Shopifreaks E-commerce Industry News Recap ?? Week of Oct 7th, 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 194th Edition published Oct 7th, 2024. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: People that make more than $200k annually now make up 8% of Walmart's customers. This group has increased 5x faster over the past year than overall customer growth. — According to Brick Meets Click and Mercatus

BigCommerce appointed Travis Hess, who joined the company as President this past May, as its new CEO. Hess will succeed Brent Bellm, who has served in the position since 2015 and saw the company through its IPO. Hess previously held senior leadership roles at Accenture, where he led the firm's D2C commerce offering and go-to-market strategy. He has also served on partner advisory boards for Shopify, Klaviyo, SAP/Hybris, and Rackspace. Prior to his time at Accenture, Hess was VP of The Stable, an omnichannel commerce agency that was acquired by Accenture, and before that, CEO of BVA, a Shopify agency, which was acquired by The Stable in 2021. See the pattern here? Everywhere Travis Hess works gets acquired!

Starting next year, eBay will begin charging buyer fees instead of seller fees in the UK, following in the footsteps of Mercari, Poshmark, Depop, and Delcampe, all which shifted fees from sellers to buyers this year. In April, eBay started testing no fees on used clothing for private sellers in the UK, and last week, the company made it free to list items in all categories except motors. The catch to the no seller fees? A “buyer-facing fee” early next year.

ByteDance unveiled two new video generators at an event in Shenzhen last week — PixelDance and Seaweed. PixelDance focuses on AI-driven character animation, generating 10-second videos of characters with lifelike human movements that include walking, turning, picking up objects, and interacting with their environment. The model maintains consistency in character appearance, proportions, and scene details across varying camera angles and shots, which is a bone of contention among users of other existing models. Seaweed offers similar features, but stretches video generation to 30 seconds, with the ability to create up to to 2 minutes of consistent shots. Both models are in an invite-only testing phase and only available to a limited number of users, however, the models could be made publicly available next month.

Last week Meta launched Movie Gen, a generative AI tool that uses text inputs to automatically generate videos and audio up to 16 seconds in length, as well as edit existing footage and still images. Since the audio added to videos is also AI-generated, it can match the imagery with ambient noises, sound effects, and background music. Meta says Movie Gen can also create custom videos from images or change elements of an existing video. For example, the company showed a still headshot of a woman transformed into a video of her sitting in a pumpkin patch sipping a drink. As impressive as it is, Meta's chief product officer, Chris Cox, wrote on Threads that Meta isn't ready to release the product anytime soon, as it's still expensive and generation time is too long.

At the company's Facebook IRL event in Austin, TX, Facebook revealed new features aimed at attracting young adults to its platform. 1) Local Tab – an experience that pulls together local content from across Marketplace, Groups, and Events into a single feed. 2) Weekly and Weekend Digest for Events, 3) Explore tab - which curates content based on your interests, 4) Video Tab - combines short-form, long-form, and live videos into a full screen player, 5) SMS / E-mail / IG Invites for Events, 6) Group AI Chats - to help members find answers (ie: an improved search experience for groups), plus a few other updates.

Flexport is undergoing a reorganization of its omnichannel business, integrating its freight forwarding and fulfillment teams. As part of the integration, the company is cutting around 2% of its workforce due to redundancies. While that might not sound like a large portion of its headcount compared to recent tech layoffs, keep in mind that Flexport already laid off 20% of its workforce this past January, after last year having made 20% reductions in both January and October. Flexport's headcount today sits at about 50% of what it was just over a year ago.

Amazon will be offering more Prime Video ad slots to advertisers next year as the company “ramps up” its ad load “a little bit more.” In January, when Amazon launched Prime Video's ad tier, subscribers would see two to three-and-a-half minutes of ads per hour (which is increasing), and never in the middle of content (which is changing). It's also been confirmed that Amazon will be adding shoppable ads to Prime Video next year, which will include carousel ads, pause ads, and brand trivia ads.

Not everyone at Automattic agreed with Mullenweg on the way he was handlings things with WP Engine, so he decided to clean house of all dissent at the company by offering employees the option to resign immediately and receive $30k or six months of salary (whichever was higher) if they disagreed with his leadership decisions — or stay and kiss his ring. 159 employees, or roughly 8.4% of staff, accepted the “alignment offer” (as he called it), of which 80% worked at the company's Ecosystem / WordPress division, and the rest were in Automattic's Cosmos businesses, which consist of apps like Pocket Casts, Day One, Tumblr, and Cloudup.

Amazon introduced 5 new visual search features in the past few months to enhance customers' abilities to find products more precisely, including: 1) Visual Suggestions - live suggestions with image thumbnails to refine searches, 2) Add text to image searches - to add things like brand, color, or material, 3) More like this - a button on top of images that users can click to see more items like it, 4) Video in search - instead of just seeing product thumbnails, now videos appear in search results, 5) Circle to search - customers can circle items within photos to search for them.

Google Shopping Ads?are?now eligible?to be shown in Google Lens results, giving advertisers a new placement to showcase their products in real-time. Users will now see detailed product information when using Google Lens to search such as price comparisons across retailers, current deals on the product, product reviews, and where to buy the item.

The European Union's top court?ruled?that social networks cannot keep using people's information for ad targeting indefinitely, which could have major implications on the way Meta and other ad-funded social networks operate in the region. Moving forward, social networks must limit how long personal data can be kept or face fines of up to 4% of global annual turnover.

ByteDance?released a web crawler?called “Bytespider” sometime in April, according to research from Kasada that was confirmed by Dark Visitors. The bot has quickly become one of the most aggressive scrapers on the Internet, scraping data at a rate that's as much as 25x of other major companies, including Google, Meta, Amazon, and OpenAI. Bytespider, like OpenAI and Anthropic, does not respect robots.txt, which while not legally binding, is supposed to signal to scraper bots not to crawl certain pages. (Early 2025 Prediction**:**?ByteDance launches an AI search engine next year (independent of TikTok).?

Last December,?Amazon?slashed referral fees?for merchants who sell apparel items under $20 to better compete with Shein, and new data suggests that the move has paid off. The selection and sales of under-$20 clothing has risen 27% since the fee change, compared to 5% growth the year prior. However a side effect of the apparel fee change is that first-party sellers are now more likely to lose the Buy Box to resellers, who can sell at a lower price and undercut the actual brand. In 2022, brands won their own Buy Box more than 89% of the time, but that number dropped to 77% in 2024.

Swiggy, an Indian food ordering and delivery platform that operates in more than 500 cities,?launched?Bolt, a 10-minute meals and beverages delivery service, across six major cities in India. The startup said it partnered with more than 2,700 restaurants including KFC, McDonald's, and Starbucks to deliver meals to customers within 10 minutes who reside within a 2-kilometer radius of the restaurants. Honestly, 10 minutes seems impossible. I wait longer than that for food to be made in most fast food restaurants, let alone to be delivered.?

Wondery, an Amazon-owned podcast studio known for its story-driven shows like Dr. Death, British Scandal, and Even the Rich, is launching a new line of toys?tied to its kid's podcast “Wow in the World,” which it claims is the first toy line based on a podcast. The science-focused toys, which include a volcano kit and dinosaur collection that range from $14.95 to $29.95, will be sold on Amazon, Barnes & Noble, Mastermind Toys, Nordstrom, and other retailers.?

TikTok?partnered?with?InMarket?to allow its advertisers to see new stats on how their in-app campaigns are performing offline. InMarket's measurement platform and closed-loop reporting will highlight TikTok's effect on driving store visits and sales through ROAS via physical retail actions.?

Millennials?and?Gen Xers?are the?top shoppers?on?Temu,?Shein, and?Amazon, according to new data from Numerator, which dispels the myth that Gen Z were the e-commerce apps' top fans. The study also found that 7 in 10 Temu shoppers are repeat buyers, with the average person spending $247 annually on the platform over an average of 6 orders — — which is no match to Amazon customers' average spend of $2,700 annually over 71 orders.

Shopify President Harley Finkelstein?wants Canada?to address the “600-pound beaver in the room” — which he feels is the lack of ambition weighing down on the country's tech sector, which has left Canadian companies with a reputation for being acquired while their US competitors grow more dominant by taking them over. Finkelstein instead wants Canadian companies to focus on striving for more rather than settling for being acquired, and wants more companies to be headquartered in Canada rather than the country being treated like a branch plant for bigger organizations. Canada’s industry minister Fran?ois-Philippe Champagne?echoed the call to boost ambition?in the country, saying, “I could not agree more because for 10 years, I’ve always finished my speeches by saying, ‘Let’s seize the moment. Let’s be ambitious.’”

Microsoft?won't impose?a return-to-office mandate unless productivity drops, according to a high-level exec at the company. Microsoft currently allows employees to work remotely, with many new hires promised the flexibility of working from home at least half the week. Fortune asked Microsoft to comment on what specific metric would be used to rank productivity, and whether the process would be made transparent for employees, but the company has not yet made a statement on the matter.?

A federal judge?ruled?that the?FTC?can proceed with its case that?Amazon?operates as an illegal monopoly, according to two anonymous sources familiar with the ruling. The judge permitted the agency's claims that the company violated federal antitrust and competition laws to move forward, while tossing some of the claims brought by state attorneys general about alleged breaches of state law. The court is expected to unseal the order later this month.

5% of Adobe Commerce and Magento stores?were hit?with the CosmicString exploit, which is the name for a critical vulnerability that can be used to tamper with the pages of sites so that user data can be siphoned. Ray-Ban, National Geographic, Whirlpool, and Segway were among the thousands of brands whose e-commerce sites were compromised. Of the 4,275 merchants impacted, about half removed the malware, but it's possible that they may get hit with it again unless they took certain steps to change compromised keys.?

The American Apparel & Footwear Association?recommended?Meta's platforms for inclusion on the upcoming “notorious markets” counterfeiting list published by the Office of the US Trade Representative for the fifth time. The AAFA says that Facebook, Instagram, WhatsApp, and Threads have a “concerning volume and accessibility” of counterfeit goods on their platforms. The AAFA also named AliExpress, DHgate, and Shopee as platforms with a concerning level of counterfeit activity.?

Amazon?is?looking to hire?3,000 seasonal roles in Los Angeles, Long Beach, and Anaheim, and 30,000 full-time, part-time, and seasonal roles across California. (Wow, that many folks didn't want to return to office? LOL.) The company says that seasonal employees will have an opportunity to transition to full-time positions — which they say every year — yet still hire thousands of seasonal workers each holiday season, so I guess the full-time thing doesn't actually stick.

While Amazon is hiring thousands of seasonal workers,?Morgan Stanley?thinks it?should cut?more than 13,000 managers, which it estimates would save the company between $2.1B and $3.6B next year. The estimate assumes that 7% of Amazon's workforce is in management positions, but Amazon doesn't publicly disclose a breakdown of its workforce.?

As you might recall,?X?was suspended in Brazil since late August for failing to comply with court orders related to hate speech moderation and failing to name a legal representative in the country. Initially Elon Musk said he wouldn't budge on the matters, but later backpedaled on his decision in order to save his 5th largest market. On Friday, X?filed a request?to restore its services in Brazil after paying all its fines, but The Supreme Court determined that the company paid the fines to the wrong bank! As of now, the ban has not been lifted.?

Amazon?shut down?three more of its cashierless convenience stores in New York that featured its Just Walk Out technology, but the company says it remains committed to building out that technology as an offering for third-party merchants. Since 2023, Amazon has cut the number of Go stores it operates nearly in half.?

A U.S. District Court Judge?ruled?that?TikTok users?can?proceed with a privacy lawsuit?alleging that the company logged their keystrokes when visiting outside websites through TikTok's in-app browser, which if proven true, could support claims that TikTok violated federal and California state wiretap laws. The decision comes in a class-action complaint brought in November 2022 that alleged TikTok gathered a trove of personal data by tracking app users' activity in outside sites, including information about users' health.

Revolut, a UK-based fintech that offers banking services for consumers and businesses,?criticized Meta?over its approach to tackling fraud, claiming that the company should directly compensate people who fall victim to scams on its social network. Wood Malouf, Revolut's head of financial crime, said that Meta's plans to tackle financial fraud on its platforms amount to “baby steps, when what the industry really needs is a giant leap forward.” The company published a report alleging that 62% of user-reported fraud on its banking platform originated form Meta, down from 64% last year.?

Indonesia?blocked?Temu?in the country, citing concerns over potential disruptions to the country's micro, small, and medium enterprises. Indonesia's Minister of Communications said the platform's direct sales model could jeopardize local vendors and small businesses, which form the backbone of the country's economy. So does this mean Temu has to buy part of Tokopedia in order to operate in the country again??

Qoo10 CEO Koo Young-bae?is?under investigation?for diverting funds from Korean e-commerce platforms, TMON and WeMakePrice, to assist with corporate acquisitions and the listing of its logistics unit, Qxpress, on Nasdaq. The Seoul Central District Prosecutors' Office summoned Young-bae as a suspect on charges of fraud, embezzlement, and breach of trust. In July, TMON and WeMakePrice filed for court receivership, requesting that the court take control of their management, after failing to pay merchants for several weeks. At the time Young-Bae apologized and pledged to use his own assets to help compensate affected customers and vendors.

6 out of 10 employers?say they have?already fired Gen Z workers?after hiring them fresh out of college earlier this year. 1 in 6 bosses say they're hesitant to hire college grads again after experiencing a number of issues with young new hires, with 1 in 7 bosses saying they may avoid hiring them altogether next year. TikTok creator justwaynecreative claims that Gen Z doesn't understand that work is not the place to fully express one's authentic self, and that Gen Z isn't contributing enough to workplace culture or companies' bottom line to justify the demands they're making in regards to self-expression.

Amazon's AI chatbot Rufus?doesn't like?when customers ask for “dupes,” “knockoffs,” or “copycats” of expensive products and won't engage with those types of questions. The workaround is to simply ask the question differently, such as, to look for an item similar to one from a name brand, without using those trigger words. Well, that was easy!

Plus 7 seed rounds, IPOs, and acquisitions of interest including Pallet, an all-in-one transportation and warehouse management system that uses AI to help businesses streamline their logistics operations,?raising $18M?in a Series A round led by Bain Capital Ventures.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler