Choices and constraints: How DTC companies decide which strategy to follow

Companies typically have to settle on strategies that align with their customers, employees, investors, and regulators. The more they know about how the other side will decide, the clearer their own strategies become.

If regulators always prefer choice for consumers, then it is easy for a platform to allow multiple payment choices: Shopify allows multiple payment options from its partners, Apple doesn’t.

By regulatory intervention, it will have to now.

Nash equilibrium and Netflix time

Nash equilibrium is a fascinating, post-facto explanation for some of the interesting decisions you will often see in business.

In simple terms, Nash equilibrium states that if you have clarity on the other side’s decision, you can make yours without regret. In other words, there is no incentive to change strategy once each side knows what the optimal position of the other side is, in their combined transaction.

All physical products cannot escape retail, because ignoring retail means a smaller serviceable market. But it is a choice companies can make.

I see this playing out every weekend at home. I don’t mind reading a book alone or watching Netflix with my kid, but when I am available for Netflix and my kid decides to read a book, it is a bummer.

DTCs, DNVBs and game theory

In DTC, how companies decide their omnichannel strategy depends on how well they know what their customers’ choices are and what their ideal strategy will be. In many transactions, constraints are actually good forcing functions — they narrow down choices and help you arrive at an equilibrium faster and cheaper.

The marketing and public-market filing languages make for a fascinating read into the minds of companies.

When Warby Parker filed its IPO prospectus last month, the company referred to its digitally-native status in the past tense. The model was effectively flipped in 2020, as its share of online sales to total sales dropped from 65% to 40%. Meanwhile, its physical store count increased from 126 to 145.

#d2c, #direct-to-consumer, #dtc, #ec-column, #ec-ecommerce-and-d2c, #ecommerce, #growth-marketing, #marketing, #marketing-strategy, #merchandising, #omnichannel, #online-shopping, #startups, #verified-experts

Constructor finds $55M for tech that powers search and discovery for e-commerce businesses

One of the biggest problems in the world of e-commerce is the predicament of shopping cart abandonment: when shoppers aren’t getting to what they want fast enough — whether it’s finding the right item, or paying for it in a quick and easy way — they bounce. That singular problem is driving a wave of technology development to make the experience ever more seamless, and today one of the companies closely involved in that space is announcing some funding on the back of healthy growth.

Constructor, which has built technology that powers search and product discovery tools for e-commerce businesses, has picked up $55 million in a Series A round of funding. Constructor says that it powers “billions” of queries every month, with revenues growing 233% in the last year. Customers it works with include Sephora, Walmart’s Bonobos, Backcountry and many other big names.

The round is being led by Silversmith Capital Partners — which coincidentally, just today, led another round for an e-commerce startup, Zonos.

It is joined by a long list of notable individual investors. They include David Fraga, former president of InVision; Kevin Weil, former head of product at Twitter and Instagram; Jason Finger, founder of Seamless; Carl Sparks, ex-CEO of Travelocity; Robyn Peterson, CTO at CNN; Dave Heath, founder of Bombas; Ryan Barretto, president at Sprout Social; Melody Hildebrandt, EVP engineering and CISO at FOX; Zander Rafael, co-founder of Better.com; and Seth Shaw, CRO at Airtable. Cap Table Coalition — a firm that helps underrepresented-background investors back up-and-coming startups — was also involved. Fraga is joining Constructor’s board with this round.

The last year and a half has been a bumper one for the world of e-commerce — with more traffic, transactions and retailers moving online in the wake of social distancing measures impacting in-person, physical shopping. But that has also exposed a lot of the cracks in how e-commerce works (or doesn’t work, as the case may be).

One of the more dysfunctional areas is search and discovery. As most of us have unfortunately learned first-hand, when we search for things in the search window of an online store, it’s almost always the case that the results don’t have what we want.

When we browse as we might in a physical store, because we are not sure of what we want, all too often we are not prompted with pictures of things we might actually like to buy. They may be there — we typically visit sites because we either already know them, or have seen something we like elsewhere — but nevertheless, finding what we might actually like to buy can take a lot of time, and in many cases may never happen at all.

Eli Finkelshteyn, Constructor’s CEO and founder, says that one of the issues is that search and discovery are often built as static experiences: they are designed to meet a one-size-fits-all model where site architects have effectively guessed at what a shopper might want, and built for that. This is one area that Constructor has rethought, specifically by making search and discovery more dynamic and responsive to what’s happened before you ever visit a site.

“One of the things wrong with product discovery was that prescriptively sites show you what they think is valuable to you,” he said. “We think the process should be descriptive.”

As an example, he talked about Cheetos. Sometimes people who might want to buy these start out by navigating to the potato chip category. In many static searches, those results might not include Cheetos. Some people might abandon their search altogether (bounce), but some might navigate away from that and search specifically for Cheetos and add them to their carts. In a descriptive and more dynamic environment, Finkelshteyn believes that these two flows should subsequently inform all future chip searches.

“We take into account as much data as we can learn from, and that list is always growing,” he said. “The goal is anything we can learn from should become part of the user experience.”

Google is the current, undisputed leader in the world of search, and it too uses a lot of dynamic, AI-based tools to learn and tweak how it searches and what results it produces.

Interestingly it hasn’t extended as much of this to third parties as you might think. The company wound down its own site search product in 1997 and now if you look for this you are redirected to the company’s enterprise search suite.

There are however others that have also stepped into that void to provide services that compete with Constructor, including the likes of Algolia, Yext, Elasticsearch and more. Finkelshteyn believes that among all of these, none have managed yet to provide a service like Constructor’s that learns and adjusts its results constantly based on search and browsing activity.

This is one reason the company has stood out with its customers, and with investors.

“Constructor has built a search and discovery platform that is truly making a difference for enterprise retailers. They are providing customers with comprehensive and optimized search and discovery that is unmatched in the market,” said Sri Rao, Constructor board member and general partner at Silversmith Capital Partners, in a statement. “We are excited to partner with the Constructor team as they continue to revolutionize search and discovery capabilities for retailers across all platforms.”

Looking forward, there will be some interesting opportunities ahead for Constructor to take its search and discovery tools to new frontiers. These could include ways to bring in and account for shoppers on third-party platforms — currently Constructor does not power experiences on, say, social media, so that is one potential area to explore — as well as more offline experiences, critical as retailers and shoppers take on more blended approaches that might start online and finish in stores, or proceed the other way around, or find users walking around with their phones to shop even as they are in physical stores.

#algolia, #artificial-intelligence, #better-com, #board-member, #bonobos, #carl-sparks, #ceo, #co-founder, #constructor, #cto, #david-fraga, #e-commerce, #ecommerce, #founder, #funding, #google, #google-search, #invision, #jason-finger, #kevin-weil, #marketing, #merchandising, #online-shopping, #partner, #president, #retail, #seamless, #sephora, #shopping, #silversmith-capital-partners, #social-media, #sprout-social, #technology-development, #travelocity, #yext, #zonos

Sustainable e-commerce startup Olive now ships beauty products, in addition to apparel

Earlier this year, a startup called Olive launched its new shopping site and app with the goal of making e-commerce more efficient, convenient, and sustainable by offering a way for consumers to aggregate their orders from across retailers into single shipments that arrive in reusable packaging, not cardboard. If items need to be returned, those same packages are reused. Otherwise, Olive will return to pick them up. Since its February 2021 debut, the company has grown to include over 100 retailers, predominately in the fashion space. Today, it’s expanding again by adding support for another 25 beauty retailers.

Launch partners on the new effort include brands like Supergoop!, Kora Organics, Pai Skincare, Erno Laszlo, Jecca Blac, Sahajan, Clark’s Botanicals, NuFace, Purlisse, Cover FX, LYS Beauty, SiO Beauty, Peace Out Skincare, Koh Gen Do, Julep Beauty, In Common Beauty, Indie Lee, Glow Recipe, Ursa Major, RMS Beauty, Ceremonia, Sweet Chef, Follain, and BalmLabs.

They join Olive’s numerous apparel and accessory retailers like Adidas, Superga, Rag & Bone, Birdies, Vince, Goop, Khaite, and Veronica Beard, among others.

To support the expansion, Olive also developed a new set of reusable packaging that has protective elements for more damageable items. While before, the company had offered a variety of packages like soft-sided garment bags and various sizes of more rigid containers (see below), it’s now introducing its own alternative to the air bubble strips you’ll find in most Amazon boxes these days. Olive’s version is integrated into its reusable packaging and can be easily deflated by the customer when it’s time to return the package at pickup.

Image Credits: Olive, founder Nate Faust

The idea for Olive is a timely one. Due to the Covid-19 pandemic, e-commerce adoption has soared. But so has consumers’ guilt. Multiple packages land on doorsteps every week, with cardboard and plastic to recycle — if that’s even available in your area. Delivery trucks — Amazon, UPS, FedEx, and others — are now a daily spectacle on every city street. Meanwhile, market leaders like Amazon and Walmart seem largely interested in increasing the speed of delivery, not necessarily the efficiency and sustainability. (Amazon allows shoppers to pick an Amazon Day delivery, for consolidated shipments, but it’s opt-in.)

Olive founder Nate Faust says he was inspired to build the company after realizing how little interest there was from larger e-commerce players in addressing some of the inconveniences and inefficiencies in the market. Faust had previously served as a vice president at Quidsi (which ran Diapers.com and Soap.com and sold to Amazon), then co-founder and COO at Jet, which was acquired by Walmart for $3.3 billion. Before Olive, he was a senior vice president at Walmart.

After some soul searching, he realized he wanted to build something in the e-commerce space that was focused more on the social and environmental impact, not just on driving growth and consumption.

Image Credits: Olive

“I had an epiphany one evening when taking out the trash and recycling,” Faust explains. “It’s pretty crazy that we’re this far into e-commerce and this is the status quo delivery experience —  all this waste, which is both an environmental issue and a hassle for consumers,” he says. “And the bigger issue than the packaging is actually the fact that the majority of those packages are delivered one at a time, and those last-mile emissions are actually the biggest contributor of carbon emissions in the post-purchase e-commerce supply chain.”

Consumers may not think about all the issues, because many of them are hidden, but they do struggle in other ways beyond dealing with the waste. Returns are still a hassle — so much so, that Amazon now allows customers to go to Kohl’s where it’s partnered on in-store return kiosks that also help the brick-and-mortar retailer increase their own foot traffic.

Plus, consumers who shop from different sites have to set up online accounts over and over, entering in addresses and payment information many times, which is an annoyance. Olive offers the convenience of an Amazon-like one-stop-shop experience on that front.

Meanwhile, Olive addresses the return issue by allowing consumers to simply place their unwanted items back in Olive’s packaging then leave them on their doorstep or with the building’s doorman for return. It works with both the USPS and a network of local carriers to serve the customers in its current footprint, which is about 100 million U.S. consumers on both coasts.

While customers don’t have to deal with packaging, it hasn’t been entirely eliminated from the equation at this point. Olive today partners with retailers who ship packages to its own west coast and east coast warehouses, where they repackage them into the reusable containers to deliver to customers. Right now, that means Olive is responsible for the recycling issues. But it’s working with its brand partners to have them pack orders directly into the reusable packaging from the start — before shipping to Olive’s consolidation warehouses for delivery. Today, it has a few retailers on board with this effort, but it hopes that will eventually expand to include all partners.

The company generates revenue on an affiliate commission model, which works for now. But over time, it may need to evolve that business model over time, as its customer base and partnerships grow. At present, around 10,000 consumers have used Olive, ahead of any large-scale marketing and customer acquisition efforts on the startup’s part.

For now, New York-based Olive is growing its business by way of a fundraise of around $15 million from investors including Invus, Primary Venture Partners, and SignalFire.

#adidas, #amazon, #birdies, #diapers-com, #e-commerce, #east-coast, #ecommerce, #fedex, #goop, #kohls, #marketing, #nate-faust, #new-york, #online-shopping, #primary-venture-partners, #product-management, #quidsi, #retailers, #reuse, #soap-com, #startups, #united-states, #usps, #walmart, #west-coast

Is India’s BNPL 2.0 set to disrupt B2B?

Both as a term and as a financial product, “buy now, pay later” has become mainstream in the past few years. BNPL has evolved to assume various forms today, from small-ticket offerings by fintechs on consumer checkout platforms and marketplaces, to closed-loop products offered on marketplaces such as Amazon Pay Later (which they are now extending for outside use as well). You can also see some variants offered by companies that want to expand the scope of consumption and consumer credit.

Globally, BNPL has seen the most growth in the consumer segment and has driven retail consumption and lending over the past few years. Consumer BNPL offerings are a good alternative to credit cards, especially for people who do not have a credit history and can’t get credit from banks. That said, a specific vertical of BNPL products is gaining traction — one targeted toward small and medium enterprises (SMEs). This new vertical is known as “SME BNPL.”

BNPL can be particularly useful when flow-based underwriting or transaction-based underwriting is used to offer credit to small businesses.

B2B commerce in India is moving online

E-commerce has seen tremendous growth in India over the past decade. Skyrocketing smartphone and internet penetration led to rapid growth in e-commerce across large cities and smaller towns alike. Consumer credit has also taken off in parallel as credit cards and digital lending spurred credit-based consumption across offline and online stores.

However, the large B2B supply chain enabling the burgeoning retail market was plagued by bottlenecks and inefficiencies because it involved a plethora of intermediaries and streamlining became a big problem. A number of tech players responded by organizing the previously disorganized B2B commerce market at various touch points, inserting convenience, pricing and easier product access through tech-enabled logistics and a modern supply chain.

Online B2B and B2C penetration in India in 2019

Image Credits: Redseer

India’s B2B e-commerce space has developed rapidly since 2020. Small businesses have moved from using paper to smartphone apps for running a significant part of their day-to-day business, leading to widespread disruption in how businesses transact today. The COVID-19 pandemic also forced small businesses, which were earlier using physical means to procure goods and services, to try new and online models to conduct their affairs.

Graph depicting growth of India's B2B retail market

Image Credits: Redseer

Moreover, the Indian government’s widespread promotion of an instant payments system in the form of the Unified Payments Interface (UPI) has changed how people send money to each other or pay merchants for their goods and services. The next step for solving the digital B2B puzzle is to embed credit inside every transaction and invoice.

Investments in online B2B in india 2016-19

Image Credits: Redseer

If we compare online B2B transactions to the offline world, there is only one missing link: The terms offered to small businesses by their supplier/distributor or vendor. Businesses, unlike consumers, must buy goods and services to eventually trade them, or add value and sell to consumers or others down the value chain. This process is not immediate and has a certain time cycle attached.

The longer sales cycle means many small businesses require credit payment terms when buying inventory. As B2B commerce scales and grows through digital means, a BNPL product that caters to the needs of SMEs can support their growth and alleviate the burden on their cash flows.

How does consumer BNPL differ from SME BNPL?

An SME BNPL product is a purchase financing product for small businesses transacting with suppliers, distributors, aggregator platforms or B2B marketplaces.

#asia, #bnpl, #column, #e-commerce, #ec-column, #ec-fintech, #ec-india, #ec-indian-subcontinent, #finance, #india, #online-lending, #online-shopping, #retail, #small-business, #startups, #supply-chain, #tc

Investors are doubling down on Southeast Asia’s digital economy

Southeast Asian tech companies are drawing the attention of investors around the world. In 2020, startups in the region raised over $8.2 billion, about four times more than they did in 2015. This trend continued in 2021, with regional M&A hitting a record high of $124.8 billion in the first half of 2021, up 83% from a year earlier.

This begs the question: Who exactly is investing in Southeast Asia?

Let’s explore the three key types of investors pouring money into and driving the growth of Southeast Asia’s tech ecosystem.

Over 229 family offices have been registered in Singapore since 2020, with total assets under management of an estimated $20 billion.

Big tech

Southeast Asia has become an attractive market for U.S. and Chinese tech firms. Internet penetration here stands at 70%, higher than the global average, and digital adoption in the region remains nascent — it wasn’t until the pandemic that adoption of digital services such as e-wallets and online shopping took off.

China’s tech giants Tencent and Alibaba were among the first to support early e-commerce growth in Southeast Asia with investments in Sea Limited and Lazada, and have since expanded their footprint into other internet verticals. Alibaba has backed Akulaku, M-Pay (eMonkey), DANA, Wave Money and Mynt (GCash), while Tencent has invested in Voyager Innovations (PayMaya), SHAREit, iflix, Ookbee and Sanook.

U.S. tech firms have also recently entered the scene. In June 2020, Gojek closed a $3 billion Series F round from Google, Facebook, Tencent and Visa. Google, together with Singapore’s Temasek Holdings, invested some $350 million in Tokopedia in October. Meanwhile, Microsoft invested an undisclosed amount in Grab in 2018 and has invested $100 million in Indonesian e-commerce firm Bukalapak.

Venture capitalists

In Q1 2021, Southeast Asian startups raised $6 billion, according to DealStreetAsia, positioning 2021 as another record year for VC investment in the region.

The region is also rising in prominence as a destination for investment capital relative to the rest of Asia. Regional VC investment grew 5.2 times to $8.2 billion in 2020 from $1.6 billion in 2015, as we can see in the table below.

Venture capital investment by region 2015-2020

Image Credits: Jungle VC

Southeast Asia also has many opportunities for VC investment relative to its market size. From 2015 to 2020, China saw VC investment of nearly $300 per person; for Southeast Asia — despite a recent investment boom — this metric sits at just $47.50 per person, or just a sixth of that in China. This implies a substantial opportunity for investments to develop the region’s digital economy.

The region’s rising population and growth prospects are higher due to China’s population growth challenges, alongside the latter’s higher digital economy market saturation and maturity.

#alibaba, #asia, #asia-pacific, #bridgewater-associates, #china, #column, #e-commerce, #ec-column, #ec-southeast-asia-oceania, #facebook, #ggv-capital, #google, #internet-penetration, #james-dyson, #joseph-phua, #lazada, #lazada-group, #microsoft, #online-shopping, #paul-allen, #private-equity, #ray-dalio, #sergey-brin, #singapore, #southeast-asia, #startups, #temasek-holdings, #tencent, #tokopedia, #united-states, #venture-capital

Meet retail’s new sustainability strategy: Personalization

We have been raised to believe in recycling, but it has mostly been a sham — only 9% of all plastic waste produced in 2018 was recycled. The beauty industry produces over 120 billion units of packaging every year, little of which is recycled. Globally, an estimated 92 million tons of textile waste ends up in landfills.

Reducing waste is key to meeting environmental milestones, and some retail firms have narrowed in on a unique approach to minimize what their customers throw away: personalization. Accurate personalization can guide consumers to the right products, reducing waste while increasing conversion and loyalty.

Reducing waste is key to meeting environmental milestones, and some retail firms have narrowed in on a unique approach to minimize what their customers throw away: personalization.

For big brands and retailers, personalization is expected to be the top category for tech investment this year. Moreover, personalization holds high appeal, with 80% of survey respondents indicating they are more likely to do business with a company if it offers personalized experiences and 90% indicating that they find personalization appealing, according to a survey by Epsilon.

Startups that deliver sustainable personalization solutions that also improve business for retailers and brands fall into three categories:

  • AR virtual try-on with shade matching.
  • Advanced virtual fitting rooms with VR/AR for fashion.
  • Smart packaging with IoT and distributed ledger technology.

AR virtual try-on with shade matching

Faces are easy to map, since it’s not difficult to virtually place a lipstick color on a face, but using AR and AI to recommend skin-tone-matching makeup products has been challenging for many AR virtual try-on companies. “I’ve been searching for an intuitive foundation-shade-finder tool since launching Cult Beauty in 2008, and nothing has lived up to the experience of having a professional match you in daylight until I discovered MIME,” says Alexia Inge, founder of Cult Beauty. “There are so many variables like light, skin tones, prevalent undertones, device, screen, OS, formula density, formula oxidation, as well as preferences for coverage levels, finish, brand and skin type,” she says.

MIME founder and CEO Christopher Merkle said, “Virtual try-on has exploded in the past few years, but for color cosmetics, the technology doesn’t help solve the primary customer pain point: shade matching. From day one, I decided to focus our company’s R&D efforts exclusively on color accuracy. I want to make sure that when the consumer receives their foundation or concealer in the mail, it’s the perfect shade once applied to their skin.”

MIME’s Shade Finder AI allows consumers to take a photo of themselves, answer a few questions, then get matched with a makeup color that pairs with their skin tone. MIME helps retailers and brands increase their online and in-store purchase conversion by up to five times. More than 22% of beauty returns are due to poor customer color purchases, but Merkle says MIME can get returns as low as 0.1%.

#amazon, #apple-inc, #arkit, #artificial-intelligence, #augmented-reality, #body-labs, #column, #cosmetics, #ec-column, #ec-consumer-applications, #ec-ecommerce-and-d2c, #ec-food-climate-and-sustainability, #ecommerce, #marketing, #new-york, #online-shopping, #personalization, #startups, #tc, #true-ventures, #virtual-reality, #walmart

Chrome Beta to experiment with a more powerful New Tab page, web highlights, and search changes

Google is launching a new version of its Chrome Beta browser today that’s introducing some fairly notable changes to its user interface and design. The browser will introduce an updated New Tab page, which will now include cards directing you back to past web search activities, instead of only a list of shortcuts to favorite websites. Other changes aim to make it easier to navigate search results and to highlight and share quotes from the web.

The New Tab page’s update will be one of the first changes Chrome beta users may notice.

The idea behind this design change is about getting you back quickly to past web activities without a need dive into your browsing history to remember which sites you had been using for things like recipes or shopping. It can also help you to return quickly to your recent documents list in Google Drive, in a handy bit of cross-promotion for Google services.

Image Credits: Google

The page will now feature what Google is calling “cards,” not just links, which could direct you to things like a recently-visited recipe site where you had been browsing for ideas, a Google doc you need to finish editing, or a retailer’s website where you had left your shopping cart filled with things you may like to purchase at a later date. The latter ties into Google’s larger investment in online shopping, which has already seen the search giant trying to grab more marketshare in the space by making product listings free and partnering with e-commerce platforms like Shopify.

Google is rightly concerned about Amazon’s surging advertising business, which is a large part of the retailer’s “Other” category that grew 87% year-over-year to generate $7.9 billion in the second quarter. Now, it’s capitalizing on Chrome’s New Tab real estate to elevate shopping activity in the hopes of pushing users to complete their transactions.

Another change aims to make it easier to do web research. Google says that often, users searching for something on its platform will navigate to multiple web pages to find their answer. The new version of Chrome will experiment with a different way of connecting users to their search results by adding a row beneath the address bar on Chrome for Android that will show the rest of the results so you can navigate to other web pages without needing to hit the back button.

Image Credits: Google

A new “quote cards” experiment, also coming to Chrome Beta on Android, will allow users to create a stylized image for social sharing that features text found on websites. Taking a screengrab of a website’s text is something that’s already a common activity, and particularly for people who want to share a key point from a news article they’re reading with followers on platforms like Twitter, Facebook, or Instagram. With this new feature, you’ll be able to long press text to highlight it, then tap Share and select a template by tapping on the “Create Card” option from the menu.

All features are a part of the Chrome Beta browser. To enable experiments, you can type chrome://flags into the browser’s address bar or click on the Experiments beaker icon, and then enable the flags. The associated flags for these experiments are #ntp-modules flag (New Tab page), #continuous-search (search results changes), and #webnotes-stylize flag (quote cards).

Experiments don’t necessarily become Chrome features that roll out more broadly. Instead, they offer Google a way to capture large-scale user feedback about its new design ideas, so the features can be tweaked and fine-tuned before a public release.

#android, #android-apps, #apps, #chrome, #chrome-beta, #chrome-on-android, #computing, #freeware, #google-apps, #google-search, #google-chrome, #google-docs, #google-drive, #online-shopping, #operating-systems, #recipes, #search, #search-results, #software, #web-search

Tuna raises $3M to address complexity of e-commerce payments in Latin America

Tuna, which means “fine tune” in Portuguese, is on a mission to “fine tune” the payments space in Latin America and has raised two seed rounds totaling $3 million, led by Canary and by Atlantico.

Alex Tabor, Paul Ascher and Juan Pascual met each other on the engineering team of Peixe Urbano, a company Tabor co-founded and he referred to as a “Groupon for Brazil.” While there, they came up with a way to use A/B testing to create a way of dealing with payments in different markets.

They eventually left Peixe Urbano and started Tuna in 2019 to make their own payment product which enables merchants to use A/B testing of credit card processors and anti-fraud providers to optimize their payments processing with one integration and a no-code interface.

Tabor explained that the e-commerce landscape in Latin America was consolidated, meaning few banks controlled more of the market. The address verification system merchants use to verify a purchaser is who they say they are, involves sending information to a bank that is returned to the merchant with a score of whether that match is legitimate.

“In the U.S., that score is used to determine if the purchaser is legit, but they didn’t implement that in Latin America,” he added. “Instead, merchants in Latam have to tap into other organizations that have that data.”

That process involves manual analysis and constant adjusting due to fraud. Instead, Tuna’s A/B tests between processors and anti-fraud providers in real time and provides a guarantee that a decision to swap providers is based on objective data that considers all components of performance, like approval rates, and not just fees.

Over the past year, the company added 12 customers and saw its revenue increase 15%. It boasts a customer list that includes the large Brazilian fashion chain Riachuelo, and its platform integrates with others including VTEX, Magento and WooCommerce.

The share of e-commerce in overall retail is less than 10 percent in Latin America. Marcos Toledo, Canary’s managing partner, said via email that e-commerce in Latam is currently at an inflexion point: not only has the global pandemic driven more online purchases, but also fintech innovation that has occurred in recent years.

In Brazil alone, e-commerce sales grew 73.88% in 2020, but Toledo said there was much room for improvement. What Tuna is building will help companies navigate the situation and make it easier for more customers to buy online.

Toledo met the Tuna team from his partner, Julio Vasconcellos, who was one of the co-founders of Peixe Urbano. When the firm heard that the other Tuna co-founders were starting a business that was applying some of the optimization methods they had created at Peixe Urbano, but for every company, they saw it as an opportunity to get involved.

“The vast tech expertise that Alex, Paul and Juan bring to a very technical business is something that we really admire, as well as their vision to create a solution that can impact companies throughout Latin America,” Toledo said. “The no-code solution that Tuna is building is exciting because it is scalable and can help companies not only get better margins, but also drive their developers to other efforts — and developers have been a very scarce workforce in the region.”

To meet demand for an e-commerce industry that surpassed $200 billion in 2020, Tuna plans to use the new funding to build out its team and grow outbound customer success and R&D, Tabor said.

Up next, he wants to be able to show traction in payments optimization and facilitators in Brazil before moving on to other countries. He has identified Mexico, Colombia and Argentina as potential new markets.

 

#alex-tabor, #artificial-intelligence, #atlantico, #canary, #ecommerce, #enterprise, #funding, #juan-pascual, #julio-vasconcellos, #latin-america, #marcos-toledo, #online-shopping, #paul-ascher, #payments, #recent-funding, #saas, #software, #startups, #tc, #tuna

Point Pickup acquires e-commerce platform GrocerKey for $42M to allow for same-day delivery

Point Pickup Technologies, a last-mile delivery service, has acquired white label e-commerce platform GrocerKey for $42 million, according to the company. With the acquisition, Point Pickup now allows retailers to offer same-day delivery, from purchase to fulfillment to delivery, under their own brand name, rather than under third parties like Instacart.

Instacart made a killing delivering groceries and goods for retailers during the coronavirus pandemic, with a generated revenue of $1.5 billion in 2020 and $35 billion worth of sales. The company has an estimated 9.6 million active users and over 500,000 “shoppers” who pick up and deliver goods. 

New entrants to the same-day delivery space are cropping up, which aligns with the expected growth of the industry to $20.36 billion by 2027, according to Allied Market Research. But companies like Amazon and Instacart that perform this service and host a delivery marketplace get far more than sales revenues – they also get all the customer data. 

Tom Fiorita, founder and CEO of Point Pickup, says retailers should have a right to own that data themselves. The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands. 

“If you are a customer of Instacart, you pay them a subscription, they own your buying habits, your credit cards, your data,” Fiorita told TechCrunch. “Instacart was a big thing during COVID because no one had delivery. So now retailers woke up and said, ‘Oh my god, I can’t just have an Instacart-like marketplace be selling my goods. I don’t know who my customers are, I don’t have their credit cards or data.’ And you know data runs the world now.”

Another recent, if not smaller, entrant to the space is Canadian startup Tyltgo, which operates under a similar model to what Point Pickup is now offering via GrocerKey’s technology. In both cases, the buyer goes directly onto the merchant’s platform and places the order through them, so it feels like they’re interacting with the brand they purchased from. And on Tuesday, Walmart also announced a new white-label delivery service that would allow other merchants to tap into its own delivery platform to get orders to their customers.

Fiorita founded Point Pickup in 2015 as a reaction to Amazon’s increased omnipotence with the noble, if not naive, mission to “save local America.” Walmart and Kroger, two of the largest grocery retailers in the U.S., are Point Pickup’s top customers, alongside other nationwide retailers like Albertsons, Giant Eagle and more. But Fiorita believes the service his company is offering will be even more impactful when it starts to work its way down to the mid-sized and small- to medium-sized businesses. 

“We built this not only to survive against Amazon or Instacart, but because these small businesses need this for their survival,” Fiorita said. “These companies will no longer survive if they continue to allow other companies to sell their merchandise and to own their customer, including the data, the advertising, the CPG dollars and everything.”

Point Pickup offers deliveries of everything from grocery to general merchandise, pharmacy and oversized delivery. It has a network of 350,000 gig economy drivers across 25,000 ZIP codes in all 50 states. 

Since the company’s network of drivers, who often pick and pack the products for the customer as well as deliver the goods, comprises all gig workers with their own vehicles, Point Pickup doesn’t have a clear picture of the percentage of its fleet that’s electric or hybrid. Fiorita speculates it’s probably on par with nationwide rates, if not higher. A recent Pew Research report found that 7% of Americans say they own an EV or hybrid. 

Fiorita said that the type of car drivers own is taken into account during recruitment and that the company is looking for ways to incentivize drivers to buy less polluting vehicles. He also said Point Pickup is a vehicle-agnostic platform, meaning it’s piloting other delivery vessels like drones and autonomous robots.

To compete with the big dogs in the space like Amazon and Walmart, both of which are either testing or already have in place electric delivery vans, Point Pickup will have to also make efforts to beef up its strategy in the carbon emissions space.

#albertsons, #amazon, #delivery, #ecommerce, #instacart, #online-shopping, #point-pickup, #retailers, #same-day-delivery, #transportation, #tyltgo, #united-states, #walmart

Shipt’s new feature pairs members with their favorite, 5-star shoppers

Target’s same-day delivery service Shipt is launching a new feature that will pair customers with their favorite shoppers on future orders. This “Preferred Shoppers” feature will be available as a membership-only perk at no extra charge, offering customers a more reliable shopping experience, where more of their orders are directed towards people they already known and trust to do a good job.

The feature arrives at a time when the online grocery delivery market is booming due to the pandemic. But this market shift has also led to a number of newer shoppers joining the gig economy who don’t have the same level of experience as others. Today, you’ll come across some shoppers who excel at picking quality items, making great substitutions, and staying in close communication with their customers. Others, meanwhile, are checking out before you even have time to respond to their text about the product replacements they’ve made or the refunds they’ve put through. That can leave consumers feeling like online grocery shopping is an unreliable experience.

The Preferred Shoppers feature aims to change that.

As Shipt explains, customers who rate their shopper with five stars after their order is complete will be presented with the option to add the shopper to their Preferred Shoppers list. If the shopper accepts this request, they’ll be prioritized to shop for those customers in the future. (If the shopper declines, however, that won’t be shown the customer.) This list can be edited at any time, and if a customer downrates a shopper on a future order, they’ll be removed.

Image Credits: Shipt

The feature was developed in response to feedback from both shoppers and Shipt regulars, the company says. Consumers, in particular, had been asking for a way to be paired with their favorite shoppers who they already trusted to handle their orders correctly. But until now, whether or not that shopper would be available to grab the customer’s order was left mostly up to chance. The shopper would have had to see the order come in as it arrived, then grab it before someone else did.

During early tests, which included the Detroit metro, Shipt found the feature impacted its own bottom line and increased shoppers’ tips. Without providing specific metrics, the company said that customers using the feature would order more often and would rate their experience highly. Shoppers also benefitted because they were now serving customers who valued their work and who were expressing their appreciation with a larger tip.

“The more often a shopper shops for a customer, the more they learn about that customer’s wants and needs and are able to deliver a tailored shopping experience,” said Karl Varsanyi, Chief Experience & Product Officer at Shipt, in a statement. “Preferred Shoppers helps customers get the exceptional service they enjoy again and again,” he added.

The feature could also motivate shoppers to focus on building up a quality clientele, so they had a better shot at being assigned orders from customers they enjoyed working with and where they could expect to see higher tips. Over time, as customers add more shoppers to their Preferred Shopper list, the likelihood of being paired with a highly-rated shopper would improve, too. This could perhaps help to address some gig workers complaints over their work being undervalued, where bonuses are placed out of reach and customers are stingy with tips.

The idea for personal shoppers is not new. A startup called Dumpling has been developing a platform that allows gig economy workers to transition their clients off apps like Shipt and Instacart to a service where shoppers set their own rates and get to keep all their tips. But many consumers aren’t aware of Dumpling unless a shopper they know markets the service to them directly and usage of Dumpling isn’t free. In addition, while Shipt offers delivery from a number of top retailers, being owned by Target has other advantages. The service is now integrated into Target’s own website and mobile app, and Target products aren’t marked up on an individual basis, like you’d see on other services.

Currently, Shipt’s membership is $99 per year, offering free delivery on all orders over $35. The Preferred Shoppers feature will be made available to all U.S. members, starting today.

#e-commerce, #ecommerce, #instacart, #marketing, #merchandising, #online-shopping, #personal-shopper, #retail, #retailers, #shipt, #shopping, #target, #united-states

Virtual dressing room startup Revery.ai applying computer vision to the fashion industry

Figuring out size and cut of clothes through a website can suck the fun out of shopping online, but Revery.ai is developing a tool that leverages computer vision and artificial intelligence to create a better online dressing room experience.

Under the tutelage of University of Illinois Center for Computer Science advisrr David Forsyth, a team consisting of Ph.D. students Kedan Li, Jeffrey Zhang and Min Jin Chong, is creating what they consider to be the first tool using existing catalog images to process at a scale of over a million garments weekly, something previous versions of virtual dressing rooms had difficulty doing, Li told TechCrunch.

Revery.ai co-founders Jeffrey Zhang, Min Jin Chong and Kedan Li. Image Credits: Revery.ai

California-based Revery is part of Y Combinator’s summer 2021 cohort gearing up to complete the program later this month. YC has backed the company with $125,000. Li said the company already has a two-year runway, but wants to raise a $1.5 million seed round to help it grow faster and appear more mature to large retailers.

Before Revery, Li was working on another startup in the personalized email space, but was challenged in making it work due to free versions of already large legacy players. While looking around for areas where there would be less monopoly and more ability to monetize technology, he became interested in fashion. He worked with a different adviser to get a wardrobe collection going, but that idea fizzled out.

The team found its stride working with Forsyth and making several iterations on the technology in order to target business-to-business customers, who already had the images on their websites and the users, but wanted the computer vision aspect.

Unlike its competitors that use 3D modeling or take an image and manually clean it up to superimpose on a model, Revery is using deep learning and computer vision so that the clothing drapes better and users can also customize their clothing model to look more like them using skin tone, hair styles and poses. It is also fully automated, can work with millions of SKUs and be up and running with a customer in a matter of weeks.

Its virtual dressing room product is now live on many fashion e-commerce platforms, including Zalora-Global Fashion Group, one of the largest fashion companies in Southeast Asia, Li said.

Revery.ai landing page. Image Credits: Revery.ai

“It’s amazing how good of results we are getting,” he added. “Customers are reporting strong conversion rates, something like three to five times, which they had never seen before. We released an A/B test for Zalora and saw a 380% increase. We are super excited to move forward and deploy our technology on all of their platforms.”

This technology comes at a time when online shopping jumped last year as a result of the pandemic. Just in the U.S., the e-commerce fashion industry made up 29.5% of fashion retail sales in 2020, and the market’s value is expected to reach $100 billion this year.

Revery is already in talks with over 40 retailers that are “putting this on their roadmap to win in the online race,” Li said.

Over the next year, the company is focusing on getting more adoption and going live with more clients. To differentiate itself from competitors continuing to come online, Li wants to invest body type capabilities, something retailers are asking for. This type of technology is challenging, he said, due to there not being much in the way of diversified body shape models available.

He expects the company will have to collect proprietary data itself so that Revery can offer the ability for users to create their own avatar so that they can see how the clothes look.

“We might actually be seeing the beginning of the tide and have the right product to serve the need,” he added.

#artificial-intelligence, #ecommerce, #enterprise, #fashion, #funding, #kedan-li, #online-shopping, #recent-funding, #retailers, #revery-ai, #startups, #tc, #y-combinator

Tiger Global backs Nacelle with $50M for its e-commerce infrastructure

Consumer shift to buying online during the global pandemic — and keeping that habit — continues to boost revenue for makers of developer tools that help e-commerce sites provide better shopping experiences.

LA-based Nacelle is one of the e-commerce infrastructure companies continuing to attract investor attention, and at a speedy clip, too. It closed on a $50 million Series B round from Tiger Global. This is just six months after its $18 million Series A round, led by Inovia, and follows a $4.8 million seed round in 2020.

The company is working in “headless” commerce, which means it is disconnecting the front end of a website, a.k.a. the storefront, from the back end, where all of the data lives, to create a better shopping experience, CEO Brian Anderson told TechCrunch. By doing this, the back end of the store, essentially where all the magic happens, can be updated and maintained without changing the front end.

“Online shopping is not new, but how the customer relates to it keeps changing,” he said. “The technology for online shopping is not up to snuff — when you click on something, everything has to reload compared to an app like Instagram.”

More people shopping on their mobile devices creates friction due to downloading an app for each brand. That is “sucking the fun out of shopping online,” because no one wants that many apps on their phone, Anderson added.

Steven Kramer, board member and former EVP of Hybris, said via email that over the past two decades, the e-commerce industry went through several waves of innovation. Now, maturing consumer behaviors and expectations are accelerating the current phase.

“Retailers and brands are struggling with adopting the latest technologies to meet today’s requirements of agility, speed and user experience,” Kramer added. “Nacelle gives organizations a future-proof way to accelerate their innovation, leverage existing investments and do so with material ROI.”

Data already shows that COVID-era trends accelerated e-commerce by roughly five years, and Gartner predicts that 50% of new commerce capabilities will be incorporated as API-centric SaaS services by 2023.

Those kinds of trends are bringing in competitors that are also attracting investor attention — for example, Shopistry, Swell, Fabric, Commerce Layer and Vue Storefront are just a few of the companies that raised funding this year alone.

Anderson notes that the market continues to be hot and one that can’t be ignored, especially as the share of online retail sales grows. He explained that some of his competitors force customers to migrate off of their current tech stack and onto their respective platforms so that their users can get a good customer experience. In contrast, Nacelle enables customers to keep their tech stack and put components together as they see fit.

“That is painful in any vertical, but especially for e-commerce,” he said. “That is your direct line to revenue.”

Meanwhile, Nacelle itself grew 690% in the past year in terms of revenue, and customers are signing multiyear contracts, Anderson said.

Anderson, who is an engineer by trade, wants to sink his teeth into new products as adoption of headless commerce grows. These include providing a dynamic layer of functionality on top of the tech stack for storefronts that are traditionally static, and even introducing some livestream capabilities later this year.

As such, Nacelle will invest the new round into its go-to-market strategy and expand its customer success, partner relations and product development. He said Nacelle is already “the de facto standard” for Shopify Plus merchants going headless.

“We want to put everything in a tailor-made API for e-commerce that lets front-end developers do their thing with ease,” Anderson added. “We also offer starter kits for merchants as a starting point to get up-and-running.”

#api, #apps, #brian-anderson, #ecommerce, #enterprise, #funding, #headless-commerce, #hybris, #merchandising, #mobile-device, #nacelle, #online-shopping, #recent-funding, #retail, #startups, #steven-kramer, #tc, #tiger-global

Shopistry bags $2M to provide ‘headless commerce without the headaches’

Canada-based Shopistry wants to turn the concept of headless commerce, well, on its head. On Monday, the e-commerce startup announced $2 million in seed funding to continue developing its toolkit of products, integrations, services and managed infrastructure for brands to scale online.

Jaafer Haidar and Tariq Zabian started Shopistry in 2019. Haidar’s background is as a serial technology founder with exits and ventures in e-commerce and cloud software. He was working as a venture capitalist when he got the idea for Shopistry. Zabian is a former general manager at OLX, an online classified marketplace.

Shopistry enables customers to create personalized commerce experiences accessible to all. Haidar expects headless will become the dominant architecture over the next five years, though he isn’t too keen on calling it “headless.” He much prefers the term “modular.”

“It’s a modular system, we call it ‘headless without the headaches,’ where you grab the framework to manage APIs,” Haidar told TechCrunch. “After a company goes live, they can spend 50% of their budget just to keep the lights on. They use marketplaces like Shopify to do the tech, and we are doing the same thing, but providing way more optionality. We are not a monolithic system.”

Currently, the company offers five products:

  • Shopistry Console: Brands turn on their optimal stack and change anytime without re-platforming. There is support for multiple e-commerce administrative tools like Shopify or Square, payment providers, analytics and marketing capabilities.
  • Shopistry Cloud is a managed infrastructure spearheading performance, data management and orchestration across services.
  • Shopistry Storefront and Mobile to manage web storefronts and mobile apps.
  • Shopistry CMS, a data-driven, headless customer management system to create once and publish across channels.
  • Shopistry Services, an offering to brands that need design and engineering help.

Investors in the seed round include Shoptalk founder Jonathan Weiner, Hatch Labs’ Amar Varma, Garage Capital, Mantella Venture Partners and Raiven Capital.

“At MVP we love companies that can simplify complexity to bring the proven innovations of large, technically sophisticated retailers to the masses of small to midsize retailers trying to compete with them,” said Duncan Hill, co-founder and general partner at Mantella Venture Partners, in a written statement. “Shopistry has the team and tech to be a major player in this next phase of the e-commerce evolution. This was easy to get excited about.”

Shopistry is already working with retailers like Honed and Oura Ring to manage their e-commerce presences without the cost, complexity or need for a big technology team.

Prior to going after the seed funding, Haidar and Zabian spent two years working with high growth brands to build out its infrastructure. Haidar intends to use the new capital to future that development as well as bring on sales and marketing staff.

Haidar was not able to provide growth metrics just yet. He did say the company was growing its customer base and expects to be able to share that growth next year. He is planning to add more flexibility and integrations to the back end of Shopistry’s platform and add support for other platforms.

“We are focusing next on the go-to-market perspective while we gear up for our big launch coming in the fourth quarter,” he added. “There is also a big component to ‘after the sale,’ and we want to create some amazing experiences and focus on back office operations. We want to be the easiest way to control and manage data while maintaining a storefront.”

 

#amar-varma, #apps, #cloud-software, #duncan-hill, #ecommerce, #enterprise, #funding, #garage-capital, #headless-commerce, #jaafer-haidar, #jonathan-weiner, #mantella-venture-partners, #mobile, #online-shopping, #raiven-capital, #recent-funding, #shopify, #shopistry, #startups, #tariq-zabian, #tc

My big jump: Sukhinder Singh Cassidy’s CEO journey

After listening to others pitch me a few different job opportunities while still at Google in 2008, it became clear to me that I would make a better decision if I could fully explore the larger landscape of new companies emerging in Silicon Valley.

I had spent the last several years focusing on Google’s business outside the U.S., and I honestly felt out of touch with the startup world. Beyond my goal of becoming a CEO of my own company, I had two other ambitions: I wanted to help build a great consumer service that would delight people (potentially in e-commerce) and I wanted to build further wealth for myself and my family.

To better evaluate my options, I made the decision to quit Google first and find a way to study the wider ecosystem of companies before choosing where to go. Resolved to give myself a “blank slate” before making a final choice, I left Google when I was three months pregnant and joined Accel Partners, a top Silicon Valley venture capital firm and an investor in my previous startup, in a temporary role as CEO-in-residence.

In the months that followed, I helped Accel evaluate investment opportunities across a wide variety of digital sectors, with a particular focus on e-commerce, taking the opportunity to study those companies I might join or think of starting from scratch.


On Thursday, August 19 at 2 p.m. PDT/5 p.m. EDT/9 p.m. UTC

Managing Editor Danny Crichton will interview Sukhinder Singh Cassidy, author of “Choose Possibility,” on Twitter Spaces.


One of Accel’s key partners, Theresia Gouw, helped me brainstorm, joining my cadre of professional priests. We had known one another for over a decade (I originally met her as a young founder at Yodlee) and were at similar stages of our careers, so I knew she could identify personally with my career quandaries. Like me, Theresia was pregnant with her next child and at a similar life stage — yet another commonality.

Cropped photo a photo of author Sukhinder Singh Cassidy

Image Credits: Sukhinder Singh Cassidy

While at Accel, I spent a disproportionate amount of time testing my macro thesis that online shopping was about to explode in new ways. I had seen the rise of e-tailers at Google (many of these companies, such as eBay and Amazon, were Google’s largest advertisers at the time), but many of the leading e-commerce sites like Amazon and Zappos still had a utilitarian feel to them.

Meanwhile, new fashion and décor e-commerce sites such as Rent the Runway, Gilt, Houzz, Wayfair and One Kings Lane were popping up everywhere and growing rapidly. These sites sought to tap into a more aspirational and entertainment-oriented kind of shopping experience and move it online.

Expert investors like Accel and others were funding them, and my own observations suggested that this area would yield another big wave of online consumer growth. These lifestyle categories of shopping also appealed to me personally; I was the target customer for many of them.

I started to work on an idea for a new e-commerce service, a luxury version of eBay, while listening to the pitches of every e-commerce company that was looking for funding and talking to several that needed early-stage CEOs. I continued to listen to non-e-commerce pitches as well, simply to give myself a point of reference for evaluating online shopping opportunities.

At Yodlee and Google, I had been lucky enough to work with incredibly smart and talented people who shared my values, and I wanted to do the same at my next venture.

I wanted to work with great investors, too, and fortunately I had the ability either to work with Accel-funded companies, start my own or leverage other investor relationships I’d developed. I spent time with multiple company founders to try to discern who they were as leaders, in addition to what they were working on.

By this point in my career, I had a pretty clear idea of my own superpowers and values, so I looked to find companies that could make the most of my unique gifts and whose founders or senior leaders had strengths complementary to mine.

Specifically, I hoped to join a company with a very strong engineering and product management culture that needed a CEO with strategy, vision, business development, fundraising and team-building expertise. Applying these criteria, I turned down several opportunities at companies whose founders had skill sets too similar to mine, reasoning that this overlap might lead to conflict if I ever became CEO.

Finally, I used my time at Accel to think long and hard about the risks I would take in becoming a startup CEO and whether I could afford to fail. My biggest risk by far was ego- and reputation-related. Mindful of how precarious early-stage startups are, I feared that I would leave a successful role as a global executive only to suffer a very large and visible failure. But the more I thought about this, I faced this ego risk head-on and concluded that my reputation as an executive from Google would hopefully be strong enough to survive one failure if it came to that.

The personal risks of taking on a startup CEO role felt different but not greater than those associated with my job at Google. While I knew that serving as a first-time CEO while having another newborn at home (my son Kieran) would be immensely stressful, I would likely benefit from no longer traveling around the world for days and weeks on end and working across multiple time zones, as I had previously.

Last, I evaluated the financial risks of potential moves. Although my startup equity would have uncertain value for a long time, I judged this a risk worth taking, given how excited I’d feel to have more impact and responsibility as CEO. While I lost a large financial package in choosing to leave Google and switching to a startup salary, I could pay the bills at home while digging into my savings only slightly. Under these conditions, I was prepared to make the leap.

In early 2010, almost a year after I left Google, I finally found the right opportunity and decided to join fashion technology startup Polyvore as its full-time CEO. A precursor to Pinterest, Polyvore was based on the idea that women could “clip” online images to create fashion and décor idea boards digitally that were instantly “shoppable.”

Millions of young women (including influencers) were already using the service and loved it. The founding team was led by a rock star engineer, Pasha Sadri, along with three other product and technology folks he recruited from the likes of Yahoo and Google.

Pasha was known for his intelligence, and we had connected informally over the years for coffee, each time having great discussions about business strategy. In fact, Polyvore twice before had tried to recruit me to become its CEO, once when I was at Google and again when I departed that company in 2008. Back then, I’d spent a productive afternoon with the founding team, helping them think through their business model. I also knew Peter Fenton, one of Silicon Valley’s most successful investors and a leading funder of the company. Peter was the one who first introduced me to Polyvore and who continued afterward to passively court me.

Having spent so much time exploring my options from multiple angles, I was now poised to make a great decision. I felt convinced that e-commerce was starting its next wave of growth, and felt excited to be part of it.

Within that vision, Polyvore was among the companies best positioned to succeed, and I knew I could contribute in significant ways to building a service that would delight millions. I was impressed with the strengths of Polyvore’s founder and investors and anticipated that I would be able to complement their efforts nicely. Recognizing that my success as a startup CEO hinged on my relationships with the founder and board, I had also invested time to get to know them.

Meanwhile, I had faced my fear demons, taking financial risk but negotiating my offer aggressively to account for downside scenarios I imagined, and coming to grips with my ego risk. With all this work in place, I finally jumped.

After managing a multibillion-dollar profit and loss and leading a 2,000-person team at Google, I became the newly minted CEO of a 10-person fashion startup in February 2010.

As we tee up the bigger choices in our careers, we all face critical moments of decision. No choice we make will be perfect, and all the frameworks in the world won’t eliminate risk entirely. But we don’t need perfection or freedom from risk. We just need to take the next step.

By choosing thoughtfully, using all the tools at our disposal to maximize our upside and anticipate our downside, we can grasp the opportunities available to us while equipping ourselves to handle whatever challenges reality throws our way.

Excerpted from “Choose Possibility: Take Risks and Thrive (Even When You Fail)’ by Sukhinder Singh Cassidy. Copyright © 2021 by Sukhinder Singh Cassidy. Published and reprinted by permission of Mariner Books/Houghton Mifflin Harcourt. All rights reserved.

#accel-partners, #column, #ecommerce, #entrepreneurship, #fashion-startup, #google, #online-shopping, #polyvore, #startups, #sukhinder-singh-cassidy, #tc, #theresia-gouw, #yodlee

Amazon says it will now compensate consumers for defective products sold on its marketplace

Amazon today is making a significant change to its returns policy, known as the A-to-Z guarantee, to address issues with defective products sold through Amazon’s marketplace of third-party sellers. In the past, Amazon directed consumers to the sellers in the case where a defective product caused property damage or personal injury. Now, Amazon says it will directly pay customers for their claims under $1,000, which would cover more than 80% of cases, at no cost to sellers.

It also says it may step in to pay claims for higher amounts if the seller rejects a claim or is unresponsive on a claim Amazon understands to be valid.

For years, Amazon has attempted to skirt responsibility for the products sold through its marketplace, saying it was only the platform that enabled these transactions to take place — not the liable party in the event of defective product claims. Some U.S. courts over the years have agreed, but others have not, complicating matters. Most recently, a California appellate court ruled that Amazon could be sued when consumers were injured by third-party products it sold on its website. The case at hand was a lawsuit over a defective hoverboard a mother bought for her son in 2015, which burned the customer’s hands and started a fire.

Meanwhile, as Amazon’s marketplace has grown, how defective products and consumer complaints are handled has become even more of problem. Today, Amazon’s marketplace has 6.3 million total sellers, 1.5 million of which are currently active, according to estimates from Marketplace Pulse.

This situation recently came to a head, when last month Amazon was sued by the U.S. Consumer Product Safety Commission, which aims to force Amazon to accept responsibility for recalling potentially hazardous products sold on Amazon.com. The named products in the complaint included “24,000 faulty carbon monoxide detectors that fail to alarm, numerous children’s sleepwear garments that are in violation of the flammable fabric safety standard risking burn injuries to children, and nearly 400,000 hair dryers sold without the required immersion protection devices that protect consumers against shock and electrocution,” the federal agency said.

As a part of that action, the CPSC also wanted Amazon to step in and issue refunds, naming it as a distributor of these products by way of its FBA (Fulfilled by Amazon) program. It pointed out that Amazon stores products at its warehouse, inventories them, and sorts and ships them — and earns fees for doing so. The agency also argued that consumers that consumers who then buy these products may “reasonably believe” they are purchasing from Amazon.

Today, Amazon says it will step in to handle these types of consumer complaints. Instead of telling customers to reach out to the seller, it will allow customers to begin their claims process through Amazon Customer Service.

Starting September 1st, Amazon will take the claim information and notify the seller to help them address the claim. If the seller doesn’t respond, Amazon will step in to address the customer concern at its own cost while it separately tries to pursue the seller. And if the seller rejects a claim that Amazon believes is valid, it will compensate the customer.

The retailer says it will use its existing fraud detection and abuse systems and work with external, independent insurance fraud experts to analyze customers’ claims for validity. This will provide an initial layer of seller protection, as Amazon will stop sellers from having to deal with “unsubstantiated, frivolous, or abusive claims,” Amazon explains. It will also offer product liability insurance to sellers through a new service, Amazon Insurance Accelerator, which will offer a selection of trusted providers to shop from.

Amazon likely believes this new policy will help to head off new regulations that could impact how it runs its marketplace business. In announcing the news, Amazon stated that it’s “going far beyond our legal obligations and what any other marketplace service provider is doing today to protect customers” — a message clearly meant to dissuade further regulation.

The changes will roll out initially in the U.S., Amazon says.

#amazon, #amazon-marketplace, #amazon-com, #california, #computing, #ecommerce, #hoverboard, #online-shopping, #product, #products, #technology, #united-states

Online retailers: Stop trying to beat Amazon

Brick-and-mortar stores forced to close due to pandemic lockdowns had to quickly pivot to an online-only model. Understandably, newcomers to the digital retail scene found themselves behind the curve in attracting online buyers, particularly in the face of popular established events like Amazon Prime Day. This year’s Prime Day, held June 21-22, was reportedly the biggest ever on the platform.

Online retailers that have opted to forge their own path to generate sales often wonder how they can compete with Amazon.

Amazon’s true unique selling proposition is its distribution network. Online retailers will not be able to compete on this point. Instead, it’s important to focus on areas where they can excel.

The reality is that Amazon’s true unique selling proposition is its distribution network. Online retailers will not be able to compete on this point because Amazon’s distribution network is so fast. Instead, it’s important to focus on areas where they can excel — without having to become a third-party seller on Amazon’s platform.

The following are seven key tips that are relevant for online retailers that want to attract and retain customers without having to partner with Amazon or to try to beat it at its own game.

Gain a 360-degree view of the customer

An online retailer needs to consider what kind of experience it wants to create; customers expect smooth processes on every step of their online shopping journey.

One idea is to implement a consumer data platform that will help the retailer gain the best insights into their customers: who they are and what they like, which websites they frequent and other relevant information. Retailers can use this data to then target customers with ads for products they’ll actually want to buy. Consumer data platforms can even help online retailers target consumers across platforms as well as in the store.

Ensure smooth and glitch-free pre-sale transactions

One of the biggest frustrations with online retailers is the performance of a website, from getting on the site through the closing of the sale. If something fails or glitches at any point in the process of searching for a product and paying for it, the customer will leave and not come back.

The solution to this problem involves a lot of testing of the user interface to ensure a good user experience. Tests should be done on all e-commerce segments on a site, including the basket and ad banners. By inserting tags along the customer journey, a retailer can track lost sales and see where problems happen on their website.

Offer a broad variety of payment options

As a payment option, PayPal recently experienced a record 36% year-on-year growth in payment volume between the third quarter of 2019 and Q3 2020. Despite PayPal’s popularity, Amazon does not accept it as a form of payment.

#amazon, #brand-management, #column, #customer-experience, #customer-service, #e-commerce, #ec-column, #ec-ecommerce-and-d2c, #ecommerce, #online-shopping, #supply-chain-management, #tc

Amazon expands same-day Prime delivery to 6 more U.S. cities

Amazon announced this morning it’s expanding its faster, same-day delivery service to half a dozen more U.S. cities. The service, which the retailer has been working to make same-day delivery even faster over the past year, now offers consumers in a number of markets the ability to shop up to 3 million items on Amazon.com, then receive their orders in only a few hours.

To do so, Amazon invested in what it called “mini-fulfillment centers” closer to where customers lived in select U.S. markets, initially in Philadelphia, Phoenix, Orlando, and Dallas. Those customers could then shop across a dozen merchandise categories, including Baby, Beauty & Health, Kitchen & Dining, Electronics, Pet Supplies, and more. As the pandemic continued to impact Amazon’s business, in November 2020, Amazon expanded its faster same-day service to more cities, to include Nashville and Washington, D.C.

With today’s expansion, Amazon is rolling out same-day delivery to Prime members in Baltimore, Chicago, Detroit, Tampa, Charlotte, and Houston, bringing the total markets served to 12. In these markets, shoppers will be able to place orders online throughout the day then have items on their doorstep in as fast as 5 hours, Amazon says. Customers can also place orders by midnight to have their orders arrive the following morning.

The service continues to be free with no additional charges on orders over $35 that qualify for same-day delivery. Orders under $35 have a $2.99 fee for Prime customers, and a $12.99 fee for non-members. Prime membership, meanwhile, is $12.99 per month or $119 per year.

The time frame commitments for same-day delivery are the same as those Amazon promised last year when it first announced its plans to speed up Prime delivery. Orders placed between midnight and 8 AM will arrive today by 1 PM. Orders placed between 8 AM and 1 PM arrive by 6 PM; those placed between 1 PM and 5 PM will arrive by 10 PM; and those placed between 5 PM and midnight will arrive overnight by 8 AM. That means customers can place orders fairly late and receive their items before they head out of the house the next day.

Faster same-day delivery has been one of the most significant services Amazon has used to challenge rivals like Walmart and Target, who both benefit from having a large brick-and-mortar footprint that allows them to more quickly serve their customers through same-day order pickup, curbside pickup, and same-day delivery services. While Walmart partners with third-parties on its same-day service, Express delivery, largely focused on grocery, Target acquired delivery service Shipt in 2017 to bring its fast delivery services in-house.

In response to the growing competition, Amazon has been recently acquiring smaller warehouse space inside major urban metros, including in these six new markets where it’s now announcing same-day delivery, as well as larger markets, like New York, and even suburban neighborhoods. It also acquired Whole Foods for $137.7 billion in 2017, not only to more fully participate in the online grocery business, but also in part because of its large retail footprint.

As Amazon has sped up the pace of what’s available under “Prime” delivery, it has wound down its older “Prime Now” business, which was retired Aug. 30 and will be fully shut down by year-end. The separate app had allowed customers to shop items that were available in one or two hours for an additional fee.

The news follows Amazon’s earning miss last week, when the retailer fell short of Wall St.’s estimates for revenue, and gave a weaker than-expected outlook for the quarter ahead, which Amazon attributed to difficult comparisons with a time frame that included Covid lockdowns during height of the pandemic in 2020. The company reported $113.08 billion in revenue and earnings of $15.12, versus expectations of $115.2 billion and $12.30.

#amazon, #amazon-prime, #amazon-com, #baltimore, #charlotte, #chicago, #dallas, #delivery-services, #detroit, #ecommerce, #food-delivery, #houston, #nashville, #new-york, #online-grocery, #online-shopping, #orlando, #philadelphia, #phoenix, #prime, #prime-now, #retailers, #shipt, #tampa, #target, #united-states, #walmart, #washington-d-c, #whole-foods

Demand Curve: Questions you need to answer in your paid search ads

Around 15% of website traffic comes through paid search ads. But to turn passive searchers into active shoppers, your ads should answer their question and entice them to click.

We’ve tested thousands of paid search ads at Demand Curve and through our agency Bell Curve. This post breaks down 14 questions your paid search ads should answer to ensure you’re only paying for the highest-intent shoppers.

Question 1: “What’s in it for me?”

An important distinction between paid search and organic search is that paid ads are an interruption. Users of search engines are simply looking for an answer to their question. The people who see your ads don’t owe you anything. Just because you’re paying to have your ad show up first doesn’t mean they’re going to pay attention to it.

To generate genuine interest in your paid ads, reframe your offer as a favor.

You can do this in two ways:

  • Describe the features of your product as the solution to your customers’ problem.
  • Emphasize the outcome your customer seeks.

For example, reframing free delivery as an extra convenience makes the offer that much more attractive.

Use ad extensions by listing additional benefits in the description of the page. For example, including “customized plans” in the pricing extension page signals to your customer that they’ll have control over the cost. This will help to attract the curiosity of even the most cost-conscious buyers.

To capture genuine interest in your paid ads, re-frame your offer as a favor.

Image Credits: Demand Curve

Question 2: “Why should I buy now?”

Approximately 80% of e-commerce shopping carts are abandoned, mostly because shoppers don’t feel any urgency to complete the transaction. Online shoppers aren’t in any rush, as the internet is open 24/7 and inventory feels unlimited.

Use ad copy that bridges the gap between their problem and your solution. The easiest way to create that curiosity bridge is by asking a question.

To answer the question, “Why should I buy now?”, you’re going to have to create an incentive to get them to take action now.

#ad, #advertising-tech, #column, #digital-marketing, #ec-column, #ec-ecommerce-and-d2c, #ec-how-to, #ecommerce, #marketing, #online-advertising, #online-shopping, #search-ads, #search-advertising, #search-engine, #search-engine-optimization, #search-engines, #startups, #targeted-advertising, #tc

Square to buy ‘buy now, pay later’ giant Afterpay in $29B deal

In a blockbuster deal that rocks the fintech world, Square announced today that it is acquiring Australian buy now, pay later giant Afterpay in a $29 billion all-stock deal.

The purchase price is based on the closing price of Square common stock on July 30, which was $247.26. The transaction is expected to close in the first quarter of 2022, contingent upon certain closing conditions. It values Afterpay at more than 30% premium to its latest closing price of A$96.66.

Square co-founder and CEO Jack Dorsey said in a statement that the two fintech behemoths “have a shared purpose.”

“We built our business to make the financial system more fair, accessible, and inclusive, and Afterpay has built a trusted brand aligned with those principles,” he said in the statement. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”

The combination of the two companies would create a payments giant unlike any other. Over the past 18 months, the buy now, pay later space has essentially exploded, appealing especially to younger generations drawn to the idea of not using credit cards or paying interest and instead opting for the installment loans, which have become ubiquitous online and in retail stores.

As of June 30, Afterpay served more than 16 million consumers and nearly 100,000 merchants globally, including major retailers across industries such as fashion, homewares, beauty and sporting goods, among others.

The addition of Afterpay, the companies’ statement said, will “accelerate Square’s strategic priorities” for its Seller and Cash App ecosystems. Square plans to integrate Afterpay into its existing Seller and Cash App business units, so that even “the smallest of merchants” can offer buy now, pay later at checkout. The integration will also give Afterpay consumers the ability to manage their installment payments directly in Cash App. Cash App customers will be able to find merchants and buy now, pay later (BNPL) offers directly within the app.

Afterpay’s co-founders and co-CEOs Anthony Eisen and Nick Molnar will join Square upon closure of the deal and help lead Afterpay’s respective merchant and consumer businesses. Square said it will appoint one Afterpay director to its board.

Shareholders of Afterpay will get 0.375 shares of Square Class A stock for every share they own. This implies a price of about A$126.21 per share based on Square’s Friday close, according to the companies.

Will there be more consolidation in the space? That remains to be seen, and Twitter is all certainly abuzz about what deals could be next. Here in the U.S., rival Affirm went public earlier this year. On July 30, shares closed at $56.32, significantly lower than its opening price and 52-week-high of $146.90. Meanwhile, European competitor Klarna — which is growing rapidly in the U.S. — in June raised another $639 million at a staggering post-money valuation of $45.6 billion.

No doubt the BNPL fight for the U.S. consumer is only heating up with this deal.

#afterpay, #apps, #buy-now, #cash-app, #credit-card, #director, #finance, #financial-services, #fintech, #jack-dorsey, #klarna, #online-payments, #online-shopping, #pay-later, #payments, #square, #tc, #twitter, #united-states, #up

White-label SaaS shipping startup Outvio closes $3M round led by Change Ventures

Outvio, an Estonian startup that provides a white-label SaaS fulfillment solution for medium-sized and large online retailers in Spain and Estonia, has closed a $3 million early-stage financing round led by Change Ventures. Also participating were TMT Investments (London), Fresco Capital (San Francisco), and Lemonade Stand (Tallinn). Several angels also joined the round including James Berdigans (Printify) and Kristjan Vilosius (Katana MRP). This is the startup’s first institutional round of funding, after bootstrapping since 2018.

Online retailers usually have to use a number of different tools or hire expensive developers to create in-house shipping solutions. Outvio offers online stores of any size a post-purchase shipping experience, which seeks to replicate an Amazon-style experience where customers can also return packages. Among others, itcompetes with ShippyPro, which runs out of Italy and has raised $5 million to date.

Juan Borras, co-founder and CEO of Outvio said: “We can give any online store all the tools needed to offer a superior post-sale customer experience. We can integrate at different points in their fulfilment process, and for large merchants, save them hundreds of thousands in development costs alone.”

He added: “What happens after the purchase is more important than most shops realize. More than 88% of consumers say it is very important for them that retailers proactively communicate every fulfilment and delivery stage. Not doing so, especially if there are problems, often results in losing that client. Our mission is to help online stores streamline everything that happens after the sale, fueling repeat business and brand-loyal customers with the help of a fantastic post-purchase experience.”

Rait Ojasaar, Investment Partner at lead investor Change Ventures commented: “While online retailing has a long way to go, the expectations of consumers are increasing when it comes to delivery time and standards. The same can be said about the online shop operators who increasingly look for more advanced solutions with consumer-like user experience. The Outvio team has understood exactly what the gap in the market is and has done a tremendous job of finding product-market fit with their modern fulfilment SaaS platform.”

#amazon, #customer-experience, #e-commerce, #estonia, #europe, #italy, #london, #marketing, #merchandising, #online-shopping, #online-stores, #partner, #retail, #saas, #san-francisco, #spain, #tc, #tmt-investments

Walmart to sell its e-commerce technologies to other retailers

Walmart’s investments in software and retail technologies it used to transform its business from a brick-and-mortar to one that combines both in-person and online shopping will now be made available to other retailers for the first time, the company announced today. Through a strategic partnership with Adobe, Walmart will integrate access to Walmart’s Marketplace, as well as its various online and in-store fulfillment and pickup technologies, into the Adobe Commerce Platform.

The technologies will be made available to both Adobe Commerce and Magento Open Source customers, Adobe says.

The deal will allow Walmart to potentially reach thousands of small to mid-sized retailers, who will effectively be able to tap into the same tools that one of the largest global retailers is using to run their business.

Through the partnership, Adobe retail customers will be able to do things like show store pickup eligibility and available pickup times online; offer multiple pickup options like curbside and in-store pickup; provide their store associates with mobile tools to pick for orders, validate item selections and handle substitutions; and use tools to communicate with customers about their pickup orders, like those where customers can alert store associates of their ETA or arrival for curbside pickup.

Another aspect of the partnership will allow retailers to syndicate and sell their products across Walmart’s Marketplace.

The arrangement not only aims to benefit Walmart’s bottom line as it offers new revenue streams related to retail technologies, it could also serve as another tool in Walmart’s battle with Amazon for online retail dominance.

Retail businesses will use the Adobe Commerce platform to reach an expanded set of customers by listing products on Walmart’s Marketplace and then leverage Walmart’s Fulfillment Services to offer two-day shopping across the U.S.

And this, in turn, could boost the number of available products sold on Walmart’s Marketplace, which is still largely dwarfed by Amazon.

Walmart’s Marketplace had grown to an estimated 70,000 sellers in 2020, fueled by a surge in online shopping triggered by the pandemic, according to third-party estimates. This was a more than doubling over 2019. Today, the marketplace is topping 100,000 sellers, per Marketplace Pulse data. Amazon’s Marketplace, on the other hand, counts an estimated 6.3 million total sellers worldwide, 1.5 million of which are currently active, per estimates.

Part of Walmart’s problem in scaling its marketplace business could be related to its ease-of-use on the seller side. Many smaller sellers have reported that Walmart’s Marketplace is far more difficult to use than Amazon’s, and they’ve complained about waiting months to hear back from Walmart about whether they were approved to sell on the platform.

Adobe’s partnership could help to address some of those challenges.

Adobe also notes it’s working to consolidate its other channel solutions into a single, unified extension that would allow its retail customers to sell across multiple sales channels — including Amazon’s — using one, integrated tool for easy account setup and catalog syndication.

This is the first time Walmart has made its retail technologies available to other businesses, the company said. And it has yet to forecast what sort of revenue the new partnership could bring in. But it’s a path that Amazon has also been pursuing in recent years to maximize the return on investment from its novel, retail innovations, like its A.I. and computer vision-powered Just Walk Out system that lets customers skip the checkout line.

“The core mission of helping people save money and live better is at the heart of every idea including Scan & Go and checkout technologies, AI-powered smart substitutions and pickup and delivery,” said Suresh Kumar, chief technology officer and chief development officer of Walmart Inc., in a statement. “Combining Adobe’s strength in powering commerce experiences with our unmatched omni-customer expertise, we can accelerate other companies’ digital transformations,” he said.

Adobe’s retail customers in the U.S. will be able to integrate Walmart’s technologies in their own storefronts starting in early 2022, the companies said. Pricing and other details will be provided closer to launch.

While today’s announcement concerns channel partner Adobe, who will help to resell the technologies, Walmart also has a GoToMarket team that will target retailers directly.

#adobe, #amazon, #checkout-technologies, #e-commerce, #ecommerce, #magento, #online-shopping, #retailers, #suresh-kumar, #united-states, #walmart

Same-day delivery apps need more than speed to survive post-pandemic

We have entered a whole new era of e-commerce centered on speed and convenience. Business leaders are being forced to prioritize delivery capabilities and push for more accelerated delivery services.

“Fast/reliable delivery” was the most important online shopping attribute among the more than 8,500 consumers queried for PwC’s June 2021 Global Consumer Insights Pulse Survey, making it clear that delivery services will only become more crucial across the e-commerce landscape.

Now that consumers have grown accustomed to same-day (and same-hour) delivery service models, customer expectations for delivery options will only increase.

In fact, according to a recent report from the mobile app intelligence platform SensorTower, the top food delivery apps saw continued growth in January and February 2021, with installs up 14% year over year. And yet, despite climbing user growth, DoorDash, Uber Eats and GrubHub remain unprofitable. So how can business leaders design rapid delivery models that meet consumer expectations — and still make money?

If your delivery service results in a poor customer experience, you’ll be less likely to win customer loyalty just because you offer faster delivery.

The challenge: Delivery apps need more than speed to drive profitability

To remain competitive, delivery apps are rethinking their services and broadening their offerings.

“Amazon powers next-day delivery,” Raj Beri, Uber’s global head of grocery and new verticals, said in May. “We’re going to power next-hour commerce.”

But speeding up the delivery process won’t necessarily drive revenue. More importantly, if your delivery service results in a poor customer experience, you’ll be less likely to win customer loyalty just because you offer faster delivery.

The primary challenge faced by delivery apps, or any e-commerce company looking to add delivery services as part of its offerings, is building a foundation that enables not only speed and convenience for the customer, but one that takes into account all aspects of the customer experience. For example, when delivering food, the business responsible for the delivery must make sure the food is handled safely and remain free of any contaminants. The temperature — whether hot or cold — must be maintained throughout the delivery process and the order itself must be correct.

The solution: Same-day delivery relies on sophisticated technology platforms

The “Uberization” of everything, combined with dramatically elevated consumer expectations, will take much more than a delivery app and fleet of drivers for businesses to be profitable. To follow through on the promise of same-day delivery services, a number of things need to happen without any missteps between when an order is placed and when it shows up at the customer’s door. The more complex the product being delivered, the more difficult the delivery process becomes.

To enable same-day delivery services while also reaching profitability, a delivery app must take into account the technology needed to meet customer expectations. It involves much more than simply designing an app and growing user numbers. A truly successful same-day delivery model that provides an exceptional customer experience relies on a sophisticated software platform that can simultaneously manage various aspects of the customer journey, all while making it appear seamless from the customer’s point of view.

Profitable delivery services are built on automated systems powered by artificial intelligence systems and robotics. The technology must come first, before the app and before user growth. Any other delivery business model is putting the cart before the horse.

Domino’s Pizza is a brand that has perfected the delivery process and vastly improved the overall customer experience by making technology core to their business model. The key moment came when the brand defined itself as an e-commerce company that sells pizza. It committed to data applications and implemented a robotics technology platform that enabled electronic delivery systems that added speed and efficiency to the delivery process. In April, Domino’s began rolling out a robot car delivery service to select customers in Houston via Nuro.

GrubHub is also taking steps to integrate robotic capabilities into its delivery process. According to recent reports, the company announced it would be adding self-driving units that deploy drone-like robots to deliver food to college students. The program, which will roll out on a limited number of U.S. college campuses this fall, aims to reduce delivery times and, hopefully, costs.

This focus on technology is crucial in the world of delivery apps, or for any businesses forced to compete in the newly emerging category of next-hour commerce. The key to building a successful, profitable business model is to invest in technology platforms that can connect all components of the customer journey, from opening an app and clicking on a product to purchasing the product and scheduling the delivery, and beyond.

Same-day delivery: Where to go from here

In a world where everyone wants to open an app on their phone and have whatever it is they need to be delivered within an hour, it’s tempting for business leaders to focus on the delivery app itself, whether they are building their own or partnering with another company. But focusing on the app is a shortsighted view of same-day delivery models.

Instead, business leaders must use a wide-angle lens and consider every single aspect of their customer journey: How do customers engage with their business? How do customers search for and find the products they offer? What does it take to complete an order and what conditions must be met before the order can be delivered? Also, what happens after the order to ensure it went smoothly and to the customer’s satisfaction?

Some businesses are finding success partnering with delivery apps, but this comes with the risk of putting your brand’s reputation in the hands of another company that acts as a frontline employee with customers. Other companies are adding delivery service options to their current e-commerce model, relying on third-party software that can be plugged into an existing technology stack. Unfortunately, this comes with limitations and is not viable for regulated businesses that include multiple components.

The only way to ensure a seamless customer experience on top of same-day delivery services is to build a proprietary software platform that puts the technology at the heart of your business, which allows you to automate key processes, adding speed and convenience to your delivery model. It also makes it possible to integrate robotic systems that can expedite orders, include artificial intelligence protocols that can accelerate business growth, and scale your delivery model as your business expands.

Thriving in the new era of e-commerce

“Next-hour delivery” is a catchy tagline that is sure to gain traction among consumers, but whether it will help drive profitability remains to be seen. As the CEO of a firm that has built a profitable business model centered on same-day delivery services, I’m skeptical that the promise of next-hour delivery will drive more revenue if the technology powering the delivery systems lacks automation, artificial intelligence and robotics.

It’s true that businesses will be forced to compete on same-day delivery. But another truth that has emerged since the pandemic is that this new era of e-commerce comes with heightened customer expectations that won’t be met on speed alone. Consumer satisfaction hinges on more than the amount of time it takes to move an order from an app to the customer’s door.

To succeed in the delivery service market, business leaders must ask themselves a number of questions: Which parts of their business are needed to complete a same-day delivery order? Is the ordering process intuitive? Can the order and delivery be monitored by the customer? Is the order correct when it arrives? Does it meet the customer’s expectations?

And, most importantly, is their business built on a technology platform that can support the entire customer journey and delivery model, from product discovery and purchase to same-day delivery and beyond? The businesses that answer yes to these questions are the ones I expect to thrive in the post-pandemic world.

#artificial-intelligence, #column, #delivery, #e-commerce, #ecommerce, #food-delivery-apps, #online-shopping, #tc, #uber

Powered by local stores, JOKR joins the 15 min grocery race with a $170M Series A

“We are true believers in the fact that the world needs a new Amazon, a better one, a more sustainable one, one that appreciates local areas and products.” It’s quite one thing to claim you are out to replace Amazon (just as its founder goes into space), but Ralf Wenzel, Founder and CEO of JOKR, certainly believes his company might have a shot. And he’s raising plenty of money to aim at that goal.

Today the fast-growing grocery and retail delivery platform has closed a whopping $170 million Series A funding round. The round comes three months after the company started operations in the U.S., Latin America, and Europe. JOKR’s team consists of people who created both foodpanda and Delivery Hero, so from the outside at least, they have the chops to build a big business.

The round was led by Led by GGV Capital, Balderton Capital, and Tiger Global Management. It was joined by Activant Capital, Greycroft, Fabrice Grinda’s FJ Labs, as well as Latin America’s tech-specialized VC firms Kaszek and Monashees, as did HV Capital, the first institutional investor.

Based out of New York, where it launched last month JOKR plans to roll out across cities in the U.S., Latin America and Europe. Right now it’s live in nine cities, across Latin American countries, Brazil, Mexico, Colombia, Peru, as well as Poland and Austria in Europe.

Wenzel said: “The investment we announced today will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains. We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us.”

JOKR’s pitch is that it enables small local businesses to sell their goods, sourced from other local businesses, via the platform, thus expanding their reach without the need for complex logistics and delivery networks on their own. But that local aspect also builds sustainability into the model.

Hans Tung, Managing Partner at GGV Capital, and newly appointed member of JOKR’s board said: “Ralf has put together an all-star team for food delivery that will transform the retail supply chain. The combination of food delivery experience and the sophisticated data capabilities that optimizes inventory allocation and dispatch, set JOKR apart. We look forward to working with the team on their mission to make retail more instant, more democratic, and more sustainable.”

JOKR is joining other fast-delivery grocery providers like Gorillas and Getir in providing a 15 minute delivery time for supermarket and convenience products, pharmaceuticals, but also ‘exclusive’ local products that are not available in regular supermarkets. Although, so far, it only has an app on Google Play.

Speaking at an interview with me Wenzel said: “We are close to the equivalent of Instacart, strongly grocery focused. Our offering is significantly broader than the ones of Gorillas because we’re not only focusing on convenience and all kinds of different grocery categories, we’re getting closer to a supermarket offering, so the biggest competing element would be the traditional supermarkets, the offline supermarkets, as well as online grocery propositions. We are vertically integrating and hence procuring directly, cutting out middlemen and building our own distribution warehouses.”

#activant-capital, #amazon, #austria, #balderton-capital, #brazil, #ceo, #colombia, #delivery-hero, #distribution, #europe, #food-delivery, #foodpanda, #getir, #ggv-capital, #gorillas, #grocery-store, #hans-tung, #hv-capital, #instacart, #jokr, #latin-america, #managing-partner, #mexico, #new-york, #online-food-ordering, #online-shopping, #peru, #pharmaceuticals, #poland, #premier, #ralf-wenzel, #retailers, #tc, #tiger-global-management, #united-states

Taste intelligence startup Halla closes $4.5M Series A1 to predict which grocery items shoppers will buy

Halla wants to answer the question of how people decide what to eat, and now has $4.5 million in fresh Series A1 capital from Food Retail Ventures to do it.

Headquartered in New York, Halla was founded in 2016 by Gabriel Nipote, Henry Michaelson and Spencer Price to develop “taste intelligence,” using human behavior to steer shoppers to food items they want while also discovering new ones as they shop online. This all results in bigger basket orders for stores. Today’s funding announcement brings Halla’s total capital raised to $8.5 million, CEO Price told TechCrunch.

The company’s API technology is a plug-and-play platform that leverages more than 100 billion shopper and product data points and funnels it into three engines: Search, which takes into account a shopper’s preferences; Recommend, which reveals relevant complementary products as someone shops; and Substitute, which identifies replacement options.

Halla’s Substitute product was released earlier this year as an answer to better recommendations for out-of-stock items that even retailers like Walmart are creating technology to solve. Price cited a McKinsey report that found 20% of grocery shoppers sought out competitors following a negative outcome from bad substitutions.

Halla Substitute. Image Credits: Halla

None of these data points are linked to any shoppers’ private data, just the attributes around the shopping itself. The APIs, rather, are looking for context to return relevant recommendations and substitutions. For example, Halla’s platform would take into account the way someone adds items to their cart and suggest next ones: if you added turkey and then bread, the platform may suggest cheese and condiments.

“It’s also about personalization when it comes to grocery shopping and food,” Price said. “When you want organic eggs from a specific brand and it is out of stock, it is often up to your personal shopper’s discretion. We want to lead them to the right substitutions, so you can still cook the meal you intended instead of ‘close enough.’ ”

Halla’s technology is now live in more than 1,100 e-commerce storefronts. The new funding gives Halla some fuel for the fire Price said is happening within the company, including plans to double the number of stores it supports across accounts. He also expects to double employees to 30 in order to support growth and customer base, admitting there is “more inbound interest that we can handle.” Halla has been busy fast-tracking big customers for pilots, and at the same time, wants to expand internationally with additional product lines over the next 18 months.

The company is also seeing “a near infinite increase in recurring revenue,” as it attracts six- and seven-figure contracts that push the company closer to cash flow positivity. All of that growth is positioning Halla for a Series B if it needs it, Price said.

Meanwhile, as part of the investment, Food Retail Ventures’ James McCann will join Halla’s board of directors.

McCann, who only invests in food and retail technology, told TechCrunch that grocery stores need a way to inspire shoppers, that Halla is doing that and in a better way than other intelligence versions he has seen.

“Their technology is miles ahead of everyone else,” he added. “They have a terrific team and a terrific product. They are seeing huge uplifts in terms of suggestions and what people are buying, and their measurements are out of this world.”

Photo includes Halla co-founders, from left, Spencer Price (CEO), Henry Michaelson (CTO & President) and Gabriel Nipote (COO).

#artificial-intelligence, #ecommerce, #enterprise, #food, #food-retail-ventures, #funding, #gabriel-nipote, #halla, #henry-michaelson, #james-mccann, #mckinsey, #online-shopping, #recent-funding, #saas, #spencer-price, #startups, #tc

Repeat raises $6 million Series A for its service that makes reordering favorite products easier

Subscriptions have become a popular way to pay for digital services, like Netflix or Spotify, but they haven’t yet taken off as a means of reordering your everyday items or other household essentials. Retailers, including Amazon, have tried shifting consumers to a subscription model for these sorts of purchases — even by offering discounts. Still, consumers have largely balked at the idea of forced reordering on a fixed schedule. A startup called Repeat believes it may have figured out a better solution. Instead of trying to lock consumers into subscriptions, Repeat analyzes consumer purchase behavior to nudge customers when it’s time to reorder. It then provides them with a personalized shopping cart to make the reordering experience fast and painless.

This service is now being used by 67 companies in the consumer packaged goods (CPG) market, including brands like By Humankind (personal care), Jot (coffee), Vegamour (haircare), Youth to the People (skincare), Osea (skincare), hydrant (rapid hydration packets), Twice (toothpaste), lemon perfect (flavored water), and many others.

Today, Repeat is announcing its $6 million Series A, led by Battery Ventures. Seed investors Mucker Capital and Harlem Capital also invested in the round. With the round’s close, Battery’s general partner Neeraj Agrawal, whose background is in enterprise software-as-a-service businesses, is joining Repeat’s board.

Repeat co-founders Sarah Wissel (L) and Kim Stiefel (R)

The idea to tackle e-commerce’s replenishment problem came about after Repeat’s co-founders Kim Stiefel and Sarah Wissel tried launching their own direct-to-consumer apparel brand, UNDR, focused on refreshing the basics — like socks, tees, and underwear. Having spend their careers in the marketing and ad tech world, they believed they would be able to put their experience to work to grow their new business.

After launching a quarterly subscription for t-shirts, the founders soon discovered not only how hard it was to get a brand-new brand off the ground, but also how getting customers to commit to ongoing purchases was even harder. From their customer feedback, the founders learned that most consumers actually don’t like the experience of reordering household items. Customers told them it doesn’t always make sense to reorder products on a fixed schedule.

Unlike Netflix, where you’re paying for the rights to access a broad catalog on an ongoing basis, there are times when you’ll use your household products more quickly or more slowly. That means you’ll sometimes end up receiving items too soon when you’ve ordered them on subscription. That’s not ideal; nor is it very eco-friendly. Other times, you may run out before your scheduled delivery is due to arrive. That’s also a problem.

“We should have known that,” admits Stiefel, now Repeat’s CEO, after hearing that customers didn’t like subscriptions. “We asked ourselves if we actually subscribe to any products, and it turns out, the answer was ‘no.’” 

The founders decided to scrap their subscription in favor of a new idea. Instead of forcing consumers to subscribe on a schedule, they would “nudge” customers to reorder during what they determined would would be the perfect window, based on past order history.

Image Credits: Repeat

After experimenting with personalized reminders for their own brand for a year, Stiefel and Wissel decided to pivot their startup so they could offer this service to any e-commerce CPG company.

Today, any brand that sells a replenishable or consumable product can use Repeat to turn their one-time buyer into a repeat customer. To do so, Repeat uses a combination of logic, where it analyzes all the company’s a la carte purchase behavior to make sense of the general replenishment intervals on a per-SKU basis. It then leverages that logic to nudge customers when it’s time to reorder by sending an email or text with a link to what Repeat calls its “replenishment cart.” The customer can choose to snooze the reminder or they can click through to checkout.

This replenishment cart is a special shopping cart that’s personalized to the individual customer and pre-filled with the product or products they’re due to repurchase, as well as other suggestions. But unlike a typical checkout experience, the customer can adjust the merchandise the cart contains — for example, by opting for a different flavor or scent for their product, or opting for a larger size, among other things.

As the customer continues to interact with Repeat’s reminders and cart, the service gets smarter about understanding that customer’s unique reordering intervals, so its nudges also get smarter. In time, Repeat envisions offering a universal cart where customers can reorder from across their favorite CPG brands in one place.

Image Credits: Repeat

“There’s a lot of logic that goes into making that cart experience work as well as it does,” notes Stiefel. “For example, the cart converts at around 25 percent on average. Some brands are seeing 40, or 45 percent conversion on that cart, and we see that people check out oftentimes in less than 15 seconds on that cart. And I think that’s really the underlying magic — that, in combination with the logic, is the underlying magic of Repeat,” she adds.

There is, of course, the challenge of getting its nudges exactly right. If Repeat hits up customers at the wrong time, it could be perceived as an annoyance and customers might opt out of the notifications.

Repeat currently generates revenue through a monthly SaaS (software-as-a-subscription) fee, and as a percentage of the revenue its cart drives. For brands that drive less than 2,000 a la carte, non-subscription orders per month, Repeat would charge $99 per month plus 5% of the revenue it drives. And for brands that are driving more than 10,000 a la carte, non-subscriptions orders per month, Repeat charges $499 per month, plus 5% of the revenue it drives. The company isn’t disclosing its own revenue figures, however.

L.A.-based Repeat says it plans to use the new funds to hire across all roles, including in engineering, product, sales, marketing and growth. The startup began the year with just 3 employees, but hopes to be at around 15 to 20 by the end of the year by expanding its team that’s distributed across the U.S.

The company will also use the capital to work on scaling the business. For example, it recently launched QR codes that allow anyone to be redirected to a Repeat cart — even first-time shoppers who discover a brand through a friend, and scan the product to order one of their own.

Over time, Repeat believes it can change the way CPG subscriptions work.

“The problem with subscription today is that it’s fixed, and time-based and rigid, and not rooted in any kind of real consumption cadence,” says Stiefel.

“Because Repeat focuses on that all a carte reordering experience, and because we’re looking at repeat behavior across individual product SKUs, we actually know a tremendous amount about consumption behavior across every category of CPG. I think what you’ll see from us in the future is being able to leverage that data to offer more flexible dynamic subscription experiences,” she says.

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