June 10th, 2024: Amazon Buy with Prime off to a slow start, Shein launches Shein Exchange Resale Program in UK and Europe, eBay expands its consignment service, and a call to action for brands
Today’s episode of the Watson Weekly podcast is sponsored by Commercetools.
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It’s June 10th, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Amazon Buy With Prime Off to a Slow Start
Shein Launches Shein Exchange Resale Program in UK and Europe
eBay Expands Its Consignment Service
A Call to Action for Brands
- 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….
Amazon Buy With Prime Off to Slow Start
Amazon Buy With Prime Solves One Problem, Creates Another Larger Issue
Let's say a DTC merchant who is also a solid 3P brand on Amazon has a conversion problem on their own website. Now Amazon solves it for them. Now they have another problem - more reliance on Amazon.
A new story from Business Insider throws some light on the problems Amazon is having with Buy With Prime adoption.
It seems to me that Amazon is treating Buy With Prime adoption as a technology problem. As if they can "product" their way out of it.
I don't believe that's the case.
What does an Amazon-friendly brand value more than anything?
Reducing its reliance on Amazon.
How can Amazon do this?
Introduce credits and incentives to increase their reliance on Amazon Advertising, while at the same time taking share from Google and Meta. In this space, the wind could be at their backs more than trying to focus on conversion.
Merchants want to understand how their customers can migrate from Amazon to their own website. More than anyone, Amazon could provide them with a data clean room to do that.
Why does this not yet exist? Every merchant I speak with wants to understand how they can use Amazon to acquire customers for their website. The technology is not complex, but it still does not exist.
Instead Amazon is focused on asking merchants to pay out of their own funds to drive traffic to Amazon. At the same time they are selling Buy With Prime? This is madness, folks. Left hand, meet right hand.
That is Step 1.
Then at the same time, let Amazon MCF sink or swim on its own. With Amazon scale, it seems to me where there is a point where this would be a no-brainer. Scale, speed, amount of services. They just need to be patient enough.
How about this for a promotion? 20% back on your Amazon Advertising fees if Amazon drove the sale and its fulfilled by Amazon MCF.
Or the reverse: Or 20% off on your Amazon MCF fulfillment costs if the sale is driven by Amazon Advertising.
Would Lina allow this? ;-). This would get the attention of large brands.
That is Step 2.
and what is Step 3? Step 3 is to pause and take a breath. Focus on these two huge opportunities and do not dilute them.
I am not sure the existing conversion-related services are long for this world. Is this "Buy With Prime"? I'm not sure. But perhaps the Buy With Prime thesis is a much longer-term bet than Amazon originally thought.
These building blocks could get them faster traction.
Oh and one more thing. In the race between Amazon building merchant-facing services (BWP) and Shopify building/not-building a marketplace (Shop App) I struggle to say that Shop App is winning (especially since I have been so critical of it). More on this later. ;-)
[References:]
https://www.businessinsider.com/amazon-buy-with-prime-shopify-sellers-report-slow-growth-2024-5
Our Second Story
SHEIN Launches SHEIN Exchange Resale Platform in Europe and the United Kingdom
Some interesting news out of the Chinese retailer SHEIN last week, in that they announced a way for SHEIN sellers to use the Shein App on their previous order history to then sell the item back to Shein.
The company had launched a resale program in the US in 2022 previously, but the uptake seems limited as it has only sold about one-hundred thousand items. Less than I might have thought.
At any rate, from where I sit this is opportunism and greenwashing at the highest levels. You won’t see such nonsense and BS this side of the United States Congress.
And with no amount of irony, Shein has published a survey saying that Shein customers want to be a part of the circular economy. Serious question: I wonder if “Junk” is a product condition code in the app when you create a new listing? The Lion King had the circle of life. Shein has the circle of crap.
Yes it’s true, sometimes stories just write themselves.
If the brand was worth anything, I might point Shein to my next article where eBay is expanding its partnership with Linda’s Stuff.
The first phase of the launch will see the platform being made available in France followed by the UK, and Germany in subsequent phases.
[References:]
Our Third Story
Ebay Expands Its Consignment Service to Jewelry, Watches and Footwear
Ebay is continuing to expand its consignment service, which will now include fine jewelry, luxury watches and footwear. The service, already available for handbags and luxury apparel, allows casual sellers to access Ebay experts for help listing and selling their high-end products.
It appears to me that eBay is looking to attract more luxury sellers and buyers, taking share from folks like the Real Real which have taken share over the year.
Let’s be honest, the only reason there are platforms like The Real Real and other resale sites at all is because of eBay’s multi-year failures. More inventory is always better for eBay, and easy consignment always encourages more inventory.
Does anyone remember the eBay gold rush days were there used to be these eBay dropoff stores? Linda’s Stuff is like a virtual version of these old stores. Give them inventory, they give you back cash. They handle the rest.
I do have a personal connection to us because the implementors of this feature for eBay is the long-time eBay seller legends Linda’s Stuff, led by Linda and her son Max Lightman. It appears to me that Linda’s Stuff went through the wringer with the ill-fated Olive acquisition, but has come out the other end smelling like roses.
[References:]
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And Our Last Story
A Call To Action for Brands
What if the Dust Never Settles? A Call to Action
eCommerce brands and retailers are facing a crisis of confidence and in uncertain times seem to be relying on the "sure thing."
From my recent conversations, many have forgotten how to operate during turbulence.
The last 10 years has spoiled some people. Up and to the right. And then hyper-up and to the right. Followed by correction, then overcorrection, then undercorrection... Your inventory and cost structure guesses were wrong, it's understandable. (They are always wrong)
"Fool me once, shame on me. Fool me twice..." seems to be the mantra. Certainty seems to be the order of the day. Proven 10x ROI on every decision, by a trusted vendor everyone knows that you over-vet... looking for any small crack.
This approach is an absolutely terrible way to run a business.
If you have overcorrected to certainty, let me give you a message. You're already falling behind. This mentality is the route to stagnation, destroying experiments.
Remember when Jeff Bezos used to say: "We want to find more ways to say yes" rather than most big companies which find more ways to say no. The culture of experimentation and fail fast is MORE essential in an environment like this.
The opposite of experimentation is turtle-mode. Stagnation. Certainty.
Embracing experimentation is scary, I get it. It requires living in the gray. Making decisions with only 60% confidence.
I always find, "What is the worst that could happen" to be a good guide. If you are committing less than 5% of your revenue for less than a year, this can always be unwound. It's not a bet the company initiative. Give yourself permission to fail. Tell your employees it will probably fail.
Trust me, they are waiting to hear this from you. They are tired of leadership being so damn cautious. Instead of waiting for the dust to settle, and worrying about being perfect -- you should instead have the opposite worry.
What if this is the way it's going to be for the next few years?
What if the dust never settles?
As Andy Dufresne said in Shawshank: "Get busy living or Get busy dying." If this sounds like you, it's time to regain that swagger and get back in the arena.
[References:]
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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Suave Brands Company Completes ChapStick Acquisition
Suave Brands Company has completed its acquisition of ChapStick and welcomed health conglomerate Haleon as an investor. How much more consolidation will we see in consumer brands? From my mouth to your lips.
Second
Headless Content Management System Storyblok Raises $80M Series C
Developer friendly content management system Storyblok has raised $80M in Series C funding that will be invested into the company's technology. Are there not many CMS solutions available currently or is this a case of AI-FOMO from investors?
Link: https://www.storyblok.com/mp/series-c
Third
Shopify Acquires Checkout Blocks
Shopify has acquired checkout customization app, Checkout Blocks for an undisclosed amount. Shopify Plus customers have been using this solution. Is Shopify now a payments company that does infrastructure?
Link: https://techcrunch.com/2024/06/03/shopify-checkout-blocks-acquisition/
Fourth
EverFence Raises $7M Series A
EverFence a marketplace that connects homeowners with contractors for fence construction has raised a $7M Series A funding round. The new funding will be used to invest in its technology, go to market and to offer financing. Contractor marketplaces are all the rage at the monent. Kudos to the founders for the name EverFence.
Link: https://www.axios.com/pro/retail-deals/2024/05/29/everfence-raises-7m-series-a-fencing-transactions
AND FINALLY …
OneRail Acquires Inventory and Distributed Order Management Solution Orderbot
Omnichannel fulfillment platform OneRail has acquired Orderbot, an inventory and distributed order management software solution, for an undisclosed amount. By my count, this is two acquisitions by OrderBot, one from WebLinc aka Workarea Commerce, which practiced a catch and release program, and now another acquisition to OneRail.
Link: https://www.linkedin.com/posts/billcatania_onerail-orderbot-acquisition-activity-7204201857320169472--K-S
Today’s final word for the week of June 10, 2024 is “Hype”:
Most AI right now is way over-hyped. There I said it.
In another 10 years maybe we will find something useful there. I’m not saying AI is harmful, but it is not a business proposition anymore than having a “.com” website was in 2000. It’s a flaming pile of dogshit masquerading as a business plan.
In the short-term what is AI? It’s a way to get between 5 and 25% more efficient with some bucket of spending. Perhaps support, perhaps marketing and creative.
Is that useful? Yeah, sure.
Is it transformational? Not in the way everyone is talking about it.
If you’re a brand, keep that in mind as you evaluate vendors. I like asking a simple question to a potential vendor. “Let’s pretend I am a third-grader. Why would it matter to me that your product uses AI or not”? Then watch the sales rep squirm.
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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.