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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