text in a dedicated space for those formats.”
Does this mean that YouTube is going to launch an app for sharing photos next? LOL.
I feel like social media goes round and round in circles. At the start of social media, we could post text, photos, GIFs, videos, and even music files on one amazing social media platform. Then apps came out that were specific to one post format — like photos, videos, or text. Then those same apps integrated additional post types into their existing apps for some mediums, and built stand-alone apps for others (ie: Threads for text posts). The end result for users is that we have a TON of apps to check daily where we follow the same people.
Should ByteDance launch an Instagram competitor? Sure, why not! But how long will it be before they integrate short-form videos into it?
5. The chip wars are heating up!
Chip winter is coming! Every big tech player is getting in on the chip war to seek control of the AI Throne.
Last week Google partnered with Arm to make more of its own chips, announcing its new CPU named Axion which is set to be available for Cloud services later this year. Google says the chip will improve performance for “general-purpose workloads” such as open-source databases, web and app services, in-memory caches, data analytics engines, media processing — and of course, AI training.
Meanwhile Meta just announced that its next generation of custom AI chips will be more powerful and able to train its ranking models much faster. The Meta Training and Interference Accelerator (MTIA) is designed to work best with Meta's ranking and recommendation models with the goal of eventually expanding the chip’s capabilities to begin training generative AI like its Llama language models. Beyond building the chips and hardware, Meta has made significant investments in developing the software necessary to harness the power of its infrastructure in the most efficient way.
Both companies are touting their chips as key to the development of their AI platforms, and as alternatives to the Nvidia chips that they have been relying on to power AI data centers. Nvidia currently controls more than 90% of the AI chips market, and demand for its semiconductors is only increasing.
Alvin Nguyen, a senior analyst at Forrester, told Fortune that chips designed by Google, Meta, and Amazon won’t be as powerful as Nvidia’s top-of-the-line offerings, but that in-house production could benefit the companies in terms of speed. They’ll be able to produce the chips on less specialized assembly lines with shorter wait times.
Going in-house could also save these companies money. Nvidia's Blackwell chip, for example, is estimated to cost from $30,000 to $40,000.
6. Changing domain names is difficult
Last week, X began automatically changing “twitter.com” to “x.com” in links, but did so in the absolute worst way possible. The automatic text replacement was unintentionally applied to any URL ending in “twitter.com” even if it wasn't actually a Twitter link!
The change went live on X's app for iOS, but not on the Android app or web version, and remained a problem for a couple days before the company fixed the issue so that it wouldn't affect non-Twitter.com domains.
Security reporter Brian Krebs called the move “a gift to phishers” because scammers could register a domain name like “netflitwitter.com,” which would appear as “netflix.com” in posts on X, but clicking the link would take a user to netflitwitter.com.
At least 60 domain names were registered while the issue was live for domains ending in twitter.com, although research shows that many of the domains were registered defensively by private individuals to prevent the domains from being purchased by scammers. (Or so they say.)
The funniest part of the botched transition is that even if the change had been implemented smoothly, x.com still redirects to twitter.com, so the visitors were landing right back where they started anyway!
But hey — changing domains from one URL to another is difficult. Just ask WooCommerce, which recently moved its domain from Woo.com back to WooCommerce.com after facing SEO challenges.
The company wrote in a blog post, “Moving to Woo.com created challenges for our users to find WooCommerce in Google searches, which were made worse following Google’s March update. To address those challenges, we assembled a group of SEO experts and consultants to evaluate the best way to build on the strength of the WooCommerce brand. We collectively believe that reverting back to WooCommerce.com will deliver the best outcomes for WooCommerce and the wider Woo community.”
I feel like Woo's problems could have been solved with either:
- A meta title that read, “Woo (formerly WooCommerce)” instead of just “WooCommerce” like it reads now on the site.
- Simply keeping the WooCommerce.com website up in addition to Woo.com for a period of time with a landing page announcing the change and linking to the new domain.
Changing domains is hard — as learned this year by Twitter, WooCommerce, and Overstock, which initially changed its domain to BedBathandBeyond.com after acquiring the company in bankruptcy, and then reverted back to the Overstock domain after the major headache it created for itself.
Need help switching domains?
Leave changing domains up to the pros. If your company is about to rebrand and switch to a different domain, contact me at Ideas Focused (or hit reply to this e-mail) so I can help you do it right. If done properly, you should be able to retain all your old SEO rank, not leave any dead links floating around the web, and create a seamless transition for your users. I've helped dozens of companies flawlessly change domains in the past two decades and would be happy to help your company do the same. You only get one shot at it! Give me a shout anytime.
7. Amazon search results are now less self-preferential
Amazon's search results have become less self-preferential, according to research from a University of Minnesota economist who analyzed over 8 million Amazon search listings across 22 Amazon domains between June 2023 and Mar 2024.
In a paper titled “Amazon Self-preferencing in the Shadow of the Digital Markets Act,” distributed via the National Bureau of Economic Research, Joel Waldfogel, professor of applied economics, concluded that after the EU's designation of Amazon as a gatekeeper, the rank of their own products changed substantially, falling from a 30 to a 20 rank advantage, while other brands' search ranks did not change.
His report documented three things:
- Amazon's own products received search ranks that were 24 positions better on average throughout the sample period.
- The Amazon rank differential was large in comparison with the differential for 142 other popular brands.
- Shortly after the EU designated Amazon a “gatekeeper” platform in September 2023, the Amazon rank differential fell from a 30 position advantage to a 20 position advantage, while other major brands' rank positions were unaffected in both Europe and other jurisdictions.
Amazon says it does not give preference to its own products within its search results, and it never has.
Last month it published a compliance report that describes how the company has responded to the DMA, maintaining that its ranking processes are unbiased and compliant with Article 6(5) of the DMA, which forbids self-preferencing.
The report states clearly, “Our ranking models do not differentiate on the basis of whether the product is sold by Amazon Retail or a Seller or whether it is an Amazon product or a third-party product.”
Yet something happened to Amazon's search listings around October last year, just after the company was officially designated a gatekeeper under the DMA.
Waldfogel notes that the rank differential can't be definitively attributed to self-preferencing, and that other factors like differences in product quality come into play. He told The Register in an email, “What is interesting, instead, is the change in the Amazon rank differential that occurred in about October 2023. For whatever reason, there is now a change in the extent to which Amazon's search rankings give preference to their own products.”
8. Swiggy takes away health insurance from riders who are too sick or injured to work
This is an insane story about Swiggy, an India food delivery app, taking away health insurance from riders when they need it most.
Swiggy rates its riders — bronze, silver, gold — depending on how many deliveries and points they earn each week. The top tier, gold, includes company-sponsored health insurance.
The problem with this system? It recalculates weekly!
So what ends up happening is that a rider reaches “gold” status, which makes them eligible for health insurance, but then if they get sick or injured and subsequently stop working, they lose their gold status the following week, and thus lose their health insurance.
So in other words, if they can't work due to injury or illness, they lose their insurance for not working!
Riders typically have to work 15-16 hours a day to earn their gold status within a system that's already rigged against them, so there's no option of scaling down and working part-time to maintain their gold status if they get sick or injured (which they shouldn't have to do anyway).
PROVE ME WRONG: A rating system tied to benefits that recalculates weekly is intentionally designed to take away health insurance when a rider needs it most.
At minimum, the rating system needs to look at the gold status of the rider as an average of the previous 26 weeks. So for example, if a rider maintains gold status for at least 20 of the previous 26 weeks, they maintain their health insurance. (And I'm saying that's a MINIMUM, not what it should be.)
Swiggy brought in the new health insurance plan in 2023, after it changed its corporate insurance provider from Acko General Insurance to Reliance General Insurance. The company’s previous policy had been uniform for all workers, but now coverage depends on their conditions. It's rumored that Swiggy is working to restructure and reduce costs in preparation for an IPO.
9. Other e-commerce news of interest
OpenAI shared that Klarna's adoption of its technology is estimated to yield the company a $40M improvement in profits this year. OpenAI's chatbot now field two-thirds of Klarna's customer service chats, which used to require 700 full-time contracted employees.
Best Buy must have been paying attention because the company announced that it too plans on incorporating AI into customer support, working with Google Cloud and Accenture. Best Buy detailed the new strategy within days of reported layoffs that impacted its Geek Squad customer support operations.
Shopify will be hosting an exhibit at Retail Technology Show for the first time ever, which will take place at London's Olympia on the 24th and 25th of April. Shopify will be taking the opportunity to demo its latest enterprise and retail solutions on stand 5B60.
OpenAI hired former Shopify executive Glen Worthington, who previously worked as VP of global support at Shopify, to lead product and customer support. Under Worthington's leadership, Shopify embarked on a plan to put AI at the center of its work with merchants, and now he will lead User Operations at OpenAI to ensure that companies using its products have a good experience.
The UK's Financial Conduct Authority is looking to improve Britain's “highly concentrated” consumer credit ratings market, which it says is currently not serving consumers well. Much like in the States, the consumer credit ratings market is dominated by Experian, Equifax, and TransUnion within the country, and the FCA feels that the lack of competition within the sector necessitates immediate action. I mean, it's not exactly a new triopoly that formed overnight, so I'm curious what the urgency is, but either way, I support reform in this space.
Meta lowered the minimum age for WhatsApp users from 16 to 13 in the UK and EU, which the company says puts the age limit in line with that in the majority of countries. The campaign group Smartphone Free Childhood said the move “flies in the face of the growing national demand for big tech to do more to protect our children.” I say that the move is inconsequential, given that Meta has no real guardrails in place to verify the ages of users who sign up. They might as well make the minimum age 3 years old, as no-one's checking. Kids who want WhatsApp already have it.
Amazon Web Services owes tech company Kove $525M for violating its patent rights in data-storage technology, an Illinois federal jury ruled last week. The jury determined that AWS infringed three Kove patents covering technology that Kove said had become “essential” to the ability of Amazon's cloud computing arm to “store and retrieve massive amounts of data.” Amazon disagrees with the verdict and intends to appeal.
Coupang, a Korean e-commerce marketplace, is raising its monthly membership fee for paid users by 58% to 7,890 won ($5.74), in a move to secure further capital amid growing challenges from Chinese rivals like Temu and AliExpress, which are building momentum in the country. The company currently has 14M paying members on its premium service, and it plans to use the additional revenue from the fee increase to expand its “rocket delivery” nationwide.
JD.com is offering up to $138M in cash incentives to boost video content on its platform. Qualified influencers who post videos reviewing products or conduct live-streaming sessions to promote and sell them can receive up to 30k yuan ($4,144 USD) as a weekly bonus and “more exposure” for their content. In 2023, 71.2% of Chinese consumers purchased goods when they watched short videos or live-streamed content, compared with 42.7% in 2022.
Amazon is also leaning into video, but this time in Poland, to challenge the country's online marketplace leader Allegro. Amazon, which entered the Polish market in 2021, plans to add more original Polish-language shows to the five it has launched on its Prime Video service since 2023, because the company knows that once its got a user on Prime Video, it's an easy segway to get them over to its e-commerce marketplace.
eBay is discontinuing Promoted Listings Express for auctions, which was first introduced in the US in 2021 as a way for sellers to promote their auction listings by paying to have their ad displayed to potential buyers. Now the company is abandoning that model in favor of a cost per sale model, which is more favorable to sellers than paying a flat upfront fee for advertising, regardless of whether or not the item sold.
Allbirds, the San Francisco-based eco-friendly shoe brand that was once the darling of the D2C industry, received a non-compliance notice from Nasdaq after its share prices fell below $1 for 30 consecutive days. According to Nasdaq's rules, the company now has six months to regain compliance by having its common stock close at over $1 for 10 consecutive business days. The company, which closed its first day of trading valued at more than $4B in Nov 2021, has never turned a profit in its nine years of business.
It's rumored that Facebook will not be renewing Facebook Live deals with publishers and instead will be focusing on a new plan to push longer-form premium video content. Several publishers told Kurt Wagner of Recode that the social network is no longer emphasizing Facebook Live video during negotiations, and they do not expect the livestreaming deals they inked with Facebook last year to be renewed.
Shein more than doubled its profits last year, hitting a record of more than $2B in profits for 2023, while recording roughly $45B in GMV. Shein is currently awaiting regulators in Beijing and Washington to approve its listing, which is expected to be the largest IPO of the year that values the company at more than $60B.
ByteDance also crushed it last year, with its profit surging 60% in 2023, outpacing the growth of Tencent and Alibaba. ByteDance's earnings jumped to more than $40B last year from about $25B in 2022, according to people familiar with the matter who asked not to be named.
Amazon CEO Andy Jassy said in an annual letter to shareholders that the company views generative AI as a key foundational element of delivering better customer experience and plans to deepen its investment in the technology. Jassy characterized generative AI as a building block that would serve as a foundation for new products and services, and also described the technology as possibly “the largest technology transformation since the cloud.”
Amazon and Walmart use over-the-top surveillance in their warehouses, which undermines the rights of employees and puts their health and well-being in jeopardy, according to a report released by Oxfam, an international anti-poverty organization, which collected data from 1,484 Amazon and 444 Walmart warehouse workers across the U.S. Oxfam's report quotes several unidentified warehouse workers describing harsh labor conditions, including one Amazon worker who likened their experiences on the warehouse floor to “slavery.” Amazon disputed claims that it uses technology to monitor its warehouse workers, and Walmart said the report fails to accurately depict its use of technology.
Squarespace launched its first campaign for Australia & New Zealand about a boat captain who creates a modern business idea called “Hitch on the Ditch” where he marries Aussies and Kiwis who can't choose which country to have the ceremony in. Australia is currently one of the company's fastest-growing markets.
Google agreed to destroy $5B worth of user data illegally collected when users browsed the web in Incognito Mode. For years, Google informed Chrome users that “you've gone Incognito” and “now you can browse privately,” when the supposedly untraceable browsing option was turned on, but in reality, while no activity was saved to the users' own devices, other companies including Google, ISPs, and website hosts were still tracking and monitoring their online activity the whole time. As the suit was pending, Google changed the splash screen of incognito mode to be more transparent about what was really going on behind the scenes.
56% of people who use BNPL encountered at least one problem while using the service — including overspending (29%), missing a payment (18%), and difficulty returning products or getting a refund (18%) — according to a Bankrate and YouGov survey of 2,276 U.S. adults. The report also found that the top used BNPL services were PayPal (16%), Affirm (12%), Afterpay (12%), and Klarna (11%).
10. Seed rounds, IPOs, & acquisitions
Automattic, the parent company of WordPress, WooCommerce, and Tumbler, acquired Beeper, a universal messaging app that combines 14 chat networks into one inbox. Its plans are to combine Beeper with Texts, a messaging app that Automattic acquired in 2023, and merge the two apps under the Beeper brand.
eHouse Studio, a Shopify Plus Partner and Recharge Partner agency, acquired Commerce12, a Klaviyo Master Elite partner, with the financial backing of Periscope Equity. The acquisition will help progress their long term vision of building a unified e-commerce agency to manage large enterprises complexities and eliminate the need for multiple niche agencies.
Back-Track, a company that helps retailers process and resell their returned inventory, acquired Upstrem, the creator of a recommere technology called Return and Resell, which helps streamline the returns process for e-commerce merchants, for an undisclosed amount. The deal gives Back-Track access to their proprietary inspection and grading technology, which they will natively add to the Back-Track system.
Anrok, a global sales tax platform for software companies, raised $30M in a Series B round led by Khosla Ventures. In the past year, the company has expanded its platform with a reconciliation tool, advance tax exemption certificate manager, and support for VAT and GST compliance, and it plans to use the fresh funds for R&D and product development.
eBay acquired Goldin, a collectibles marketplace, from Collectors Holdings, a company co-owned by New York Mets owner Steve Cohen, for an undisclosed amount. At the same time, eBay sold its Vault, a 31k sq.ft. temperature controlled facility for collectors to store their physical trading cards, to Collectors.
Hokodo, a London-based BNPL provider, secured a €100M debt facility from Viola Credit, which it will use to facilitate more than €1.5B in B2B transactions over the next 24 months. The debt facility will also support the continued roll-out and expansion of Hokodo's embedded Pay Later and Pay Now offerings for B2B merchants and marketplaces.
Kiki World, a beauty startup that co-creates products and co-owns the company with consumers with the help of web3 technology, raised $7M in a round lead by the Andreessen Horowitz crypto fund and The Estée Lauder Companies’ New Incubation Ventures. Kiki allows its community members to vote on the features they want before the beauty products are made, which they then earn points as a reward that can be used towards free products and digital tokens in the company.
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PAUL
Paul E. Drecksler
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PS: Google isn't as good as it used to be. I searched last night for a lighter, and it instead gave me 17,000 matches.