EC Ecommerce and D2C

Quantifying the global e-commerce slowdown • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in alibaba, Amazon, Commerce, EC Ecommerce and D2C, EC Newsletter, eCommerce, jumia, Shopify, The ExchangeNo Comments

The COVID-19 pandemic was many things. Global contagion. Health catastrophe. Herald of new geopolitical tensions and a long-running commentary on how far we’re willing to go to protect — or not — our fellow humans. It was also a business earthquake that shook up most industries around the world. But as quickly as COVID came on the scene, breaking supply lines and business models, it also faded. In the wake of most of the world learning to live with — or merely deciding to endure — the health impacts of the pandemic, many industries snapped back to their prior form. Airlines went from trash to first class; in contrast, tech companies flipped from darlings to disparaged. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Some tech concerns picked up tailwinds during COVID, in that a newly reformed business climate helped them grow for a time. You can cast a wide net here: Robinhood exploding in part thanks to consumers stuck at home with more cash than usual, Instacart seeing explosive demand for its grocery delivery service. Some tech companies went the other way, as was the case with Airbnb’s business cratering during the early COVID months as going places went from aspirational to insane overnight. Since the return to what passes as normalcy, the businesses impacted initially by COVID have charted diverging courses. Robinhood lost some of its shine as its user base, per the usually chatted narrative, went back outside. Instacart saw its growth slow but managed to hold onto its pandemic-era gains. Airbnb, an early example of the layoffs that COVID could induce at erstwhile healthy companies, recovered, and has retained much of its value since going public, a rare feat for its IPO cohort.

Amazon CEO Andy Jassy faces enormous challenges amid falling profits and negative numbers • ZebethMedia

By zebethcontrolPosted on November 11, 2022Posted in Adam Selipsky, Amazon, Andy Jassy, AWS, Commerce, EC Cloud and Enterprise Infrastructure, EC Ecommerce and D2C, EC News Analysis, Enterprise, jeff bezosNo Comments

Amazon CEO Andy Jassy is the definition of a company man. In an age when people switch jobs frequently, he has been at Amazon for 25 years, working his way up to president and CEO. But before he reached the corner office, he helped build Amazon Web Services, its cloud arm, into a $60 billion juggernaut. It wasn’t exactly a rise from the mailroom, but Jassy was there as founder Jeff Bezos’ aide-de-camp when they came up with the idea of AWS in the early 2000s at an executive offsite. He helped build it. He nurtured it. He made it into the crown jewel of the company. So when Bezos announced he was stepping down early last year, it didn’t take long for the organization to turn to Jassy, whose hard work at AWS and his deep understanding of company culture seemed to make him the perfect heir apparent. But things haven’t necessarily gone as planned since he took over the leadership role in July 2021. Much of what has happened has been out of his control. Like many chief executives, he inherited the problems left behind by his predecessor. During the pandemic, Amazon became the general store for the world. People stuck in lockdown turned to Amazon for their goods. The company’s revenues mushroomed and its workforce exploded, with the organization adding an astonishing 800,000 workers, mostly in its warehouses (per The Wall Street Journal). The future was bright, but as Jassy took over last year, people were heading out again. Suddenly, everyone wasn’t buying everything online anymore. As we headed into 2022, other macroeconomic factors began to affect commerce — online and brick-and-mortar — as inflation soared and consumers’ buying power began to diminish. Add to that the higher cost of energy and persistent supply chain issues, and Amazon was suddenly facing some challenges that were beginning to have a serious impact on earnings.

Tips for e-commerce startups that want to win market share this holiday season • ZebethMedia

By zebethcontrolPosted on November 3, 2022Posted in black friday, Column, Commerce, EC Column, EC Ecommerce and D2C, EC How To, holiday shopping, StartupsNo Comments

Guru Hariharan Contributor Guru Hariharan is CEO and founder of CommerceIQ, an e-commerce management company. For consumers, the holiday season means indulging in gifts, family traditions and festive celebrations. But for retail businesses, it’s the most critical time of the year. We’re seeing a gathering storm of economic conditions — inflation, inventory and supply chain issues, and an elongated holiday season — that has companies scrambling to determine the right e-commerce strategy for the holiday season. Retail e-commerce channels such as Amazon, Walmart and Instacart, where a majority of all e-commerce happens, will be the real holiday battlefront. The key to succeed this year will be flexibility, responsiveness and endurance: Companies will have to be ready to respond to the market and the consumer throughout the season. Following two years when e-commerce enjoyed pandemic tailwinds, consumers are now living with inflation and an unofficial recession, and we can expect more selective and price-conscious shopping behavior. While prices across major retail e-commerce marketplaces like Amazon, Walmart and Target have mostly kept pace with inflation, consumers are feeling the squeeze on their everyday essential purchases. According to CommerceIQ data based on thousands of products across 450+ online retailers, grocery and home and kitchen prices have risen about 20% on average over last year, far outpacing inflation. The average shopper has to focus more of their budget on essentials, leaving them less to spend on gifts and other discretionary purchases. Place as many inventory orders as possible early so that you have inventory before the holiday season begins. However, unemployment has remained low so far, and consumer spending has been resilient, which we can see in the continued strength of online shopping. For instance, in Q2 2022, e-commerce growth has already rebounded to 9% at Target, 12% at Walmart and 10% at Amazon in North America. On top of this shift in value, the holiday shopping season is kicking off earlier this year, spurred by the second Amazon Prime Day in October. Other retailers will follow suit in an attempt to capture the spending of price-conscious consumers as they plan ahead for the holidays. What does this mean for brands? The focus must be on endurance and companies will need to be ready to shift their strategy for discounting, inventory planning and ad and marketing spend as the environment changes, all while fending off potential consumer fatigue. Increase discounts while balancing profitability Discounting has taken a back seat over the past couple of years, largely thanks to consumers’ lockdown savings and stimulus checks, but that is set to change this year. Promotions and discounts have been on the rise throughout 2022, and Amazon Prime Day was a great indicator of what could come in the holiday season. According to CommerceIQ data, during Prime Day 2022, discount levels for items on sale rose 10% to 12% compared to Prime Day 2021. The trend will likely continue at other major retailers as we head into the holidays. While companies and retailers will look to increase promotions and discounts throughout the season, the majority of promotions will still occur during specific sales like Black Friday and Cyber Monday rather than broadly across the season as consumers hold out for the best deals. There is an opportunity to further eventize promotional events like Cyber Week to capture greater volume, but getting discount levels wrong could lead to big hits to profitability. Companies that go into the season with excess inventory could face a perfect storm that eats into the bottom line. Prices continue to rise leading into 2022 holidays, but discounts have yet to pick up. Image Credits: CommerceIQ Here are some principles companies should keep in mind when planning e-commerce promotional strategies for the holiday season:

Korean internet giant Naver eyes North America, Europe as it grows its C2C marketplace business • ZebethMedia

By zebethcontrolPosted on October 26, 2022Posted in Commerce, EC Consumer Applications, EC Ecommerce and D2C, Naver, Poshmark, south koreaNo Comments

Did you know that Google isn’t the top search engine in South Korea? It’s not even a close second. Most Koreans actually prefer Naver for various reasons, and they like it so much that the search engine holds about 56% of the market, per Statista. Google is catching up, but it currently only has about a 35% share, and it’ll likely be a while before it can close the gap. Naver’s other offerings are also received quite well in the country, including its e-commerce platform, messaging, payments, storytelling, digital comics (webtoons), metaverse efforts, a selfie app, games, the cloud and more. But like any true tech company, Naver was never satisfied with its success at home. The company quickly expanded to Japan, and more widely in Southeast Asia. But instead of leading with its core search engine and e-commerce businesses, it instead opted for different strategies in each new country, such as expanding in Japan with its Line messaging app and increasing its footprint in Southeast Asia with its 3D avatar app, Zepeto, and other offerings. It’s now expanding its e-commerce business — wildly successful in South Korea with 18% of the market — with a consumer-to-consumer (C2C) marketplace model that it aims to offer in North America, Europe and Asia. Unlike many B2C marketplaces, which usually sell large quantities of a few profitable, popular items, Naver’s e-commerce strategy is focusing on long-tail business, allowing sellers to sell small quantities of hard-to-find items to buyers looking for niche products. It wants to add a social network feature, which allows sellers to receive comments, likes and users in its e-commerce unit. To that end, the company earlier this month said it would buy Redwood, California-based social commerce marketplace Poshmark for $1.2 billion.

What does Instacart’s supposedly delayed IPO teach us about how unicorns think? • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in EC Ecommerce and D2C, EC Newsletter, EC venture capital, Instacart, instacart IPO, Startups, The Exchange, VentureNo Comments

Instacart has left us IPO nerds feeling whiplashed. Late last week, Reuters reported that the American grocery delivery and technology company might probably shelve its IPO until next year. The richly valued startup was poised to become the splashiest public offering of the year in the United States, but now it appears we won’t get to see the implications of the IPO’s reception for at least a few more months. Instacart going public is notable not just due to its own corporate history. The company raised huge sums, grew immensely during the pandemic and is in the midst of an expanding into advertising and software. The IPO was also set to be a critical affair for other, yet-private unicorns, as it would have provided some indication of how the public market felt about at least one of their peers. Sadly, we are likely bereft of new unicorn liquidity information for the rest of calendar 2022. While disappointing, this turn of events does teach us a few things. (Instacart declined to comment on its IPO timing, but did reveal some juicy info on its Q3 performance — details below.) The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Recall that Instacart got a new, lower 409a (internal) valuation earlier this month. So we are seeing the company delay its IPO despite what we could consider to be a lower hurdle ahead of it — in terms of pricing, at least.

VCs continue to pour millions into independent beverage startups • ZebethMedia

By zebethcontrolPosted on October 22, 2022Posted in beverages, Commerce, EC Ecommerce and D2C, EC venture capital, eCommerce, Startups, Venture, venture capitalNo Comments

After seeing a ton of venture capital investment flow into independent beverage startups recently, it was time to take a step back and see if this kind of company actually made sense as a venture investment. For one, the competition for space on grocery store shelves is fierce, eclipsed only by the fact people are finicky. The U.S. Beverage Manufacturing and Filling Locations Database contains nearly 2,500 alcoholic and nonalcoholic beverage manufacturers making everything from beer and soft drinks to coffee and 10,000 flavors of fizzy water. Within the whole beverage sector, functional beverages grew in popularity over the past five years as consumers sought out better-for-you drinks. Most of them include add-ins like vitamins, probiotics and electrolytes and boast lower sugar content and more natural ingredients. This market is also growing fast: Precedence Research estimated the global functional beverages market was valued at $129.3 billion in 2021 and would grow nearly 9% annually through 2030, when it’s forecast to be worth $279.4 billion. These companies don’t usually go public, but often sell to another entity, perhaps a soda conglomerate or even an alcoholic beverage company looking to get into the nonalcoholic space. Opening a fresh can of capital If the amount of capital going into this area is any indication, investment into the sector makes sense. Venture capital firms pumped over $170 million into functional beverage companies in 2018, up $111 million from 2017, according to PitchBook.

Advances in fit technology could minimize those onerous online returns • ZebethMedia

By zebethcontrolPosted on October 18, 2022Posted in Bessemer Venture Partners, Commerce, EC Ecommerce and D2C, eCommerce, Kent BennettNo Comments

If you’ve watched even one episode of “Project Runway,” you’ve noted that clothing designers use a “fit model” as the basis for creating their garments. That same method is used by clothing brands all over the world. However, everyone’s body shape is different, and very few of us are built like a fit model, so how the outfit looks on the person modeling the clothes online and how it fits an individual person can also be radically different. Startups and big retailers have jumped in with technology to help brands better manage returns, but they’re also attempting to tackle the root cause — the fit itself. However, Bessemer Venture Partners partner Kent Bennett said not enough attention is being focused on fit technology. “This is an area that people are not covering as closely as they should be,” he told ZebethMedia. “It’s such a huge part of our lives, but one where I think the tech has gotten a little older and dusty, and I do think there’s potential for a revolution here.”