E-commerce Industry News Recap ?? Week of Apr 22nd, 2024

Hi LinkedIn - I'm Paul Drecksler and I follow the e-commerce industry closely for my Shopifreaks E-Commerce Newsletter.

This is a summary recap of the 170th Edition published 04-22-2024. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: 90% of Americans know about Temu. However despite the brand awareness, more than 56% have never made a purchase. More than half the survey respondents said they heard of Temu because of ads for the online marketplace. — According to DigitalCommerce360

The Wall Street Journal published a massive exposé last week about the secret and borderline illegal ways that Amazon has gathered trade secrets on its competitors during the past decade. The operation, called Big River Services International, is a company owned by Amazon that sells around $1M a year of products through competing platforms such as Walmart, eBay, Best Buy, Overstock, and Flipkart, so that Amazon can get an inside glimpse into how these marketplaces operate. By posing as a seller on competing marketplaces, Big River has been able to obtain proprietary information about their pricing data, logistics, and payment services, which they then shared with Amazon higher ups to incorporate into decisions about its own business. Although all companies research their competitors, lawyers say there is a fine line between normal corporate intelligence gathering of publicly available information and corporate espionage.

TikTok Shop is launching a secondhand luxury category in the U.K., putting it in direct competition with Poshmark, The RealReal, Vestiaire Collective, Depop, Mercari, and other secondhand marketplaces. The category has already existed in TikTok Shop U.S. for over six months. The new category allows customers in the U.K. to purchase pre-owned high-end clothing, handbags, and accessories, beginning with just five brands initially including Sellier, Luxe Collective, Sign of the Times, HardlyEverWornIt, and Break Archive. Like other resale marketplaces, TikTok Shop has an anti-counterfeit policy that guarantees a full refund if a buyer is sold a counterfeit product. All secondhand brands in the U.S. are required to have certificates from third-party authenticators such as Entrupy and Real Authentication, but initially in the U.K., partner brands will be using their own in-house authentication process.

In other TikTok news… The House of Representatives passed legislation (again) that could trigger a nationwide ban of the app if its Chinese owner does not sell. This time the ban was attached to a sweeping foreign aid bill that provides support for Ukraine and Israel, so now the Senate has to choose between helping allies and keeping TikTok unbanned. Can't have both apparently.

Meta announced that its newest large language model, Llama-3, is the “most capable” and “best open source model” currently available on the market. The company's blog post minced no words about claiming it was the best. Meta also says that its new model creates “sharper and higher quality” images and has a “better ability to include text in images.”

Wix is now allowing freelancers and agencies who are part of its Studio platform to sell their website templates directly within the Wix Marketplace. All available templates for sale must pass a review for quality and usability before being listed. Wix has historically offered a selection of free templates provided by the company itself. Additionally Wix users could code their own templates by themselves or with the help of Wix's AI Site Generator which launched last July. Now with the new ability to sell templates, Wix can increase its selection of ready-to-publish site templates via leveraging its partner network, as well as create new revenue opportunities for them.

Following its successful debut in Europe, Klarna is now preparing to extend its credit card offering to consumers in the U.S. The card, which will be issued by Utah-based WebBank, will allow customers to buy products in any brick-and-mortar or e-commerce store that accepts Visa with the ability to pay for the purchase in either three or six month installments. On other words, Klarna's credit card brings its BNPL payment option to any store that accepts Visa, even if the store doesn't offer its own dedicated BNPL offering.

The EU's Data Protection Board told very large online platforms, particularly looking in Meta's direction, that they cannot offer users a binary choice between paying for a service and consenting to their personal data being used to provide targeted advertising. The opinion published last week follows complaints by consumer and privacy organizations about Meta's decision to introduce a €9.99/month (or €12.99/month on iOS and Android) premium plan for users who do not want their personal data used for targeted advertising. Meta believes that the EDPB's opinion is contrary to what the EU courts ruled last year, and doesn't plan on changing its model solely based on this new opinion. So it looks like the Data Protection Board is going to have to fight this battle in court if that opinion is to be enforced, as Meta won't be doing it voluntarily.

Two weeks ago, I reported that Amazon is removing its Just Walk Out cashierless checkouts from its Fresh supermarkets in the US and instead will rely more heavily on Dash Carts. Amazon said that it will continue to license the Just Walk Out cashierless system to third parties, to which I commented that as a retailer, I personally wouldn't invest in a technology that Amazon is removing from its own stores, as it doesn't show much confidence in the tech. However apparently Amazon doesn't think it'll be a problem that it's shuttering the tech in its own stores because last week the company said that it plans to push its Just Walk Out technology into more third-party stores this year, increasing its count from the 140 stores that currently use it.

Amazon also said that it's planning on bringing its Dash Carts to more supermarkets, including all of its own Amazon Fresh stores in the U.S. and selected Whole Foods locations, as well as third-party grocers. Amazon claims that customers who use Dash Carts spend 10% more than normal shoppers in Amazon Fresh stores, and that more than 80% of daily Dash Cart transactions are from repeat users. In a blog post, Amazon also discredited The Information's report that its AI cashierless tools relied on thousands of humans behind the scenes. They wrote, “The erroneous reports that Just Walk Out technology relies on human reviewers watching from afar is untrue. Most AI systems, including the underlying ML models behind these technologies, are continuously improved by annotating synthetic (AI generated) and real shopping data.”

BigCommerce announced over 100 significant platform enhancements, new features, and integrations as part of its first ever BigCommerce Next Big Thing product launch, which breaks down which features are currently available, coming soon, or on a waitlist. The company says in its video that these features are designed to enable “commerce without compromise, helping you to grow and stand out from your competition.” Upcoming features include multi-address shipping, localized blog content, new Google Retail AI integrations, and more. Lots in store for the newly profitable BigCommerce 2.0!

Shopify is taking an unconventional approach to raises by making its 8,300 employees compete against each other to qualify for more pay. According to The Information, Shopify assigns employees a numerical score to represent their skill level, which can only increase if their skill level improves faster than colleagues. Feels a little Squid Game-ish.

Amazon will account for 40.4% of U.S. retail e-commerce sales, or a total of $491B this year, according to an eMarketer report. Among major U.S. retailers, only Walmart is growing its e-commerce sales faster than Amazon at 13.6% compared with Amazon's 10.5%.

This makes sense given that Amazon Prime had 180M members in March, which accounts for 75% of all U.S. shoppers, according to Bloomberg Businessweek. This represents an 8% increase from 2023.

The share of consumers carrying cash is on the decline, at 81% as of April 2023, down from 84% in August 2020 and 94% in July 2018. The most common reason given for not carrying cash is that other payment methods are easier or more convenient to use.

commercetools made three announcements at its Elevate conference: 1) They integrated PayPal's new Fastlane feature, a one-click guest checkout experience designed to speed up the checkout process for consumers. 2) They launched a new B2B offering called Blueprint for B2B Manufacturing, which streamlines implementation and speed time-to-market for manufacturers. 3) They launched Community, a platform designed to foster enhanced support, communication, and collaboration among customers and partners.

Walmart Marketplace and Cart.com teamed up to allow customers using Cart.com's multichannel management platform to access special incentives across Walmart's shipping, advertising, and repricing services, as well as support for onboarding and customer success. Cart.com will use its multichannel selling capabilities and Constellation AI features to make it more efficient for brands to sell and list products on the marketplace and leverage Walmart's customer base, infrastructure, and fulfillment network.

Amazon introduced a free, shoppable, ad-supported channel to its Prime Video and Freevee streaming service, which allows U.S. consumers to browse, shop, and engage with content they're watching on their TV screen via mobile devices. The channel utilizes Amazon's “shop the show” technology, which integrates its mobile app with onscreen content to showcase a carousel highlighting the featured products being depicted on television in real time.

None of the ad transparency tools created by 11 of the world's largest tech companies operate as effectively as needed, according to a report by Mozilla and CheckFirst research. The study, which tested the transparency of tools using over 20 parameters regarding functionality, data accessibility, and accuracy, found that the repositories are plagued by missing data, bugs, shoddy features, and unacceptable shortfalls.

Post News, the Twitter alternative founded by Noam Bardin, the previous CEO of Waze, and backed by Andreessen Horowitz and Scott Galloway, is shutting down just a year and a half after launching in beta. Bardin said in a statement, “At the end of the day, our service is not growing fast enough to become a real business or a significant platform.. we have not managed to find the right product combination to make it happen.”

MercadoLibre plans to increase total staff by 30% this year by hiring 18,000 people as it seeks to grow its business in Mexico and other Latin American countries, a hiring spree which will bring its headcount to around 76,000 full time workers. The company has been seeking to expand operations in Mexico, which was its number three market by revenue in 2023, behind only Brazil and Argentina.

Target is reducing the selection and quantity of DVDs it will sell in its retail stores, transitioning most of the sales online, with the physical stores only carrying new releases during key times of the year moving forward. Best Buy made a similar move last October, abolishing all physical media from its stores other than video games, leaving Walmart as the physical media king with over 45% market share.

Best Buy launched an AR app called Best Buy Envision, designed exclusively for the Apple Vision Pro that offers real-time product previews. The app allows consumers to see how a product would appear in their space in terms of size, style, and color before making a purchase, showcasing products in 3D and providing essential information like ratings, reviews, and pricing.

Kraft Heinz Co. and Mattel Inc are teaming up to produce a “Barbiecue” sauce — a limited edition pink colored sauce with Barbie branding on the label. The company first gauged interest on social media last summer, when a Facebook post generated 464k likes and 71k comments. From there, product development took about six months.

The House Financial Services Committee voted to block a rule that would cap credit card late fees as soon as next month. Chairman Patrick McHenry said in a statement, “The credit card late fee rule fails to acknowledge the role certain fees play in encouraging timely payments. It will harm consumers by shifting costs to responsible consumers who pay on time in the form of higher annual fees and higher interest rates.” I call BS on that though. The credit card landscape is still very competitive and “responsible consumers” wouldn't sit back, do nothing, and absorb higher fees — they'd move on to a different card with better fees / rates. Capping late fees would've only protected consumers who need a break.

Grubhub teamed up with Mercato, an online marketplace for independent grocery stores, to bring its inventory of more than 950 merchants across the US to the Grubhub Marketplace. This is the first time Mercato has teamed up with a third-party delivery company.

Last week I reported that Coupang was raising its monthly membership fee for new users by 58%. Now its biggest competitors, Naver and Shinsegae Group, are going all-out to take advantage of the decision by running promotions on their own paid membership programs. However Coupang isn't worried because neither competitor can match its ultra-fast Rocket Delivery service.

Here's what Coupang should actually worry about… Amazon introduced free shipping benefits for South Korean consumers last week for orders exceeding $49. While delivery times fluctuate depending on the product, and even Amazon can't beat Coupang's fast delivery network, Amazon ensures that it'll hit the estimated delivery times indicated during checkout.

Dollar General opened its 20,000th store in February with the opening of its latest store in southeastern Texas. The company plans to complete 2,385 real estate related projects this year including opening 800 new stores, remodeling 1,500 locations, and relocating 85 stores. There's currently about one Dollar General for every 16k Americans.

MarketForce, the Y Combinator-backed Kenyan startup founded in 2018, is shutting down RejaReja, its B2B e-commerce platform, citing the razor-thin margins of B2B e-commerce businesses and profitability struggles as contributing factors to the decision. The company's co-founder, Tesh Mbaabu, shared that he and his co-founder will be pivoting to a company called Chpter, which focuses on empowering online merchants through conversational commerce in Africa.

Amazon's packaging has been getting more efficient in recent years thanks to its multimodal AI model called the Package Decision Engine, which is tasked with selecting the right box, bag, or wrapper for each package it ships. The AI model interprets pictures and text to choose the best shipping materials, which has helped the company cut out 2M tons of plastic and cardboard since 2015.

Tesla confirmed that it spent $200k to advertise on X so far, despite Elon Musk famously saying that he despises advertising and that Tesla doesn't pay to advertise. X users reported starting to see Tesla ads on X starting in February 2024.

Meta may launch ads on its Threads platform as early as the second half of this year, likely to be integrated into Meta's ad platform, Advantage+, alongside existing options for Facebook and Instagram. Initial ad formats are anticipated to include in-feed placements, with potential expansions to trends and topic selections.

Alibaba Group announced that its CEO, Eddie Wu, would now be directly overseeing its domestic e-commerce arm which includes Taobao and Tmall Group. Wu has been CEO since September, when he also took over the company's cloud business, which means he will now be leading the company's two most important divisions.

Seven amateur criminals rented heavy equipment from Home Depot locations in Washington and Colorado using stolen credit cards, and then sold the machinery on Facebook Marketplace. The funniest part is that the criminals would often use their real driver's licenses for the required identification to rent the machines, so they were easy to find!

TAKE HER DOWN: eBay Stalking Scandal, a documentary short that tells the story of when eBay executives threatened and stalked Ina and David Steiner of EcommerceBytes for publishing blog posts critical of the company, is set to be released on April 25th. Filmmakers Ray and Nicole Ward ,a brother and sister production team, are initially releasing the 15 minute short on YouTube, with the possibility of developing it into a feature length version later this year. You can watch the teaser on YouTube.

U.S. parcel volumes reached 21.65B shipments in 2023, a 0.5% increase from the year prior. Amazon and alternative carriers posted strong volume gains, while FedEx and UPS both saw a decline.

I hope you found this recap helpful.

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See you next week!

PAUL