E-commerce Industry News Recap ?? Week of Mar 4th, 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 163rd Edition published 03-4-2024. Check out the full edition for links and sources and subscribe here .

1. Shopify is now offering discounts for its merchants to fulfill and ship orders through Flexport as the two companies deepen their logistics ties. The discounts include 10% off Flexport’s fulfillment services for first-time users for up to $1M in savings and 10% savings on shipping fees up to $250k for any shipment upgraded to Flexport’s “Flexpedited” service. The discounts only apply to inventory inbounded and fulfilled by June 30, which is a fairly short window of time for a company to switch fulfillment services and subsequently fulfill enough orders for the savings to offset the cost of the transition.
2. TikTok Shop listings began to pop up in Google Shopping in recent weeks, particularly within results for beauty and skincare products. Searches for trendy products like “nail art” and “dior lip oil dupe” featured results that linked to smaller sellers on TikTok Shop. TikTik confirmed the company's Google Shopping ads, but declined to comment on specifics such as how much it was spending or how long they plan to advertise on Google.
3. PYMNTS recently reported that 70% of consumers consider the availability of their preferred payment method extremely influential when choosing which online store to purchase from. The report concluded that merchants who offered a customer's preferred payment method saw lower cart abandonment. However on the flip side of the coin, Modern Retail says that some brands question the value of having too many payment options on their checkout, particularly too many BNPL options, wondering if it looks too cluttered and scares away shoppers.
4. The Consumer Product Safety Commission said on Friday that the ability of the US to enforce product safety standards is being strained by the huge number of goods shipped directly to American consumers from factories in China via marketplaces like Shein and Temu. The agency said that it receives limited data on products entering the country, is dealing with a huge volume of imports, and has limited staff at major entry points, which is presenting significant challenges to their ability to stop dangerous products before they enter the market.
5. Automattic, the parent company of WordPress, WooCommerce, and, Tumblr, is in talks to sell content from its platforms to AI companies like MidJourney and OpenAI for training purposes, according to a new report from 404 Media. The company plans to introduce a new setting that will let users opt out of training AI systems, but it’s not clear whether the setting will be toggled on or off by default for users. Squarespace introduced a similar setting to opt out of allowing your data to be used for training AI last year.
6. I'm sure you saw the news and the TikTok videos blasting Wendy's for its recent announcement that it'll begin using Uber-like surge pricing at its restaurants during peak hours. It was reported by CNN and other news outlets that the fast food restaurant will begin testing dynamic pricing as early as 2025 as part of its $20M investment in new digital menu boards across its US restaurants, which will enable them to change prices throughout the day depending on demand. However after all the backlash, Wendy's now wants you to know that it will NOT be using surge pricing. The company wrote in a statement: “This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants. We have no plans to do that and would not raise prices when our customers are visiting us most."
7. The latest Social Media Benchmarks report from Rival IQ reveals that engagement with brand posts has dropped on every social media platform except Facebook in 2023. TikTok engagement rates dropped by about 50% this year, however despite the significant drop, with a median engagement rate of 2.63%, TikTok still performed better than any other channel. Brands posted more frequently on TikTok than they did last year across the board. Media brands posted nearly twice as often as they did in the previous period. Post frequency increased on Instagram and TikTok while decreasing on Facebook and Twitter.
8. Klarna announced that within one month, its AI-powered assistant had handled two-thirds of customer service inquiries and is “doing the equivalent work of 700 full time agents.” Klarna currently outsources its customer service to five global third-party providers that collectively employ more than 650,000 people, of which 3,000 of those agents were dedicated to Klarna. A Klarna spokesperson told Sourcing Journal, “Since the launch of the AI assistant, we have seen that number reduce to 2,300 agents fully dedicated to Klarna. Because our third-party customer service agents have such a large volume of work from other clients, they are able to redeploy those agents. But for Klarna, that implies a direct reduction in our customer service requirements, and therefore, cost savings.”
9. Flipkart is developing its own Unified Payments Interface service for online and offline payments to compete with Paytm, PhonePe, Google Pay, and Amazon Pay in India. The service will offer loyalty features such as supercoins, cashbacks, milestone benefits and branded vouchers to its over 500M customers.
10. Amazon's typical shopper is a white Gen X woman earning around $60,000 per year, according to a study by Numerator. The typical customer makes an average of 72 orders per year (or roughly 1-2 orders per week) at an average cost of $37 per order for an annual spend of $2,662. Sounds about right. She's probably the type to bake cookies using prepackaged dough and then tell other parents on the PTA that they were made from scratch, but we all know.
11. Apple is reversing its decision to kill Progressive Web Apps in the EU after backlash from users. Last month, Apple said this decision was due to requirements under the Digital Markets Act related to support alternative browser engines on iPhone, but that obviously made no sense and everyone saw past it, so Apple reversed course. As of March 1st, EU users will continue to be able to install and use home screen web apps on iOS.
12. Experian will be the first credit bureau to include Apple Pay Later loans on consumers' credit reports with a BNPL designation. The loan information will not immediately be factored into existing traditional credit scores, but it may in the future as new credit scoring models are developed.
13. ShopBack, a Singapore-based loyalty platform, is discontinuing its BNPL service PayLater as of March 22nd because the company feels it lacks growth potential. The PayLater service was introduced after ShopBack acquired Hoolah in November 2021.
14. Amazon, Walmart, Temu, Shein, and Sears are recommending and selling doorbells that hackers can infiltrate and gain access to footage, IP addresses, and WiFi networks. Despite the alleged security concerns, at least one doorbell has the “Amazon's Choice” recommendation and receives over 300 sales a month. Anyone can walk up to the doorbells, hold the button long enough for it to go into pairing mode, and link it to their account on the app. The info could then be used for porch piracy or other unscrupulous things.
15. The US Drug Enforcement Administration issued a letter to e-commerce companies informing them that if they continue to turn a blind eye to the sale of the pill presses that are being used to make fentanyl pills on their platforms, that the DEA will hold them accountable. Last month eBay agreed to pay a $59M fine and enhance its compliance program to resolve allegations that it violated the Controlled Substances Act after selling thousands of pill presses and encapsulating machines on its website.
16. Etsy and Amazon will be hosting spring sales events to promote seasonal items such as Outdoor & Garden, Home, Beauty & Fashion, Pets, Travel and other relevant categories. To participate, Etsy sellers can pick the listings to include in the sale, whereas Amazon is collecting deal submissions for an opportunity to participate in its promotion. The sales will have a dedicated landing page and will be promoted through paid media and merchandising placements.
17. Meta is removing restrictions on how much creators can earn from its Creator Bonus program, which previously limited a maximum payout to $30k per month. Meta is also inviting more creators to participate in the program including creators from Italy, France, Germany, Spain, Colombia, Argentina, Peru, the Philippines, Thailand, and Indonesia.
18. Brazil ordered Meta to stop using its name in the country within 30 days, after a local computer services provider with the same name fled a lawsuit saying it has been damaged by third parties confusing the companies. Meta Servicos, which registered its brand in the late 2000s, said that since Facebook changed its name in 2021, it has been wrongly included in more than 100 lawsuits and had Instagram profiles disabled for supposedly impersonating another company. Zuckerberg's Meta must pay $20k per day if it fails to comply with the decision, which it can appeal. But something tells me Meta Servicos is about to get a buyout offer.
19. Amazon labeled Apple's FineWoven iPhone 15 case as a “frequently returned item” and warned customers to read the reviews — many which are one star. Customers have been complaining about the case since it was released last September, claiming its the worst product Apple has ever released.
20. The European Parliament banned Amazon representatives from accessing its buildings due to multiple events where the company did not attend meetings requested by members of the parliament. Apparently Amazon refuses to attend more than one meeting with EU lawmakers to discuss the condition of its workers. It is now the responsibility of the secretary general to initiate the process of withdrawing their badges and to determine the duration of the ban.
21. US e-commerce sales penetration hit a new all time high, representing 22.0% of total retail sales in 2023, according to Digital Commerce 360 analysis of US Dept of Commerce data. However total retail sales grew just 3.8% in 2023, which is just over half the rate they did in 2022. .
22. Studios staffed with Chinese livestreamers are training Americans to sell on TikTok Shop, convinced that a livestream shopping boom is inevitable in the West. More than 20 agencies have popped up in the US, filled with staff experienced in Chinese livestream e-commerce, who seek to professionalize livestream shopping on TikTok by recruiting and training local talent.
23. Macy's is closing 150 underperforming stores by 2026, leaving just 350 stores at that time. The company is pivoting to focus on its successful Bloomingdale's and Bluemercury brands, which have outperformed the Macy's brand, and is planning to open more, smaller versions of those stores over the next several years. Okay cool, but does Bloomingdale's and Bluemercury have Thanksgiving Parades??
24. A former Shopify employee was awarded €10k following his layoff, which he successfully argued was a result of accusing female team leads of discrimination. Mark Wells was allegedly subjected to abuse from a customer, with his subsequent complaints being poorly handled by his employer, leading to his unfair dismissal.
25. Elon Musk is suing OpenAI and CEO Sam Altman, claiming that the ChatGPT-maker's partnership with Microsoft is jeopardizing its original nonprofit mission. The suit claims that the company's pivot to a “capped-profit” division breached its contract of being an open-source, nonprofit company, as it was first established in 2015.
26. Affirm, which operates in US and Canada, has its sights set on the UK, where the BNPL provider sees a demand for the longer-term, interest-bearing loans it offers. Beyond that market, Affirm is seeking to plan flags where its partners, Shopify and Amazon, have a presence.
27. Pinterest launched its first-ever streaming show, Deliciously Entertaining, developed and produced in partnership with the media company Tastemade. The series is available on the Tastemade streaming channel with a shoppable experience on Pinterest. Viewers can scan an on-screen QR code which links to a Pinterest board filled with shoppable Pins to recreate recipes, DIY tutorials and inspirational Pins connected to the episode theme.
28. DICK'S Sporting Goods released a new e-commerce ad campaign entitled Click on DICKS.com that stars actors Will Arnett and Kathryn Hahn. The campaign features two 30-second spots that showcase the seamless, hassle-free experience of shopping on DICK'S website and highlights the retailer as the ultimate online shopping experience for athletic apparel, footwear, and sporting goods equipment. The commercials were okay. Personally I would've pulled inspiration from some classic Gob quotes like, “Yeah, like I'm going to get grass stains all over these $120 cleats! COME ON!”
29. Plus 12 seed rounds, IPOs, and acquisitions of interest including Shein potentially pursuing an IPO in London rather than in the US after determining that the US is unlikely to approve its IPO due to scrutiny over its business practices, particularly its alleged use of cotton from forced labor regions in its clothing.

I hope you found this recap helpful.

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See you next week!

PAUL

#ecommerce #ecommercenews #shopify #temu #shein #squarespace #thrasio #affirm #pinterest #bnpl #livestream #eu #china #commerce #retail #tech