June 27th, 2022: Global-e acquires Borderfree, eBay acquires KnownOrigin, Walmart and Roku team up, and Amazon appoints Doug Herrington
It’s June 27, 2022, and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Global-E Acquires Borderfree In Further Consolidation of Cross-Border Market
eBay Acquires NFT Marketplace KnownOrigin as Part of its Metaverse Investments
Walmart and Roku Team Up on Bringing Commerce to the TV
Amazon Shuffles its Consumer Team Leadership and Appoints Doug Herrington Leader of Stores Worldwide
- and finally, The Investor Minute, which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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BUT FIRST in our shopping cart full of news….
Global-E Acquires Borderfree In Further Consolidation of Cross-Border Market
Borderfree has had a long history - both ups and downs here. I worked there for about three years as part of Pitney Bowes post-acquisition.
The history of the Borderfree brand itself started as part of Canada Post originally and there was a very complex and sorted history between Pitney Bowes, Canada Post and Borderfree . Truthfully, I have a 2001 email in my inbox from Craig Reed from Craig@Borderfree.com. He is one of the genuine OGs of the whole market.
Anywho....
The company got its start as an Israel-based foreign exchange hedging platform E4X, the company later became 51 (dot) com. (Canada being the 51st state, after all.) It then rebranded to become Borderfree, acquiring the name from Canada Post.
Suffice to say, Borderfree invented Global-E's model and killed many other cross-border companies on the way to its IPO – which was one of the most perfectly timed IPOs – at a time of extremely low value of the dollar and low tariffs.
What does Global-E get for this?
Primarily Macy's and Nordstroms and maybe Crate & Barrel. I'm sure they would have liked to get Neiman's, but Farfetch picked them off earlier.
There are many Borderfree names that are not enterprise-level and will probably be moved to a more Flow-like solution, as they are not high-volume enough to support on the more expensive Borderfree model.
Who is the biggest loser in this?
I would think ESW. Anything that makes Global-E stronger puts pressure on ESW (which recently acquired ScaleFast to expand its portfolio – odds are this acquisition will not be the best culture-mesh).
One other thing I am happy to see - both Global-E and Borderfree were originally founded in Israel, so many of the original employees now get to reunite. Congrats to both teams!
[References:]
Our Second Story
eBay Acquires NFT Marketplace KnownOrigin As Part of Its Metaverse Investments
eBay this past week acquired an NFT marketplace property called KnownOrigin for an undisclosed amount.
While NFTs do serve some purpose, the whole space has fallen on hard times because, well, you know, the value of an NFT is not based on anything.
The clue to this whole acquisition is buried in the press release, where you notice that the price of the acquisition is not disclosed. This tells you it was essentially an acqui-hire and that the press value of being somewhere near the NFT space is greater than the expected value of the software acquired.
Ultimately, eBay has a very poor record acquiring other marketplaces, so I actually hope it’s shut down for its own sake.
In other collectibles-related news, I want to also mention eBay’s physical investments in storage, namely the eBay Vault.
Just like it sounds, it is a physical vault designed to store high-valued collectibles in a secure, temperature-, humidity- and light-controlled environment.
Unlike its NFT acquisition, I think the Vault is a good idea for eBay. One of the biggest problems with eBay is that people don’t have the resources to keep valuable trading cards in near-mint condition. It also prevents the cards from being shipped around unnecessarily if the buyer doesn’t need the card physically. If this is a worthy value stream for its sellers and buyers, eBay could gain more revenue from these transactions.
Of course Fanatics is owning the IP for many of these cards, so it is still winning here too.
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Our Third Story
Walmart and Roku Team Up on Bringing Commerce to the TV
Recently, Walmart announced a new partnership with Roku set-top boxes, which has a number of elements with it:
* Product discovery and product purchase will happen on the Roku device, and
* I learned that this is using Roku’s advertising stack and not Walmart’s.
All without that awkward reliance on QR codes.
A few points on this partnership:
First, anything has to be better than Walmart’s previous ill-fated partnership with Vudu for TV. I don’t think anyone ever watched Vudu.
Second, programmatic video ads are a huge growth area in advertising and Walmart has no exposure to them. Roku has long been an independent player and this is an interesting market to experiment with.
Third, Walmart’s direct competitor, Amazon, has a clear path to programmatic video and eCommerce that Walmart has no access to. As far as I’m concerned, this is a dress rehearsal for an acquisition by Walmart for Roku’s programmatic video ad platform.
And given that Roku controls about 51% of the streaming box market in the US, the success of this could be important for both sides. So, while this is an experiment, I would put this in the “important experiment” bucket because of its potential future implications.
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And Our Last Story
Amazon Shuffles Its Consumer Team Leadership And Appoints Doug Herrington Leader of Stores Worldwide
Well, Andy Jassy certainly isn’t wasting any time after the departure of Dave Clark.
Here are the announced changes:
First, Amazon changed the name from the Consumer group to the Stores group. Originally I was confused at why they did this, but my secret sources tell me that Legal is behind it. Apparently, the department thinks that if Amazon's divisions sound more like a traditional retailer’s, Lina Khan and other FTC regulators will be fooled. Clearly Amazon's legal team has an extremely dim view of regulators, who by the way are also lawyers. What a tremendous misdirection! I was almost fooled myself.
In case you were wondering, Doug Herrington is the direct replacement for Dave Clark as the CEO for Worldwide Amazon Stores. So this is a very mainstream pick for the replacement and there is not a tremendous reshuffling or reimagination happening here.
Third, John Felton, the Senior VP of Global Delivery, has been appointed to lead all of Operations at Amazon. John has been Dave Clark’s primary financial partner for years, and has been operating the business more recently.
Fourth, Christina Beauchamp, formerly President of Fashion but more recently the SVP of Consumer Categories, was appointed to Doug Herrington’s old role as Head of North American Stores.
A number of other changes were announced, but these were the major ones.
What does this tell us?
First, Andy Jassy has known about Dave Clark’s departure for months and has worked out the succession plan for not only him but his entire management team.
Second, this is a huge step and validation for Christine Beauchamp, who came into Amazon with a fashion background but has quickly applied her skills across all categories. Previously she was running the business side of these categories, but now takes over the technology as well.
Third, and the most interesting part of this announcement to me, John Felton was running all Operations at Amazon. Looking at John’s background, he most recently has three years as Leader of the Delivery Services group and the rest of his long career at Amazon is as the primary Finance partner to Operations leadership.
I was most interested in who would land as the fulfillment leader, and what it would say about the future. John Felton’s appointment definitely fits more in the Tim Cook style of leader, financially and operationally focused rather than a logistics builder.
Given Dave Clark’s departure, his comments about building, and all the network optimization that needs to be done at Amazon, I am not terribly surprised by any of this.
Overall, a lot of this simply gives insight into how truly deep Amazon’s leadership bench is compared to others in the space. When one executive leaves, many others are ready and willing to step into the void.
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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Bold Metrics secured $8 million in series A funding in order to build its AI body modeling technology platform.
There have been a few companies working on this type of scanning technology, and all have the goal to improve fit and reduce returns.
Second
Chain.io closed $11 million series A financing to deliver better data integration and visibility across the global supply chain.
Unlike other companies that are focusing on physical assets, Chain.io is focused solely on an easy integration platform between all partners in a supply chain between logistics service providers, shipping companies, and software platforms.
Third
Cloud-based POS system PredictSpring raised $16 million in series B funding.
I think PredictSpring is a super-interesting next-generation player in the POS market that is starting to make a lot of noise by combining POS, clienteling, inventory management, and order management.
Fourth
Brandtech Group acquired e-Commerce marketing platform Acorn Intelligence for more than $50 million.
Acorn Intelligence clients include Adidas and Microsoft and the company has helped clients in Amazon and Direct-to-Consumer advertising scenarios.
AND FINALLY …
Allyson Felix’s Saysh footwear brand raised $8 million in series A funding.
For those who didn’t know who Allyson Felix was, she is a track and field athlete in the 200 and 400 meter events.
One interesting point here is that The Gap is an investor, so this could also get the brand into Athleta and other outlets.
Link:
https://www.yahoo.com/entertainment/allyson-felix-saysh-footwear-brand-123006287.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.
Our show is produced by Citizen Racecar. Alex Brower is the producer and also wrote our theme music. The Executive Producer is David Hoffman.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
