December 16th, 2024: Shopify releases a boring update, Amazon haul launched sooner as political strategy, Potential impact of tariffs on eCommerce? Why use a consultant to help you solve a problem?
Today’s episode of The Watson Weekly Podcast is sponsored by Mirakl, the global leading provider of eCommerce software solutions. Create a value flywheel for your business with AI-powered marketplace and retail media solutions from Mirakl. Over 450 customers across the globe are unlocking new revenue opportunities with Mirakl - what's holding you back?
It’s December 16, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Shopify Releases a Boring Update
Was Amazon Haul Launched Sooner As Political Strategy?
What is the Potential Impact of Tariffs on eCommerce?
Why Use an Outside Consultant to Help you Solve a Problem?
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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BUT FIRST in our shopping cart full of news….
Shopify Releases a Boring Update
Shopify completed one of its biannual Editions releases this past week, and called it their boring update since according to them they didn’t release any new major features. Of course that’s new true, but it was fun theater regardless, complete with some fun AI-generated videos.
The Edition started with Shopify Product Leader Glen Coates speaking about how he used to be frustrated setting up games on his PC until Nintendo came around.
Somehow this is related to Enterprise software.
Besides the clever AI-generated videos, there are things to like in the updates:
* Faster APIs and cart
* Updates to add more existing features to more countries. POS in France feels big.
* Draft order improvements
* More Checkout Blocks and apps across order status, thank you
* Unified fulfillment logic
* Ship to Store
I find Shopify is quite good about learning from two things: system integrators, and lost deals.
Asking for a friend:
* How often was our cart slow before this update?
* Are the "Built for Shopify" requirements getting too difficult? Seems to require an app redesign and is more of a power move than an ecosystem-friendly move.
For B2B Industrial & Scientific customers, which admittedly is still a nascent category for Shopify:
1 - Why are all my updates buried under "Wholesale"? That's not how I think about my business.
2 - How do you think about assemblies, BOM, fitment? Core or partner?
3 - What CRM would you recommend I integrated with Shopify.... Salesforce?
And of course some WTF, how was this not present before?
* Offline support for POS; I guess retailers did not exist before WIFI?
And then some existential questions.
1 - Does Shopify have too many developers for its own good? How will they know to stop and reallocate vs overbuild?
2 - Why does Shopify have a Marketing R&D team in a world where there are 1,000+ marketing apps? (see last question?)
3 - When will Shop App revenue be broken out?
As we sit here in 2024, we have Enterprise companies who might wonder if they are "stuck in the middle with you." There are 3 fundamental changes that must be made that seem to be ignored on purpose:
1 - Truly unbundle Stripe from Shop Pay.
2 - Why is it so damn complicated to use Adyen or Braintree with the full suite of Shop Pay features?
3 - Release our staging environment from captivity. Freedom for all.
And finally...
4 - Tell us what Shop App is doing for us. If you're a marketplace, advertise it more to consumers? If you're not a marketplace, then... why should I invest in it vs my own app?
Just curious, as I have not seen Shopify publish this: what is the definition of "Enterprise"?
Here's to 2025?! I think I wrote 2 years ago about some of these topics also. We are always going to find new things to chat about here, the question is: how does Shopify define what is core? Who is making that decision, and for what customer? "Everyone" is a never-ending game of catch-up.
Finally... inquiring minds want to know:
When will Glen Coates get his games to work?
What was his top score on Duck Hunt?
[References:]
Our Second Story
Was Amazon Haul Launched Sooner as Political Strategy?
As early as June this year, we heard rumblings about a "Low Cost Store" on Amazon. At the time there was a quote by a seller BrandsFactory stating "It could launch as early as November, but it probably won't fully open until early next year."
At the time, the notion of Amazon launching a major new service in November seemed exceptionally remote. Who launches in the middle of Q4? It takes time to build an initial consumer-ready version of a service at Amazon scale.
A few events intervened.
* October 21, 2024: Amazon launched its Holiday Beauty Haul. Perhaps they were soft-launching the "Haul" name to see how consumers responded. Little did we know how quickly more hauls were to come.
* November 5, 2024: Trump wins the election, bringing perhaps a more determined anti-China bent, having made public statements about eliminating the de minimis threshold (currently $800), targeting Shein and Temu, revoking China's MFN status, and adding an additional 10% tariff on China.
* November 13, 2024: Amazon Launches Its Haul, Its Low Cost Store in time for BFCM.
Coming from a company whose second headquarters is outside of Washington DC, spent $14.2M in 121 lobbyists this year (via OpenSecrets), has been constantly targeted by the FTC, the timing does not seem coincidental.
Keep in mind, Trump called Jeff Bezos "Jeff Bozo" back in the day, which may not mean much since he called Tim Cook "Tim Apple".
What does Haul mean to Amazon?
* In my view, Haul is two things. It is a hedge against the rise of Temu. And a legitimate growth lever. A way for Amazon to bet on the continued cheap consumer, without going "all-in". Once an offering is launched, it can decide to improve or prioritize its offering more or less over time.
For a moment, let's consider the fact that Amazon rushed Amazon Haul forward, what could be the political reason?
* In a post-Trump world, any new launch or collaboration with China would be under heightened scrutiny at best or blocked altogether, at worst.
* If Haul just looked like "part of Amazon" instead of a "Temu clone", after Temu was shut down, Haul might slip in under the tent unnoticed if Amazon was not forced to break out its success in earnings.
* If one wanted to later lobby an administration about the essential nature of a new service what would one do?
** Launch it as soon as possible.
** Give it as much exposure as possible.
Like how? On the homepage of the Amazon app. Which is exactly where Amazon Haul was this Black Friday through Cyber Monday.
As I sit here today, Haul is still on Amazon's App homepage. Which, I'm not saying there's a reason for it. But if there is a reason for it, I would understand. One explanation is that this is Amazon playing political chess.
After all, it's much easier for a new administration to block a new launch in isolation than it is to go inside a well-defended company like Amazon and rip out one part of it.
[References:]
Our Third Story
What is the Potential Impact of Tariffs on eCommerce?
Probably the most common question I am being asked these days is clearly about impending tariffs. The impacts I think have two categories of consequences, threatened and reality.
Threatened = What people think might happen, what politicians say and do on social media, talk about on the news, bluster about, etc. But not an actual policy change.
Reality = Real tariffs not just promised but actually approved and at least "scheduled", if not active.
1 - Threatened
Perceived impact will almost certainly be greater than the real impact. Trump has a history of using threats to achieve his aims, which prevents the need for further action. Still, brands must act as if. As in, they must act as if the tariffs or other penalties or blockages will be implemented.
2 - Reality
In reality, the President does have power to change tariffs, particular in matters of safety and national security. Which of course is the claim with some countries, in particular: either based on the country of origin (China), or industry (like AI/technology/defense/essential materials, etc).
1 - Escalating trade wars between nations
Tariffs beget tariffs. And tariffs provoke escalation - investigations, lawsuits, sanctions, etc. The effects can be hard to predict. China, for instance, just signaled an anti-trust investigation into a recent Nvidia acquisition as one example.
2 - Trade lanes changing
The global supply chain, as we learned during COVID, is an immensely complex beast. When one shipping lane is limited, it puts strain on other lanes which are often completely unprepared to handle the new demand.
This can lead to delays and shortages, regardless of if the tariffs impacts are perceived or real.
3 - Increasing supply chain diversification
The trend which COVID accelerated could continue to accelerate.
Backup suppliers will be sought for any critical material which goes into the production of any materials, in the event that a trade war results in cutting off of materials entirely.
4 - Deminimis / Section 321 enforcement changes
The current Biden administration was already on the path to changing these rules, but it's safe to say even stricter rules may be in the offing.
5 - Increased HTS classification and reporting requirements
These are unique 10 digit numbers used to classify goods.
Other questions:
What do I think Trump's ultimate aim is?
Nothing short of turning America into the world's greatest manufacturer, or at least eliminating some of the imbalance between America (the second biggest manufacturer) and China. Perhaps more importantly, reducing or eliminating dependence on China, especially with regards to critical industries.
How do I think this will all be justified?
Primarily in the name of national security, preventing the flow of illegal goods, and national self-sufficiency. Of course I am in no position to evaluate these claims, but neither is anyone else at the moment.
[References:]
https://www.linkedin.com/posts/ecommercestrategyconsulting_what-is-the-impact-of-potential-tariffs-on-activity-7272592224624824320-QtEF/?utm_source=share&utm_medium=member_desktop
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And Our Last Story
Why Use an Outside Consultant to Help Solve a Problem?
A common question that gets asked of consultants is "Why should I hire an outsider? You don't know my business." This is a common objection and here are the top answers I repeat to potential clients.
1 - Independent Outsider's Perspective
Consultants often have a lot of experience seeing through conflicting internal and external opinions present regarding important decisions. A fresh outsider’s perspective can often see old problems in new ways, highlight gaps or inadequacies, and identify the best paths forward while challenging traditional methods (TTWWADI – "That’s The Way We’ve Always Done It").
2 - Practiced Expertise in Digital Transformation
Most consultants make tough decisions like how to shape-up an existing business, make a major new platform or partner decision, or create new streams of revenue several times a year, whereas most companies only attempt this type of transformation once every five to ten years. Practice makes perfect.
3 - Extensive Commerce Industry Network
Consultants can have vast networks that include industry leaders and executives, enhancing their ability to connect you with the right resources and solutions, increasing the likelihood you will make the decision right the first time. There are few companies or providers that would not answer a call I place, or a LinkedIn message, even without a prior relationship.
60k+ Watsonian followers does come in handy.
[References:]
https://www.linkedin.com/posts/ecommercestrategyconsulting_why-use-an-outside-consultant-to-help-you-activity-7272229833474990081-B__o/?utm_source=share&utm_medium=member_desktop
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Under New Ownership, Lord & Taylor Revives Old Logo And Comeback Dreams
Lord & Taylor has a new owner, Regal Brands Global!, which has reinstated its cursive logo and plans to revive the fashion business as an online-only business. It is not reportedly a marketplace but will use drop-shipping for fulfillment, which sounds like a multi-brand online retailer. Lord & Taylor is onboarding vendors and will soft launch home, dresses, and footwear. What is the best version of Lord & Taylor? A licensing play in my book.
Second
Cart.com Acquires OceanX and Deepens Capabilities for Health & Beauty Brands
Cart.com has acquired OceanX, the wholly-owned fulfillment operations arm of Guthy-Renker, for an undisclosed amount. Approximately 200 OceanX employees will join the Cart.com team. The company will also add two new facilities to its network, including a West Coast distribution hub in Southern California and its third facility near Columbus, Ohio. Cart.com continues to target certain verticals to grow its business.
Third
Mirakl Acquires AdTech Company Adspert
Mirakl, a eCommerce software platform has acquired Adspert, an e-commerce advertising optimization platform for an undisclosed amount. This is Mirakl's third acquisition in three years with a particular focus on its retail media solution. Adspert will enable Mirakl to offer demand side solutions to brands that advertise on multiple channels. In the end everyone sells advertising.
Fourth
Omnicom Acquires Interpublic Group To Create Advertising Agency Behemoth
Omnicom will acquire Interpublic in a stock-for-stock transaction. Post-closing, Omnicom and Interpublic shareholders will own 60.6% and 39.4%, respectively, of the combined entity. This creates a behemoth that offers end-to-end services for brands. This acquisition likely will lead to mergers and acquisitions in 2025 by competitors such as WPP, Publicis and Dentsu. Interestingly in the conference call discussing the transaction the presentation describes a advertising platform that encapsulates behavior,identity, and transactions in one business. Sounds familiar - hello Meta and Google.
AND FINALLY …
Khloé Kardashian and Kris Jenner Are Raising Money For a New Consumer Brand
The Kardashians are at it again: Khloé Kardashian and Kris Jenner are raising funding for a new consumer brand, Khloud, focusing on consumer goods. The company has filed trademarks for popcorn, granola, and protein-based products. We have seen entrepreneurs enter the better-for-you snack sector in 2024, so it makes a lot of sense for the Kardashians to enter this space to use their popularity to sell consumer goods in hot sectors.
Today’s final word for the week of December 16, 2024 is Spindrift:
If you haven’t heard, rumor has it that Spindrift is for sale and is nearing a private equity acquisition of a whopping $650 million dollars. 650 million dollars. For water. That is some freaking expensive flavored water. But cheers to them because they only raised $70 million dollars building the company. I would say this is the model for the next 5-10 years. Raise little, exit big.
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Did you know that RMW Commerce has a brand new podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
Our production partner for the series is CitizenRacecar. The show is produced by Jose Baez; Production Manager, Gabriela Montequin.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
