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 setup, which seeks to replicate an Amazon-style experience where customers can also return packages. Among others, it competes with ShippyPro, which runs out of Italy and has raised $5 million to date.

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

“What happens after the purchase is more important than most shops realize,” he added. “More than 88% of consumers say it is very important for them that retailers proactively communicate every fulfillment 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.”

“While online retailing has a long way to go, the expectations of consumers are increasing when it comes to delivery time and standards,” Rait Ojasaar, investment partner at lead investor Change Ventures, said. “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 fulfillment SaaS platform.”

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Gopuff confirms new $1B cash injection at a $15B valuation to expand its instant grocery delivery service

Gopuff, the startup that’s helped kickstart a new category of food delivery in the U.S. — “instant” delivery of essential groceries and other home goods for a flat fee of $1.95, 24 hours a day — has closed a huge tranche of funding to help it scale its service further across the country and globe. It’s raised $1 billion in a Series H round that values the Philadelphia-based company at $15 billion.

New backers Blackstone’s Horizons platform, Guggenheim Investments, Hedosophia, and Adage Capital, and previous backers Fidelity Management and Research Company, Softbank Vision Fund 1, Atreides Management, and Eldridge Capital all participated in the round.

This news confirms our scoop of last week, when reported on this Series H as it was still being closed.

Gopuff said it plans to use the funding to continue expanding in North America, the UK (where it has already acquired one company, Fancy, and, sources tell us, is acquiring another, Dija), and Europe; on more hiring; and to continue building out the tech platform that bridges an ecosystem that includes customers, drivers, suppliers and distribution centers.

It currently operates 450 sites across North America and the UK, with includes more than 285 dark stores (or “micro-fulfillment centers” in Gopuff’s words), plus more than 185 retailers by way of its acquisition of BevMo earlier this year.

One of the reasons that Gopuff has raised such a large sum is that building out food-based, logistics-fueled, transportation business along all of those parameters is capital-intensive.

But also, that effort to grow is coming amidst a strong surge of competition. Getir out of Turkey, backed by Sequoia and others and most recently valued at $7.5 billion, is also aggressively expanding. And just looking at Europe, there are a wave of others such as Flink, Gorillas, Glovo, Zapp, Cajoo, and Weezy also bulking up their bank accounts to throw their delivery bags into the ring. (In the U.S., established delivery giants like DoorDash will also be moving deeper into Gopuff’s territory.)

Gopuff believes it can give all of these and others a run for their money. Founded back in 2013 by Rafael Ilishayev and Yakir Gola — now co-CEOs — while they were still in university to fill a gap they saw in the market for students like themselves, Gopuff has expanded well beyond that by catering to anyone looking for a quick and relatively low-cost way of getting essential goods without physically going out to get those items themselves.

In a stretch of time where many of us were either being ordered by our municipal governments, or acting on our own decisions, to stay in place to curtail the spread of Covid-19, Gopuff’s star rose quickly as an easy way of complying without compromising our consumerist tendencies.

But Companies like Getir out of Turkey — which has been around for years also building out a model of “instant” delivery of essential goods — have demonstrated that there is staying power to the concept, and that is what Gopuff is betting on, too.

“Gopuff has quietly built a very strong business and solidified itself as the leading player, continuing to define this evolving category,” said Scott Minerd, Global Chief Investment Officer of Guggenheim Investments, in a statement. “Rafael and Yakir are focused on maintaining fiscal responsibility while having the ability to successfully execute on strategic growth opportunities. This measured approach along with Gopuff’s impressive offering has only just scratched the surface. We are thrilled to support this incredibly strong company and look forward to being part of Gopuff’s journey and continued expansion.”

Part of Gopuff’s strategy has been to augment the basic instant delivery of essentials model with more efficient distribution along with a wider vision of what constitutes essentials.

So in addition to building out more localized “dark” stores to more easily distribute goods to customers who buy them, that has included starting “Gopuff kitchens” to make and deliver ready-made food; buying alcohol retailer BevMo for $350 million in November 2020; and acquiring more logistics technology, in the form of buying rideOS for $115 million.

Gopuff itself has been on a fundraising tear to finance all of this. It was only in March that it raised $1.15 billion at an $8.9 billion valuation, which came just months after a $380 million round at a $3.8 billion valuation. Together the three most recent rounds total around $2.5 billion in funding in the space of 10 months, and the idea here seems to be that there may be more of where that came from.

“As Gopuff continues to define the Instant Needs economy, we are thrilled to have new leading global partners onboard, along with the support of our longtime investors. This funding round is further validation of the success of our model and will enable us to continue to do what we do best: deliver an unmatched customer experience,” said Ilishayev in a statement.

“We have truly doubled down on our key business priorities, accelerating our geographic expansion by entering new markets in the US and abroad, innovating for our customers, and continuing to invest heavily in our technology, our people, and our partners. We look forward to continuing to enhance the customer experience and to bring the magic of Gopuff to new customers around the world,” added Yakir Gola.

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Catch takes hold of $12M to provide benefits that aren’t tied to employers

Catch is working to make sure that every gig worker has the health and retirement benefits they need.

The company, which is in the midst of moving its headquarters to New York, sells health insurance, retirement savings plans and tax withholding directly to freelancers, contractors or anyone uncovered.

It is now armed with a fresh round of $12 million in Series A funding, led by Crosslink, with participation from earlier investors Khosla Ventures, NYCA Partners, Kindred Ventures and Urban Innovation Fund, to support more distribution partnerships and its relocation from Boston.

Co-founders Kristen Anderson and Andrew Ambrosino started Catch in 2019 and raised $6.1 million previously, giving it a total of $18.1 million in funding.

It took the Catch team of 15 nearly two years to get approvals to sell its platform in 38 states on the federal marketplace. Anderson boasts that only eight companies have been able to do this, and three of them — Catch included — are approved to sell benefits to consumers.

“More companies are not offering healthcare, while more people are joining the creator and gig economies, which means more people are not following an employer-led model,” Anderson told TechCrunch.

The age of an average Catch customer is 32, and in addition to current offerings, they were asking the company to help them set up income sources, like setting aside money for taxes, retirement and medical leave without having to actively save.

When the global pandemic hit, many of Catch’s customers saw their income collapse 40% overall across industries, as workers like hairstylists and cooks had income go down to zero in some cases.

It was then that Anderson and Ambrosino began looking at partnership distribution and developed a network of platforms, business facilitation tools, gig marketplaces and payroll companies that were interested in offering Catch. The company intends to use some of the funding to increase its headcount to service those partnerships and go after more, Anderson said.

Catch is one startup providing insurance products, and many of its competitors do a single offering and do it well, like Starship does with health savings accounts, Anderson said. Catch is taking a different approach by offering a platform experience, but going deep on the process, she added. She likens it to Gusto, which provides cloud-based payroll, benefits and human resource management for businesses, in that Catch is an end-to-end experience, but with a focus on an individual person.

Over the past year, the company’s user base tripled, driven by people taking on second jobs and through a partnership with DoorDash. Platform users are also holding onto five times their usual balances, a result of setting more goals and needing to save more, Anderson said. Retirement investments and health insurance have grown similarly.

Going forward, Anderson is already thinking about a Series B, but that won’t come for another couple of years, she said. The company is looking into its own HSA product as well as disability insurance and other products to further differentiate it from other startups, for example, Spot, Super.mx and Even, all of which raised venture capital this month to provide benefits.

Catch would also like to serve a broader audience than just those on the federal marketplace. The co-founders are working on how to do this — Anderson mentioned there are some “nefarious companies out there” offering medical benefits at rates that can seem too good to be true, but when the customer reads the fine print, they discover that certain medical conditions are not covered.

“We are looking at how to put the right thing in there because it does get confusing,” Anderson added. “Young people have cheaper options, which means they need to make sure they know what they are getting.”

Labor leaders and startup founders talk how to build a sustainable gig economy

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Online Brand CMOs ‘Tremendously Confident’ at recovery

ChannelAdvisor and research firm CensusWide surveyed 304 CMOs working at UK brands selling online. 91% of CMOs said they feel confident that their brand’s revenue would grow over the next 12 months, with a quarter (25%) feeling very confident in revenue growth. Respondents were also self-assured about customer growth, with 92% expecting it to become even easier for their brand to attract and retain online shoppers across the next 12 months, with nearly a third (32%) saying they expect this to become ‘much easier’.

When asked which hires would be most sought after by their brand over the next 12 months, ecommerce expertise was ranked first, followed by marketing talent. Those surveyed listed web developers third, while senior strategic expertise came fourth, followed by logistics expertise.

As brands look to build further ecommerce success in a very crowded market, many have poured money into online marketing. 80% of brands say their digital marketing spend is higher than pre-COVID levels and 91% expect their digital ad spend to increase further over the next 12 months.

Digital ads across all online channels were primarily dedicated to directing consumers to D2C opportunities. 36% of CMOs said digital advertising was directing traffic to the brand’s own website, while 29% said clickable digital ads directed customers to online marketplaces such as Amazon. 20% direct to retailer partner websites, while 14% said their digital ads were not clickable.

How Brands Have Adapted To A New Wave Of Online Shoppers

The pandemic has seen brands responding to shifting consumer habits and behaviour. More than a quarter (29%) of CMOs said they had noticed an older demographic of shoppers purchasing their brand’s products online. 31% said they had noticed that shoppers were purchasing online more frequently than before COVID, while more than a quarter (28%) observed that consumers were demanding more flexibility in when and how their products were delivered compared to before the pandemic.

Brands have invested to meet these new demands over the last year. 84% of CMOs say their brand has increased the speed of their average delivery time since the start of the COVID-19 crisis. 45% have invested significantly in their logistics capabilities, including delivery and returns.

Brands have also spent to optimise the various channels they sell across. When asked about areas they have made significant investments in across the last 12 months, 49% of CMOs say their brand has invested heavily in optimising their presence on online marketplace channels, while 45% made a significant investment to improve their relationships with retailers. More than a third (38%) say they have invested in optimising their own online stores.

“This research shows that brands are tremendously confident about their online prospects and believe the next 12 months could drive even higher ecommerce revenues than those seen during lockdown. It appears that the investments in marketplaces, online advertising, ecommerce infrastructure, and retail relationships are paying off for most brands.”
– Mike Shapaker, Chief Marketing Officer, ChannelAdvisor

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Livestream e-commerce: Why companies and brands need to tune in

Alanna Gregory Contributor

Alanna Gregory is a marketing executive and is currently senior global director at Afterpay. Previously, she was VP at Hairstory, the founder and CEO of VIVE Lifestyle, and was an AVP at Barclays.

More posts by this contributor

• E-commerce roll-ups are the next wave of disruption in consumer packaged goods

What comes to mind when you think of livestreaming? In the U.S., most people would name their favorite celebrity leading a Q&A on Instagram or a gamer doing a speedrun on Twitch.

In China, it’s shopping, streamed live.

Livestream e-commerce has taken off in China in the last few years and is expected to yield more than $60 billion this year. In 2019, 37% of online shoppers in China (a cool 265 million people) made purchases on livestreams — and that was well before quarantine. In 2020, it’s estimated to have reached around 560 million people.

During Taobao’s annual Single’s Day Global Shopping Festival in 2020 (China’s Black Friday), livestreams accounted for $6 billion in sales — nearly doubled from a year earlier.

Starting to see a trend? The big U.S. companies have noticed, and they’re jumping on the bandwagon faster than you can say, “Swipe up to buy now!”

Last December, Walmart livestreamed shopping events on TikTok. Amazon released a live platform where influencers promote items and chat with customers. Instagram launched a Shop feature that encourages users to browse and buy within the app. Facebook also kicked off Live Shopping Fridays for the beauty and fashion categories.

“It’s an entertaining way for shops to tell the story behind their products. It brings buyers closer than ever to their favorite creators and allows them to have a voice in the conversation.”

Startups are growing fast to keep up with the heavy hitters — PopShop.Live raised $20 million to let people buy everything from books and toys to jewelry from sellers who livestream their offerings, and Whatnot raised a $50 million Series B, largely to expand its livestream commerce infrastructure. There’s also a burgeoning category of SaaS tools such as Bambuser, which is working with brands like Klarna to test native livestream shopping directly within branded apps.

At this pace, retailers will all welcome livestream commerce teams like they have influencer partnerships in recent years. It’ll just be part of the digital equation to stay competitive and relevant in the future of marketplaces and e-commerce.

From B.C. to 5G: The evolution of shopping

What is old is new again. Your grandparents spent years watching QVC because it balanced the experience of speaking with an associate with the convenience of their retirement community’s TV room. Livestream is today’s version of “shoptainment,” where hosts showcase products dynamically, interact with their audiences and build urgency with short-term offers, giveaways and limited-edition items.

Now, with livestream commerce, hosts can form deeper customer connections and answer questions in real time. It’s a new standard of communication that holds a longstanding truth from Istanbul’s Grand Bazaar to smartphones: People shop to kill time and are more likely to buy when they feel connected with a salesperson.

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Colombia’s Merqueo bags $50M to expand its online grocery delivery service across Latin America

Merqueo, which operates a full-stack, on-demand delivery service in Latin America, has landed $50 million in a Series C round of funding.

IDC Ventures, Digital Bridge and IDB Invest co-led the round, which also included participation from MGM Innova Group, Celtic House Venture Partners, Palm Drive Capital and previous shareholders. The financing brings the Bogota, Colombia-based startup’s total raised to $85 million since its 2017 inception.

Merqueo CEO and co-founder Miguel McAllister knows a thing or two about the delivery space in Latin America, having also co-founded Domicilios.com, a Latin American food delivery company that was bought by Berlin-based Delivery Hero and later merged with Brazil’s iFood.

McAllister describes Merqueo as a “pure-play online supermarket with a fully integrated grocery delivery service” that sources directly from large brands and local suppliers, bypassing intermediaries and “delivering directly from its dark store network.” (Dark stores are traditional retail stores that have been converted to local fulfillment centers.”

Merqueo offers more than 8,000 products, including fresh foods, packaged goods, home essentials, beverages and frozen products. It currently operates in more than 25 cities in Colombia, Mexico and Brazil and has over 600,000 users.

Image Credits: Merqueo

It must be doing something right. The startup is close to $100 million in “run-rate revenue,” according to McAllister, having grown more than 2.5x in 2020. Merqueo also reached positive cash flow in Colombia, its most mature market. Over the last year, large Latin American retail chains and retailers have approached the company about potentially acquiring it, McAllister said.

Part of the company’s success might be attributed to the speed and flexibility it offers. Users can choose how and when to receive their groceries according to their needs, with the startup offering delivery in as little as 10 minutes or three to four hours. Users can also schedule delivery of their groceries in two-hour intervals for the same day or the next day.

Also, owning and controlling the “entire” vertical supply chain gives it the ability to obtain better margins, offer competitive pricing and achieve healthy unit economics, according to McAllister.

Merqueo plans to use its new capital in part to expand geographically. The company is currently in phase one of its expansion to Brazil, entering initially in Sao Paulo later this month. Next year, it expects to launch in other Brazilian cities such as Rio de Janeiro, Fortaleza and Salvador de Bahia.

The market opportunity in Latin America is massive considering that online grocery sales only represent just 1% of the market –– far lower than in the U.S., EU or China, for example. Other players in the increasingly crowded space include GoPuff in the U.S., Getir out of Turkey and Mexico-based Jüsto, which raised $65 million in a Series A led by General Atlantic earlier this year.

Instant grocery startup Getir makes its first acquisition to expand into Spain and Italy

“The pandemic accelerated the adoption of online grocery shopping in LatAm,” McAllister told TechCrunch. “The region went from 0.3% share of online groceries to 1%. And after the pandemic, we are seeing a 50% increase in the pace of user adoption.” Overall, the $85 billion e-commerce market in Latin America is growing rapidly, with projections of it reaching $116.2 billion in 2023.

Currently, Merqueo has over 1,300 employees in LatAm, up 60% from last year. It plans to continue hiring with the proceeds from the Series C round as well work “to become the largest and most ambitious dark stores network of Latin America.”

Alejandro Rodríguez, managing partner at IDC Ventures, is naturally bullish on Merqueo’s potential.

“From all the opportunities we looked into, Merqueo is undoubtedly the most advanced in the region. … The Merqueo team has proved they know how to scale the business and how to get to profitability,” Rodríguez told TechCrunch.

Online grocery delivery is a business with many technical and operational complexities, he said. In his view, Merqueo’s technology and operational expertise allow it to tackle those issues in a way that has led to “the best customer experience that we have seen in a scalable way.”

“They have the best combination of both great service metrics and healthy unit economics,” Rodríguez added.

Who’s building the grocery store of the future?

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Consumers desire more authentic eco-transparency

Bazaarvoice’s Influenster community has revealed that consumers desire eco-transparency from brands now more than ever.

Consumers are really keen on bettering themselves as sustainable shoppers in a bid to bring oceans back from the brink. This means that a lot of pressure is being put on brands to be more open with the efforts they make in offering sustainable initiatives.

Over three quarters (78%) of consumers feel it’s important to use brands or products that are described as ‘green’, ‘eco-friendly’ or sustainable, however, whether consumers will trust these efforts is another story with 1 in 3 consumers believing brands are not completely transparent with their practices when using terms such as ‘eco-friendly’, ‘sustainable’ or ‘green’ (30%) in their marketing and packaging. A quarter (24%) believe brands just use such terms to sell products.

Authentic sustainability efforts

As a brand, you might be under the impression that consumers opt for quick, efficient information but is that changing? According to the data, consumers want to hear more from brands on their sustainability efforts, as long as it’s authentic.

Social media is your friend

Almost two-thirds of consumers (60%) will actively search on brand websites, blogs and social media to understand what a company is doing to be more eco-friendly, sustainable or to discover what their ‘green’ initiatives are. In fact, Instagram (48%) and influencers (48%) are now the second most popular source for consumers looking to educate themselves about sustainable practices, just behind search engines (50%).

So right now, consumers favor eco-transparency from brands, wanting to hear about the efforts they are making to keep the earth and its oceans healthy. If your brand provides sustainable options, it’s never been a better time to provide your consumers with a heart-to-heart on the good you do for the planet.

“Every year we see consumers become more aware of their ecological footprint, and sustainability is undeniably now a necessity for today’s shopper. Consumers are already actively changing their lifestyles to be more sustainable, and it’s clear they want to trust that brands and retailers are following suit. Uncertainty remains around how the actions of some retail corporations impact the planet, so the key for brands to garner trust and respect is to be open, transparent, and communicative about the ways they prioritise sustainability.”
– Ed Hill, SVP EMEA, Bazaarvoice

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Twitter grab a piece of ecommerce pie with Shop Module

Earlier in the year Twitter let us know that they were testing out the potential for shopping on their platform. This week Twitter have announced the launch of a pilot of the Shop Module, a feature that allows them to explore how shoppable profiles can create a pathway from talking about and discovering products on Twitter to actually purchasing them.

The Shop Module is a dedicated space at the top of a profile where businesses can showcase their products. When people visit a profile with the Shop Module enabled, they can scroll through the carousel of products and tap through on a single product to learn more and purchase — seamlessly in an in-app browser, without having to leave Twitter.

Twitter wouldn’t be the first or last social media platform to test the waters for ecommerce. It is not surprising that social media platforms would want to take advantage of their expansive member base. Eerily, even before the Pandemic began businesses selling on social media sites and apps were predicted to rise and given the current circumstances, these platforms have been pushed to develop shopping features that meet the new much larger demand for ecommerce.

Currently, Twitter are starting small with a handful of brands in the United States. People in the U.S. who use Twitter in English on iOS devices will be able to see the Shop Module. As they learn, Twitter is creating deeper partnerships with businesses that reflect whom they’re building for with a new Merchant Advisory Board. The board will consist of brands that have established themselves as best-in-class examples of merchants on Twitter. With their partnership, Twitter hope to more easily address the needs of businesses of any size or vertical in our product innovation.

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£3m Klarna Small Business Support Package for SME recovery

A new £3m Klarna Small Business Support Package has been launched today, to help British SMEs recover from the pandemic. The package comes as new research reveals a quarter (24%) of SMEs aren’t confident their business will survive the next two years with 46% of owners stating their main priority is to simply survive the next six months.

The Klarna Small Business Support Package will provide 100 retail SMEs with access to much needed support across different elements of their business, from office space and customer acquisition to advertising support. Specifically, the fund will provide SMEs with WeWork All Access for 3 months, complimentary use of Klarna’s Pay later products for one year and £15,000 of Klarna media services. Together this package equates to over £30,000 of support for each business.

The recipients of the package will be decided by a hand-picked panel of judges including Matt Vickers MP for Stockton South and Co-Chair of the APPG on Future of Retail, Alex Marsh Head of UK for Klarna and Mathieu Proust, General Manager, UK, Ireland & Emerging Markets at WeWork.

Support will be split across four categories:

• Retail Innovator

  For the small businesses who have been breaking barriers and bringing innovation to the retail industry

• Omnichannel trailblazer

  For those leading the way on omnichannel retail, and creating exceptional cross-channel experiences for their customers.

• Sustainability Champion

  Celebrating the retailers who have made a commitment to our planet, and champion sustainable retail as part of their business.

• Pandemic Impact

  For those who have been heavily impacted by the pandemic – from physical store closures to impact on demand.

The £3m Klarna Small Business Support Package comes after Klarna-commissioned research highlighted the specific issues senior SME leaders have faced in the past 16 months. It found that nearly two fifths (38%) of SMEs didn’t think that they’d survive the pandemic with a further 39% feeling they are still yet to recover. The impact on wellbeing is also startling, with 44% of SME leaders noting that pandemic induced business pressures had a negative impact on their mental health.

The initiative will also support those who want to make a positive impact on society, notably in sustainability. A third (32%) of SMEs want to make a positive contribution to society over the next 6 months and 50% are committing to focus on sustainability over the next year. As part of its 1% Pledge, Klarna is committed to supporting those who align with their climate goals.

“SMEs are at the core of our economy and it’s vital that they’re given all the tools they need to survive. At Klarna, we are determined to help small retailers navigate their way back to pre-pandemic levels and we hope that this fund, together with our Accelerator Program, will inspire and boost confidence across the SME sector.”
– Alex Marsh, Head of UK at Klarna

Matt Vickers, MP for Stockton South and Support Package judge said: “It has been a monumentally difficult year for our SMEs, and as we recover from the pandemic, it’s vital that we can provide all the support we can. Klarna’s £3m Support Package and Accelerator Program will be instrumental in rebuilding business health and confidence and I encourage every SME to get involved.”

Mathieu Proust, General Manager, UK, Ireland & Emerging Markets at WeWork, said: “WeWork is fortunate to be home to some of the UK’s most exciting start-ups and SMEs and we know the power of the right resources, space and network on driving success. After such a challenging year for SMEs, we’re looking forward to welcoming the Support Package beneficiaries into our community and to providing space designed for collaboration and innovation to help them grow and thrive”

Alongside the Support Package, Klarna has also launched a ten-part Accelerator Program hosting a series of free training masterclasses with industry experts from various partners including Shopify, WeWork, Global-e, dotdigital and more to provide SMEs with actionable insights to boost their business.

The first of these sessions ran yesterday, with over 400 attendees and is one of many initiatives being undertaken by Klarna as part of its commitment to supporting SMEs.

Applications for the fund are open until 8th September.

Also check out the Accelerator Program here.

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Social Commerce in the Gulf Cooperation Council countries

Hassan Mikail, head of Shipa Ecommerce, has over 20 years combined experience in the digital, marketing & global partnerships. He has spent the last 11 years building scalable technology systems for businesses that are both consumer facing and merchant friendly, with a key focus on cross-border ecommerce. In this guest post today, Hassan reveals what’s happening with ecommerce in the Gulf Cooperation Council countries (GCC) and the broader Middle East and how European retailers are missing out:

Social Commerce: The Future is Now in the GCC

The use of social media to buy and sell is the fastest-growing segment of ecommerce in the Gulf Cooperation Council countries (GCC) and the broader Middle East. Social commerce in the region deserves more attention from merchants and brands that have, until now, devoted most of their focus to larger, more mature markets.

Globally, the market for global social commerce – worth about $475 billion in 2020 – is forecast to reach $3.4 trillion over the next seven years, according to Grand View Research.

As a share of all ecommerce, sales through Instagram, WhatsApp, Snapchat, Facebook, Tik Tok, YouTube, Reddit, Twitter, Pinterest, Taobao, Fab, Poshmark, Etsy and other social platforms are expected to expand from 5% to 12% over that same period.

A number of factors are driving growth in social commerce, sometimes referred to as “conversational commerce.” Social media penetration and time spent on social media by individual users is increasing. The number of social platforms creating built-in ecommerce experiences is growing. Brands are pouring more money into social advertising.

At the same time, the line between commerce and entertainment is blurring as marketers use live-streaming videos to showcase products and introduce rewards and gamification that engage users and get them to spend.

Across the Middle East, 28% of the population is between the ages of 15 and 29. The median age in the region is 22 – well under the global median age of 28. That’s important because social media penetration and use are highest among young adults and teens regardless of region.

Grand View Research says B2C sales account for 53% of global social commerce sales. The leading categories are personal and beauty care products; apparel; accessories; home products; health products; foods and beverages. Asia Pacific is the fastest growing region for social commerce.

But marketers would be shortsighted to overlook the Middle East and, particularly, the Gulf states, where ecommerce sales spiked 52% in a single year from 2019 to 2020, according to venture capital firm Wamda. The under-30 demographic there is large, curious, and eager for new experiences. It is made up of digital natives, many of them affluent, who are starved for entertainment, connection and information – and eager to both consume and create original content.

Online merchants and brands that have grown into ecommerce powerhouses in the United States, Europe and China have struggled in the GCC and wider Middle East. They trip up on local fulfillment, customs red tape, cross-border shipping hassles, postal and delivery peculiarities, local payment preferences, and a high rate of returns.

Even with all that, it’s clear that the pandemic has caused a seismic shift in ecommerce across the region. A Wamda whitepaper cited a “remarkable spike in demand and adoption” during the pandemic. “Today, 80% of young Arabs shop online frequently, compared to 71% in 2019. Additionally, 50 percent of those aged 18-24 … are shopping more online” even as pandemic restrictions have eased, it says.

Ecommerce in the region is booming, Forbes says, because of the combination of a highly digitized population and a lockdown-induced surge in consumer demand. Part of that surge has been driven by offline retailers that began listing products on Facebook and WhatsApp, using them to conduct transactions and start their digital journeys.

It’s clear the explosive growth in the region’s ecommerce and social commerce will outlast the pandemic. The region’s young population is drawn to Tik Tok and other platforms that are reinventing creativity and giving them a place to find and share videos of acrobatics, dancing, singing, gags and jokes. Social media users in the Arab world are obsessive about sharing and just as eager to share product posts and recommendations as Tik Tok dance videos.

I expect merchants and brands to take more notice of social commerce in the Middle East. They see the data showing that basket values there are higher there than virtually anywhere in the world. And they are familiarizing themselves with the region’s social media influencers, coming to understand what kinds of personalities can help sell in the Arab world.

Meantime, all of the social media platforms are on the cusp of introducing new features that will finally allow them to fully monetize the followings they’ve developed, especially in the Middle East.

What’s coming in the Gulf Cooperation Council countries?

• Integration of the buying experience

  Social platforms making changes that will soon have buyers making purchases and payments on their sites – with available payment gateways and logistics options — rather than doing so through sellers’ sites that are embedded on social platforms’ frames. Look for more Checkout features on social platforms such as the one introduced by Instagram.

• Trust-based transactions and payments

  Online sellers in the GCC and Middle East have been bedeviled by consumers’ preference for cash-on-delivery and the related problems of over-ordering and high returns. The pandemic accelerated development of a more trust-based online economy through adoption of contactless payments – digital wallets, credit cards, etc.

• Social seller access

  Social commerce activity will skyrocket once individual merchants – social sellers, solopreneurs and others — can sell through social platforms the way they now do via marketplaces such as eBay, Etsy and Craigslist.

• Augmented reality

  Social media platforms are ideal vehicles for use of next-generation interactive experiences that will let shoppers try on clothes, go for a test drive, or try new products virtually.

• Big Data and better targeting

  Social platforms allow brands to collect lots of data on consumers – age, sex, interests, languages, tastes, buying preferences, travel habits, admired public figures — and target them better. They can tailor content and promotions to individual tastes.

• Innovation from China

  The country making the most advances in digital shopping tools – and in entertainment that gets eyeballs – might surprise you. It’s not the United States, it’s not a country in Europe. It’s China.

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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.

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Shopify’s Q2 results beat estimates as e-commerce shines

Canadian e-commerce juggernaut Shopify this morning reported its second-quarter financial performance. Like Microsoft and Apple in the wake of their after-hours earnings reports, its shares are having a muted reaction to the better-than-expected results.

In the second quarter of 2021, Shopify reported revenues of $1.12 billion, up 57% on a year-over-year basis. The company’s subscription products grew 70% to $334.2 million, while its volume-driven merchant services drove their own top line up 52% to $785.2 million.

Investors had expected Shopify to report revenue of $1.05 billion.

Shopify also posted an enormous second-quarter profit. Indeed, from its $1.12 billion in total revenues, Shopify managed to generate $879.1 million in GAAP net income. How? The outsized profit came in part thanks to $778 million in unrealized gains related to equity investments. But even with those gains filtered out, Shopify’s adjusted net income of $284.6 million more than doubled its year-ago Q2 result of $129.4 million. Shopify’s earnings per share sans unrealized gains came to $2.24, far ahead of an expected 97 cents.

After reporting those results, Shopify shares are up less than a point.

In light of somewhat muted reactions to Big Tech earnings surpassing expectations, it’s increasingly clear that investors were anticipating that leading tech companies would trounce expectations in the second quarter; their earnings beats were largely priced-in ahead of the individual reports.

The rest of Shopify’s quarter is a series of huge figures. In the second three-month period of 2021, the company posted gross merchandise volume (GMV) of $42.2 billion, up 40% compared to the year-ago period. That was more than a billion dollars ahead of expectations. And the company’s monthly recurring revenue (MRR) grew 67% to $95.1 million in the quarter. That’s quick.

Shopify is priced like the growth will continue. Using its Q2 revenue result to generate an annual run rate for the firm, Shopify is currently valued at around 43x its present top line. That’s aggressive for a company that generates the minority of its revenues from recurring software fees, an investor favorite. Instead, investors seem content to pay what is effectively top dollar for the company’s blend of GMV-based service revenues and more traditional software incomes.

Consider the public markets bullish on the continued pace of e-commerce growth.

It will be interesting to see how BigCommerce, a Shopify competitor and fellow public company, performs when it reports earnings in early August. Shares of BigCommerce are up more than 3% today in wake of Shopify’s results. Ironic given Shopify’s relaxed market reaction to its own results? Sure, but who said the public markets are fair?

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Twitter launches U.S. e-commerce pilot that lets users shop from profiles

Twitter this morning will launch a pilot in the U.S. aimed at testing the potential for e-commerce on its platform. The company is introducing a new “Shop Module” that offers brands, businesses and other retailers the ability to showcase their products to Twitter users directly on the business’ profile. Users will then be able to scroll through a carousel of product images in the module, and tap through on a product they’re interested in purchasing. This opens up the business’s website inside the Twitter app itself, where the customer can learn more about the product in question and opt to make a purchase.

The Shop Module itself will appear in a new, dedicated space at the top of a supported Twitter profile, which can be seen by U.S. users in English on iOS devices.

The company tells TechCrunch that only businesses with a Professional Profile will be able to use the feature at this time.

Professional Profiles, which began testing in April, give businesses, non-profits, publishers and creators the ability to display specific information about their business directly on their profile, including things like their address, phone number, operating hours, and more. Essentially, it’s the Twitter equivalent to something like a Facebook Page for a business.

At launch, the new Shop Module will be made available to only a small group of pilot testers. In addition to gaming retailer @GameStop and travel brand @ArdenCove, Twitter says there will only be approximately 10 other brands across the lifestyle, traditional retail, gaming, media and entertainment, tech and telco industries who will gain access to the new feature.

At present, Twitter isn’t offering a way for interested businesses to sign up for the pilot, as the company is only in the initial phases of testing this feature, it says.

Image Credits: Twitter

While Twitter users often discuss products on the app and even reach out to companies directly for help with purchases, it’s unclear whether users will come to view Twitter as a shopping platform.

With the pilot, Twitter aims to better understand what could help it to make that shift, by tracking which types of products drive traffic to online retailers. For example, it wants to determine whether people are inspired by online conversations in the heat of the moment — like sports fans buying team apparel — or whether Twitter users could be encouraged to make purchases of a more lasting impact, like products for a new skincare routine. Having a diverse lineup of early pilot testers will help the company to compare data across verticals to learn what works best.

Twitter says it will also work directly with businesses to better understand their needs through the creation of a new Merchant Advisory Board, which will consist of “best-in-class examples” of merchants on Twitter.

The company earlier this year had mentioned its plans to expand into e-commerce.

At Twitter’s Analyst Day presentation in February, where it first announced its Super Follow platform for creators, the company also briefly spoke about its e-commerce investments.

“We’re…starting to explore ways to better support commerce on Twitter,” Twitter Revenue Lead, Bruce Falck, had said during the event. “We know people come to Twitter to interact with brands and discuss their favorite products. In fact, you may have even noticed some businesses already developing creative ways to enable sales on our platform,” he continued.

“This demand gives us confidence in the power of combining real-time conversation with an engaged and intentional audience. Imagine easily discovering, and quickly purchasing, a new skincare product or trendy sneaker from a brand you follow with only a few clicks,” Falck added.

Since then, Twitter has tested a new e-commerce feature for tweets, which allowed businesses to link out to online product pages — like those on a Shopify store, for instance.

Twitter tests new e-commerce features for tweets

Twitter CFO Ned Segal also touted the potential to shop on Twitter when speaking to investors at the J.P. Morgan Technology, Media and Communications conference in May, noting that people “do a lot of research on Twitter before they buy something.”

Twitter’s entry into online shopping comes at a time when major tech companies and social platforms are ramping up their investments in e-commerce. Facebook has made significant moves into e-commerce with shopping features across Facebook, Instagram and WhatsApp, including with initiatives like online storefronts, integrated checkout, product drops, video shopping, and more.

Shopify has also partnered with a number of tech platforms, including Facebook, TikTok and Google, to make it easier for consumers to connect with products sold by its merchants.

It’s worth noting that Twitter previously attempted to run a commerce operation and failed. In 2017, the company begin to wind down its “Buy” button product, which had allowed Twitter users click to make purchases, and the retailer partnerships associated with that effort due to lack of traction. Clearly, the company believes the time is now right to try again.

Twitter is phasing out the “Buy” button, will continue to offer donations

 

 

 

 

 

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BigCommerce acquires feed optimization platform Feedonomics

BigCommerce have announced their acquisition of feed optimization platform Feedonomics to help merchants increase cross-channel sales.

As a full-service data feed management platform, Feedonomics helps mid-market and enterprise merchants succeed on hundreds of advertising channels and marketplaces by ingesting, unifying, enhancing, and syndicating product data, and then syncing the resulting order data back into existing systems to streamline operations.

In the US, ecommerce channel ad spending is expected to surpass $41 billion by the end of 2024, representing nearly 15% of all digital ad spend1. Together, BigCommerce and Feedonomics will provide merchants with the ability to seamlessly connect the dots between their back-end operations and their sales, marketing and advertising channels to drive higher ROAS, higher conversion and ultimately, higher GMV.

BigCommerce acquired the assets of Feedonomics for up to approximately $145 million, with approximately $80 million in cash paid at closing and up to $32.5 million to be paid at each of the first and second anniversaries of closing or upon the earlier achievement of certain milestones.

“This acquisition reflects our strong belief that Feedonomics offers the world’s best product feed optimization and syndication solution for merchants looking to optimize their advertising and selling via search engines, ad networks, social media sites and marketplaces. On average, these channels represent ecommerce merchants’ largest non-direct source of sales and one of the largest spending line items. With Feedonomics, BigCommerce merchants maximize their omnichannel sales and return on ad spend (ROAS) by connecting, transforming and enhancing their product data across hundreds of global channels. The combination catapults our ability to deliver the world’s most powerful ecommerce platform for omnichannel selling.”
– Brent Bellm, CEO at BigCommerce

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Money for nothing – The Apprenticeship Levy

Adrian Grove, Business Development Director at Qube Learning, wants to spread the word about the generous funding available to SMEs to boost their workforce before the funds are returned to government coffers. It’s basically money for nothing with the apprenticeship levy pot sitting their waiting for you to access it. Read on to find out more:

The Apprenticeship Levy: ‘That’s the way you do it’

If you know the Dire Straits song ‘Money for nothing’, released in 1985, it would be a good track to have playing in your mind while you read this article because it’s about a huge pot of money – around £157 million this year alone – which you, as a small business owner or manager could have a share of.

Any company in the UK with a payroll of over £3million has to pay the apprenticeship levy at a rate of 0.5% of their annual pay bill. A quick back of envelope calculation will tell you that this amounts to a huge amount of money.

The levy contribution sits in a digital account which the employer can use to pay for apprenticeship training. However, it can be difficult for large companies to spend all the money they have paid on the sort of training which the levy is tied to, apprenticeships, and after 24 months any unused levy funds expire and return to the government.

To give you an idea of scale, according to a question asked in parliament of apprenticeships minister, Gillian Keegan in May this year, £1 billion “had expired between May 2020 to February 2021”

You can help spend the money

This is the key point as it relates to you as a small UK marketplace retail business with perhaps 5 – 10 employers. To avoid that money ‘expiring’, employers who pay the levy can transfer the money to other smaller employers who don’t pay the levy. The only requirement is that the money must be spent, as the name of the levy suggests, on apprenticeships or training.

Yes, you read that correctly, your company could use the money other large organisations have paid, to pay for your own apprenticeship training. In classic economic terms this is called ‘a redistributive tax,’ and it’s one which your business could benefit from if you follow just a few simple steps.

What’s the catch?

For small businesses this is one of those rare occasions when there really is no catch – assuming you value what an apprentice can bring to your organisation. All you must do is pay 5% of the cost of the apprenticeship to access a whopping 95% of the remaining cost.
Think of all the work and different tasks required to buy and sell effectively on Amazon or other outlets – selecting stock, organising imports or delivery, checking stock or warehousing, managing your website or IT system, publicity and marketing, customer services and returns – all of these are roles which could benefit from skilled and motivated staff.

This is what you will be developing with an apprenticeship, whilst also ensuring succession and career planning at the same time and hopefully boosting productivity and profit in the long run too.

How to start

Questions you may be asking by now probably include: ‘how do we access the money’ or ‘how do I set up an apprenticeship scheme’. The UK government has taken pains to make accessing the apprenticeship levy money for small businesses as easy as possible and has stated “we want to give smaller employers greater control over their apprenticeship choices.”

Nevertheless, for a small business, transferring unused levy funds and setting up schemes can be complicated and time consuming. There are clear guidelines on the government website: www.gov.uk but for a small company where all hands are already on deck, this can be a job that never quite gets done.

Training providers help

The easiest way to get started therefore is to go straight to a training provider who is incentivised to help you. Training providers specialise in different areas so look for one that covers both your geographical location and type of apprenticeship you feel your business needs.

Qube Learning provides apprentices and training programmes for large organisations such as John Lewis, JD Sports, Peacocks, Matalan and DHL. This is the sort of experience and ability to connect levy fund ‘donor’ and ‘receiver’ you should look for you.

The training providers have step by step guides to encourage you to work with them, an example being this one: www.qube-learning.co.uk/levy-transfers

Many large companies who use the Apprenticeship Levy have massive amounts of funding leftover at the end of the year. This is a huge opportunity for SMEs, who can take advantage of the transfer as a ‘gift’ – it’s a fantastic opportunity to upskill and grow small business workforces from Level 2 or GCSE upwards, at low expense.

Adrian Grove can offer advice on how the levy transfer works and what it can mean for SMEs – and a helpful summary infographic on the levy transfer is shown here.

Step by step

What do Apprenticeships include? Each Apprenticeship programme has its own Standard linked to a specific occupation – these are rigorous, challenging and require the Apprentice to undertake a minimum of one year’s training followed by an End-Point Assessment (EPA).

If you work with a training provider, they will help you find the right programme, organise your staff lists and needs, and ensure the training and EPA is in place. They can also help set up your own Apprentice Service Account into which the levy transfer money is paid each month. If you decide to stop or your apprentice leaves, the money stops, it’s that simple. If you and your apprentice carry on and complete their training you’ve got a new, well trained member of staff almost completely for free.

In the words of Dire Straits ‘That’s the way you do it!’

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IOSS number submission now easier with Royal Mail

Good news for those that use Royal Mail, they’ve made it possible to enter an order by order IOSS number rather than IOSS number submission at account level.

“If you import orders by spreadsheet, including Click & Drop Desktop, we have added a new IOSS number field which you can map, which will assign IOSS numbers to specific orders”
– Royal Mail

If you sell through a marketplace, they are likely to have registered for IOSS. If so, you just need to assign their IOSS number in the pre-advice to Royal Mail for the items sold through the marketplace.

Marketplace sellers who sell via eBay, Etsy and NotOnTheHighStreet can also continue to visit their local Post Office in the normal way. Those customers should declare which of these marketplaces their items were sold on, when presenting them at the Post Office counter, and the Post Office branch will capture this information. The correct marketplace IOSS number will then be allocated to your item by Royal Mail. If you are selling goods on other marketplace places you can use the Royal Mail Click & Drop service – where you will find instructions how to do this.

For orders on marketplaces over €150 or orders on your own website, you will be responsible for EU VAT and need your own IOSS number. You then need the correct IOSS number submission for each item in the pre-advice you give to Royal Mail.

NB Where you have not integrated the marketplace with your Click & Drop account or you’re using a marketplace Royal Mail don’t support via Click & Drop integration, you can set up separate trading names, one for each marketplace you use and then enter the appropriate IOSS number for each marketplace. You must then remember to raise orders against the right trading name account so that the right IOSS number submission flows through with the item.

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

Cary Breese Contributor

Cary Breese is the CEO and co-founder of NowRx, a digital retail pharmacy.

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.

How we got 75% more e-commerce orders in a single A/B test for this major brand

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