June 19th, 2023: Update from Retail Innovation Conference 2023, Update on grocery eCommerce, Walmart launches startup accelerator, Payment provider Stripe joins MACH Alliance
Today’s episode of the Watson Weekly podcast is sponsored by Commercetools.
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It’s June 19, 2023, and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Update from Retail Innovation Conference 2023
Update on Grocery eCommerce
Walmart Launches Startup Accelerator
Payment Provider Stripe Joins MACH Alliance
- and finally, The Investor Minute which contains 6 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….
Update from Retail Innovation Conference 2023
I traveled last week to Chicago to attend the Retail Innovation Conference 2023, or RICE. If you are wondering what RICE is, it is the old Internet Retailer Event.
Why did I go? I spoke with Ed Jiminez from Amazon and Sharon Gee from Feedonomics about Buy With Prime and how it can help merchants who want to build lifetime value from their direct to consumer websites. One of the biggest pieces of news from the event was that if you have a first party relationship with Amazon, you can now use this Amazon to power your Direct to Consumer website using Buy With Prime. That is a pretty cool feature.
As far as the RICE event itself, let me cut to the chase, this event is just a shell of the former glory of the old Internet Retailer event. Shoptalk has almost killed it off and I worry that when Shoptalk comes to Chicago next year, it will finish the job.
Given that I only spent 24 hours in Chicago and seemingly about half of that in traffic, here are a few impressions:
On day 1, there were 8 hours of talks with a lot of people there, but the show floor was closed. Yes, you heard me right, the exposition hall was closed the first day of the event. Sounds like a no thank you to all the vendors involved.
While I didn’t go to the event last year, I am told by many people that did that the conference was about half the size of the previous year. This is at the same time conferences like Shoptalk and Manifest continue to grow by leaps and bounds.
Overall the logistics for the event were not great and while I didn’t attend on Day 1, other attendees told me they ran out of food. Given that you know how many people are coming to the event, how does that even happen?
I polled a few vendors who were on the show floor and I’m told that the brands on the floor were few in number but serious. It’s just there were so few vendors to evaluate.
Did I mention that the exposition hall itself was about half its previous size that I remember? And even with that, about half of the vendors there I have literally never heard of in my life.
Of course it’s difficult to give critical feedback in the most constructive way possible, and I am going to get some time with the organizers in the next week to help them brainstorm and improve for the future.
Safe to say, it’s almost sad to see a conference in such decline. This is coming from someone who has been going to IRCE on and off for the past 20 years.
This next week, I will be back in Chicago at the EnvisionB2B event, which will be a new one for me, so look me up if you are there.
Our Second Story
Update on Grocery eCommerce
It looks like that while eCommerce grocery surged during the pandemic, things are going back to normal somewhat, according to a new survey by the website PYMNTS.
Here are a few findings:
At the top-level 87% of grocery eCommerce is done in-stores, which is one of the lowest penetrated categories still.
Kroger which had been rolling out new eCommerce fulfillment facilities using Ocado, has slowed the rollout of this service, likely due to adoption.
Grocery stores like Trader Joe’s which have done basically nothing about eCommerce are still doing well.
Look, while I’m bullish on eCommerce generally we need to be realistic here. Consumer behavior is slow to change. Delivering great fruits and vegetables is still a mystery for even pretty high-end retailers like Whole Foods.
Finally, most people go on one big stock-up trip to the grocery store or Costco each week, which means that the place for online is at the margins. When you need something in a hurry, or are too busy to go because of other constraints. The challenge with this kind of behavior is that it is at the margins.
Mainstream grocery shopping is still not shifting online anytime soon.
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Our Third Story
Walmart Launches Startup Accelerator
I saw a new press release from Walmart last week which could be useful for the startups in the audience. Walmart has launched what they are calling a Web3 accelerator.
Now, before you think it’s only about NFTs and crypto, it’s actually not. Walmart defines the categories as decentralized commerce Infrastructure, data and growth solutions, immersive experiences, and of course the AI-Blockchain stack.
By supporting startups in this realm, Walmart aims to stay at the forefront of emerging trends, enhance its digital strategy, and ultimately provide a more personalized and engaging commerce experience for its customers. So it’s a win for Walmart.
For startups, you could do worse than getting a stamp of approval from Walmart. For startups that are interested in participating, links to the Outlier Ventures program is in the show notes. Applications close by the end of July.
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And Our Last Story
Payment Provider Stripe Joins MACH Alliance
The momentum of payment providers joining the MACH Alliance continues as Stripe joins Adyen in the MACH Alliance. Expect others to follow.
The simple way to look at Stripe joining the MACH Alliance is Stripe going up-market and needs to find new partners, events, and alliances. Not that this will be easy, but the signal it sends is interesting to watch on its own.
Aligning with a particular group like the MACH Alliance can be a big part of go-to-market strategy. To the extent that you see more enterprise retailers and brands taking similar strategies, and you want Enterprise organizations as part of your addressable market, it helps to align and make them feel more comfortable about you as a provider.
This is a smart move by Stripe, particularly as it prepares for an IPO next year. Of course, Stripe's partnerships with Shopify and Amazon are fantastic, but they are also complete. What's next?
This partnership provides part of that answer: Stripe is moving up-market.
I like to think of eCommerce in terms of ecosystems. In the past 5 years, the two largest ecosystems in eCommerce in the US were simple to identify:
Shopify for SMB and Mid-Market Direct to Consuemr eCommerce, and Amazon for the most marketplace sellers.
To be clear, the two largest ecosystems are not changing anytime soon.
That does not mean that trends are not worth following, however. If you are a third-party service provider, these Amazon and Shopify are the easiest places to hunt for new brands growing the fastest.
In the past few years, the MACH Alliance has put a pretty clear stake in the ground in terms of the Enterprise Commerce ecosystem. Their progress has been notable. Personally, I joined as an Advisory Board Member earlier this year to continue to learn how it can help Enterprise customers I work with, not to the exclusion of other platforms like Shopify, but in addition to.
This move continues Stripe's evolution and stretching into new markets. Just to give you some idea how Stripe’s branding has changed in the last few years:
From June 2018-2020, Stripe’s tagling was the "New standard in online payments,” which has a clear lean towards Direct to Consumer eCommerce.
In 2021, the messaging changed to Payments Infrastructure for the Internet which sounds more substantial than the previous messaging.
In 2022, June 2022: Financial Infrastructure for the Internet (expanding TAM further)
Financial Infrastructure basically tells the world that any kind of financial technology is fair-game to Stripe in the future, not just payments. And where are the biggest opportunities for growth long-term? With the largest companies in the world.
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Hey, Watsonians, this is Rick. Tired of trying to find good eCommerce discussion on Twitter and LinkedIn and only find self-promotion instead? High quality discussions are migrating to more intimate sites like the RMW Commerce Community. Recently on the forum, Amazon CEO Andy Jassy got roasted by an investor in an open letter by Bernstein, and our community was here for it breaking it all down with a 14 post thread started by Hendrik Laubscher.
Check it out at community.rmwcommerce.com.
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It’s That Time Friends, for our Investor Minute. We have 6 items on the menu today.
First
App Platform Builder.ai Raised a $250 M Series D
The company Builder calls itself an AI-powered software platform which turns ideas into apps. I can’t help but think this is a bad idea because its messaging really focused on individuals who can’t build apps on their own that can turn their ideas into reality. If there’s one thing I need less of on my iPhone, it’s more apps.
Link: https://www.builder.ai/newsroom/press/builder-ai-announces-series-d-led-by-qia
Second
European Amazon Aggregator SellerX acquires US rollup company Elevate Brands in share deal, and raise additional funds
The fact that cash was not involved in the acquisition of Elevate Brands tells you a lot. Elevate Brands investors live to fight another day. In other news, SellerX raised an additional $64 million from existing investors, which is not an easy thing to do in the current environment. I have found many investors willing to let their previous investments die rather than throw good money after bad.
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Third
Publicis Sapient Acquires eCommerce Agency Corra
Those that have been in the eCommerce space a long time, probably know of Corra. They have been a long-time leader in the Magento implementation space, and have branched out to other platforms like Shopify in the past years. Despite this, it never felt to me that they moved too far past their Magento roots. And in a world where Magento is not winning many direct-to-consumer deals, that’s a problem for an agency like Corra and I can’t imagine the agency was growing significantly in recent years as a result.
Link: https://corra.com/resources/blog/publicis-sapient-announces-acquisition-of-corra/
Fourth
Venture Capital Arm of Loreal Invests in Series B of Biotech Company Debut
I didn’t realize that L’Oreal had a venture arm, but now I know it has one, and it’s called Debut which launched in 2018 actually. I continue to be bullish on large brands and retailers starting venture arms, and for startups to puruse investments from these companies as strategic investors can provide a lot of specialized resources for startups. Debut is a synthetic biotech company that focus on sustainable beauty concepts.
Fifth
Amazon Services Company Channel Key Acquires Seller Tools Company Kaspien
This acquisition I think is relatively straightforward to understand - most agencies need automation to become more efficient so a services company needing proprietary technology to scale is not hard to understand. Kaspien raised $50 million over its history and completed a direct NASDAQ listing in 2022. Given that it’s stock price was near zero, I imagine it was acquired for pocket change.
AND FINALLY …
Curri nabs $42M for its construction-focused last-mile logistics platform
Specialized service providers for B2B categories continue to spring up, and Curri is in the conversation here. Curri is in the construction space as a last-mile logistics provider. The company’s services include a nationwide carrier network, logistics software, and other supply chains services. It’s likely that the company’s same-day and rush services are among its most popular.
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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.
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.
