July 1st, 2024: Target reshuffles its leadership team and Shopify releases summer editions
It’s July 1, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Target Reshuffles Its Leadership Team
Shopify Releases Summer Editions
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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This week we are going to do a special episode about Shopify’s Summer Editions, but also zero in on Target’s recent changes.
BUT FIRST in our shopping cart full of news….
Target Shuffles Management Deck Chairs: Still Too Slow
It looks to me like Target is shuffling roles amongst the existing leadership team of Christina Hennington, Rick Gomez, and Lisa Roath. The one exception is CMO.
It strikes me that Lisa Roath, the current CMO, is primarily a merchant. The company apparently concluded that Target lacked depth in the marketing function.
Of course Rick Gomez, the one with the marketing background, is now in charge of merchandising. Whereas Christina Hennington is in charge of not only Growth now, but also Strategy. Christina with the merchandising background.
Isn't the Head of Marketing responsible for growth? Why does Target need a Head of Strategy and Growth?
The answer is straightforward. Brian Cornell has overstayed his welcome, and the organization is scrambling to compensate for it.
Streamlining and simplifying the management and organization structure needs to be the order of the day.
It's not that Target doesn't have a great consumer culture -- it does. It's more that the business culture needs to acquire speed and efficiency. Decisionmaking needs to be about 5x faster.
That often comes from getting leaders closer to the problems. This new leadership structure moves leaders further away from the problems. It's also out of step with a lot of the corporate streamlining and cash efficiency concerns that most companies are facing right now.
Let's start here:
Something must be done to adjust and evolve the Target brand for a new era of cheap, strained consumer which doesn't appear to be dissipating anytime soon.
The Target approach of "own brand-ing" your way out of the slump has not worked. Full stop. That is the current playbook.
What is the new playbook? It needs to generate consumer demand. Product is one component, but there is a worry the elevation of Christina Hennington could continue more of the same -- because we have another merchant as a leader.
Target needs a Marketing Leader as CEO, and the entire management team needs about 2-3 less people, and that likely applies to the 4-5 levels beneath that.
Speed kills, and currently Target is not only dying from strategy, which should come from the CEO. If Christina Hennington truly is that person, well, she needs to be the CEO sooner than later.
If not, Target needs to announce its CEO succession process has kicked into high gear -- I suspect you might start hearing about this as soon as the next earnings call.
The age of efficiency waits for no person, and no company. Brian Cornell has done an admirable job over his CEO tenure in the last 10 years leveraging those store assets, primarily with the help of former COO John Mulligan who built the playbook as Brian was assuming the CEO role.
Brian's tenure has been primarily about supply chain innovation. Target's next act truly needs to be about marketing innovation, but it starts from the top. A new CMO alone cannot move the mountain.
[References:]
https://www.linkedin.com/feed/update/urn:li:activity:7211695847170863104/
Our Second Story
Shopify releases Summer Editions
Glen Coates, in his introduction to Shopify Summer Editions used the word "Unified" as a way to describe what is going on in these editions. I would give it another analogy: Raising the Water Level. If anything, I think "unification" is underselling what Shopify has done in a lot of this release.
Let's dive in. There are 3 parts to what Shopify has done:
More Defaults. Make available new features that merchants and buyers think are just "normal" available in Shopify. Sometimes to the detriment of key partners (hello Klaviyo, Loop and Rebuy).
Competitive Checks. Removing a slew of gaps to both BigCommerce and Salesforce.
Refactoring and Convenience. Make possible and easier a lot of things that while they might have been technically possible before, they were somewhat broken as to be unusable a large merchant.
The first item in the release is what they call Markets. You see, Shopify renamed Markets to Markets.
But seriously, If there was one crown jewel of the release I would pick, it would be the work done to unify inventory. In short, if you have a B2B store, POS, additional market, brand or storefront, there no longer seems to be any limitation-based need to split inventory in Shopify. (link)
Here are a few items included in the release:
There is a new "central command center" called markets where you can see across every country what brands and selling formats you support -- all tied to the same inventory.
Essentially this means you can create unique buying experiences without creating multiple stores.
This is also true for multiple business entities. Shopify Payments used to require a single corporation per account. This has been released, and hallelujah.
Markets Pro -> Managed Markets. Global-E and Shopify seem to have rebuilt Markets Pro within the new Shopify Markets admin and catalog. Still seems like work to be done here for the merchant of record model. Customs and catalog restrictions now integrated into catalog. VAT inclusive pricing. A little yawn here. (link)
Bottom line: Storefronts that are global by default and omnichannel by default are going to be the standard going forward. Shopify doesn't like to be caught behind the times, and their willingness to make major changes to their functionality is admirable given how difficult these changes must have been. Put another way, one of the final BigCommerce advantages. I have an entire section on BigCommerce and other competitors below.
The next major item in the release is Analytics
Shopify seems to be taking aim at reporting apps, as well as the fact that a lot of people have been thrown off by all the new Google Analytics . The true experts I know really love GA4, but that is like less than 1% of people I speak with. The average person was quite frustrated by the GA to GA4 transition. Shopify Analytics could be helpful here. (link)
Here are a few items that are included:
Standard commerce reports out of the box, that are customizable / draggable by default.
Reports are customizable by ShopifyQL which is a nice feature for advanced users. This is something you can do in Google Reporting.
Real-time streamed analytics are now available, versus waiting a day. I mean, finally we are out of the Stone Age. The old reports were actually a very bad look for Shopify on this point.
Bottom line: Shopify gets a lot of grief for reporting, but most veterans would recognize that historically all eCommerce platforms have had terrible or almost no reporting at all out of the box. Let's hope this keeps improving.
The next item is Point of Sale or POS
For years, it felt like there was a battle between the POS team and the Shopify core team. They were on different islands hurling cannonballs at each other. This seems to be the release they have buried the hatchet and all teams are singing from the same sheet of music. (link)
Here are a few items included in the release:
UI Extensions. There is now only one way to customize the Shopfy admin, checkout, or POS.
Promotions. There were a slew of what I considered broken promotion use cases which now seemed fixed with Discounts and Discount Functions which appear to work the same for POS now as normal checkout. (Buy X get Y, Stack Discounts).
Payment Customizations and Product Bundles. See above.
Custom Pricing or Catalog by Store. Seems like this should have already been in the tin already, no? Better late than never I suppose!
Pickup in Store. Automatically transfer item from another store when out of stock. If I didn't know better, this was starting to sound like an ERP. (link)
Ship from Store. Powered by Shopify order routing. Good that this is standard now. (link)
Sales Staff Attribution. OK finally. This wasn't in there before, truly?
Streamlined Email Collection. Nice touch to use Shop Pay to help merchants collect email addresses. Truly insidious and thoughtful at the same time. (link)
Bottom line: These are much needed changes from POS and look forward to these products staying in sync more in the future. I know many integrators struggled with the differences between these product lines, including knowledge and functionality gaps between internal Shopify teams. Shopify seems to be trying to reduce the effects of Conway's law here.
POS still growing up from my point of view. It will take until 2025 before they enter into the realm of being worrisome for NewStore, PredictSpring, and others.
Also. Also. Shopify is building a lightweight OMS here. While connector-oriented solutions like Pipe17 don't seem to have much to worry about, and Manhattan has no concern.... It does appear that basic omnichannel (BOPIS, BORIS, blahhh) is now in the box in all plans + POS. Water level rising.
Wholesale and B2B
Some of the new features that I noticed, among others are:
Headless Storefront. This closes a gap between Shopify and BigCommerce. It's unclear how many people will want to access this given the nature of headless, ya know.. but it's a notable inclusion.
Bottom line: Shopify carefully looks at items reported from sales reps and agencies and closes gaps relentlessly over time. This fits into that bucket.
Headless Storefronts
Shopify has introduced a visual editor called Utopia for developers to be able to build templates with associated settings that can be used by non-technical users to build pages. (link)
Sorry I just have to. Really, it's a requirement to bring in humor here. Sorry to the PM on headless, but I'm sorry his section sounds like a Metamucil commercial. (link)
"Headless Commerce gives you a lot of great flexibility, but it can also slow you down. Add some Utopia to your diet and get your GI system regular again!"
Bottom line: Most still not gonna need it. Why are you rebuilding a CMS you could get off the shelf on top of Hydrogen? Seriously, send up a signal flare. You need help.
In other news, this is Shopify's answer to MakeSwift which was recently acquired from BigCommerce. I'll admit to not being technical enough to determine the feature gaps between one and the other -- my suspicion is Shopify is still well behind here given MakeSwift was its own company prior -- but still....
Next on our agenda is Artificial Intelligence
It wouldn't be an update from Shopify if we don't talk about AI. Let me just say, still work to do. I asked Shopify a very simple question - when did a specific feature release? It pointed me at the announcements page. That link to the announcements page was a 404 🤦 (link) DOH. Can you say garbage in garbage out?
But what did they try to do? Here are a few items:
AI Visual Editing enabled in the platform. You can make AI-based edits to imagery from the Shopify platform natively. It's on mobile too.
Shopify Magic in Core Product Creation Flow. Auto-creating titles, descriptions, etc. This also ties into their new Shopify Category stuff.
Bottom line: More to do here as evidenced by the above. However, I do expect for some of these items to be truly useful for Enterprises, they need to move them upstream. Shopify has a Salsify or Bynder competitor buried in here long-term, if they ever choose to go in this direction. Challenge for larger merchants - Shopify is not going to be the center of their universe (think about someone like Mattel's workflow, for example).
If Shopify believes it is truly a leader here AND wants to make AI truly useful for Enterprises for products and imagery, it needs to build additional, AI-powered composable applications. Outside of Core.
These features are not factored properly for large merchants. In the same way that Organization and Markets setup was previously not factored properly for large merchants.
Shopify also released CHECKOUT Updates.
Shopify continutes to expand its checkout solution with new updates. Many of them they probably should have had before, or you could do before if you used checkout.liquid. In particular, they added a few items:
Checkout Blocks Free in Plus. Boom-shaka-laka. Hello free upsells? Sorry, Rebuy, I didn't see you sitting there. You can now use apps to customize thank you and order status pages also. (link)
Split Shipping in Checkout. If items are coming from multiple warehouses, buyers see different shipping methods in checkout. Shop Promise got a brief mention. (link)
Bottom line: If you wanted to build a marketplace, you would need split shipping wouldn't you? Asking for a friend.
Also, can we have subscription upgrades in upsell? Please?
Top Marketing Items
Obligatory mention of Shopify Audiences and Shop Campaigns. Shop Campaigns in particular is developing nicely, but I still think it needs more tooling to apply to larger merchants. (link)
Bottom line: the pitch is compelling for Shop campaigns. Even though you can only redeem Shop Cash in Shop App. Still feels like this is building....
Top Marketplace Items
Target+ joins Marketplace Connect: While every other marketplace connectivity solution already has Target+, Shopify did not. (link)
Bottom line: Let's be clear. Shopify is deeply integrating marketplace connectivity into its Admin. Will BigCommerce regret not more fully integrating Feedonomics sooner?
Developer Items
Upgraded Admin Extensions. More places you can add pages or customize blocks and actions in the Shopify UI. These are always features appreciated by developers that users won't notice until you take advantage of them. Demandware has had an Admin extensibility framework for 10+ years. (link)
GraphQL updates. They mention this is now "almost" on parity with REST APIs. (link)
Bottom line: There's more than this, but these are two that seemed interesting to me. Which is what this update is all about :)
Top Items for Plus
Here are a few nice items I noticed that might be useful for larger merchants. Even though many of them seem to be catch-up items, they are still very much appreciated.
Role-Based Access. Coming soon. Ability to define permissions in groups to sets of users, and then define / modify roles in bulk. (link)
Organizational Access Across Stores. Although officially coming soon, it deserves a mention. Previously, most of Shopify's admin and permissioning controls where store-based. If you have a dozen stores this is a serious maintenance issue and security risk. Similar to how Markets allows a unified inventory across multiple storefronts, you might say this allows unified permissioning across multiple storefronts. (link)
Create Stores from Other Stores: If you aren't going to give us a staging environment, at least make it a little easier to clone a store for testing. Better than a kick in the head, right? (link)
Markets. One of the biggest disadvantages Shopify had in the market was a unified inventory across storefronts. The multiple business entity issue is particularly appreciated. Shopify has finally closed that gap. Danke.
Analytics. While most larger merchants will still want Looker Studio, Domo, or other reporting suites, Shopify could remove the reason for a large swath of smaller Plus merchants to try and find or figure out a third-party reporting application.
Checkout Blocks Free. This could have a devastating impact on the business of some third-parties.
Bottom line: Most of these items are catch-up to larger players like Salesforce Commerce Cloud. That said, they will be appreciated by a lot of merchants.
Wrapping Up
Shopify called this unification. I call it quite a bit more than unification. Some of it is omnichannel glow-up. A lot of ticking off competitor gaps. Raising the water level based on merchant and buyer expectations
[References:]
https://www.linkedin.com/pulse/shopify-summer-editions-raising-water-level-rick-watson-iknuc/
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Juvo Plus, Cap Hill Brands, Dragonfly, and Moonshot Brands Complete Four-Way Merge
Juvo Plus merged with Cap Hill Brands to form Infinite Commerce, which later acquired Dragonfly and Moonshot Brands, consolidating Victory Park Capital's debt in the assets into one entity. It seems like there was a capital call involved here and a lender now owns a few new companies. Tell them what he’s won Bob@
Second
Commerce Operations Platform Hive Raises €28.2M in Series A Extension
Commerce operations platform Hive has raised a €28.2M Series A-extension funding round. Honest question: Is this not a supply chain business?
Link: https://www.hive.app/blog/hive-raises-28-million
Third
Eastern Mountain Sports, Bob’s Stores file for bankruptcy
Outdoor gear retailers Eastern Mountain Sports and apparel retailer Bob’s Stores have filed for Chapter 11 bankruptcy. Mall retailers are under threat; sadly, this news will be repeated multiple times in 2024.
Link: https://www.retaildive.com/news/eastern-mountain-sports-bobs-bankruptcy/719509/
Fourth
B2B Cross-Border Home Decor Brand Trampoline Raises $5M in Seed Funding
B2B cross-border home decor brand Trampoline has raised a $5M Seed Funding round. The new funding will grow the team and invest in its technology. I’m truly confused by this one, it is kind of a brand studio. What year is this?
Link: https://tech.eu/2024/06/24/trampoline-home-decor-brand-secures-5-million-in-seed-funding/
AND FINALLY …
AI-powered Search Engine Daydream Raises $50M Seed Funding
Generative AI search and discovery platform Daydream has raised a $50M Seed funding round. This is a big first bet on the impact of generative AI search on commerce. Sadly, a $50M seed round almost guarantees failure in a startup. Do you take the over or under?
Today’s final word for the week of July 1 is: Chickens.
As in, the chickens are coming home to roost. As reported in the Infinite Commerce deal today where 4 companies were combined into one, the lenders of the world who shelled out lots of vendor debt in the past 3 years are all doing capital calls. Lenders are starting to get the idea that if they are going to own the liability, they may as well own the company. After all, if they are the lender of last resort, what’s the difference anyway? Even a worthless asset is now their asset.
Let this be a warning to players out there with too much debt.
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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.
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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.