e-commerce

AI-driven fashion platform Shoptrue constantly learns its users shopping habits • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Commerce, e-commerce, Fashion, online shopping, StartupsNo Comments

An A.I.-powered online fashion marketplace, Shoptrue, is launching its website into beta today with plans for a public release early next year. The site blends artificial intelligence and personalized recommendations with taste-driven shopping, the company says, which helps give users a source for style inspiration as well as the ability to create and share outfit ideas with others. Rather than the typical algorithmic approach such as Amazon, which ranks items based on a strong sales history, Shoptrue is A.I.-driven and continually improves its product recommendations based on purchase behaviors and user engagement. That way, users can have more say on what items they see on their curated feeds. The site offers a “One Stop Personal Shop” for the user, which gives fashion suggestions based on their style preferences. Users can eliminate the items they dislike and purchase items directly on Shoptrue through its unified checkout process. Romney Evans, the founder of Shoptrue, told ZebethMedia, “Instead of being a top-down recommendation system, where the user is passive, it’s putting the user in the driver’s seat, back into personalization, giving them the controls.” Image Credits:Shoptrue Shoptrue’s individualized shopping experience begins with an onboarding quiz, which includes questions about your style personality, favorite brands, and color preferences– similar to other personalized e-commerce sites, like Stitch Fix. Shoptrue users can then browse a large selection of merchandise from over 2,000 merchants that range from high-end brands like Alexander Wang, Christian Louboutin, Gucci, and Dolce & Gabbana, to affordable retailers like Ross, Kohls, Nordstrom Rack, H&M, and Forever 21. There are also “Shops,” or collections created by Shoptrue’s team of editors, that users can explore for inspiration. For instance, the “Girl’s Night Out” lookbook features trendy miniskirts, strappy heels, tanks, graphic pants, and handbags. Users will soon get to create and share their own Shops, Shoptrue says. Peer-generated Shops will also roll out when Shoptrue officially launches out of beta. Image Credits: Shoptrue Shoptrue will also soon launch the ability to pre-filter size and fit specifications, so shoppers only see the products in stock that are in their size. This is a natural step for the company as Evans is also the co-founder of True Fit, the personalization company that built a data platform to help online shoppers find the correct sizes for apparel and footwear. Within the next year or so, Shoptrue users will be able to create a True Fit profile that helps determine what size they are for specific items, Evans explained to ZebethMedia. As Shoptrue evolves, the company plans to add features based on customer feedback. “We invite shoppers everywhere to join us on this journey. It will take time, but today begins our rollout of an exciting stream of innovation and distinctive experiences that will make it easy to get only what you love. We aspire to delight shoppers and earn their trust as we improve their shopping experience every month and every quarter through innovation, trial and error, and by listening to their feedback,” Evans said. With the launch of Shoptrue, Evans has brought on a team of technology and fashion experts, including Brandon Holley, a Condé Nast veteran with over 25 years of experience in fashion, and former Netflix data scientist John Lashlee. Holley is also the founder and CEO of Everywear, a technology platform that’s now incorporated into Shoptrue and helps with custom recommendations and foreseeing purchase behaviors. The startup raised $6 million in seed funding in 2021 to help build, test, and launch its beta. Investors included Signal Peak Ventures, Pelion Venture Partners, and Peterson Ventures. The company expects to raise additional funding in 2023. Founder of Shoptrue Romney Evans (left), Chief Fashion Officer Brandon Holley (middle), VP of Data Science John Lashlee (right) Shoptrue’s business model is typical for online marketplaces. When a user completes a transaction with a merchant via Shoptrue, the company takes a commission on those sales. Shoptrue declined to share the commission range but said it was standard for most fashion marketplaces. (Note that Poshmark’s and ASOS Marketplace’s commission is 20%.) There is no fee for brands to participate on Shoptrue. Social media platforms like Instagram and TikTok are becoming increasingly responsible for influencing the shopping habits of young consumers—especially Gen Z. Shoptrue hopes that Gen Z and Millenials will feel empowered to share their Shops and fashion favorites on social media, get help from Shoptrue’s style experts and find other users and influencers that use the platform. Shoptrue’s launch is another example of how AI technology is transforming the e-commerce industry. In June, Pinterest acquired the AI-powered shopping platform The Yes, which builds a personalized fashion feed and continually learns about a user’s style as they shop. Pinterest said the deal would help the company become the home for taste-driven shopping. “We are making it easier for people to find only the things they’re going to love, and then give them the tools to organize and share their style POV with the world,” Shoptrue’s Chief Fashion Director Brandon Holley said in an announcement. “Anybody’s shop has the potential to set off a chain reaction of fashion inspiration that can surprise and delight you from any direction.”

TAM tough love, ‘building in public,’ 6 key SaaS metrics • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in Commerce, e-commerce, EC roundup, immigration law, proptech, Startups, TechCrunch Disrupt 2022, VentureNo Comments

Are you ready to launch a bajillion-dollar startup? Before you start: Are you planning to build a centaur, a unicorn or perhaps a decacorn? Startup pitching has become an existential drama, in part because so many founders exaggerate the size of the total addressable market (TAM) in which they hope to compete. At ZebethMedia Disrupt, I spoke to three investors about how they use TAM to guide their decision-making. Everyone agreed that the number itself is far less important than the process that produced it. “The way it’s calculated and the way the founder is thinking about it tells us not necessarily about the business or its future, but about how the founder thinks about company creation,” said Deena Shakir, a partner at Lux Capital. Full ZebethMedia+ articles are only available to members.Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription. “It is almost guaranteed you’re going to be wrong,” said Aydin Senkut, the founder and managing partner of Felicis Ventures. “It’s either going to be too large or too small.” Kara Nortman, a managing partner at Upfront Ventures, said the TAM numbers given in a pitch do not control whether she’s likely to invest. “I would say [it is] more important to be able to articulate how big something can become and to show that you have a thought process around TAM, if it’s early,” she said. Choosing a mythical TAM won’t put dollar signs in investors’ eyes, as unrealistic numbers reflect unrealistic expectations, a red flag for any VC. As Senkut said, “the plan doesn’t have to be accurate — the plan has to be directionally correct.” Thanks very much for reading TC+ this week! Walter ThompsonEditorial Manager, ZebethMedia+@yourprotagonist 3 investors explain how finance-focused proptech startups can survive the downturn Image Credits: Kuzma (opens in a new window) / Getty Images How are finance-oriented property tech investors reacting to the ongoing downturn in public markets? Senior reporter Mary Ann Azevedo interviewed three VCs to learn more about how they’re counseling the companies in their portfolios, which types of startups are best positioned to weather the downturn and how they’re managing risk: Pete Flint, general partner, NFX Zach Aarons, co-founder and general partner, MetaProp Nima Wedlake, principal, Thomvest Ventures How Metafy founder Josh Fabian caught the attention of 776 by building in public Image Credits: Kelly Sullivan / Getty Images At ZebethMedia Disrupt, Josh Fabian, CEO of video game coaching platform Metafy, explained why he’s committed to “building in public,” or sharing aspects of his founder’s journey with an audience. “Consumers don’t trust corporations; I don’t trust corporations,” he said. “I don’t think any of you do, even if you’re running your own.” Katelin Holloway, a founding partner at 776 (an investor in Metafy), said Fabian’s approach was a breath of fresh air. “We were able to just engage and talk like humans, and Josh told us his story in a very different way,” she said. “Not only was it incredibly compelling from a business perspective, it was incredibly compelling from a human perspective,” she said. Is the modern data stack just old wine in a new bottle? Image Credits: Mikhail Dmitriev (opens in a new window) / Getty Images Before Ashish Kakran became a principal at Thomvest Ventures, he was a data engineer who transformed disparate consumer data points into optimized offers for consumer telecoms. “Part of my job involved unpacking encrypted data feeds, removing rows or columns that had missing data and mapping the fields to our internal data models,” he writes in a TC+ guest post. “Our statistics team then used the clean, updated data to model the best offer for each household.” Because today’s datasets contain exponentially more information, “the rules are being rewritten on how data will be used for competitive advantage, and it won’t be long before the winners emerge,” he asserts. In a deep dive, he compares modern and legacy data stacks to identify key trends for enterprises and opportunities for founders and investors. “Practitioners are spoilt for choices when building enterprise data pipelines,” says Kakran. Investor’s advice during a downturn: Don’t panic Image Credits: Kelly Sullivan / Getty Images Fewer investors are writing checks these days, but what kind of advice have they been giving their portfolio companies in recent months? Mary Ann Azevedo spoke to three executives at ZebethMedia Disrupt to learn more about the strategies they’re promoting to preserve runway and their peace of mind. Eric Glyman, CEO, Ramp Thejo Kote, CEO, Airbase Ruth Foxe Blader, partner, Anthemis “It behooves everybody to be really lucid about the macro environment that we’re entering,” said Blader. “It’s likely to be long-lived, and it’s very important to be judicious but not lose sight of your goals and the reason you founded the business in the first place.” 6 key metrics that can help SaaS startups outlast this downturn Image Credits: Andy Ryan (opens in a new window) / Getty Images The most successful companies I’ve worked at fostered parasocial relationships with customers in much the same way many of us invest emotional energy while following the lives of celebrities. During a downturn, “the goal is to pick up on warning signs early and course-correct as you go, and those signs are often hidden in the breadcrumbs,” writes Sudheesh Nair, CEO of ThoughtSpot. “Not all industries are affected equally, so don’t assume your customers will cut spending this year just because the headlines are bleak.” Tips for e-commerce brands that want to win more market share this holiday season Image Credits: Justin Sullivan (opens in a new window) / Getty Images Santa Claus makes a list and checks it twice before each holiday season. Can your e-commerce startup make the same claim? “Consumers are now living with inflation and an unofficial recession, and we can expect more selective and price-conscious shopping behavior,” writes Guru Hariharan, CEO and founder of CommerceIQ. Now that people “are feeling the squeeze on their everyday essential purchases” and the holiday shopping season is

Former ButcherBox execs leverage meat shipment expertise into new D2C startup • ZebethMedia

By zebethcontrolPosted on November 3, 2022Posted in Commerce, e-commerce, Shipping, VentureNo Comments

As ButcherBox’s former head of logistics, Juan Meisel knows how to get perishable items from A to Z, and now he wants to do the same for Grip, a perishable shipping company he is bringing out of stealth mode with $2 million pre-seed funding. Dubbed a “smart logistics engine,” Grip’s technology sits on top of customers’ existing order management systems and manages the shipment process using real-time network conditions, like weather events and temperature, carrier on-time delivery and box performance. Founder Juan Meisel told ZebethMedia that other shipping software uses “flat shipping logic and business rules for shipments, aka, the same amount of packaging, refrigerant, carrier, etc., each time for the same routes.” Instead, Grip adjusts its shipping recommendations dynamically based on what’s going on in the shipping network. This way, businesses can use that data to proactively hold orders, let customers know of potential delays and identify areas for improvement. Meisel got the idea for Grip while he was head of logistics at ButcherBox, where he had also been trying to solve the challenge of shipping perishable items, while also reducing the damage rate and improving margins, all while operating in conditions that seemed to change minute by minute. “I was always looking for that piece of software that could help us do this internally,” Meisel said. “I failed to find something, but at the same time, I also started advising some companies on the side that would find me on LinkedIn. They got their ButcherBox in the mail and were trying to ship anything from frozen milk to chocolate, flowers and pharmaceuticals.” While advising those other companies, he realized that there needed to be software to help e-commerce companies improve the way they ship and increase the customer experience. So he came upon the idea of Grip and launched a company a few months ago, joining with Jimmy Cooper, ButcherBox’s former head of data. Customers are onboarded and can begin shipping in a matter of hours, and Grip makes money via monthly SaaS fees based on the size of the company and the complexity of integration, Meisel said. In this short period of time, the company has processed hundreds of thousands of orders and customers have seen a 25% reduction in failure rates and 30% reduction in shipping costs, Meisel said. Grip is coming into a market that is not only growing fast, but has also attracted interest by other startups and investors. It’s a big market — U.S. food and beverage e-commerce sales are expected to be around $80 billion by the end of 2022, up 20.7% from just under $65 billion last year, according to Insider Intelligence. Those sales are forecasted to nearly double by 2026. Over the past year, we’ve seen several startups also raise venture-backed capital to solve similar logistics issues, particularly around food waste as direct-to-consumer subscription meal kits gained popularity. For example, Alima is building out produce logistics in Mexico, while Full Harvest is tackling the B2B produce supply chain. Grip’s $2 million pre-seed round was backed by Soma Capital, Western Technology Investment and a group of individual investors. Though ButcherBox itself was bootstrapped, Meisel said he decided to go after venture capital for Grip largely in part because “developing technologies is expensive.” To develop the right technology and the right data processing system to add value to customers quickly required some institutional funding and industry investors. “We’re running what we call ‘fast innovation cycles,’ which means that we go from idea to product to feedback very fast,” he added. “We basically have an idea, launch a product, work very, very closely with the customer to get feedback on that product and then we go back to the idea of how we can keep improving that product. Therefore, we’re using the money to develop technology to grow fast innovation cycles and to keep adding value to investors.” The company currently has six employees, and Grip will also add to that team to develop new features and user experience as it relates to reducing waste and improving customer experience.

Klarna launches new creator features and shoppable video • ZebethMedia

By zebethcontrolPosted on October 19, 2022Posted in Apps, Commerce, e-commerce, Fintech, Klarna, online shopping, retailersNo Comments

As consumers turn to content creators to influence their online shopping habits, Klarna, the buy now, pay later platform, today launched a new Klarna Creator app for retailers and influencers to collaborate on brand campaigns and to track earnings, performance and sales. Klarna’s creator platform allows over 50,000 vetted creators to have access to leading brands and retailers. Retailers can use the app to direct message a creator they want to partner with and send them products for content. The app also has a tracking feature to watch sales and commissions. The new creator tool is available for desktops, iOS devices and Android devices. Separately, the company also announced new features and updates to its Klarna platform, which rolled out to the U.S. today. These include shoppable video content, a new search and discovery tool, as well as a donations feature and an upgraded CO2e tracker. Image Credits: Klarna Over 150 million global consumers use Klarna’s platform for its flexible payment options. Consumers can shop from 400,000 retailers on the app while having the choice to pay immediately, pay later or pay over time. With today’s announcement, the Sweden-based company hopes to move beyond being just a payment platform but a place for consumers to search and discover, for influencers to create content and for retailers to promote their products. “Seventeen years ago, Klarna started as a place where you could pay…With this latest product release, we strengthen our position as a true shopping utility for consumers and a growth partner for retailers and lay the groundwork for a new era of shopping where the entirety of the world’s commerce will be condensed into one single point,” Klarna co-founder and CEO Sebastian Siemiatkowski told ZebethMedia. The most notable feature added to Klarna’s platform is the “Watch and shop” widget. According to Klarna’s 2022 Holiday report, 65% of Gen Z favor video content when shopping online. So, as Gen Z shoppers turn to video-based platforms like TikTok and Instagram, consumers can also go to Klarna for video content that’s specifically tailored for shopping and discovering products by well-known brands. At launch, 70 cosmetics brands use the feature, such as Haus Labs By Lady Gaga, e.l.f. Cosmetics, Keys Soulcare and more, with videos on the app ranging from unboxings, tutorials and reviews. Consumers can also save videos of brands they like or add them to their wishlists. Since soft launching “Watch and shop” three months ago, the brands “see an average click-through rate 3x higher than click-through rates of social media platforms,” Siemiatkowski claimed. Image Credits: Klarna The new search and compare tool allows consumers to look up what products are on sale, the lowest price, rankings, ratings, shipping options and what’s in stock. Consumers can also use automated coupons at check-out to save even more money. Klarna is also expanding its sustainability efforts with an upgraded CO2 tracker and a new donations feature. The tracker displays emissions from over 50 million products, bringing more awareness to carbon footprints. Consumers can use the donations feature to donate products to high-impact organizations.

MaxAB, an Egyptian B2B e-commerce platform for food and grocery supplies, nabs $40M • ZebethMedia

By zebethcontrolPosted on October 19, 2022Posted in africa, b2b e-commerce retail, Commerce, e-commerce, Fintech, MaxAB, StartupsNo Comments

Last year, MaxAB, the food and grocery B2B e-commerce and distribution platform serving a network of traditional retailers across Egypt and Morocco, raised its $55 million Series A in two tranches; the latter accompanied its acquisition of the Morocco-based and YC-backed WaysToCap. The moves signaled MaxAB’s ambition to dominate Egypt’s and North Africa’s B2B retail and e-commerce market, which includes Cartona and the troubled Capiter, other players that have raised significant capital to compete within the past year. To continue growth due to the rising demand for food and groceries and fuel its expansion across the MENAP region, MaxAB has raised more money, this time a pre-Series A to the tune of $40 million. Although smaller than last year’s prized round, CEO Belal El-Megharbel told ZebethMedia that the pre-Series A was neither a down round nor a flat round in terms of valuation. He also noted that the company raised new capital, not because it needed the money but because “there are many opportunities that we believe we can tap into quicker the more capitalized we are.” The asset-heavy MaxAB has raised over $100 million in total. Small traditional retailers serve as the backbone of the FMCG industry across Africa. For most B2B e-commerce platforms across the continent, groceries are one of the many consumer goods they help retailers source from suppliers. For MaxAB, that’s its sweet spot. And since its launch in 2018, MaxAB has connected suppliers with over 150,000 unique traditional retailers in this food and grocery supply chain across Egypt and Casablanca, Morocco, delivering over 2.5 million orders within this timeframe. MaxAB’s perspective of going deep rather than wide with its product offerings also extends to how it regards geographical expansion. After scaling its B2B grocery delivery across Egypt for over three years, it intends to utilize its network and relationships with local and multinational suppliers and advance full distribution into Morocco, which now accounts for 10% of MaxAB’s business, and entry into Saudi Arabia by the end of 2023. The company estimates that more than 750,000 mom-and-pop businesses require its services in Egypt and Morocco alone. At the same time, Saudi Arabia is appealing due to the government’s drive to digitize the informal sector and the FMCG’s willingness to explore new business models. “We’re trying to offer more services to the grocery stores since they are the foundation of the economy we operate in before jumping into these other supply chains. Think about Amazon; they kept selling books for eight years before adding another category. And that’s the school of thought we like to go with,” said the CEO who founded MaxAB with Mohamed Ben Halim. “In Egypt, we focused on launching the grocery supply chain and we’ll use the learnings that have come from that to launch across multiple markets. It’s easier to launch the grocery supply chain in various markets than launch, for example, electronics in our core market because it’s just a completely different business model that we have to relearn from scratch.” Another growth stream for MaxAB is the fintech business launched last year, which leverages its large pool of merchants and operational capacity to carry out cash collections. And its entry approach to offering financial services differs from the competition; it launched a bill aggregation product — which has grown 5x in transaction value since the start of the year — rather than a BNPL product that many B2B e-commerce platforms introduce to merchants first. It didn’t take long for MaxAB to delve into the popular B2B fintech category, though; last month, the platform launched a working capital product to its merchant base. However, like Wasoko, another B2B e-commerce platform based in sub-Saharan Africa, MaxAB opted not to raise debt financing to scale that part of its operations. According to El-Megharbel, who was an ex-general manager at Careem, MaxAB currently gets a lot of supplier credit that helps it finance the working capital without raising debt, at least for now. “And because the buy now, pay later product is still early, we can still do some financing with equity without having to pay for debt that we won’t be utilizing in the short term,” the CEO added. MaxAB’s equity round includes an impressive list of new investors: DisruptAD, ADQ’s venture capital platform; the British International Investment (BII); and the Menlo Park–headquartered private equity firm Silver Lake — its first check of any form in an African startup. Silver Lake invested through its Long-Term Capital strategy with Mubadala Investment Company. “We’re always proud of our ability to attract top-tier investors to the region. Historically, since our seed round, we’ve always had at least one VC that has invested in Egypt, North Africa or Africa for the first time,” said El-Megharbel on the investment, referencing firms such as 4DX Ventures and Flourish Ventures. They participated in this round alongside other existing investors, Beco Capital and Africa Platform Capital.

Kenzz, an Egyptian e-commerce platform for the mass market, grabs $3.5M seed funding • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in africa, Commerce, e-commerce, kenzz, VentureNo Comments

Kenzz, an e-commerce platform bringing shopping to the mass market in Egypt and MENA, is announcing that it has raised $3.5 million in seed funding. U.S.-based and MENA-focused venture capital firm Outliers Ventures led the round. Some of the participating investors include HOF Capital, Foundation Ventures, and Samurai Incubate. The company, founded this February by Ahmed Atef, Mahmoud Al Silk and Moataz Sami, said it will use the seed round to grow its product categories, widen the product categories on its platform, hire talent and invest in tech as it launches its app. You can compare the e-commerce landscape in Egypt to fintech across Africa in that there are more startups in that sector than others; reports say 20% of tech startups in Egypt are in the e-commerce and retail sectors. Several factors drive the creation of such startups in the country, including a young and urban population that has increased in tandem with internet and mobile penetration rates rising over the years. About 40% of Egyptians purchase consumer goods online weekly, according to data. However, some, like Kenzz’s founders, believe that internet penetration levels and shopping numbers in Egypt mask the reality that e-commerce is yet to be fully realized and optimized in the North African country and, more widely, across the MENA region. Chief executive officer Atef told ZebethMedia that they launched Kenzz for this purpose: to deepen e-commerce adoption in Egypt. Online shoppers in Egypt mainly purchase items on big e-commerce platforms such as Souq, which rebranded as Amazon Egypt in 2021; Jumia; and Noon or social commerce platforms that utilize Facebook pages and groups in a B2B2C manner. Atef argues that while both models have managed to increase e-commerce activities in Egypt, the big e-commerce players neglect the mass market and instead focus more on the three largest cities Cairo, Alexandria and Giza — while smaller social platforms tend to provide unreliable and unorganized service. Thus, Kenzz was built to fill in the lapses from the two models: make products available to the mass market and offer them in an organized manner. “We’re going after a completely different segment that Amazon and the big platforms are not looking at as they are centralized in big cities and towards the people who are comfortable buying online,” said Atef. “What we’re doing is bringing that experience much closer to the masses and building a reliable, trustworthy e-commerce platform that caters specifically for the mass market, solving for the barriers to buying, whether it’s trust, affordability and relevance, while capitalizing on social engagement and social interaction aspects of e-commerce.” Kenzz’s model is akin to players like Taager because it’s social. However, the mass e-commerce solution is taking a B2C approach as it removes the middleman/resellers, sources products directly from local manufacturers and offers them to consumers. Therefore, consumers know the exact brand selling to them, Atef said. The platform also gives consumers discounts of up to 65% when they make collective purchases with friends and family. According to the CEO, sourcing directly from manufacturers and importers enables it to secure the best deals for consumers — and the group buying feature facilitates more referrals, bringing down its customer acquisition costs. Group orders can also be sent to single locations to reduce consumer delivery fees and logistics costs for Kenzz. “Most users didn’t see the need to pay for deliveries as they could buy offline and get the product themselves. However, they are finding out that they pay more for transportation. So what was interesting in the pilot is that we’ve seen that people want to share this burden as it became a major pain point when we talked with consumers,” the chief executive said. “So when you’re buying with your friends, we can deliver the order to one place. They get to unlock more savings when they choose this approach.” Alef also stated that Kenzz’s model helps stakeholders on the other end — local manufacturers and SMEs — by providing data on what consumers want and access to such consumers among additional insights. Kenzz is yet to launch fully into the market as it is fine-tuning offerings to meet consumers’ demand, which, according to Alef, was grand when the platform soft-launched for two months. He said thousands of customers used the platform within this timeframe, with 50% ordering from outside Egypt’s big cities. “Those numbers help prove this vast potential outside the big cities where people were not comfortable buying online. But when you’re so relevant to them, in terms of brand products, prices and experiences, you unlock this huge potential.” In a statement, Sarah AlSaleh, a partner at Outliers Venture Capital, said the asset-light Kenzz is solving two key issues that current e-commerce incumbents are not addressing: affordable and reliable last-mile logistics and an uncompromising customer trust philosophy. She references Kenzz’s founding team — with experience from Vodafone, Google, Amazon and Jumia — as one of the reasons Outliers invested. “The diversity and depth of Kenzz’s founding team strongly positions them to combine a multitude of experiences and expertise into creating a category-defining company and e-commerce champion for Egypt,” said the partner.

PayPal debuts a new rewards program that combines Honey’s discounts with other ways to earn • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in Apps, discounts, e-commerce, Fintech, PayPal, rewards, shoppingNo Comments

PayPal is taking a step away from the Honey brand, the $4 billion shopping rewards acquisition it made in 2019, with today’s launch of PayPal Rewards. The new program will replace “Honey Gold” — the rewards program for Honey browser extension users, which allows customers to redeem their points for cash, gift cards or PayPal shopping credits. With the new PayPal Rewards, consumers will be able to track and redeem their points directly inside the PayPal app, and will have new ways to earn, the company says. The deal for Honey was intended to give PayPal a better position in the face of the increased competition in the payments space from larger rivals, including Appl, Google and even Facebook (now Meta). The battle for consumer adoption of online and mobile payments had shifted away from the checkout page itself, to compete against all the other places people go to discover, browse, get inspired and deal-hunt — including on retailers’ sites and on social platforms, like Instagram, Pinterest, and today, TikTok. A rewards program, like the one offered by Honey, works to entice users by offering promo codes and coupons for favorite retailers, while redirecting them away from Amazon with better prices. Features like the price tracking “droplist” also help consumers find the best deals on items they’re considering. And, with last year’s revamp of the PayPal app, personalized deals and rewards became a larger part of the mobile experience as well. This year, PayPal customers have saved nearly $200 million through the Honey cash back and discounts program, says PayPal. With the launch of PayPal Rewards, the company is now combining the rewards being offered to PayPal customers across multiple PayPal products, including the Honey browser extension, the PayPal app, and, in the future, various card products. Rewards will also be given its own dedicated spot in a new part of the PayPal app, where shoppers can track and redeem their points as they earn. When customers want to redeem their points, there won’t be category restrictions or account minimums, the company notes, and the points can be converted to cashback at a rate of 100 points equaling $1 USD. Once redeemed as cash, the funds can be transferred to a linked bank account, deposited into a PayPal Savings account, donated to a charity, or sent to someone else as a peer-to-peer (p2p) payment. With the new in-app hub, customers will also be able to earn points through personalized engagement in the PayPal app, in addition to the browser extension, and will be able to be stacked with the rewards earned from their payment card programs. This personalized engagement introduces a new way for a customer to earn PayPal Reward points by doing things like linking a debit card or bank account to their PayPal, for example. If the customer has already done so, they might be presented with a different action to take. Image Credits: PayPal The company is touting the move ahead of the 2022 holidays and traditionally, the biggest quarter for online shopping. This year, however, the e-commerce landscape is looking a little different, with more spending expected to start earlier thanks in part to Amazon’s decision to host a second Prime Day event in October, leading other retailers to follow suit. Still, Adobe predicts consumer spending will still increase this year by 2.5% during the Nov. 1-Dec. 31 time frame, reaching $209.7 billion. “With the financial challenges people face these days, brought on by rising prices and the need to tighten budgets, it can be frustrating to shop for everyday essentials or plan for the holidays,” said Greg Lisiewski, Vice President of Shopping and Global Pay Later, in a statement about the launch. “PayPal Rewards makes it easy to find sales, discounts, and great deals when making a purchase with PayPal – through cash back, discount codes, or other rewards,” he said. Image Credits: PayPal