Game of E-Commerce Thrones Weekly Update – May 25 – May 29 Edition
You would think as we head into summer, the news-flow in the land of e-commerce would slow down and you would be….wrong! First, there was the Re/Code conference that featured several of our Game of E-commerce Thrones contenders, and they had some news there. Amazon also released a fury of news this week, and the excitement around Google’s possible buy buttons hit a fever pitch. On top of that, Google hosted their annual developer’s summit, Google I/O which featured a bunch of e-commerce related news.
Alibaba’s news this week was all about India where they are increasing their focus:
- Alibaba announced that in India they will speed deliveries with a logistics company called AllCargo.
- Quartz has a great article laying out the epic showdown in India between Alibaba and Amazon.
- Both articles above point out that Alibaba’s India strategy is to leverage a payment system called Paytm where Alibaba has made a $575m investment.
- Back in China, WSJ reported that Alibaba is working hard to get to next day deliveries in more regions.
- Finally, in one of these ‘power of consumer brand’ surveys, the usual suspects of Apple and Amazon were on the list, but Alibaba popped on the list for the first time…and was above Amazon!
- As we reported last week, there is growing evidence that Amazon is working on a marketplace that will compete head-on with Etsy called Handmade. This week there were many more articles on the topic, but much more news was revealed. This one from Quartz was quite dramatic.
- Amazon announced that imports to China are up 300% y/y and they are launching a site designed to specifically help Chinese buyers import goods from Amazon US called Haiwaigao.
- Geekwire broke the news that Amazon is offering free same day delivery in 14 markets which represents 500 cities. Note that this used to cost $5.99 and was called expedited shipping and is now free. The markets mentioned are: Atlanta, Baltimore, Boston, Dallas-Ft Worth, Indianapolis, LA, NY, Philly, Phoenix, SFO, Seattle, Washington DC and Tampa. Note that this seems to be a different effort than ‘next hour’ delivery service Prime Now which is a separate app. About 1m products are available for this free same day delivery.
- The best part of the Geekwire story is this Q+A sidebar with Greg Greeley, VP of Amazon Prime, where he says: “My focus is on how we can lower prices, and what can we do to make the lives of Prime customers better.”
- Amazon also announced that they intend to hire 6,000 more FC employees to keep up with demand.
- Then shortly after the news of ‘Free same day shipping in 500 cities’ hit, the WSJ broke the news that Amazon has plans to dramatically expand the number of private label products they sell. The WSJ piece specifically focuses around food and CPG type products. Note that we have been following Amazon’s march into private label in detail on the blog(s). This will all be sold under their Elements label.
- When the Target CEO, Brian Cornell, spoke at Re/Code’s conference, he admitted that Amazon’s success on-line woke Target up to the opportunity.
- Finally, back in 2013 Jeff Bezos made the head scratching move of acquiring the Washington Post and there has been little to no reporting about what’s going on there for about 2 years. The economist had an article this week that looked at what Bezos is doing with the Washington Post and how he is applying the learnings from Amazon to the newspaper. While not really e-commerce oriented, I thought it was an interesting look into how Bezos thinks. The most interesting aspect is speculation that the Washington Post will eventually be bundled in with your Amazon Prime subscription.
- Next week, Apple has their developer conference called WDC. The news this week was largely speculation and leaks about what Apple will announce next week.
- The top WDC story is speculation that Apple Pay will introduce some form of loyalty/customer awards. Most stories suggest that the loyalty program will be tied to the merchant, not overall Apple Pay.
- 9to5Mac had an interesting story on a new Apple system that extends the personal assistant Siri to be more like Google Now. It’s internally called Proactive. What I found most interesting about the story is the amount of effort Apple is taking to reduce Google searches on iOS. Here’s that tidbit: “iOS 8’s ability to display Wikipedia Search results within Spotlight was the first taste of the Proactive initiative, and was partially designed to reduce iOS’s search reliance on Google. Sources say that Apple’s internal iOS usage metrics indicate that Google clicks have indeed fallen since iOS 8’s release last fall.”
- Finally at Re/Code, the CEO of Target said he would love to role out Apple Pay, but they are focused on chip+pin first.
- This week eBay revealed they are working on a program like that available to Alibaba/Tmall sellers that allows you to ‘bid up’ a listing in the search listings. According to Internet Retailer, eBay’s take is going to be called Promoted Listings. Instead of being CPC based, sellers will ‘bid’ with an increase on take-rate/commission if the item sells. For example, if you are in a category with a 10% take rate, you can bid 2% extra (total of 12%). This is unusual because it will be hard to understand how incremental the advertising is, which is why Amazon and Alibaba use CPC with their programs.
- Shortly after the IR piece, eBay launched a blog describing more about the program.
- Businessweek had more details on the new service, but nobody seems to be able to answer the ROI question and if sellers will even be able to measure it. For those of us that have been around for a while, this is eBay’s 4th attempt at a program like this so it will be interesting to see if they can make it work this time.
- Facebook continues to take baby steps towards what we call ChatCommerce. As a reminder, at F8, they showed how FB Messenger could now be used for post-transaction communications with a consumer and used Everlane as a case study. This week, they announced that Facebook Payments in FB messenger were now live for NYC. You can split checks with friends and send money via FB Messenger (this is like eBay’s PayPal’s Venmo app which is wildly popular with the Millennial set for this use case). I view these two items together as FB working in parallel from the back of the e-commerce transaction to the front, and expect eventually you will be able to buy items from FB Messenger. They have also recently revealed that they see WhatsApp (which they acquired for $19b) as being a platform for B2C communications.
As mentioned in the beginning, there was a lot of excitement around the Google this week both from Google I/O and the Re/Code conference:
- At Re/Code, Google’s Chief Business Officer, Omid Kordestani, not only confirmed buy buttons are coming but said: “There is going to be a buy button soon. It’s imminent.” As we mentioned in our blog post last week, we believe this could be essential for retailers and they need to be ready.
- At Google I/O, Google announced that the next release of Android, which they called Android M, will be out shortly. Google has historically named Android releases after delicious treats (e.g. Ice Cream Sandwich, Lollipop, KitKat, etc.). Personally, this Southerner is hoping for
MoonPie, but I think it’s a bit of a long-shot. Android M also features a finger printer (already available on most Samsung phones).
- Android M will also feature a new payment system called……Android Pay. This is the rebrand and upgrade of SoftCard (ISIS). The Google Wallet brand will move to be a consumer-to-consumer platform (like Venmo again) and Android Pay will become the way you pay on Google Play as well as in-stores and in-apps. Here’s a Youtube video showing it in action. The motto is ‘pay your way.’ The press either called Android Pay a clone of Apple Pay, or focused on some of the advances such as the ability to pay without taking your phone out at all, this is a kind of ‘talk to pay’ (called hands free payments) and there’s a video of it here. And it is evidently coming to SFO area and you can learn more here. My take-away – be careful when you say these magic words: “I’d like to pay with Google.”
Other news of interest (contenders and the 5 battlefields of changing consumer behavior)
- Details about Walmart’s forthcoming Amazon Prime competitor leaked, including the name….Walmart ShippingPass. $50/yr, free 3-day shipping from Walmart.com.
- In China, Walmart launched a new app and functionality for online/offline as they continue to push in China.
- Pinterest quietly added some more e-commerce functionality. Now Pinterest will detect your product-oriented pins are products using object-detection technology (hey this is a handbag, this is a shoe, kind of thing) and then Pinterest will use this information to make recommendations (this purple bag will go with those purple shoes, want to pin it to this outfit board?).
- Speaking of ChatCommerce, Nordstrom added chat functionality to their popular app. The app now allows shoppers to chat with customer service reps and they can buy from the system (using a code, but it’s getting closer to ChatCommerce).
Finally, one of my favorite times of year is when Mary Meeker (former internet analyst now a VC at @KPCB) releases her ginormous research report around internet trends. For anyone in the e-commerce world this is a ‘must read’ and you can download a PDF here.
This blog post was written by Scot Wingo, Executive Chairman and Co-founder, ChannelAdvisor.