E-commerce Industry News Recap ?? Week of Mar 11th, 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 164th Edition published 03-11-2024. Check out the full edition for links and sources and subscribe here.

1. STAT OF THE WEEK: PDD Holdings, the parent company of Temu, spent nearly $2 billion on advertisements last year at Meta, according to a report by The Wall Street Journal that cited people familiar with the matter. It was the number one advertiser by revenue on Meta and one of Google's top five advertisers last year as well. .
2. Target's new premium membership program -- Target Circle 360 -- will officially launch on April 7th, costing $99/year, but Target is offering a first year discounted rate of $49 through May 18th. The membership includes unlimited free same-day delivery for orders over $35 in as little as one hour and free two-day shipping with no order minimum. Plus an additional 30 days to return purchases beyond the standard 90-day return policy. Target is also relaunching its free Target Circle loyalty program to become easier to use and more personalized with discounts automatically applied as opposed to the customer having to scan through deals on the app. Lastly Target is rebranding its Target RED Card, which offers 5% off purchases and other perks, as the Target Circle Card — although the card itself will still be rectangular. .
3. Walmart is launching an early morning delivery service to stay ahead of its rivals. The morning delivery service will include two options: One hour or less – priced at $10 per trip. Orders will need to be placed before 6am, and many will be delivered in 30 minutes. Three hours or less – this slightly slower option will only cost $5. Customers who are not members of Walmart+ will also have a base delivery fee added to their orders, which I assume will vary by market and customer location. .
4. Last Thursday, The House Energy and Commerce Committee voted 50-0 to pass a bill that would force ByteDance to divest TikTok into a US-owned company. If passed, ByteDance would be required to sell the app within five months or face removal from U.S. app stores. The bill, called the Protecting Americans from Foreign Adversary Controlled Applications Act, would give the executive branch the power to identify social media apps as national security threats if they are deemed under the control of foreign adversaries, like China, Russia, Iran and North Korea, and prohibit their use domestically. The rationale being that those platforms could use their algorithms and data on Americans to meddle with politics in the U.S. .
5. Last week Apple terminated Epic Games' Sweden AB account, which Epic claims was in retaliation of it speaking out against the company. Epic intended to use that account to bring the Epic Games Store (its own app store) and Fornite to iOS devices in Europe, which it can now do thanks to the new Digital Markets Act. Two days later, Apple reinstated the account after European Union officials looked into the issue and “requested further explanations on this from Apple under the DMA.” .
6. Meta offered more details about how it plans to make its messaging apps interoperable with third-party messaging services, as required by the new Digital Markets Act. Here's what was revealed so far: Interoperability with third-party messaging services was enabled on Mar 7th to comply with the DMA. This will open the door for users from Signal, iMessage, Telegram, and other apps to message users on WhatsApp and Facebook Messenger. Third-party providers will need to sign an agreement with Meta before it will enable interoperability, and engaging with third-party chats will be opt-in for users. .
7. Wayfair plans to roll out a consolidated delivery option for B2C shipments, in which customers can select a date for multiple items to be delivered at the same time. CEO Niraj Shah said, “As you can imagine, delivering things one at a time is less efficient than delivering a lot of things all at once.” Despite seeing an uptick in order volume (11.3M orders fulfilled in Q4, up 2.7% YoY), Wayfair still posted a $174M net loss in Q4 and laid off 1,650 employees in January. The retailer, which spends about 20% of every revenue dollar on some form of logistics (factory to port, ocean container freight, drayage, linehaul, warehousing, last mile delivery, etc.), is now looking for ways to reduce its logistics costs. .
8. Temu, which since launching in Sep 2022 has only catered to Chinese sellers, is expected to open its marketplace to sellers in the US and EU in the coming weeks. Unlike Temu's China-based sellers, new sellers from the West will not ship goods to Temu’s warehouses in China to have them fulfilled. Instead sellers from US and EU will handle fulfillment from their own domestic warehouses. Temu will also not manage pricing or marketing, mimicking the Amazon, eBay, and Walmart marketplaces. .
9. Patreon is rolling out an expansion of its e-commerce tools for creators, soon allowing them to sell one-off digital goods and offer free subscriptions. The company views the new free subscription offering like a newsletter, or a way to reach all of a creator's fans at once, which could help onboard more fans into paid supporters. For e-commerce transactions, Patreon will keep 5% of the sale, plus tax and payment processing fees, which is lower than the 8% cut it takes on subscriptions. .
10. Amazon delayed the launches of new online storefronts in Switzerland, Ireland, Belgium, and potentially other European countries this year, which the company had been planning to launch since 2022. Stores for Nigeria, Chile, and Colombia have also been put on hold. Amazon did not launch any new storefronts in 2023, which is rare for the company which has opened at least once new international market each year since 2016. .
11. Wix officially launched its new AI website builder, which can build a website and create original images using only text prompts. Users only have to answer a few questions, like what you want to call the site, what it's about, and what your goals are for it, and the AI builder creates a draft site for you, which you can then edit using Wix's traditional website builder. I first reported (story #1) on Wix's plans to launch this AI builder in July 2023. .
12. The Consumer Financial Protection Bureau finalized a rule on Tuesday that caps most credit card late fees at $8 as part of a broader push by the Biden administration to eliminate junk fees. The bureau estimates that the new regulation will save families more than $10B a year by cutting fees from an average of $32, but the financial industry says that the new regulation will hurt consumers by causing more people to pay late, which will damage their credit scores. LOL, I'm not sure if that's how that works guys. I'd imagine that a reduced late payment fee will mostly help consumers who are already in a bad spot, as opposed to encouraging more people to pay late. .
13. Etsy came out with a new feature called Gift Teasers that lets shoppers send a digital preview of the gift they purchased on Etsy to the recipient. Now last-minute shoppers can purchase gifts on Etsy that will most likely arrive late for the special occasion, and Etsy will instantly send a digital preview of the gift directly to the recipient or schedule the teaser to be sent when the item ships so that they know something is on the way. I like it! .
14. A wave of social media influencers are earning money by promoting illegal knockoffs imported from China on Facebook, TikTok, Discord, and Reddit. One knockoff brand called Pandabuy claims to have signed up thousands of content creators to its marketing program last year. Daniel Shapiro, VP of strategic partnerships at Red Points, a firm that helps brands detect counterfeits of their products online, said that their platform detected a 26% increase in counterfeiting by Chinese sellers in 2023 YoY — a stat which kind of sounds to me like an ad for their services, but it may also be true. .
15. Flipkart is planning to make an instant-delivery service available in select locations throughout India as early as May this year. The Walmart-owned company has been steadily laying the groundwork to improve its delivery time for quite a while, heavily investing in it supply chain infrastructure with a particular focus on reducing delivery times for grocery items. .
16. Walmart expanded its existing Beauty Virtual Try-On capabilities through its app to include hair color options. The capability spans close to 500 products so far. Walmart also offers virtual try-on capabilities with cosmetics and apparel, and in January, launched an augmented reality try-on for eyewear. .
17. Sam Altman is re-joining the OpenAI board after an independent probe found that his conduct “did not mandate removal.” The special committee of the OpenAI Board announced the completion of the review and expressed its full confidence in Altman and Greg Brockman's ongoing leadership of the company. The board also announced the election of three new Board members which include Dr Sue Desmond-Hellmann (former CEO of the Bill and Melinda Gates Foundation), Nicole Seligman (former EVP and General Counsel of Sony), and Fidji Simo (CEO of Instacart and board member at Shopify). .
18. Amazon infringed on British trademark rights by promoting identical branded products from another party to British shoppers on its US website, according to a recent ruling. The case revolves around the use of the words “Beverly Hills Polo Club” or the logo consisting of these words, coupled with an image of a horse and a rider, which are trademarks owned in the UK and EU by a company in the Netherlands, but are owned by a different entity in the US. According to the lawsuit, Amazon targeted customers in the UK and EU with advertisements and offers, thereby infringing on trademark rights. .
19. A coalition of 40 state attorneys general sent a letter to Meta expressing concerns regarding the surge in consumer complaints related to account takeovers and lockouts. The letter read, “Consumers are reporting their utter panic when they first realize they have been effectively locked out of their accounts” and that having their accounts taken away from them can be “traumatizing.” The letter emphasizes the need for Meta to take immediate action to provide assistance to users affected by account takeovers. .
20. Instacart will now be powering the websites for Harps Foods, Price Chopper, and Canseco's Market through its Instacart Storefront service and mobile app. Meanwhile DoorDash linked up with Rouses Markets to provide on-demand delivery for the Gulf Coast grocery chain. The new partnerships are part of the companies' latest endeavours to expand their partner bases with smaller retailers. .
21. Whole Foods is opening its first small-format location in New York City this year called Whole Foods Market Daily Shop. The grocery store will be much smaller at up to 14k sq.ft. than the standard Whole Foods stores which average 40k sq.ft. and feature a limited selection of on-the-go options. .
22. Alibaba announced plans to introduce new AI tools to assist merchants on its Taobao and Tmall platforms. The tools are expected to improve the state of advertising on the platforms, allowing merchants to create image and video campaigns via text input. .
23. Oura, the wearable health technology company, is now selling its Ring Horizon, Ring Heritage, and Ring Sizing Kit on Amazon, following its launch on Best Buy a year earlier. Customers that buy the sizing kit will receive a $10 Amazon credit that can be used toward the purchase of an Oura Ring. .
24. Meta's new AI model, designed to enhance video and user Feed recommendations, could eventually benefit advertisers by directing viewers to more relevant results, according to some experts. Meta has traditionally used separate AI models for content recommendations across various services such as Reels, Groups, and Feed, but now the company is working on a project to power their entire video ecosystem with a single model, which could then be used to recommend products as well. .
25. Bold Commerce launched its Build with Bold Partner Program to extend the company's technology to new SaaS solutions and agency partners. The program aims to make composable checkout more accessible to agencies through new training, support, and documentation. .
26. ShopeeFood, one of Vietnam's most popular food delivery apps, has been miscalculating the distance of deliveries by up to 2.1km, as a result of the app ignoring one-way streets and roads with median barriers, according to delivery workers. The platform has a mechanism to compensate for these types of miscalculations, but workers say the process is tedious and don't opt for it in many cases. .
27. X unveiled a new feature called “Articles” that allows users to share long-form content on the platform including images, videos, GIFs, posts, and links. Users can format their articles with various HTML options like headings, subheadings, bold, italics, strikethrough, indentation, lists and more. The feature is exclusive available to X Premium+ users. Elon Musk also announced that like, retweet, and favorite counts would be disappearing from the main feed in a future design change, which he says is to make the feed cleaner. .
28. TikTok Shop expanded its partnership with Shopify in the UK, now allowing Shopify merchants to connect their online store to its shopping platform using a new app, create TikTok ad campaigns, synchronize their product catalogue, and sell products through in-feed videos and LIVE broadcasts. The UK expansion follows the launch of the TikTok for Shopify App in the US last year, and will be available to merchants in the UK from March 6. .
29. Last year TikTok introduced longer videos to its platform via an invite-only Creativity Program, which required videos longer than a minute to qualify for monetization. Now TikTok announced that the program will be called Creator Rewards moving forward, and will calculate payouts based on an “optimized rewards formula” focusing on originality, play duration, search value, and audience engagement. The new fund for one minute long videos promises to rectify previous creator complaints of low payouts from the original creator fund, which often just paid a few dollars for several million views. .
30. Google introduced a new Shopping Ad format that enables competing Comparison Shopping Services to drive traffic to their own website, instead of directly to merchants. Now a comparison shopping service can run campaigns for its product pages, just like merchants do for their product pages, and enter the same ad auction as merchants, competing for a position in the same product ad box. .
31. Klaviyo released a set of professional services packages to help enterprise-level customers leverage the e-mail and SMS marketing tools on their platform, with prices beginning at $30k/month. Many Klaviyo partners criticized the company for competing against their own agency partners, while others said that the services wouldn't impact most of their partners. Klaviyo wrote in the announcement, “While Klaviyo is partner first, and we always recommend our customers leverage a trusted services provider, in the rare instance where that isn't possible, these SKUs may be recommended.” .
32. Insider Intelligence rebranded back to eMarketer and launched a new series of product features called PRO+. Four years ago when eMarketer and Business Insider Intelligence merged, they started using the name Insider Intelligence, but are now returning back to their original name. However they are still part of the Business Insider Intelligence company. .
33. Two-thirds of surveyed consumers said that they don't mind retailers using AI to automate repetitive tasks, but that they don't want it to replace human interaction. Most agreed that retail experiences will always require a blend of AI and human interactions. Shoppers want to know if a company is using AI, and not have the AI take them out of an already comfortable journey. .
34. Plus 10 seed rounds, IPOs, and acquisitions of interest including Beyond, Inc's acquisition of Zulily's intellectual property and brand assets for $4.5M. .

I hope you found this recap helpful.

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See you next week!

PAUL

#ecommerce #ecommercenews #shopify #temu #shein #commerce #retail #tech #target #targetcircle360 #beyondinc #zulily #AI #boldcommerce #klaviyo