Times running out to cast your e-commerce predictions for 2023. Take a moment and hit reply to this e-mail and share yours. Short and sweet predictions are welcome. See my LinkedIn post or Tweet for more info. Thanks to those of you who have already shared your predictions.
And to my U.S. readers, happy thanksgiving! I'll be saying thanks this year in beautiful Puerto Rico!
I've got an exciting edition for you this week. YouTube finally did what creators have been waiting for all platforms to do, PayPal is making a harder push into the Shopify ecosystem, and WhatsApp is expanding their services for businesses in Brazil.
I also cover OnlyFans entering the e-commerce chat as well as a handful of stories about link in bio platforms making more commerce moves.
All this and more in this week's 96th edition of Shopifreaks. Thanks for subscribing and sharing!
Poll of the Week 🗳️
“Will Twitter finally conquer e-commerce under Elon Musk's leadership?”
Last Weeks Poll Results: 37.1% of shoppers plan on doing their holiday shopping mostly online this year, while an equal amount say they will do a mix of both online and in-store shopping. 10% will mostly shop in-stores, and 15.7% said they won't be shopping at all. [View Poll]
Although a much smaller sample size, the results above are inline with a larger poll of 3,462 US consumers, of which PYMNTS found 21% reported that they will not be shopping for the 2022 holiday season.
Stat of the Week 📈
Online grocery sales in the U.S. fell 3% in October compared with the same period in 2021, to $7.8 billion, as shoppers spent less per transaction on average and placed orders less often. – According to Brick Meets Click and Mercatus
Are consumers catching on to the fees and higher prices when buying groceries online?
1. YouTube Shorts test shopping & affiliate marketing
New shopping features are coming to YouTube Shorts, including affiliate marketing and the ability to purchase items through Shorts.
Creators will be able to tag products from their own stores, as well as products from other stores using their affiliate links to earn a commission.
The shopping features are available to specific US-based creators and are being tested with audiences in the US, India, Brazil, Canada, and Australia.
In early 2023, creators will be able to apply to the YouTube's Partner Program if they meet a new Shorts-specific threshold of 1,000 subscribers and 10 million Shorts views over 90 days.
This is the second big push this year to attract Creators to YouTube Shorts. The first was in September, when YouTube announced it would give 45% of ad revenue to Shorts creators, with YouTube keeping the remainder.
My thoughts: Brilliant! Finally! Social media platforms have been so reluctant to implement the ability for creators to tag products with affiliate links when this is all we've ever wanted to be able to monetize our product videos.
It all came down to the platforms not being able to monetize those links — which was extremely shortsighted because those links would've brought more creators to their platforms which is a net positive. Competition has forced them to stop being so focused on controlling the entire creator monetization strategy on their platforms and instead focus on creating a marketplace that caters to creators needs. We're in demand!
In August, I reported that Instagram shut down its affiliate commerce feature, which enabled participating users to add product tags to their Instagram posts and receive a commission when peopled tapped to view a product and subsequently purchased. The feature was a flop, mostly because Instagram had never advertised it and no-one had ever heard of it.
I wrote at the time:
Creating an internally run affiliate program was never needed. It was created because Instagram wanted a piece of the transactions, however in doing so, limited the size of the affiliate marketplace to a negligible size.
The easiest solution to bring affiliate marketing into Instagram is to let users add links to posts / tags. The solution has been evident for years. Users want it. They've always wanted it (and have historically had to create link-in-bio workarounds). So let them have it.
Here's an early prediction for you: Meta will start testing the same feature as YouTube Shorts before the end of 2023.
2. Returns Shopping for Shopify
PayPal-owned Happy Returns has debuted a new returns-based revenue stream for Shopify merchants. The objective of the app is to help convert returns into additional shopping.
Shoppers begin in a customizable return portal powered by PayPal, enter their order details, choose which items they'd like to return or exchange, and then are given options on how to proceed, which include visiting the merchants website to shop for an exchange, refunding for store credit, or refunding via their original payment method.
Unlike exchanges, the return shopping feature keeps the transactions separate so that fulfillment can begin right away without the shoppers needing to return any items first. Shoppers can also choose a different shipping address and method than the original order.
Happy Returns Director of Product Management Sanaz Hajizdeh said, “We've created a way to re-engage customers at a critical point in shopper journey, in an innovative way that keeps financial reporting simple.”
If you're unfamiliar with Happy Returns, they are a nationwide service that offers a network of thousands of “return bars” through partner retailers where customers can drop off their online returns instead of shipping them back. The customer receives instant credit for the return and the return bar aggregates orders to ship back to the retailer, saving money for the merchant on shipping, while creating an easier and localized return process for customers.
It's like an outsourced version of what Amazon offers through Whole Foods and Kohl's stores for other retailers. The service historically has catered to larger retailers who have a high volume of returns.
In March, I reported that PayPal made their newly acquired Happy Returns feature available to all PayPal Checkout merchants at no extra cost.
It's a smart move by PayPal to create this new enhanced returns service and offer it free to Shopify merchants, as it onboards new merchants into their ecosystem, who later could become paid users of their Return Bars — which PayPal is not shy about advertising in their app description.
PayPal charges merchants per item returned to their return bars with a $250 monthly minimum, so the service is most cost effective for stores that are already hitting that $250 fee based on the volume of their returns.
I love the concept of Happy Returns, both as an online shopper who values a convenient return process, and as a consumer who values sustainable practices since it cuts down on the number of individual boxes and shipments.
What's interesting about the service, however, is how easily replicable it is for a business that already has a large geographic footprint — ie: Walmart.
Another early prediction for you: Walmart will launch a Happy Returns competitor in 2023.
3. BigCommerce News (Sponsored)
Everyone knows by now you should be selling across social, marketplace and search. But do you know which omnichannel marketing tools you need to succeed? Use this Feedonomics checklist to kick off or level up your omni strategy.
Imagine — you’re visiting your favorite store. The employees know you, your needs and shopping style, and quickly help you find the perfect item. IRL, this is a pretty exclusive experience. But online, you can make every visitor feel like a VIP.
DYK searches for “buy now pay later apps” have grown globally by +200% since last year? We wanted to learn why consumers were choosing #BNPL and if it made them more likely to complete a purchase if offered at checkout. Take a look in our report.
In case you missed it, watch the replay of Melissa Dixon & Leah Spector sharing insights into marketing and selling to Gen Z, plus insights from the Youth Marketing Strategies Conference in Los Angeles.
4. OnlyFans creators to sell merch
Netflix, Spotify, Amazon, & Disney+ all offer merch… so why not OnlyFans?
The platform announced a partnership with the e-commerce platform Spring (which was acquired by creator economy platform Amaze Software last week) to enable creators to link their OnlyFans profiles to a web store to sell personalized merchandise.
Chief executive Ami Gan said, “Our creator community was in search of merchandise options to have the opportunity to share one other side of their business with fans.”
Now WHAT type of merchandise are we talking about here? I'll leave that to your imagination…
Gross! I can't believe you were imagining THAT!
Actually, OnlyFan's blog post mentions “apparel, stickers, water bottles, etc” as possible merch.
So basically OnlyFans is launching a built-in print-on-demand store with limited merch options — not a full e-commerce store where creators can sell ANYTHING.
Good for OnlyFans for hopping on the merch train, but I'm wondering if these are the types of products their users are actually looking to purchase from creators? How many dedicated followers are going to wear their Bella Bumzy T-shirt to family gatherings or bring their Lucy is Loud Coffee Mug to work with them?
Or perhaps I underestimate the dedication of OnlyFans subscribers…
Another early prediction for you: It won't be long before an OnlyFans creator lists a “$250 t-shirt, includes free bathwater.”
OnlyFans has 220M users on its platform, with more than 3M creating content in 2022. They reported revenue of $932M with pre-tax profits of $433M — mostly from taking a 20% commission from creators of their subscribers who pay between $5 and $50 per month.
5. Link-in-Bio News
Speaking of selling premium content… Linktree is entering OnlyFan's space. Well, kind of.
Linktree is adding a way for users to monetize the content they share on their page through a new Payment Lock feature, which will allow creators to put a paywall in front of certain content like PDFs, messaging groups, or 1-on-1 consultations. Creators can charge up to $150 for each piece of content.
Just what the Internet needs — more paywalls! Which by the way, Shopifreaks will now cost… (just kidding).
The paywall feature is only available to Linktree users on their paid plans, and creators aren't allowed to use it to charge for adult content. So they're not quite entering OnlyFans territory, but I'm sure some creators will walk close to the line.
In June, I reported that Linktree launched its new Linktree Marketplace, which allowed visitors to watch, listen, shop, and donate in one place without leaving the Linktree page. This came seven months after Linktree launched a Shopify integration that allowed its user to promote their products directly on its platform. And in March this year, Shopify launched its own link-in-bio service called Linkpop.
In other recent link in bio news…
Fanfix, the Patreon-style platform focused on Gen Z, launched its own link-in-bio service called SuperLink, a standalone monetization-focused link-in-bio platform that displays a creator’s Fanfix page.
Fanfix previously partnered with various link-in-bio companies, however now the company says many of its creators requested that they build their own version of the feature to promote their paywalled content.
Fanfix has grown to 10M users and focuses on the monetization of clean content only. The platform is selective about which creators it works with. Creators must have 10,000 followers across their social media accounts and fit with Fanfix’s brand image. Creators can charge a minimum monthly subscription of $5, of which Fanfix takes 20%.
6. WhatsApp business directory in Brazil
How many WhatsApp users are there in Brazil? … Brazillions!
And starting now, it'll be easier for them to interact with businesses through WhatsApp with Meta's newly launched functionalities which enable Brazilian consumers to find, communicate, and transact with businesses, all within the app.
The features include a business directory, tools to view products and initiate conversations with sellers, and the ability to buy from the business within the app via local payment processors like Cielo and Mercado Pago.
Brazil is the first country in the world to receive these features, but Meta plans on rolling them out to other markets in the future.
A few reasons why Brazil was first:
- Brazil has approximately 165M WhatsApp users
- WhatsApp is installed on 99% of smartphones
- It is the country's most frequently used app
- 80% of WhatsApp users interact with businesses through the app
- 82% do so to request information on products and services
- 60% of Brazil's most valuable brands are on WhatsApp
Matthew Idema, messaging VP at Meta, said, “Since my first visit to Brazil in 2017, I found it remarkable how many small businesses were using WhatsApp to sell products, but in a unstructured way. So we wanted to make it easier for people in businesses to get things done.”
Idema also noted that Meta's strategy is to launch free products and get them to scale, then bring in paid services later — such as the ability for businesses to respond to conversations across up to 10 devices.
Meta has been making strides in improving the WhatsApp messaging platform and adding new e-commerce functionalities this year.
- In November WhatsApp launched Communities, a new feature that offers larger and more structured discussion groups.
- Also in November, WATI, which stands for WhatsApp Team Inbox, raised $23M in a Series B to build their platform which enables companies to have scalable, yet personalized, conversations with customers through WhatsApp's Business API.
- In August, WhatsApp introduced the ability for India's 500M WhatsApp users to browse JioMart’s grocery catalog directly within the app, add items to their cart, and make the payments via local payments rail UPI.
- Also in August, Take App, a Singaporean startup that helps merchants sell via WhatsApp, received an undisclosed investment from Meta.
- In July, Charles, a conversational commerce startup that promises to bring everything associated with e-commerce into WhatsApp and other chat apps, raised $20M in a Series A.
- In May, WhatsApp launched a “Pay” button for users in Brazil and India, available directly on a user’s contact card, that allows them to send money (with no fee) to friends and family, and receive a cashback reward for doing so.
- And last year in June 2021, Meta launched Shops on WhatsApp.
7. Walmart's e-commerce + ads business
Walmart CEO Doug McMillon feels that e-commerce and ads are “mutually reinforcing.”
“If we double-click on advertising with Walmart Connect in the U.S., we see it's benefiting from growth in e-commerce and from improvements made within the business itself.”
According to a recent earnings statement:
- Walmart Connect (the ads division) grew 40% YoY in Q3
- Ad sales growth at the global level increased by more than 30%
- Q3 saw the highest spending all year on sponsored search
- Total revenues were up 8.7% to $152.8B
- E-commerce grew 16% YoY for Walmart in Q3
- About 13% of total sales this year began online
The gains in online sales are helping drive the success of advertising by attracting a wider assortment of sellers who pay to promote their goods through sponsored search and display listings.
Walmart's been crushing it with e-commerce this past year:
- In November, Walmart introduced new features ahead of the holiday season including virtual queuing, a buy now button, dynamic search results, and dynamic product pages.
- In October, Walmart launched a major update to their affiliate program.
- In September, Walmart introduced checking accounts to thousands of Walmart employees and a small percentage of its online customers for beta testing through its fintech, ONE.
- In August, Walmart introduced a new cashback perk for Walmart+ members.
- In March, Walmart brought its AI-powered try-on tech (which it acquired from Zeekit) to Walmart.com and its mobile app.
- In February, Walmart extended its RFID tagging requirements to products in new merchandise categories.
- In January, Walmart partnered with Angi to make their 250k service professionals available to Walmart customers.
8. Shopify is (still) testing a universal search
Shopify's universal search test is making the rounds again in the news — which may mean that they are releasing the tool to more users.
It was reported (again) that Shopify is testing a new feature in its Shop app that allows customers to search across all merchants on the platform.
The new “Search for anything” box enables customers to search for items previously purchased, merchants matching their search term, and products sold by any Shopify merchants.
For example, a “cycling jersey” search returned 6,937 results from hundreds of Shopify merchants.
I first reported on “Shopify's secret marketplace” a year ago, when they began testing the universal product search.
Shopify has been making a lot of marketplace-esque moves in the past year including the acquisition of Deliverr for fulfillment, the launch of Shopify Collabs as a platform-wide affiliate platform, Shop Pay for payments, Shop Promise as an Amazon Prime competitor, and others.
In October, when Shopify launched their new Shopify Tax feature, I asked, “I'm wondering if this new Shopify Tax feature is foreshadowing a marketplace that's to come. Will Shopify branch into the world of “marketplace facilitator” in the future?”
It's not the first time you've heard me talk about Shopify going down that inevitable path, and it won't be the last.
Another early prediction for you: Shopify owns up to its marketplace plans in 2023.
I need to stop giving away all my predictions! More to come in the E-commerce Predictions 2023 edition at the end of the year. Don't forget to hit reply and share your predictions with me.
9. Other e-commerce news of interest
Facebook will remove a number of personal details from user profile bios starting December 1st including Interested in, religious and political views, and address fields. No other major social media company includes those fields in bios. A spokesperson said that the reason for the change is to make the social network easier to use, which doesn't make any sense.
Patchworks, an e-commerce integration provider, appointed Jim Herbert, who most recently served as SVP and General Manager EMEA at BigCommerce, as their new CEO. He will take over from Patchworks' founder, David Wiltshire, who is going to focus within the company on innovation, partnerships, and new markets.
Cart.com and FedEx announced a strategic alliance to help address e-commerce challenges including an optimized omnichannel experience, enhanced fulfillment insights, frictionless returns management, and more delivery options. The partnership will give Cart.com merchants access to a network of consumers through ShopRunner, a FedEx subsidiary that offers free two-day shipping and other offers (ie: Prime competitor).
Pitney Bowes launched a shipping-label printer with a built-in scale and WiFi called The Pitney Ship Cube that lets sellers process orders from Amazon, eBay, Shopify and other platforms, which it claims is the first printer of its kind with a built-in scale. The company also announced a general rate increase of 6.5% for e-commerce services effective Jan 1, 2023. (Jeez, how much R&D did they put into that scale?)
Saks Off 5th has revamped its fulfilment options around delivery dates calculated as the customer buys. The company is following data which supports that customers prefer timely delivery over fast delivery, as it allows them to plan for the day of delivery and not have to be on standby on other days.
Amazon launched a new Account Health Assurance program to protect sellers from having their accounts deactivated, as long as they work with Amazon to resolve any issues. Some sellers felt that the criteria, which requires an Account Health Rating of 250 or higher, excluded lower-volume sellers.
Shopify teamed up with Balance, a B2B service platform, to offer Shopify's B2B merchants a single-click payment option with a user experience that resembles shopping, ordering, and paying through a consumer e-commerce site. Balance will process payments, manage refunds, and provide a view of all transactions, buyers and credit limits for the merchants' Shopify dashboards.
Jitterbit, an API transformation company that makes it easy for businesses to exploit data from their network of sources, announced that it will provide ERP integrations for Shopify Plus merchants. The integration will allow Shopify merchants to integrate their stores with all major ERP and EDI systems without having to build their own integrations in-house. Great work, Dave!
Nick Kokonas, founder of the reservations platform Tock that got acquired by Squarespace, is leaving the company, to be replaced by Matthew Tucker, the former president and COO of online ordering provider Olo. Two weeks ago I reported that the company launched Tock Wine Shop to enable winery partners to sell directly to consumers.
clean.io launched Coupon Detective tool, a free suite of analytics that shows merchants the coupon usage on their site, the source, how often they are used, and how much revenue is being lost. The company says that many merchants don't know how much money they are losing from third-party sources like Honey and RetailMeNot scraping their coupon codes and giving them out to shoppers who weren't intended to receive them.
Amazon plans to lay off around 10,000 employees, CEO Andy Jassy wrote in a memo to workers last week. The company began informing employees that they were being let go and offering others the option to take a voluntary buyout as a means of trimming headcount. This has brought up the conversation of unionizing in certain chat groups.
eBay announced that it will no longer restrict the accounts of sellers who list banned books on its marketplace, but will continue to remove listings of books that violate its Offensive Materials policy. The change comes as a result from sellers being suspended for selling banned titles that they didn't know were banned because eBay doesn't provide them with a list.
Australia is considering rules that would treat the BNPL industry the same way as loan products or credit cards. BNPL transactions accounted for about 2% of card purchases in the past financial year, adding up to about $16B.
Sticky.io, a subscription commerce platform, appointed Spencer Watts, former CFO and COO of WooCommerce, as its new CFO. Watts will lead the finance and revenue teams as they provide the structural support needed to advance product and design.
Foot Locker's new CEO, Mary Dillon, detailed her plans to simplify the business and improve e-commerce, which include building out Foot Locker’s omnichannel capabilities, improving the FLX loyalty program, upgrading its technology and optimizing costs.
Amazon mysteriously delivered an elderly man in a supportive care establishment over £3,500 worth of the same cookbook, which he did not order, and debited his account for all of them. The charges overdrafted the man's account, who had to borrow from friends and family to pay for food and housing expenses while Amazon investigated the issue. They eventually refunded the man, but said that they do not want the cookbooks back. Maybe he can ship them back and sell them FBA?
10. Seed rounds, IPOs, & acquisitions
ReadySpaces, which operates 32 co-warehouse spaces and services over 2,000 businesses, raised $20M in an all-debt funding round, bringing their total amount raised to $40M. The new funding will fuel expansion as the company prepares to roll out new services.
theGist, an Israeli startup that's developing smart AI and machine learning tools to simplify the content of internal data and communications, raised $7M in a pre-seed funding round co-led by StageOne Ventures and Aleph. Their first product, theGist for Slack, scans through hundreds of posts to provide personalized summaries of valuable insights and highlights to help impact the productivity and performance of team members.
GoFreight, a startup that helps smaller freight forwarders compete with the giants by providing the “Shopify of freight forwarding” with backend software that makes their operations run more smoothly and a frontend that lets them set up a storefront and provide quick quotes, raised $23M in a Series A round co-led by Flex Capital and Headline. The company currently has about 1,000 customers and will use the funding to develop more features like smart quotes, rate management, and purchase order management.
Dema.ai, a Stockholm-based startup that developed a no-code tool to provide smaller e-commerce brands with data insights to enhance their outreach campaigns and boost revenues, raised €4M in a pre-seed round led by J12 Ventures. The company hopes to democratize e-commerce by providing their customers with insights that have previously only been available for bigger enterprises.
Dropshipping Direct, a platform that manages product sourcing, selling, buying, shipping, and returns for its e-commerce clients, acquired Empire Ecommerce, a provider of automated e-commerce stores. The acquisition will strengthen Dropshipping Direct's systems and customer base and open doors for new strategic partnerships.
Symend, a company that employs AI and machine learning to automate processes around debt resolution for telcos, banks and utilities, raised $42M in a round led by Inovia Capital, bringing its total amount raised to $140M. The funds will allow the company to meet the demand for their behavioral engagement technology.
Summer International, a platform that identifies the most influential content creators and works with them to incubate new brands, raised $5M in a round from investors including GDP Ventures, Teja Ventures, Gushcloud International, and angel investors. The company's goal is to create an ecosystem to help influencers and creators launch and sell beauty brands usign consumer data and analytics.
Beam, a one-click checkout solution that powers e-commerce and social commerce in Southeast Asia, raised $2.5M in a round led by Surge, Sequoia Capital India, and SEA's rapid upscale program. The funds will be used to expand its services in Thailand, increase hiring, and grow merchant acquisition.
Zest, a gifting app that places a “Send as a Gift” button on product and cart pages and lets gifters deliver personalized details, raised $4M in a round led by GV. Recipients of gifts through Zest receive control over the gifts they receive including the ability to swap sizes or products and send thank you notes.
Attabotics Inc, a startup that develops technology to make logistics warehouses more efficient, raised $71.7M in a Series C-1 round led by Export Development Canada, bringing its total amount raised to $194.1M. Two months ago the company introduced its first commercial offering called Attabot 2022, a warehouse automation system that uses robots to process e-commerce purchases.
Payload, a Michigan-based software company that develops a headless open sourrce CMS, raised $4.7M in a round led by Google's AI-focused Gradient Ventures. Payload puts its emphasis on developers, giving them the tools to create not only their backends, but the CMS-style user interfaces they need to manage apps and content.
Impacked, a B2B company creating a green ecosystem for packaging including jars, tubes, pouches, and bottles, raised $2.5M in a round led by TenOneTen Ventures, bringing its total amount raised to $3.3M. The funding will be used to recruit more primary packaging suppliers to their marketplace across North America and Europe.
Contentstack, a headless CMS geared toward enterprise customers, raised $80M in a Series C round co-led by Georgian and Insight Partners, bringing its total amount raised to $169M. The company will use the funds for customer acquisition, geographic expansion, new partnerships and product development.
Sesamy, a startup that's setting out to de-wall digital content including ebooks, audiobooks, and news articles, raised $3.4M in a round led by GP Bullhound, bringing its total amount raised to $7.5M. The company's SmartID system allows paywalled publishers to optimize single-purchase prices and prompt readers to sign up for a subscription to save money if it deteects they are already reading three or four articles a month.
Joepegs, an NFT marketplace on the Avalanche blockchain, raised $5M in a round led by FTX Ventures and the Avalanche Foundation. They better cash that check quick! (Kidding, they already did in June.) The marketplace launched in May and has grown to become the largest NFT marketplace on Avalanche with over $3.4M in secondary NFT sales and 12,000 users.
Laundrygo, a South Korea-headquartered startup that aims to digitize the laundry industry in the country, raised $37M in a Series C round led by H&Q Korea, bringing its total amount raised to $73M and valuing the company at $254M. The app offers laundry pickup and delivery, a B2B laundry service for hotels, and a brick-and-mortar laundromat service.
Wove, an online custom jewelry company that leverages technology to speed up the time it takes to create one-of-a-kind pieces, raised $3.85M in a round led by Spingdale Ventures. Wove's jewelry is made 100% in the United States with ethically-sourced diamonds and 100% sustainable materials.
What'd I miss?
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See you next Monday,
Paul E. Drecksler
PS: “How do you make a small fortune in social media? Start out with a large one.” – Elon Musk