December 5th, 2022: eBay opens store in NYC, live shopping comes to holiday windows, Microsoft and AWS, and our Black Friday Cyber Monday review

December 5, 2022 Rick Watson

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It’s December 5th, 2022 and this is the Watson Weekly - your essential eCommerce Digest!

Today on our show:

eBay Opens Store in NYC That Accepts Pre-Owned Luxury as Currency
Live Shopping Comes to Holiday Windows
Microsoft and AWS Both Release Supply Chain Platforms
Our Black Friday Cyber Monday Roundup

- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.

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….

eBay Opens Store in NYC that Accepts Pre-Owned Luxury as Currency

Seemingly wanting to capitalize on the struggles of players like TheRealReal, eBay has opened a store in New York City.

Here’s how it works:

You exchange an item for closet currency. eBay appraises the item, and then you can use that currency to buy items from the other luxury items in the store
This is all backed by eBay’s authenticity guarantee which applies to handbags, sneakers, watches, and now jewelry.
If the buyer doesn’t want to exchange the item for anything, the store will help them list it on eBay.

Overall, I don’t think this one store moves the needle for eBay, especially since if you look at the website it only seemed to open on November 16th and 17th, during Jewelry Week in New York City. Could be something to watch, however if eBay continues to plan similar events in the future to increase its visibility.

In case you are wondering why this matters, luxury is important to eBay despite the company’s reputation. Recent data shows that top brands like Chanel, David Yurman, and Gucci are up 100% in 2022 so far compared to 2021, which is a lot of progress for the company.

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Our Second Story

Live shopping comes to select NYC holiday window displays

In what seems like a strange mashup to me, during the holidays startup TalkShopLive is streaming a live shopping show in select New York City retail windows.

Some big musicians are involved like Shania Twain, Gloria Estefan as well as chef Bobby Flay. No word where these displays will appear, which seems like an odd choice to me. Wouldn’t you want to promote this?

On the other hand, Saks is also testing out its Saks Live feature according to Aaron Barr from Marketing Dive. Elton John will be using it to support his AIDS foundation.

In case you weren’t aware, Saks Live is a series of live shopping events that Saks launched last year designed to feature luxury fashion and beauty brands and icons. Hard to tell how Saks Live is going as the company has not released any figures, but in luxury you need star power to drive demand and high price points.

The tie-in with Elton John who is completing his Farewell tour in America is pretty compelling, as the traditional New York City Saks Store light display will also contain Elton John songs. Of course I’m a huge Elton John fanboy!

[References:]

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Our Third Story

Microsoft and AWS Both Release Supply Chain Platforms

As if pre-planned, both Amazon (AWS) and Microsoft introduced new Supply Chain Platforms. What's my take?

Microsoft seems better planned and suited for Enterprise, if you are on Teams or Azure or PowerBI, it's a natural fit. Microsoft's deeper retail expertise also shows through in the feature set.

AWS is taking early steps into a new world. Feels more like an BI-focused tool and more destined for the mid-market customer who has built their infrastructure on AWS.

Both provide:

* Data integrations to connect to systems of record and other data sources (ERP/EDI/WMS/OMS)

* ML-powered insights into inventory, demand planning, supplier lead times, stock-outs, etc.

Regarding AWS Supply Chain specifically:

* AWS adds its own collaboration tool, but if you aren't on Teams, aren't you already on Slack? Feels like a miss.

* Pricing is "Pay as you go" similar to its other cloud offerings -- mostly gigabyte storage or SKU and location-based pricing. No Enterprise license fees.

* The core of this offering is a "supply chain data lake" - so essentially collecting and organizing all the data into one place so that they can run machine learning models on top of it.

As far as Microsoft:

* The whole offering sounds better structured. There are integrations to Microsoft Dynamics 365, other ERPs, its low code platform, Azure, PowerBI, and Teams.

* Microsoft’s solution also adds an Order Management module to connect between sources of real-time inventory and orchestrate fulfillment. There are big players in this space like Manhattan, IBM Sterling but I'm guessing Microsoft wants to be "good enough" for some customers here. Also these types of order management systems tend to work for B2B supplies and are often not designed for consumer scenarios.

* Another advantage over AWS is that Microsoft allows extensible partner modules for new capabilities and data

* There are several pre-announced launch partners like CH Robinson, Walmart GoLocal, FedEx and FourKites. It’s totally not lost on me that Walmart is on this list!

* I also suspect there is a large Enterprise license waiting here. But the good news is you may already have many of these sub-components in Teams, Azure, PowerBI, Power, etc.

Wrap-up

- Much of this is still in early innings, but Microsoft seems further along than AWS. Both have preview elements, but Microsoft's offering feels more complete and thoughtful.

- My biggest concern is with supply chain, collaboration is a key feature. Microsoft Teams gives a decisive edge for Microsoft here.

- Secondarily, a lot of Microsoft tools end up being not as useful "out of the box" and require building custom apps to really optimize them for your Enterprise. This creates big opportunities but also a few challenges for IT teams, VARs, and other partners.

- Anyone selling into Microsoft Azure or Dynamics 365 ecosystems would be wise to pay attention to this, as it seems like the future of their retail efforts.

- While AWS has a significant retail presence, its tools are less built out than Microsoft. Still, the focus on data is so critical that if you source or transform data, you will also need to build connectors here to play well.

[References:]

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And Our Last Story

Our Black Friday Cyber Monday Roundup

Well, we are through the Black Friday and Cyber Monday madness and I wanted to wrap it up for everyone to see if we can learn anything about the season, consumers, and help us inform 2023. I’ll just call it Cyber Week for short here.

Adobe reports:

Revenue from Buy Now Pay Later rose 70% year over year. Prior to Cyber Week week, Deloitte found that 37% of consumers plan to use some kind of Buy Now Pay Later option.
Black Friday sales topped $9B, a 2.3% increase over last year.
Cyber Monday sales hit a record and topped $11.2B, rising 5% from prior years, and 25% greater than Black Friday sales. Last year, Cyber Monday was only 20% larger than Black Friday.

Mastercard reported:

Black Friday sales rose 12%, and online sales rose 14%. Of course these figures are not adjusted for inflation.

For its part, Shopify and BigCommerce reported a 19% and 31% in sales, respectively, reflecting continued growth in the middle of the market, although these are not same store sales being reported so it’s really only useful to judge the growth of these platforms not the broader market.

Jefferies a financial analyst reported:

73% of retailers tracked offered more promotions than last year, led by athletic wear brands like Nike, LuluLemon and Under Armour.
Ugg Boots was mentioned as a standout winner with fewer online promotions, and more online search traffic.

Amazon reported record holiday sales but didn’t provide any more information than its top categories were in Home, Fashion, Toys, Beauty, and Amazon Devices.

I posted a Black Friday roundup on LinkedIn last week that was slightly more pessimistic than the report I’m giving now. I’ve tempered that some having seen full Cyber Monday data which grew faster than Black Friday.

Cyber Monday has really surpassed Black Friday recently as the biggest shopping day of the season and seems to be pulling away in terms of momentum. It seems like consumers are getting addicted to shopping from their couch and avoiding huge crowds just to get the same deals they can get online.
While Adobe says the increase in sales was not just due to higher prices, it’s hard to take it entirely seriously. Even if there was higher demand, it seems like consumers leveraged themselves to make these purchases. Not to mention, costs of energy and labor are still relatively high, which often means that a brand’s cost of goods have gone up.

So more sales during this period, caused at least partly by higher inflation, but more discounting, more leveraged consumers and lower profitability. Everyone likes to hear about the upside, but no one wants to hear the warning signs and essentially shifted demand patterns due to consumers waiting on discounting.

I also think many people also forget about the year we are comping to where retailers struggled to keep products on shelves due to major supply chain issues. This year, discounting is everywhere as oversupply is the new issue.

In the final analysis, holiday sales for the entire season after accounting for inflation may still end up relatively flat when you take all these factors into account.

[References:]

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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.

First

Retailer Lowe’s to sell its Canadian business to Sycamore Partners

Canada represents about 7% of the total business today and the business is being acquired for $400 M in cash. Sycamore Partners is a private equity firm focused on retail and consumer investments.

Link: https://www.retail-insight-network.com/news/lowes-canada-sycamore/

Second

Accessories Rental Platform Vivrelle Raises $35 Million

Essentially, Vivrelle is a subscription platform like Rent the Runway but for accessories only. The founders seem intent on not repeating the same mistakes as Rent the Runway, and obviously accessories don’t have the same sizing and laundry issues as apparel.

Link: https://retailbum.com/2022/fashion/accessories-rental-platform-vivrelle-raises-35-million/

Third

Vizit Raises $10M in Venture Funding to Transform Ecommerce with New AI-Powered Image Analytics Platform

This is an interesting one I haven’t seen before, Vizit is a visual brand intelligence platform which measures the consumer’s reaction to your imagery across your website and other channels. Given how much money is spent or wasted on creative shooting in the dark, and how much image and video swipe affects shopping behavior, this could really help drive your creative spend.

Link: https://www.yahoo.com/now/vizit-raises-10m-venture-funding-192300318.html

Fourth

Loyalty Provider Antavo Closes 10 Million Euro in Series A Funding

True story: I met the Antavo team many years ago and it’s great to see them progress in their journey. The company is based in the UK and is an API-driven but no-code offering for omnichannel loyalty.

Link: https://www.finsmes.com/2022/11/antavo-closes-e10m-series-a-funding.html

AND FINALLY …

Creator merchandising startup Spring acquired by Amaze

It seems like Spring has had some funding troubles recently and had layoffs after raising a total of $70 M. Amaze is essentially a mobile page-builder company that works with brands on social media which from my vantage point looks like a very crowded space.

Link: https://www-yahoo-com.cdn.ampproject.org/c/s/www.yahoo.com/amphtml/now/fast-growing-amaze-acquires-spring-200000992.html

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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. Want to discuss the topics on the show? Head on over to community.rmwcommerce.com to connect with other listeners!

Our production partner for the series is CitizenRacecar. The show is produced by Alex Brouwer; 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.