June 24th, 2024: CMACH 3 event in New York City recap, May retail sales data released, Beyond loses a CEO, and Instacart expands retail media into Youtube
Today’s episode of the Watson Weekly podcast is sponsored by Commercetools.
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It’s June 24, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
MACH 3 Event in New York City Recap
May Retail Sales Data Released
Beyond Loses a CEO
Instacart Expands Retail Media Into Youtube
- 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….
MACH 3 Event in New York City Recap
The Recent Alliance Event Offers Community, New Questions, And An Elephant 🐘
Last week I was at the MACH 3 event in New York City as chair of the MACH Impact awards, I copresented at the MACH Alliance event with Miya Knights to a packed room. There were many deserving winners, and I thank all the entrants. Great to see good friends like Gireesh ⛁ ⛁ Sahukar at the event, along with many others.
Thanks to organizers for having me.
* How to change and why to change was on the mind of a lot of attendees. Burning 🔥 platforms were on display. Several presentations showed 2-4 year journeys with multi-billion dollar retailers.
Brain 🧠 surgery required.
* Overall, the level of technology discussion at the MACH Alliance event are second to none. You might expect that from this group -- and this is a boutique event, however the difference from a standard Shoptalk or other event is night and day.
* While there were many enterprises in the room, there were also a lot of vendors in the room - both agencies and ISVs. As the MACH Alliance itself grows, the organizers will definitely need to watch this ratio.
* The event continues to be a multi-platform affair -- the ones I personally saw at the event included commercetools, BigCommerce, VTEX and Commerce Layer. I'm sure others were there as well. Nice to see Thom Armstrong back in the platform game 😀
* The 🐘 in the room in a lot of discussions from vendors etc is "What about Shopify?" -- I fielded several questions from some (vendor/agency) who had traditionally focused more up-market but now were looking to understand how to penetrate the Shopify universe.
At RMW Commerce we travel in all the rooms; it's interesting to see this shift. In the past, the feeling was always: "If a MACH vendor and Shopify were in the same room, one of us is in the wrong room."
The time feels like a distant memory now.
The feeling on the floor is that Shopify is being pushed from the Board room (witness what just happened at Overstock - seriously whatever the F$%! is going on there, I can't figure it out generally), and that the IT teams understand the reality of a composable approach.
In this new reality where it's the CFO's world and we are all just living in it, it seems to me that "pre-composed" solutions have the upper hand, and custom-built anything feels like a distant memory as well -- perhaps up to $1B in overall revenue at least. Above $1B, the technical complexity and legacy is often dizzying. 🤯
The question remains on my mind - what is Shopify's role in an Enterprise with a sea of vendors and Shopify is just "one of" the many solutions required to power eCommerce. Just witness: No PIM, no OMS, no CMS, questions about payments, and a POS which is not yet at the level for this segment. You can argue "you ain't gonna need it" but Shopify does not seem to be taking that approach. As they partner more and more, obviously they play no role in the MACH Alliance but you will see some of these MACH vendors playing in the Shopify world.
>> closer
[References:]
Our Second Story
May Retail Sales Data Released
Every month, the U.S. Department of Commerce, Census Bureau, releases its first calculation of the previous month’s retail sales. At Retail Dive, we report these figures by grouping the key segments that define “retail” in a way that we hope is most meaningful to the industry.
Here are a few stats:
* Retail sales in May rose 4.5% year over year, with e-commerce growing over 6%. However, if you remove autos, retail sales were essentially flat and expected to be slightly higher.
* Core retail sales which excludes restaurants, automobiles, and gasoline increased by 2.88%.
* In retail, Electronics and apparel seem to have recovered with 3 and 5% growth respectively, but sporting goods and home goods are off 6% year over year.
Companies in the home category seem to be extremely worried about traffic at the moment, from my own conversations. Let me tell you something, traffic is down everywhere in this category — it may not be your marketing.
Meanwhile, the NRF continues to put on a happy face. Saying April was down as an anomaly, and May was slightly up. If that’s the case, don’t you have what’s called a good comp?
It’s interesting that these numbers are softer than analysts expected, because if they are revisions I tend to find they are revised down later and not up. Look, the data out there is not bleak by any stretch - there is a lot of growth from good companies. And the rebound of apparel is very positive.
The reason that CEOs are holding on tight to their investment reins, however, is due to warnings about the future and wondering how long things can last. Interest rates declining will be good news bad news for retailers.
Great if you are in the home sector, but perhaps bad for other reasons. After all, the Fed doesn’t raise rates unless it feels like the economy needs a boost for some reason to begin with. Does anyone else out there have little faith in the Fed’s ability to time things perfectly?
Haven’t we learned that timing the economy at all is a bad idea with regards to your personal investments, why would it be any different for your business investments?
There’s always something to improve for your customers - focus on that and you will be in a good place long-term.
[References:]
https://www.digitalcommerce360.com/article/monthly-online-retail-sales/
https://www.retaildive.com/news/monthly-retail-sales-from-the-us-commerce-department/574252/
Our Third Story
Beyond Loses a CEO
At the Home Show recently, increasingly active Board Chair Marcus Lemonis - while introducing Chandra Holt (the new Bed Bath CEO) said "all the idiots are out of the room" and the company was on a stable platform going forward.
Apparently, all the idiots, but not all the costs.
CEO Chandra Holt has been ejected from this mess -- after only 5 months on the job. It increasingly looks to me like the strategy for Beyond is just to become the old Overstock, since Dave Nielsen the long-time veteran of the company is now taking over all of Overstock, Bed Bath and Beyond, and Zulily.
Chandra Holt joined in February and is already out.
Zulily was acquired in March this year and in the site is still shuttered, not yet live.
From technology to acquisitions to leadership, Overstock and Beyond have had a very strange recent history. There are more questions than answers:
* Will the technology stack be consolidated across the firms?
* Is there any brand equity left in Zulily? What's left to turn back on?
* When will these new promised brands launch?
* Is this more than just a dumpster-diving strategy?
* When will all these home loan and other new "grift-y" services launch?
Apparently all the idiots, and even more cost is out of the room. To me, this means there are several shoes to drop and the firm has not yet hit rock bottom in Marcus Lemonis' attempt to reboot the firm.
I guess the good news for him is -- no more pesky activist investors to worry about: the mess is all his own at this point as the world has moved on.
[References:]
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And Our Last Story
Instacart Extends Retail Media Data to YouTube
A new article from PYMNTS talks about how the a new partnership between Instacart and Youtube for shoppable ads.
Here is how it works:
* Shoppable ads can be created on Youtube to allow brands to use those ads to drive same-day purchases, of course powered by Instacart.
* The key behind the whole thing is leveraging a segmented set of Instacart’s customer data in order to drive the proper audience for the ads.
* There are two initial partners in the program, Clorox and Publicis.
Overall, the uses for retailers who have valuable shopper data are endless, and these types of partnerships are becoming more common. Amazon has Prime Video and other assets, and is increasingly building a targeting engine to work with other media partners as well.
The fact that these ads not only drive brand impressions, but also direct purchases is very ROI-friendly for CFOs as well. The retail media train has left the station a long time ago. There are many channels, but it seems to me that the big players will still get bigger, and there needs to be some kind of consolidated first party data network for the lower tier vendors to survive by sharing data. A data network which pooled the lower-tier retail media networks data would increase the value of their data assets and give retailers another viable option rather than having to choose from a sea of smaller niche options.
[References:]
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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Retailer Accounting Platform Finaloop Raises $35M Series A
Finaloop, a real-time accounting platform for retailers, has raised $35M in Series A funding. The money will be invested in its software platform and partnership network.
Second
Express, Bonobos Bought Out of Bankruptcy
Phoenix Retail, a joint venture between WHP Global and mall owners Simon, Brookfield, and Centennial, has acquired Express for $174M and Bonobos for $75M. Will 2024 be the year we see more brand acquisitions after bankruptcy? This venture seems to be focused on spreading the risk between the parties involved.
Third
Descartes Acquires BoxTop Technologies for $13M
Descartes, a global supply-chain SaaS platform, has acquired BoxTop, a shipment management solution for small- to medium-sized logistics service providers, for $13M in cash. Descartes loves making these small tuck-in acquisitions which fit certain capability needs on their platform.
Link: https://www.freightwaves.com/news/descartes-acquires-boxtop-technologies-for-13m
Fourth
International Shipping Platform Ship Angel raises $5M
Ship Angel, a rate management platform for beneficial cargo owners, has raised $5M to optimize supply chain performance, save time and costs, and improve data accuracy. It sure does feel that there are a lot of rate management platforms out there. I expect consolidation as this industry matures.
Link: https://www.freightwaves.com/news/ship-angel-raises-5m-launches-two-new-products-for-bcos
AND FINALLY …
B2B Inventory Optimization Platform (Re)vive raises $3.5M Seed Investment
B2B inventory optimization platform (Re)vive has raised $3.5M in Seed funding to help turn deadstock into revenue. Businesses like this have formed continuously, mostly they succeed on the back of marketplaces and are a tough business to run. This one seems focused on AI to remove the labor component which is always tricky.
Link: https://www.fashiondive.com/news/revive-new-funding-returns/718458/
Today’s final word for the week of June 24th is “Guarantee”:
I was speaking with a friend in eCommerce last week, and it seems like not only have we moved into the era of the CFO, we have also moved into the era of the guarantee. Brands are so sensitive to failure and risk-averse they have started to ask for service guarantees. If you are a service provider in this kind of environment, I feel for you.
The move here is simple - don’t eat the cheese. Be patient, communicate your value and references, and wait them out. Even if another provider is willing to lower prices enough or make outrageous guarantees to the brand, they are not going to be a good customer for that provider.
Why? Making promises you can’t keep is no way to start any business relationship.
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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.
